Solving the Complexities of B2B eCommerce with Arno Ham
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Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network Podcast. Our guest today is Arno Ham. Arno is the Chief Product Officer of Sana Commerce. Sana helps manufacturers, distributors, and wholesalers succeed by fostering lasting relationships with customers who depend on them and making their SAP or Microsoft Dynamics ERP and eCommerce work as one. He studied computer science and has been a driven eCommerce manager for years for big (retail) accounts such as Heineken, AkzoNobel, and Michelin. In his free time, Arno enjoys maintaining the webshop for the band and music society he plays in. So Arno, welcome to the show.
Arno Ham: thank you. Thank you, Lisa, for having me. I'm excited.
Lisa Ryan: So, share a little about your background and what led you to do what you're doing.
Arno Ham: Everything is with technology. I am a nerd. I started computer science. I started working here at a company that was an agency digital agency. We built many web store websites back then, mainly for these big weak retailers. But at some point, we came across businesses with other needs. B2B companies - and it was already more than 10, 15 years ago.
By helping them, we realized how we could help B2B companies, manufacturing companies, or wholesalers to do business online. , you need to do something differently. We can talk more about it later today. But the funny thing is that was the moment when Sana was born because we said, Hey, guess what? You talked in the intro about the long-lasting relationships that our customers want with their customers. In B2B, that's important. If you do, if you're shopping online as a consumer, you may buy something that you wear at the lowest price or where you can get the quickest shipment.
But in B2B, if you need to have supplies every day or multiple times a day. It needs to be good, and you have trustworthy partners, et cetera. And to make that happen, to transform that, to put that from, let's say, all those business processes before, let's say, non-digital with or by phone or by fax or by email to make the digital.
A lot of complexity is involved, and Sana was born. We were making that complexity easy by making ERP and e-commerce work as one because in that ERP, these systems that these companies are driving on, I would say where all your customers are, your order details, your transactions, your inventory, all that logic around it that makes you unique.
You need to open that up to the world to ensure you can automate things. We are key players here in what we also call a digital transformation. We have around 1500 customers worldwide running SAP or Microsoft Dynamics as their ERP. We are helping them create a B2B eCommerce environment with which they can serve their customers.
With B2B, it's just the beginning. Not all companies are doing digital commerce yet. They're starting with it. We are right on that wave. That was the shortest version I could give you, Lisa, but we could take it from here.
Lisa Ryan: And when you talk about, back in the day, you had more of that personal connection, talking to people on the phone and maybe seeing them in person. Now we're bringing in that whole element of technology and digitalization. How do you continue to work with your customers and keep that personal presence when everything is so technology-based, so you're not just another button on a keyboard?
Arno Ham: I love that question. There is a lot of complexity involved in making that relationship, let's say, more or less the same. But to give you a couple of examples or share a couple of customer stories, The important thing is that if you are a B2B buyer, as we call it, somebody needs to purchase something to do their job.
So let's say you are a gardener or a contractor and need to work at some house; you require equipment, building materials, etc. You could call or go to a store and get your supplies. And you get that personal touch that you say, Hey, you had this pricing. We have agreements about that. You are a customer that is here every week. So, we have these agreements. But if you go online, you want to have that same experience. You want to give discounts, for example, or trade agreements. And you need to bring that online.
And that is that example of the complexity we are solving, but it's so important. It sounds so stupid or simple that you must solve these things, but making that happen in your world is complex. And that's what we are solving. So that's one.
It's about real-time pricing, inventory, product information, and selection. So all these things you need to have transparency and with whatever channel your B2B buyer is, reaching you as a company, as a manufacturing company, if it is over the phone or via the web store or another, or in the store itself, you want to have that same price, the same inventory levels, and the same product description.
Because otherwise, you get an issue. You gain if the price is different online than in the store, then you harm the relationship, and you say, Hey, what's going on here? If I want to place an online order, the price is different. It's not what we agreed upon, harming the relationship.
So that's why we are all targeting that or not a relationship. It should be as convenient as if somebody's talking about it. But you need to translate that whole relationship into a digital world. And we are solving many of these complex things and making them simple.
And that's just one aspect of it. But we can also talk about, let's say, all the problems that manufacturing companies are struggling with. Still, I think this is where we see companies succeed in adopting their digital platform in this area, making sure that you supply total custom convenience as we say it. The features are that you can place these complex orders every moment of the day, 24/7 per day, seven days a week and that you have reliability without any compromise, which means it's real-time. The inventory is accurate. So, if you, that's not that you, if you're ordering something and then the salesperson or support person is calling you and saying, no, sorry, you just placed the order. But we have yet to get it in stock. That's, that is a pain, of course. So we are solving that and that you can. If you are also placing an order that the company is directly processing, it's a whole process to bring it online. So we are helping our customers with that. And it's a complex thing. But if you have done that, there are a lot of benefits for you as a manufacturing organization.
