Editor's Note: National Floor Trends invited a number of leading computer software vendors to respond to questions raised by retailers participating in the on-going B2B Study conducted by the World Floor Covering Association and National Floor Trends. The research has found that many retailers considering a B2B system are concerned by several aspects of the technology. The software vendors, however, are confident that these concerns will be put to rest once retailers become more fully acquainted with the systems now available.
Q: How can a retailer be certain he always maintains full control over his business? Some retailers are concerned that their computer system will call the shots for them. Is there any truth to that?
Terry L. Wheat
President, RFMS, Inc.
A: The floor covering dealer has complete control over what is and is not allowed in his business system. As has been the case with e-commerce in the rest of the world for years, any and all data that is either received into the dealer's system or is transmitted from his system is completely under the control of the dealer. A new price list can only be received if the dealer agrees to it. A PO (purchase order) is sent only when the dealer says send. An AP (accounts payable) Invoice is posted only when the dealer approves it.
The difference with e-commerce is that these functions can be performed in seconds electronically, compared to minutes and sometimes hours when a person has to input the data on a keyboard.
In the case of product catalogs, this could be days versus seconds. But, never would a dealer have anything happen over which he has no control, anymore so than a dealer seeing his bills paid by his current system without his approval. This is absolute myth; otherwise the rest of the world would not have been doing it for years. Of course e-commerce does eliminate the paper, so this may be the fear. But with most systems that embrace B2B and e-commerce, the dealer can print out any document received electronically so that a security blanket can still be maintained.
Q: What about the possibility of having proprietary information fall into the hands of people outside the company? Is this a legitimate concern? How is it being addressed?
Textile Management Systems, Inc. (RollMaster)
A: Around five years ago, we installed business management systems on retailer local networks. Today, ASP (Application Service Provider) or web-hosted systems are also offered along with the original local network systems.
Pursuant to the ASP concept, the participant's data is not stored on his local network.
The user's data and the business software sit on a remote site maintained by the software provider. The ASP approach permits the deliver of the business system to its users at greatly reduced cost through savings derived by not having to install multiple installations and upgrades to thousands of users individually. Instead, the software company simply installs the system on the web-based net servers and the members use the Internet to access the system and their software. Access is available from the store floor, in a customer's home or office, on the road, anytime with just an Internet connection.
The ASP concept also allows for data management and secure third party back up. This is in comparison to doing it yourself and too often, the retailer does not address security concerns resulting in loss of data.
As for maintaining your proprietary information, having a trading partner maintain your data is risky. Dealers should avoid granting unrestricted access to confidential enterprise data to any partner who has the potential to profit from such access at the expense of the dealer. Allowing unrestricted access to all your data to a conflicted party will eventually result in a one-sided relationship removing any benefit to the dealer. Most affinity group managers acknowledge this and have chosen to avoid hosting dealers' data to eliminate the perceived conflict.
Sharing select data with partners for mutual benefit and gain is important and will enhance business relationships when conducted properly.
Q: What steps have you taken to alleviate flooring retailers concerns about lost data due to a system malfunction or other unexpected situations?
President, Dancik International Ltd.
A: Many retailers have expressed concern about the potential for loss of B2B data. The data used for B2B, once loaded on any system, is no more subject to loss or corruption than any other data, and should be included in all regular backups. However, because the benefit of B2B data depends upon its successful transmission and receipt, certain checks and balances must be in place. We have built an audit system into our B2B software.
Each transaction that is sent or received is logged, including date and time stamps. Transactions that have not received a response, such as an order without an acknowledgment from the supplier, are flagged and may be re-transmitted. As soon as any B2B data is received or prepared for transmission by any application, it automatically becomes part of the data set that is included in the regular backup routine.
A complete set of exception reports has been included to list potential problems, such as "received material but no invoice." Because we sell B2B systems to manufacturers, distributors as well as retailers, our software manages both sides of the entire buy/sell process. In the case of a malfunction such as a dropped communication line, our software automatically stores up all transactions until communication can be re-established. When the system is back on-line, all transactions that were held up are sent. No data is lost. Although B2B is a new process to many flooring retailers, the underlying architecture (FTP, X.12, etc.) is stable, reliable, and proven technology. Businesses should be more concerned about "lost profit" from avoiding B2B, than "lost data" from utilizing it.
Q: In terms of hardware, software, training and education, how much of an investment should a retailer be prepared to make to adopt a B2B platform? How can he best measure ROI?
Sales & Marketing director, QFloors
A: Our B2B software is priced from $2,900-10,000, dependent upon size of store and needs. Each purchase also includes new releases for the first year (typically 3). These releases often include enhanced B2B capabilities as the B2B technology continues to evolve, expand, and be perfected. As far as hardware, the dealer must have a computer with an active Internet connection.
Training/Education: B2B features are included as part of all our software and B2B training is combined with general training. If a dealer already has our system, the investment to learn how to download a price list, process a vendor bill and send a purchase order through B2B would probably require about 1-3 hours of (free) online training.
Training can be handled three ways: 2-day sessions (free monthly seminars in Salt Lake City excluding transportation, accommodations, etc.) covering all the basics of running the software, including B2B functions; on-site conversion and training (costs between $3,000-10,000) for 4 days at the store(s), converting the entire business over and training all employees; and unlimited on-line and phone training (free for the first year). On-line B2B training would take approximately 1-2 hours, dependent upon the skill and know-how of the recipient.
Utilizing B2B technology will make an enormous impact in time savings. Just one example would be the product catalog. One hour of time using B2B could be compared to 29 hours of manual entry. Consider the possibilities of fewer employees, time available for business areas neglected previously and having a life outside of the office.
There is also a significant time savings on the back end when the product catalog has been downloaded from the manufacturers. Employees can select the right product from a list which automatically pops up on the invoice, compared to writing down the proper product and number. The human error factor is eliminated, and the person ordering does not have to track down what was really sold. B2B allows the retailer to confirm price changes and product drops quickly.
B2B also helps reduce the time required to complete business operations. It takes less than a minute for cut orders on 20 products; and for roll orders, it would take about 3-4 minutes for 20 products. Comparatively, the same orders would require one hour to be completed via phone or 20-30 minutes on the Internet.
One more example: bills take 3-5 minutes each to enter manually into a computer system. So if paying 20 bills per day, it would take an employee 1 hour to put it into the system without B2B. If using B2B to match bills up electronically, the same 20 bills can be paid within 5 minutes.