Fueled by business networks, Asia Pacific companies are connecting and collaborating in new ways to drive better performance and profits.
We live in a networked world. As consumers, we tap into personal networks like Facebook, Twitter and Amazon.com that help us learn, share and shop better. And this is changing the way that we do business. Leading companies across the Asia Pacific region are now leveraging digital networks to more efficiently engage with their trading partners and collaborate across the entire commerce process.
Take Charles Seafoods Supply. As a supplier to an industry driven by strict safety standards and quality controls, the Phillippines-based company knows there is little room for errors. Gaining advantage requires flawless execution. And to fuel it, they are going digital.
Like many small, family-owned enterprises, Charles Seafoods Supply took a largely manual approach to interacting with customers. Until recently, orders were faxed or called in by phone. Invoices were sent by mail. And while the company had successfully established itself as one of the best suppliers to the seafood industry in the Philippines, owner Mayette Yulo decided it was time for a change.
Manual processes were making orders difficult to track and manage and often causing errors that led to delivery delays. Paper invoices were tough to trace and provided little visibility into the status and timing of payments. So Yulo set out to digitise things.
The effort began with creating an online catalog on SAP’s Ariba® Network, through which customers could view and order the company’s products with just a few clicks. Then the company started collaborating around invoices using cloud-based applications delivered on the network. And it quickly saw results, including:
- A 75% boost in order accuracy
- An 80% reduction in late or overdue payments
- A 30% reduction in days sales outstanding
“We now have smooth and transparent transactions with our customers and fewer errors in ordering and delivery,” Yulo said. “More importantly, we are getting paid faster and now have a positive cash flow to support and expand the growth of our business.”
Much like social networks allow us to shop, share and consume better, business networks are driving a new, more collaborative way of operating that is changing the game for companies around the world. With business networks, companies can eliminate the hassles, paper, phone calls, and other manual or disjointed activities they do each day to find new suppliers or business opportunities; place and manage orders; collaborate with customers, suppliers, and other partners; or just get paid.
Leveraging the connectivity that business networks provide, buyers and sellers are dramatically simplifying key business processes. Malaysia-based Sunway Group, for instance, has improved the transparency of its procurement function and created a metric-driven approach to sourcing that has dramatically reduced cycle times and generated savings of more than RM82 million to date.
Three years ago, Thailand-based PTT Global Chemical Public Company Limited (PTTGC) implemented a range of solutions delivered on SAP’s Ariba Network to fuel a standard, online sourcing process through which it could more efficiently negotiate best-value agreements. And to drive compliance with them, it launched a catalog-based procurement process. Today, the company’s procure-to-order cycle is completely automated and transparent. And it is completed with greater speed.
The improved process has also enabled PTTGC to enhance its relationship with suppliers by:
- Reducing the cost of doing business with the company
- Providing greater visibility into the status of invoices and payments
- Providing access to technology to improve efficiency and productivity
In addition to simplifying existing business processes, many companies are enabling new ones that enhance their relationships and create value on both sides of the equation.
Processes like dynamic discounting that allow them to secure discounts that can be reinvested in research and development and funding to expand their business. Or contingent workforce management through which they can identify and manage highly-specialised resources needed to develop that next-generation product.
Many are harnessing the connectivity and insights that networks provide to gain critical insights that can improve their performance and profits and fuel the growth of its business globally.
Every day, Thailand-based Betagro manages huge amounts of information between its headquarters, branches, and regional offices. And in the past, much of this was done manually. But with the help of business networks – and the cloud-based applications delivered on them – Betagro has been able to automate key processes and collaborate more efficiently both internally, and externally with its suppliers. It has also been able to perform rapid data analysis and achieve better insights into its information, and make more timely, well-informed decisions as a result.
Other companies are using network-based intelligence to find the right partners and optimise their spend and supply chain. To engage with customers when, how and where they want to be engaged to increase satisfaction and wallet share. And to see the future and proactively shape it to their advantage by anticipating risks and trends in the market and developing plans to execute on them before anyone else.
And they’re seeing results. Beyond what their existing applications deliver, companies connected to the Ariba Network, for instance, report:
- Lower costs – 1% – 8% reduction in supply chain costs and a 60% reduction in operating costs, on average.
- Greater efficiency – 50% – 75% faster transaction cycles, with many customers achieving >90% fully automated (“touchless”) transaction processing.
- Real-time process transparency and greater data accuracy – 60% improvements in order accuracy, reducing risks for stockouts or the need to stockpile excess inventory.
- Improved working capital performance – 50% improvements in discount capture with suppliers and 20% faster payment cycles with customers.
- Increased sales – 5%-20% revenue increase with new customers and 30%+ greater share of wallet with existing customers.
- Better customer retention –15% improvements in customer retention rates.
Business networks are among the most disruptive technologies of our day. But when you get right down to it, companies don’t really care about technology. What they care about is outcomes and solutions that can help deliver value – fast.
That’s why leading Asia Pacific companies are connected to business networks – and why many others will follow suit.
Bernard Chiang is Managing Director of SAP Malaysia. Views expressed are his own.