Customer Story using ContactPower for Contact Management

As the customer does not want his company name in Price I shall refer to his company as ABC.  They are one of our oldest Customers and have use CPP for a few years now.

I would first like to give you a brief explanation of the IT set-up and the business of company ABC prior to installation of ContactPower on the Lotus Notes Platform to give you a clear view on how savings of such a huge amount were achievable. 

Company ABC is in the garment manufacturing business. They have around 2,000 staff most being factory staff with a small percentage of about 100 office staff, of which the offices are spread around in various areas of the factory covering an area of around 3-4 km.

The entire product is produced for export and they had the need to communicate with their customers on a regular basis overseas. Prior to the installation of ContactPower they had been doing this through two internet email accounts shared among eighty users and apart from the email account it was done through faxes and many International Telephone calls. So they were incurring some large international phone bills. This was the first problem, which needed to be solved.
 

The next problem they had was communication within the company. As they were all so spreading out, there were a number of issues, which were a problem. Although they had a small Network which was set-up for a manufacturing application the network wasn’t really being utilised enough for internal communication. So when customers needed information as to where their order was in the production line it could take up to two days for the sales people to find out an answer for the customer. Other than this the method of sending memos to other departments would mean writing a memo, putting it into a memo tray and waiting till the runner picked up the memo to take it to another department.
 

Another problem they had was the labour intensity when receiving faxes and sharing information the process would work like this:
 

When the fax was received whether it was 1 page or 30 pages it would first need to be copied 5 times and then distributed to various people and departments around the organisation. This would then need to be filed in all the various places. This as well as being extremely labour intensive was also very costly. As you will see here below not including the cost of distribution which is quite difficult to quantify this is really very wasteful.

Cost based on Photocopying
Average Number of Copies per day		250
Cost Per Sheet		1.59
Cost Per day		398.40
Cost Per week		1,991.99
Cost per Month		8,631.94
Cost Per year		103,583.33
		Cost per page
Cost
Av Office Clerk Salary	10,000
Addition costs	15,000
Cost per min based on 37.5 hour working week	1.54	0.08
Seconds per copy	3
Paper		0.12
Rent		0.19
Service		0.4
Ink Cartridges Cost	4,840	0.81
Ink Cartridges yield	6,000

These costs are based on real figures given to us by Company ABC. You will see we have worked out the average cost per copy and multiplied that by the amount of pages they were needing to copy from received faxes per day. As you can see based on a year this mounts up. But that is not all simply receiving the fax also costs money. See below:

Cost of Received Faxes
Ave Number of faxes Received per day		50
Cost Per Sheet		2.09
Cost Per day		104.71
Cost Per week		523.56
Cost per Month		2,268.74
Cost Per year		27,224.89
		Cost Per page
Paper Cost	1,900	0.42
Paper Yield	4,500
Ink Cartridges Cost	1,672	1.67
Ink Cartridges yield	1,000

This gives an additional cost so the two together just on the basic costs of receiving faxes was costing them 130,000 Baht per year and amounting to 392,000 Baht over 3 years.

I have also made some calculations here for sending faxes.

Cost of Sent Faxes
Ave Number of faxes sent per day		50
Cost Per Sheet		0.63
Cost Per day		31.64
Cost Per week		158.21
Cost per Month		685.56
Cost Per year		8,226.67
		Cost Per page
Costs
Av Office Clerk Salary	10,000
Addition costs	15,000
Paper printed for fax		0.12
Cost per min based on 37.5 hour working week	1.54	0.51
Seconds to send text fax	20

This is based on the use of a standard fax machine and bearing in mind how long it takes to send a one-page fax. Based on 50 Faxes per day which would be quite normal for Company ABC and not taking into account the call charges or time spent while waiting for a connection they are the sort of costs incurred in time spent standing in front of a fax machine rather than carrying out more important tasks. Just think the sort of amounts of time which may be spent sending out marketing type of information which is sent to the masses imagine a two page fax to be sent to 2,000 companies. This kind of thing, which was quite common, was not taken into account in these figures although this was done on various occasions. 
The decision to use ContactPower on the Lotus Notes Platform 

 
So ContactPower seemed like the right choice. Firstly they would need improved methods of communication across international boarders. Secondly better communication within company ABC itself, they needed up to the minute information on their production processes and a better method to share information and cut costs.

