SAP implementation of Business One in the RadiusGroup distribution network

Data on the customer

The Radius group proposes complete solutions on equipment of offices a modern telecommunication and computer hardware, no break power supply systems and conditioning. Working with different types of the equipment, the group uses two models  of distribution and, respectively, conducts supplies of equipment through the different companies. On a utilities equipment the Radistr company, on climatic – "Radius-Klimat" who place purchase orders of the equipment at producers, including abroad works, and act as the distributors having own dealer network. In this model there is a further branching of the channel for actually distribution and project distribution, i.e. purchases and deliveries of different types of the equipment within projects of system integration. On the IT equipment the Radius-VIP company which buys the equipment from distributors works and itself acts as the dealer working with end customers.

Implementation premises

The market of distribution of the equipment, including the market of project distribution, differs in strong competition. Successfully to coexist in the market with the large companies, medium-sized companies need effective management. As it often happens at actively upcoming business, the Radius group at some point "outgrew" possibilities of the available software. In the conditions of rapid growth of the nomenclature, the customer base and geography of activity decision making became similar to guessing more and more. It was necessary to return to business controllability, i.e. to give the management all necessary information for decision making. Besides, as the company quickly grew, it was necessary to change, change processes for those which would bring the company to the advanced market positions. As a result the management of group made the decision on implementation of such system which would help achievement of both of these purposes.

Choosing a Solution

A system for implementation was selected proceeding from the fact that it was going to implement at first it "at itself", on itself to reveal all needs for completions under industry specifics,  and then to propose to clients industry solution. As a result of the choice stopped on SAP Business One, mainly because it provides to business the standard core of functionality checked by thousands of implementations worldwide. Besides, the ratio the price quality at this system was the most attractive.

Already at a stage of the choice of a system it was clear that a part of necessary functionality of SAP Business One does not close, however in the market there are no systems which completely would conform to all our requirements. Therefore notes on functionality were formulated, and the tasks of corresponding changes and completions are set.

After all offers were collected, they were analyzed and implemented. The prototype and model of a system with advanced functionality, necessary for implementation of management accounting, an opportunity to manage the company on deviations (the message arrives that it is necessary to make management decision), etc. was as a result created.

Project Goals and Objectives

The implementation project of SAP Business One in Radius group had two main objectives:  on the one hand – to create information basis of improvement of a management system for distribution, with another – to optimize business processes and to manage effectively all variables defining success of business.

For improvement of management within the project it was required to solve the following problems:

• increase possibilities of analytics and the reporting of a system;
• provide an opportunity for work of different divisions of the company in a common information space;
• provide a possibility of control  of work in the on-line mode using integration of management accounting with an electronic document management system;

For achievement of the second purpose it was necessary to provide opportunities using an automated system:

• manage loyalty of dealers and end customers;
• make payments accurately and according to the diagram;
• manage the nomenclature and the inventory level, to minimize a remaining balance in warehouses;
• manage deliveries, provide the equipment necessary to clients accurately and in time, to provide planning and control, to provide existence of uniform base of directories and price lists;
• manage service maintenance, to effectively solve problems of a complete set;
• organize electronic workplaces which would allow to work most comfortably to the employees executing different roles;

Project Progress

Preparatory phase – a key to a project success

The quality of work of a new solution strongly depends on that, transition of all management system to other logic is how correctly prepared, i.e. data transfer from the appendices which had earlier is carried out. To pass to logic of other system, it is necessary to develop/finish – to prepare the necessary number of reports, to download all information in a system, then to carry out reconciliation, to provide training of employees, to provide technical support online. The Radius group passed to SAP Business One completely in January, 2007. Data purification, accounting of a remaining balance, adjustment of reference books, removal of duplications of data was carried out to holidays. After that there was a stage of trial operation which lasted not for long – two weeks. The most heavy load as there was a comparison of correctness of data fell on the trial period, and for this purpose two systems worked at the same time, - it was necessary to support up-to-date data in two systems, – and it is double work. There was lots of questions – they arrived practically each hour.

Expansion of functionality of a system

Difficulties, as always, appeared when passed to commercial operation. In January, 2007 when carried out system deployment, - when jobs were corrected, updates of clients, and everything began to work in a new system, - there were still requirements – to develop add-on units of functionality. As a result now proposed solution for the companies working in the field of distribution has advanced functionality which closes the requirements specific to the industry. The solution allows distributors to create price lists and directories of the equipment, to effectively plan and control distribution processes, to effectively provide service maintenance of the sold equipment.

Features of implementation

Customer relationship management

One of features of the project was the fact that the project was begun with the module CRM as before in the company there was no CRM, and implementation did not require data migration, "inherited" from other systems. Such approach was successful as all felt need of implementation, and there was no resistance which usually arises at users upon transition to a new system. While prepared implementation of the following modules, people managed to get used to work in SAP Business One. Implementation of CRM was very effective. System work with clients – key area for success of our business. Before implementation of the module CRM work with clients was conducted not really systemically: there was no possibility of support of cross-sellings (identifications and information transfers about sales opportunities to the next divisions), timely informing Customers on new offers. With system implementation there was a possibility of transfer and storage of customer information in the uniform centralized database which is much more effective than separate bases.

