For some customers, ROI offers leverage for building a business case to justify their technology projects and initiatives.
Many of Biwer’s clients are guarded against revealing the benefits they receive from the Commodity Procurement System, especially when related to financial benefits. The primary reason is the commodity supply chain is a critical aspect of their business and the configuration of CPS has given clients a distinct competitive advantage.
Because Biwer’s solutions have been successfully used across such a broad commodity arena, hard numbers or metrics from one industry will not always translate to another.
So, while financial ROI might not be openly disclosed, each new client can still utilize the following metrics to help identify and measure areas of ROI for their own projects. Non-financial project returns can also be quite significant, such as:
- competitive advantage
- project’s strategic fit
- positioning the company for needed growth
- allowing the company to be a “first mover” in the marketplace
- improving compliance to audits or regulations
Disadvantages of ROI Calculations
ROI is a metric that favors projects that focus on cost savings. If customers are not able to conduct proper evaluations or if too many variables exist, then estimates have to be used, which can make the ROI less of a hard number.
ROI does not calculate or account for valuable yet intangible returns in a project. One metric alone cannot characterize the entire value of a project. Business leaders need to continually remind themselves of the overall strategic impact the project will have for the enterprise.
Strategic Risk Reduction and Avoidance
- Return on Pain Elimination
- Corporate strategy to utilize modern information technologies that allow for improved system integration and long term supportability:
- CPS provides for a scalable database,
- Deployment of CPS is 3 tier which provides a J2EE compliant layer delivering web services and XML. This provides secure, web-based access to the application.
- Determination that an anticipated staff turnover or retirement could put the operation at risk; knowledge transfer from key staff is needed for redundancy.
- An operation needs to retire de-supported or un-supportable legacy systems.
- Company is transitioning to a new ERP or financials applications:
- CPS allows the ERP to be implemented at standard, saving costly customization and simplifying future upgrades.
- CPS brings tools to clients that represent solutions for emerging best practices.
- Increases IT productivity. Modifications in CPS are done with configurations, not customizations, so no hard coding is needed. This has been proven to take weeks or months off former programming efforts.
- Because CPS can be quickly configured, new client scenarios can be rapidly modeled with a proof of concept or a detailed conference-room pilot.
- Biwer’s in-depth knowledge of dealing with a broad range of commodities, in multiple industries, has translated into a clear understanding and quick learning curve in managing its client’s procurement workflows and business processes.
Flexibility and Speed to Implement Programs
- Better management of the crucial relationships the company has with suppliers, haulers, harvesters, land, property blocks, etc.
- Quickly define and configure new commodities, varieties, and grading attributes with ability to incorporate them as needed into payment calculations or reporting.
- Customers have reported being able to reduce their overall procurement costs between ½ and 5%. This is accomplished with the rapid implementation of programs as well as the ability to better manage the overall contracting process.
- The system allows greater ability to motivate key suppliers to deliver specific commodity quality attributes through the use of premium incentives and deductions.
- Greater control over the level of detail for calculations deliveries improved contract enforceability.
- Receiving Transactions
- CPS streamlines the receiving process while providing greater flexibility for crop delivery and load scheduling – direct connection to scales, bar codes and other input methods.
- CPS increases accuracy and validation of information captured at the time of receiving.
- Payment Methods and Cycles of Payment
- CPS allows the definition of pay cycles and gives the ability for the selection of payment candidates’ means greater accuracy in the liquidation and settlement process with fewer reversals.
Better More Timely Information
- “What if” scenarios allow clients to immediately determine the impact of proposed decisions before they are implemented.
- CPS offers the ability to eliminate separate legacy systems or customized spreadsheets.
- CPS can be viewed as the procurement “sub-ledger”. Handling the inherent complexities of grower payment / procurement within CPS allows the ERP systems to be implemented at or close to base. This approach simplifies the ERP environment when support and upgrades are needed. Integration with external systems allows existing assets to be leveraged, not eliminated.
- Delivering complete visibility into the grower-supply chain has translated into increased value for the commodity and greater differentiation from competition.
- Single source of data means single version of the truth. Fragmented, redundant, and conflicting data is eliminated.
- Benchmarking – Capturing detailed attribute, coupled with the ability to roll information up to the enterprise makes sophisticated benchmarking available.
Improved Operational Performance
- Supplier Self Service Options – Suppliers are able to manage profile information, farming practices, pesticides, even delivery and quality information.
- Better information to growers directly impacts the quality of product they deliver.
- Field Staff efficiencies have been gained and timelier, useful information has resulted.
- CPS has improved Management Decision Making. Key information dashboards provide accurate financial reporting / costing information.
- CPS provides for a separation of duties with role based control, with full audit tracking. Sarbanes-Oxley
- Crop traceability is supported within CPS which can deliver on latest quality assurance programs.
- Crop forecasts can match high quality products to the highest margin contracts.
- Mandatory Reporting is simplified and accurate.
- CPS provides for the expansion of supplier / grower base through sustainable and strategically important grower recruitment.
- Provides a first class competitive service to growers, harvesters, haulers and co-op members has helped suppliers (growers) to establish and maintain efficient operations with lower costs of production.
- Supportable application
- Proven calculation engine has operated in times of critical need for clients under strict regulatory and government oversight.
- Regular updates and upgrades are compatible with all client configurations.
- Source code can be made available with licensing of the application.