Almost a third of the company’s turnover is accounted for by what comes from its corporate clients (legal entities and smaller wholesalers).
This sizable share is tended by just four employees. And that’s really not because the company is working with just a handful of "fat" clients: as of the fall of 2010, the number of corporate clients with the company was on course to reach 20,000, and that’s really a mixed bag of companies.
Humanless approach to organizing its business processes is grounded in a reverential attitude towards human labor. We deem it to be the company’s most valuable (in both senses) activity.
It would be silly to squander a resource this valuable on routine, formalized, and automation-friendly processes. We all know what they are: receive a request from a client by phone, get in touch with the warehouse, if need be talk the shipment over with the suppliers, sort the things out with the bookkeepers (financial and documentary arrears), settle the prices and deadlines, make out an invoice, send it to the client, and then keep reminding him of payment and reminding to the chief logistician about ordering a vehicle (and check into that three times).
This is, basically, what the everyday life of most post-Soviet-era Russian companies looks like, which, since their staff are poorly educated and shallow, they consider to be work. Well, no such luck! That’s not work. It’s kind of hard to come up with a decent word to term it, but that’s NOT work, for sure.
In reengineering the client’s business processes, we strive to transfer as many functional duties as possible onto the computer. As a result, there is an increase in the business’s traffic handling capacity without incurring any additional resource expenditure. In other words, we get a boost in workforce productivity. Speeds go up, control is maintained at the level of processes, costs go down — hence, there is more money made. Staff members, the company’s brains, who keep working in the company subsequent to the optimization, can now directly focus on doing their real job — developing the company. And this process is not easily formalized — that’s purely creative stuff: developing new services, seeking out new clients, negotiating, modernizing business processes, and working with people.
An example of practical implementation of the above approach (even if it’s not fully consistent — for reasons outside the scope of our capacity) is Ulmart. Staff members of the corporate department do not even know clients by sight; nor do they recognize them by voice. Clients self-serve. The product is ordered and booked through the ulmart.ru website; the client automatically receives a payment bill based on the client’s current pricing position (the higher the turnover — the bigger the discount). The state of one’s accounts receivable is controlled by a machine in the background — based on the terms configured by the commercial director.
We have realized a motivation logic for the seller and the client for the events of delays in payment or advance payments.
Upon receipt of the bill, the client pays it off, and the product gets booked and (if the client wants it delivered) then sent to the client to the address specified, along with all related closing documentation.
That’s it. The deal is closed, the client’s got the product, and the company’s got the funds.
The client has done everything by himself, while the seller has taken no part in the process whatsoever.
This is how 99% of all deals go. With no company employees taking part in the process.
The remaining 1% — that’s what non-automated activity is.
This is what those four staff members are engaged in. And even this activity is registered in the dia$par –the entire activity is transparent.
Bargaining. If the client wishes to bargain, he may try to make a case for the price he desires by citing those offered by the competition. The staff member96 can see the client’s "bargaining efforts" and can either accept the client’s price or decline it. Consequently, the company is saved the trouble of bargaining "ex nihilo", approaching the issue of reducing its margin in a more judicious manner. The dia$par provides possibility of imposing restrictions in respect of the minimum profit margin on an item or a deal as a whole.
Similarly, clients making particularly large purchases may once in a while want individual attention. Not a problem at all — let the resources do their job.
Seeking out clients. The staff members are engaged in a specific non-formalized activity — searching for clients and conducting initial negotiations, with a view to building up an audience of consumers, who later on
will be busy unobtrusively putting together little brooks of little coins, which, in the end, are going to fuse together into one huge gorgeous EBITDA.
The clients, by the way, are also fully satisfied with this format of dealing with the supplier. They don’t waste their time on useless stuff, their actual leftovers being freely available and custom shipments being no problem. The invoice is made out instantly. And with balance-based relationships, the product can be picked up right after the order has been processed (provided there are enough funds in one’s balance to cover it or one has a satisfactory credit limit — which, again, is controlled by a machine in the background), i.e. it takes as little as three minutes to complete the transaction.
High speeds at which work is done help, as a result, sell more, with prices going down due to increased purchase volumes, and the client will know that there’s no point in looking for cheaper products elsewhere. And even if the product is, say, two cents cheaper somewhere else, one may just feel reluctant to go through all that fuss to get it from that place rather than yours.
With the overwhelming majority of companies, it works something like this: "– Hi, John! It’s Peter of Vector Ltd. I need that stuff for tomorrow — three of them. Have you got them? — What do you mean you "don’t remember"? It’s Vector! Aren’t you the one paying me 3% in kickbacks to keep us as your customer? Does that refresh your memory? So? Call me after four? Oh, OK. All right, I’ll be waiting. Take care".
That’s just awful, isn’t it? It stands to reason that with an approach like that the seller’s operating speed is a mere 20 invoices per day, at most.
And that’s, really, no volume, no control, and it all just sounds like some kind of a relic from the past.
Faraway distant past.
