Printer Supplier Projects 80% Drop in Costs and 15% Increase in Business with Supplier Enablement Solution

TCS Corporate Services provides remanufactured toner cartridges, namebrand computer printers, office supplies, and other products to Fortune 1000 companies. To retain clients and expand its business through e-marketplaces such as Ariba and Commerce One while still cutting expenses, TCS deployed a trading partner connectivity e-commerce system using the Microsoft Solution for Supplier Enablement.

Company Overview

TCS Corporate Services is one of the largest players in a competitive but highly fractured business supplies market. Based in Dallas, TCS has a 15-year history of providing large organizations with the sales and servicing of name-brand computer printers, remanufactured printer toner cartridges, consulting services, hardware such as scanners and fax machines, and general office supplies.

Currently, TCS has about 1 percent of a market in which there are approximately 4,000 vendors across the United States. While that market share sounds relatively small, TCS is at least 20 times larger than the average supplier in the market, which is dominated by mom-and-pop shops whose main focus is on providing local companies with supplies. TCS, with multiple offices and a national technical service staff, targets major corporate enterprises as its customer base.

Situation

A couple of major TCS customers, including Motorola and the U.S. Automobile Association, indicated that their suppliers would have to conduct transactions through newly deployed e-procurement systems or risk losing their contracts. And TCS realized that Web-based trade and automated trading partner communications would be mandated by more customers in the near future. TCS would need to find a cost-effective solution to brings its business—which includes more than 25,000 stock-keeping units (SKUs)— online to retain existing customers and to reach new ones while integrating Web-based commerce with its own back-end systems.

“We had two critical issues that needed to be addressed right away,” says Jeff Odom, TCS President. “The first was to respond to customers such as Motorola who were mandating that their suppliers list their goods and services through the e-marketplaces such as Ariba. Equally pressing was a longer-term strategy of aggressively entering the e-business arena, which meant not just putting on a ‘blazing saddles’ show for customers but also integrating the e-business sell side with our back-end systems. We needed to solidify our hold on our current market share by responding to the needs of specific clients and to gain market share by differentiating ourselves in this market space.

“Our business has grown in the past 15 years with bricks-and-mortar types of customer service, with technology being used in a support role for customer service but not really as a competitive advantage,” he continues. “That has really changed with the advent of online marketplaces, where technology is critical for gaining the upper hand against the competition. The key for us was to find a system that is affordable yet can deliver a real competitive advantage that would make us among the first suppliers in our market to offer easy integration into e-procurement and e-marketplace systems. This would minimize the time and effort needed for large customers to do business with us, and would help us streamline our own operations, which also helps put us ahead of the competition.”

Solution

Invited to attend a trade conference on supplier enablement by one of TCS’s large customers, Odom was discouraged to find that most Web-based commerce systems involved custom solutions that “cost in the seven figures, and that was simply out of our price range,” he says. Then TCS began discussions with Cactus Communications Internet, a Microsoft Gold Certified Partner for E-commerce Solutions, which recommended the Microsoft Solution for Supplier Enablement, consisting of Microsoft Commerce Server 2000, SQL Server 2000, BizTalk Server 2000, and BizTalk Accelerator for Suppliers.

“TCS needed to retain its existing clients and differentiate itself in the market,” says Gary Dickinson, Executive Vice President of Cactus. “They needed to do this at a price a business of its size could afford while still retaining the powerful functionality of far more expensive custom solutions.

“We felt strongly that the Microsoft Solution for Supplier Enablement could provide TCS with what it required—a powerful and flexible Web-based commerce system that’s affordable enough for a medium-size business,” Dickinson says, adding that the Microsoft solution deployed is about one-fifth the cost or less of a more complex, customized solution. “It can handle the large number of SKUs that TCS has in its catalog, it can work seamlessly with online marketplaces such as Ariba and other channels with little customization, and it can integrate the front end of TCS’s new Webbased commerce system with its existing, back-end ERP [enterprise resource planning] system.”

Delivering Fast Return on Investment

The Microsoft Solution for Supplier Enablement is resulting in transaction savings for TCS. Odom says it cost approximately $32 to process a transaction in the traditional manner—that is, receiving an order electronically and then using clerical staff to manually reenter the order into the company’s back-end ERP system.

