If some of the 3,000 attendees at Epicor's Insights 2012 looked a little wiped out toward the end of the event last month, it probably wasn't because they spent a couple of late nights in Las Vegas. It's more likely they were feeling overwhelmed by all the information their brains had downloaded at the event, a global customer conference for users of Epicor's distribution and manufacturing ERP software. Attendees could choose from more than 500 seminars.
Insights 2012 was a landmark event for Epicor in that it was the first time the company brought together its customers since the private-equity firm Apax Partners bought Activant Solutions and Epicor and merged them last year into one software provider with more than $850 million in sales.
On the distribution side of the business electrical distributors use Eclipse, Prophet 21, Trade Service, and Prelude ERP software. The electrical distributors and other wholesalers from many different distribution niches who came to Insights 2012 attended classes that covered Eclipse's new mobile interfaces for smartphones and tablet computers; Epicor's new ICE ERP software, which incorporates social media as a communication tool; network security; and various courses on running more profitable distributorships.
Kevin Roach, Epicor's executive vice president and general manager, ERP Americas, sat down with Electrical Wholesaling for an exclusive interview in which he talked about the Activant-Epicor merger; the state of cloud computing; web storefronts; and the various professional services the company offers, such as assistance with blending ERP business systems after a merger, dealing with change, lean initiatives, the new Customer Profit Analyzer and Kaizen quality processes.
He said 20%-30% of Epicor customers are big believers in cloud computing; 20%-25% are very much against it; and the rest can go either way with it. Roach also said that while not all distributors are using web storefronts to differentiate themselves from competitors, he fully expects this to change as Millennials and other younger employees and customers who prefer to make purchases online move into decision-making roles.
One big announcement at Insights 2012 was the launch of the Customer Profit Analyzer, which helps distributors identify their most- and least-profitable customers. It's promoted as being much easier to use than Activity-Based Costing (ABC) and allows users to tailor various profitability tools to their businesses.
The company said in a press release that the Customer Profit Analyzer dashboard instantly reveals the top and bottom customers by profitability and trending action and gives a letter grade for each. Each distribution business has the ability to select which factors have a material impact on the customer rating, including sales, gross-profit percent, number of order lines, outstanding days past due, average invoice value and credit status. They can also select the “weight” that each factor should have.
The application will then categorize each customer accordingly, based on the data in the ERP system. All customers are evaluated by the same set of rules, providing a foundation for determining how to maximize the relationship with each customer going forward.
“Understanding which customers are the most and least profitable — and why — can result in significant net profit growth for any business,” Roach said in that release. “In contrast to traditional Activity-Based Costing systems, which are often prohibitively complex and too costly to implement, Customer Profit Analyzer provides a simple tool for distributors looking to segment and analyze their customer base to drive adjustments in their business strategy.
“By referring to the letter grade automatically assigned to each customer, sales reps should better understand the ‘rules of engagement’ when it comes to discounting or other customer requests. Decisions about business relationships will no longer be made by ‘gut feel.’ They will be based on factual data.”