The Challenges and Benefits of Adopting New Digital Systems
Editor’s note: Proagrica, an international provider of connectivity solutions specifically for the agriculture industry, recently examined the key challenges and pain points that businesses face in the agriculture supply chain — and the benefits gained — by adopting digital systems.
Challenge No. 1: What can automated order processing do for my business?
Manual data entry processes are slow and risk the effects of human error. The standard process involves re-keying orders submitted via email into an enterprise resource planning (ERP) system. On the customer side, this can result in delays and lost business, especially during peak season. On the business side, this puts staff under pressure and directs resources away from more valuable areas.
The solution: A completely integrated system removes the inefficiencies of manual entry. Data is entered only once by the customer, usually via an ordering portal or EDI connection. Orders can then be updated real-time as the status of orders changes. The resulting order process is more streamlined and valuable for the customer, and much more efficient for the supplier.
The results: A mid-level U.S. ag retailer adopted automated order processing for their annual 2,050 transactions, usually taken through a combination of telephone, email, and postal orders.
Most orders took 38 minutes to process, although orders submitted by field sales staff via email to the sales administration team require an extra 5 minutes’ processing time. After switching to Proagrica’s fully automated ordering process, these times and other associated costs greatly reduced, resulting in a substantial increase in revenue. After two years, the total revenue saw an upsurge of 31%.
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Challenge No. 2: How can I improve efficiency in my business operations?
Businesses relying on manual operations devote extensive resources towards re-keying of customer information into the company ERP at the best of times, without considering the loss of productivity as a result of human error. For example, one study by the Australian government estimated up to 30% of invoices contain incorrect information, highlighting just how prevalent this can be in business transactions.
The solution: Automating the customer order process helps to relieve pressure and improve efficiency in both the long- and short-term. In the short-term, automated orders are much more efficient to process, saving on both required entry time and the time necessary to resolve any problems arising from human error. In the long-term, the gain in resources can be redeployed towards areas of the business that add more value, promoting growth while cutting down on unnecessary “busywork”.
The results: A report published by respected research company Gartner found that the cost of processing invoices is reduced by anywhere from 70% to 90% when done electronically. A study undertaken by retailers Landmark and Elders also found a saving of $18 per transaction.
Naturally, there are additional benefits that aren’t as easily measured: freeing up valuable time or the ability to grow without increasing staff numbers, for example. Proagrica has collaborated with businesses across the supply chain, helping them to refine their processes to ensure optimal efficiency and, ultimately, a more profitable business.
Challenge No. 3: How can I increase customer loyalty?
Businesses in the agriculture supply chain actively seek to offer excellent customer service while remaining competitive. However, the rise of online business and generic providers has led to many customers choosing their supplier based primarily on cost over any other factor. This shift in the marketplace highlights the need to offer a full, value-adding service in order to improve customer retention and loyalty.
The solution: Agricultural companies can extend their competitive advantage by integrating electronic transactions into their existing systems, and thus offer an efficient, quick, and easy-to-use service for their customers. Rather than acting as mere suppliers, businesses must reposition themselves as invaluable partners, capable of providing an automated order process with live updates and real-time status information.
The results: McKinsey, the global management consulting firm, has suggested that customer satisfaction leads to direct and measurable improvements to profitability, with good customer satisfaction rates seeing reductions of 10-20% in cost to serve and up to 15% growth in revenues. Proagrica has already worked with businesses across the supply chain, helping to integrate workflow and internal systems in order to better drive customer loyalty. Despite a turbulent marketplace, agribusinesses are well-placed to embrace technological innovation and enhance their offering.
Challenge No. 4: How can I respond quicker to customers?
Manual processing is the standard method of handling customer orders for unintegrated businesses. However, this carries with it certain risks: long delays are possible at each stage of a transaction, from the customer placing an order to receiving confirmation of the order. If responses are generally slow and confused, this won’t just result in lower productivity, but a gradual erosion of customer confidence.
The solution: Electronic transactions enable businesses to respond to their customers more quickly and armed with the right information. Customers can receive a much faster response, almost as if they are placing the order directly in the supplier’s ERP. This ability to respond quickly with accurate and up-to-date information is directly beneficial to customer satisfaction and therefore customer retention.
The results: Proagrica is collaborating with businesses across the agricultural supply chain, equipping them with the infrastructure they need to respond quickly and accurately to customer demand. According to a 2014 joint survey report from BIA/Kelsey and Manta, 61% of small and medium sized businesses receive more than half of their revenues from repeat customers rather than new business. Repeat customers also bring the most value, spending 67% more than a new customer. Quick responses are a vital part of preserving those customer relationships, and an essential facet of a successful business.
To learn more, download Proagrica’s whitepaper on achieving 100% connectivity.