Lisa Ryan: Timing is such a crucial aspect of it because we expect that immediate gratification when we want to find something and get it online. And often, the person who receives the order is the first to respond to the request for a quote. Yes. The first one they reach is that they can do it quickly, as you said. To see what's in stock to get the correct pricing and place the order versus waiting for a couple of days or even a couple of hours for the sales rep to call him back and then go through the quote process, and it's lengthy all that stuff. Digitization has sped that up and it's an expectation now.
Arno Ham: Correct. Especially on the newer generations. They are used to living on their phones, to do everything from there. So if you are not opening that channel for them, you will have a missed opportunity, or you will, in the end, you will miss business, and the competition will take it for sure.
Lisa Ryan: We talk about some of the good things that are going on, and then, of course, in manufacturing, there are all kinds of issues. In inventory management and supply chain, we saw a lot of disruption issues because of the pandemic. And then the war in Ukraine. What's your take on this, and what's the role of digital and e-commerce in inventory management?
Arno Ham: Yeah, so for inventory management, all the things you just mentioned, it has been a couple of hectic years. And we are still in these in this period where we have a lot of manufacturing companies in our customer base. And when talking to them, they all struggle with the same kind of issues that they say. So we do not know at some point in time if we had something in stock or when we will get it back in, or that we get our inventory levels where we want to have it, or if the price of a product was differentiating all the time because the production cost the raw materials, the pricing for that was changing a lot because of the situation we had in the world.
And what is so essential if you have these kinds of changes or need to adapt your business has. So, for example, if something is unavailable in stock because you cannot produce it, or is there something else? There is just a high month; they must ensure how to deal with it.
Are you going to prioritize it for a specific customer group? Are you saying, hey, these customers need it more than others, or are you showing the real-time values and informing your customers to give that transparency, saying, Hey, sorry, it is not available, but it will be there in a month or so? So all that information exchange and transparency contribute to keeping these relationships in good shape.
Because if you need to do that over the phone, you will be burning in on calls, and so on. But on the other end, if you do not have accurate numbers, you also will, once again, people will start ordering, and they will get issues because you cannot deliver. After all, you have problems with the production lines or something like that. So we have a lot of companies that have struggled with that and with the help of commerce. By giving transparency and intelligence in the platform, you can say, okay, this is not available anymore. Still, we have an alternative product that can help solve your problem.
These are all things that we are helping. That's helping a lot of manufacturing through these challenging times. By doing so, they can reduce costs on one hand. They can keep the relationships, on the other hand. Some of them even become much better out of this situation because they took the opportunity to do it correctly.
Lisa Ryan: That brings up a good point regarding the relationships because if there is a limited number of items. You have to prioritize which customers get those items, it's probably going to be the customers you like the most and you have the best relationships with versus those that come in and out.
So it's a good reminder that people are on both sides of the equation. Keeping those relationships strong gives us a better chance of getting the needed products.
Arno Ham: Correct. And that's what we have. We are solving that problem with technology, but it's mainly about the people in their sense, and technology supports that. But its effects on these companies, both the B2B buyer side and the manufacturing companies we support, are amazing. Another pain or another interesting sample, Lisa, is, for example, the complexity manufacturers face in going online.
You already mentioned the lengthy quotation processes. That is something we also see; there's a lot of back and forth, generally over the phone or via email. But you can solve it in a digital way or in a platform that you can with the product selection process that you guide the customer what they need with information or with small wizards or product selection mechanisms.
We also sometimes call that configured price quote. So that is all something we are doing, and it is, especially with manufacturing in the B2B space; sometimes, it can be highly complex. For example, ordering a new television or a piece of clothing is super easy in terms of complexity. But if you're purchasing a new truck or machine worth a couple hundred thousand dollars, you can imagine that it needs to be more easily transferred to a digital space to come to that selection process. So we have all kinds of partners we work together with to make that magic happen that you can say, okay, nicely configure a machine, or what spare parts do you need, et cetera, to bring that selection process or that lengthy quota process digital and that the B2B buyer can do that in their own time and their convenience and much faster than when to wait to on interaction from sales support. But still, the sales supporter, the people, was an important factor because they can step in when it's necessary when they can add that added value.
Lisa Ryan: And you're looking at people that may hesitate to go digital because of the complexity of the product that they have, that a hundred thousand dollars truck or piece of equipment or machine. So, when it comes to the efficiency of it, how do you balance that?