How could ContactPower do this?

With the implementation of ContactPower, the Plan was to give all office staff email for use both internally and through the Internet. An electronic fax system would also be implemented in the form of the ExtraFax Server and initially two Notes applications. Firstly a Production Tracking System so as to give the sales staff and management up to the minute information on where orders were in the production system and be alerted of any problems and Secondly a contact management system with the idea to help share information and quickly be able to acquire any information related to a customer or supplier.

The investment

To be able to achieve what they wanted, it needs to be an initial investment of around 1 million Baht. This would be needed for purchasing hardware upgrading the network and all the software required.

The savings

The initial cost to implementing their new system including hardware, network improvements and software was 1,000,000 Baht. The savings were not immediate. It took two months before company ABC started to see the savings and not till 7 months later that those savings would really take off. This is because firstly it took a little while to really start using the system to its full potential and secondly it meant working in conjunction with the Comware consultants and the Company ABC management to ensure that the system was being used in the right way. The more obvious it became to company ABC on the savings the more investment they made in their IT infrastructure, although they were making further investment after 17 months they had paid for all the investment they had made at that stage and continued to make savings. The total Investment ended up at 2,000,000 Baht, including servers, Network expansion, leased lines and of course software.

How were these savings achievable?

• Reduced Costs
• Phone
• Stationary
• Rented Copiers
• Staff
• Phone Bills

Probably the most easily quantifiable and most immediate to notice savings were the reduced cost Company ABC had in their telephone bills. The bills dropoed from an average of 120,000 Baht in the 6 months prior to implementation to 40,000 1 year later.

This was not immediately easy to achieve maximum savings in this area. Firstly staff had to change their way of working. Internet email was now available to all members of staff with a PC and the use of it had to become the preferred way of working over both fax and phone wherever possible. Close management for the first couple of months helped this along.
Even where faxes were still being sent connection times were far less in certain cases due to faster connection speeds rather than the slow connection of the fax machine of 14.4 Kbps.

Stationary 

Good savings were also made in this area. Although we have not been able to get any details in this area, you will see from the expenses incurred above prior to installation the sort of savings in this area. Fax Machines were no longer needed as all faxes were routed straight through the new Fax Server. This meant where as before to send a fax they would first need to print the fax out then go through the process of faxing they could now send the fax directly from their Notes client. Also when faxes were received they no longer needed to be copied and distributed but a link merely sent to the respective people.

Savings were also made on stationary where better availability of information relating to customers and suppliers was now available in their Contact Management system. Prior to the installation this information was scattered all around the organisation in filing and on PCs very often information would need to be reprinted due to incorrect filing or loss.
Rented Copiers

Due to less need to copy information Company ABC were able to reduce Photocopiers shared across the organisation by two. These had an overall rental and service cost of 15,000 Baht per month per machine so this meant with the implementation of Notes along with the Comware applications they had savings of 30,000 Baht per month in this area alone.

Staff

The savings here were not immediately noticeable in terms of money. This could only be noticed when staff eventually left the company, however when this happened it was found that due to greater productivity and efficiency through the use of the Production Tracking System and Contact Management System they didn’t have the need to replace staff who had left and in the long term this saved them more than 60,000 Baht per month.
With the Production tracking system there was no more running around that needed to be done trying to find out the status of any particular job. All the information was now directly to hand. The same was apparent with the Contact Management System that customer and supplier related documents were now far more available and Sales staff were now able to work on the same documents in a far more effective manner.

Benefits as a result of the entire system

• Increased Productivity
• Better Customer Service
• A cost savings in excess of 200,000 Baht per month
• Reduced time to market

Further Developments
 

With the benefits reaped in since they have started up their new way of working, Company ABC have Looked to Comware for the development of further systems which have included: Human Resources Management, Stationary Inventory System and Quotation System which has enabled them to carry out quotes which they would never have considered before because of the time involved. Before they would have had to seriously consider which jobs were of the most value and were most likely to develop and quote on those only. Now what would have taken a day before now takes less than an hour. 

This was all done a few years ago, when the Customer was using Notes 4.5, They have upgraded over teh years and are now on 6.5.  We are talking to them about further savings by the upgrade to Notes 8.5.x