Now, using the Microsoft Solution for Supplier Enablement, customers can use their e-procurement system or an e-marketplace like Ariba to find TCS product offerings. The system enables “punch-outs”—that is, a potential buyer can view an initial description of a TCS product and then by clicking the item can be transferred directly to the TCS Web site, where options can be selected. Once all the parameters for the product are chosen, the buyer is transferred back to the e-marketplace site for financial completion of the transaction, which could include the automatic transmission of a line item on a purchase order to TCS’s back-end accounting and fulfillment systems. This system allows TCS to differentiate itself from other suppliers in this market while facilitating targeted marketing and other ways to improve customer service.

“Our estimates are that each online transaction will cost us about $5 to $7, or a savings of approximately $26 per transaction,” says Odom. “That’s about an 80-percent reduction in the expenses associated with online transactions—or about $10,000 to $15,000 a month, which is significant for a company of our size. More importantly, as we grow, we expect the cost savings from this system to grow substantially.”

Odom adds that the Microsoft Solution for Supplier Enablement provides features and functionality that were previously available only from extremely costly and complicated custom implementations. With the components of the Microsoft solution, TCS can manage internally many of the content and catalog issues that the company would have outsourced in the past, thus saving money.

“More importantly, the solution is providing us with an enormous competitive advantage by allowing us to integrate with the e-procurement and e-marketplace systems increasingly used by large customers,” Odom says. “This makes us more attractive to potential customers, and we are forecasting that it will provide a 15 percent or more revenue increase in the near future. With our new system, we’ve attracted major prospective customers, including a nationally known computer vendor and a major financial services company. This is potential business that we probably would not have encountered without the Microsoft-based e-commerce solution.”

Designing and Deploying an E-procurement System in Five Weeks

To help TCS deploy its system as quickly as possible, Cactus adhered to the Microsoft Solutions Framework (MSF) and added steps to the methodology to keep TCS fully informed and involved. The project timeline called for a full implementation—from initial design to deployment—in 37 days.

“This was a very aggressive schedule because it involved a complete rebuild of the TCS site in Commerce Server 2000, plus the Supplier Enablement components, current catalogs that were not in electronic form, and custom catalogs,” says Dickinson. “However, we have integral knowledge of BizTalk Server and Commerce Server 2000 as well as BizTalk Accelerator for Suppliers, and had a team of six people to execute the design, development, testing, and deployment on time and budget. The combination of the MSF methodology and our internal skill set enabled us to successfully execute a project like this in a very tight timeframe.”

The following diagrams show the flow of communications between the e-marketplaces and the TCS e-commerce catalog as well as its purchase order (PO) system.

Helping Grow the Business

“While Cactus was able to design a powerful e-commerce system for our immediate needs, what’s perhaps more important is where this system puts us in terms of our market,” Odom says. “We think it puts us far ahead of any of our competitors. And if our customers want totally integrated suppliers, we’re going to make it to a lot more top-tier lists.”

Odom says more and more companies, at least in the large corporate market, are consolidating their supply requisition activities to e-marketplaces such as Ariba and Commerce One. Because TCS is publishing Extensible Markup Language (XML)– based catalogs using the Microsoft Solution for Supplier Enablement, companies searching the Internet for suppliers who have that capability come up with the TCS name.

“We have found that, during the early part of our sales cycle, even mentioning the fact that we are capable of quickly connecting to e-procurement marketplaces such as Ariba and Commerce One via Microsoft technology opens doors quickly and leads to selling at a much higher level in our customer organization,” Odom says. “Most small and midsize business owners and managers that I meet are still very cautious about Internet commerce and afraid of the seeming complexity of e-procurement. The Microsoft Solution for Supplier Enablement takes the mystery out of e-business and provides a complete and easily understandable solution for small and midsize suppliers.”

Microsoft Supplier Enablement Solutions are built on the Microsoft .NET Enterprise Servers—a comprehensive family of server applications designed to deliver rapid time-to-market combined with the mission-critical performance, reliability, scalability, and manageability needed by today’s global, Web-enabled enterprise. Built for interoperability from the ground up, the .NET Enterprise Servers use open Web standards such as XML to enable integrated solutions that move beyond today's world of stand-alone Web sites. Designed to accelerate the development of solutions built on the .NET Enterprise Servers, Microsoft’s Supplier Enablement Platform provides a new set of tools that simplify supplier connectivity to multiple online selling channels.

For More Information

For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Resource Centre at (800) 563-9048. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to www.microsoft.com.

For more information on TCS products and services, call (800) 633-4935 or visit the Web site at www.tcstoner.com.

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