Management of the relations with dealers

For a wholesale company CRM allows to systematize work not only with clients, but also with dealers. Having implemented CRM, the company had an opportunity to profile dealers, to divide them into groups, to reveal standard models of purchase for increase in sales to the most profitable groups of dealers, to create the differentiated marketing programs. It helped the company to construct one of the most effective in the market of dealer networks. On the basis of data analysis and the reporting under the sales made within marketing programs there was an opportunity to estimate efficiency of dealer actions.

Information analysis

When wholesale business grows, every day it is necessary to make decisions where the price of an error is quite big. If there is no tool for the analysis of sales, i.e. danger on the one hand - to buy and accumulate illiquid goods in a warehouse, on the other hand – not to have an opportunity to respond quickly to requirements of Customers. Therefore in the company very much waited for an opportunity to keep track of results of sales in real time, to analyze data in different cuts at last to have an opportunity to manage not blindly, and consciously selecting the directions of growth. Thanks to Business One SAP implementation the company management passed to really strategic management with business.

Management of the prices and discounts

Thanks to implementation of CRM in the company tools for management of price actions, difficult transactions, discounts appeared. Especially it is important for work with dealers. The system of pricing and discounts in the SAP Business One system allows to manage flexibly different discount types, for example, discounts for recurrence of purchases, discounts for purchase of sets of goods. Management of the prices and discounts is carried out on a centralized basis, at the same time it is possible to use different price levels, markdowns, discounts, to change the periods of action of discounts, to create price lists with indication of the change in price and special offers. For convenience of modeling, forecasting and also efficiency evaluation of different price offers convenient forms of the reporting are created. 

Inventory management

The Radius group works with very big range of goods therefore it is important to work with the nomenclature effectively: have in a warehouse the necessary positions of the nomenclature in optimal quantity  for quick response to market requests, minimize quantity of illiquid positions of the nomenclature. When the SAP Business One system was implemented, it became very simple to reveal goods drivers of business and to make decisions on further increase in indicators of their sales, to reveal goods with slow turnover and to determine the necessary level of discounts for their sale, to reveal on categories goods items for purpose of the best price in the market, to reveal goods items which should be excluded from the range, etc. After Business One SAP implementation information on the exact inventory level in warehouses, information from a warehouse on receiving and movement of goods, about unloadings and returns in real time appeared. A system provides the necessary inventory level on the basis of the centralized data processing in real time, creating the optimal plan of replenishment action.

Supply management

Thanks to the automated control of stocks and warehouse processes there was a possibility of automatic calculation of delivery time on the basis of the parameters determined by the user. Tracking of data on sales and stocks is conducted on key performance indicators now. Calculation of delivery time for the complex orders providing cross-dokingovye transactions, internal transfers, operations with the order and goods receipt from the supplier is provided. In a convenient form  necessary information which is necessary for negotiations with suppliers and receiving optimum conditions on the prices, terms and placement of goods is provided.

Task management system

To the client it is important that process of implementation took place quickly. Use of task management system of Djem Service Desk helped to provide efficiency of implementation very much. Especially there is a lot of time and resources work with requests of users for completion of a system requires. First, not all requests should be satisfied, - time and consulting resources for the analysis of requests respectively is necessary. Often happens that the user just does not know all functionality,  and then he needs the corresponding training. Happens that as a system is integrated, change of one process can entail changes of processes in other modules, and it cannot be visible to the head of line department approving a request. Thanks to Djem Service Desk at implementation it was succeeded to manage very accurately and quickly requests of users, to carry out their analysis and it is correct to set tasks to consultants and analysts.

Features of user training: intra-corporate certification

To facilitate to users transition to work in a new system, the system of internal certified training was developed. Thanks to a set of the training demo videos users at individual speed acquire information, then answer control test questions. Advantage of such training first, that it helps to overcome the psychological resistance to new – to argue with the training machine it is useless. Secondly, for the growing companies it is important to train in work in the system of new workers, - thanks to demo videos  each newcomer can avoid infinite repetition of the same information to the employee.

SAP Business One as part of a common information space of the company

Its complexity became important feature of the project. The solution received in a project deliverable covers four main fields of business which are usually requiring automation using the software of different classes and the subsequent their integration: resource management of the enterprise (ERP), document management, contact management and customer relations, operational management. In particular, within the solution integration of a resource management system of the SAP Business One enterprise with a management system for Open Text document flow – Hummingbird therefore during the work in the ERP system there was an opportunity to create a document package of a management system for document flow is implemented, accompanying any business process (accounts, invoices, agreements, delivery notes, etc.) which is in work. The preconfigured integration based on Enterprise Service Bus technologies  provides data exchange between different applications, and as a result affects significant increase in business performance.

Results of Implementation

If to systematize the results received in a project deliverable, then except expansion of standard functionality of the SAP solution Business One it is possible to select the following:

• New standards of management and new business processes which significantly increase company performance are implemented
• Different divisions of the company work in a common information space
• The management has the broad picture of business thanks to the advanced system of analytics and the reporting
• Electronic workplaces ensure comfortable functioning to the employees executing different roles
• The effective management of all variables defining success of business - loyalty of dealers and end customers, the nomenclature and the inventory level, efficiency of all business processes increased.