What would you suggest when somebody's. At that precipice that they don't know, is this something that I should keep doing the old way, or do I pay a small price for higher, a lot higher efficiency down the line? Where does that decision come into for them to decide?
Arno Ham: Yeah. That is one of the most complex struggles or the questions they are asking us a lot or that they are struggling with themselves. Most of the time, we can have investments in B2B e-commerce can be severe to solve the complexity, and so on.
So, will you get a return on investment at the end of the light? Looking at the 1500 customers that we have, many of them succeed and can reduce so many costs by chasing a better opportunity by automating or digitizing things.
Let me give you an example. We had a European company that was a supplier of cleaning equipment, chemicals, and so on in the B2B space - for hotels, restaurants, etc. You need to keep these things clean, and before, they didn't have any digital channels, so they had salespeople on the road every week, every month, just taking in these orders.
On the one hand, that was quite time-consuming because these people were driving around all those hotels checking, okay, how much do we need from this? How much do we need from that? And it needed to be automated or digitized. But, on the other hand, when Corona hit Europe, they could not physically visit these locations anymore, so they needed to do it differently. So what they did was they started with Sana, they digitized everything, and salespeople were not driving in cars anymore to all those hotels every weekday to get the orders.
No, they were just online to say, Hey, place these repeatable orders or these orders on a day-to-day basis in the digital platform via the mobile app. And when I'm coming by, I will talk about more strategic topics of explaining new product times, really spending the time of you enhancing that relationship. And guess what? These salespeople now also have more time because they were not. So they could have this meaningful conversation by taking all these repetitive tasks they were not spending time on. They could also explore new markets or businesses because they have more time, and that's how you can expand your business.
Lisa Ryan: I've heard that a lot because the pandemic taught us that a salesperson can call on smaller customers. Some accounts could be seen by salespeople who wouldn't jump on a plane and go to some tiny machine shop or something because it wasn't worth their time. But now being able to digitize that, being able to do it online, Not only does that give you access to customers that you may not have ever paid any attention to before, but as you said, now there's more of a strategic opportunity to work with the customers and personalize the attention and build stronger relationships by digitizing.
Arno Ham: There is always a way, Lisa. This is about saving costs or chasing an opportunity by getting the boring stuff out of the way so the salesforce can do more valuable work there. But another attractive area is where we see a lot of success with struggling manufacturing companies, saying, Hey, how do we start, or the investment is considerable.
There is always a way to start in a specific area. For example, if the machines are still lengthy, complex, and very hard to digitize, you can start with the after-sales or spare parts. That can also be a big part of your business, and you can have the opportunity there to digitize it.
We have many manufacturing companies that are just focusing on, in the first years or in the first phases on that area, so that they say, Hey, this whole machine selling that is still, let's say, more or less a human process. All the after-sales and the spare parts that are fully digitized and the same values about the relationship are still there because the nature of our solution is that sense or the importance there is that all that information on what machines you have as a customer. You want to know that information to order the correct spare parts. You're not looking around for hours to ensure you have the right tools because you want to fix your machines quickly.
That is what we solve with our solution. This integration we have with systems like SAP or Microsoft Dynamics is because all the logic is most of the time, and the data is already there. We are just bringing that to the surveys and helping the B2B buyers have this convenient place where you can, with a couple of clicks, say, Hey, these are my machines. I know this machine is broken. I need a new wheel. I have to correct one order and have it delivered as soon as possible to fix it.
Lisa Ryan: So, when discussing manufacturers wanting to start the process and sell their spare parts online, where would you suggest they start? What are some of the things that they need to look at? Do you have any examples of a situation that began with spare parts that led to that same company's ability to do much more digitization by starting small and getting those results?
Arno Ham: Exactly. So have for most of the manufacturing start indeed with spare parts. Another customer is Diversity, a prominent supplier of cleaning equipment, chemicals for hospitals, tools, et cetera, et cetera. It's a huge company; they do a couple of billion a year. Also, in the US and where there, we started with all these consumables, not only spare parts but also the chemicals to use in the machines because they're selling these cleaning machines and so on.
That is step one. And later on, it went from region to region. They started first with one a couple of countries in Europe. And they have gone to another store, into another store. And now we are also talking about, hey, now we have all these consumable products for many different regions. What if you also digitize the machines' sales process, for example? We have C P Q tooling that you can do that's a selection process also for more complicated stuff like a machine, and you have all those questions and selections you need to do. And that is the next step to take another example I have, which is interesting for you to share. We had a company called Pinger, a global player in the world that is doing. It's a supplier of lifting equipment. Every truck needs a lift most of the time or a crane. Nine out of ten times, it's from Pinger. It's an Austrian company, but it's a world player there.
And we are also starting here with spare parts. So as such a...