1Whitepaper ROI Model
Building a B2B E-Commerce ROI Model 2
Potential Cost Savings 3
Entering and Servicing Orders 3
Reducing or Eliminating Printing & Mailing Costs 3
Fewer Processing Errors & Reduced Lead Times 3
Electronic Invoicing 4
Before E-Commerce 4
After E-Commerce Deployment 4
Sunsetting Legacy Systems 4
Potential Revenue Gains 4
Increasing Customer Satisfaction 5
Saving the Sale 5
Targeted Selling 5
New Product Launches 5
Salesforce Automation 5
Using Speed as a Multiplier 5
Flexible Deployment Options 5
Feature Set and Agility 6
Out-of-the-Box Integrations 6
Optimizing the ROI Model 6
Building an ROI model to Evaluate
Your B2B E-Commerce Initiative
A how to guide for manufacturers, distributors
and other B2B organizations on building a
financial model to assess the value of e-commerce.
B2B companies everywhere are under heavy pressure to offer their
customers and employees robust e-commerce capabilities that rival
best-of-breed consumer-focused companies like Amazon.com and Dell.
Whether buying books for themselves, computers for their family, or
industrial parts for their employers – shoppers demand and expect the
same features and performance from e-commerce systems. They want
easy-to-use platforms that deliver a high level of personalization and a
well-designed, intuitive interface.
2Whitepaper ROI Model
Total cost of ownership can vary widely from one platform
to another. For example, the total one-time price is strongly
related to the operational efficiency of the platform, because
modern platforms require less hardware and a smaller
license. Cost of implementation, maintenance, and upgrades
is greatly influenced by architectures that are based on open
Enterprises should design a customized ROI model to address
the uniqueness of the industries and segments they serve,
the stage of their e-commerce channel evolution, and the
mindsets of the company’s key executives. When building an
ROI model, some companies will gravitate towards salesforce
productivity and effectiveness, while others will assign more
value to the associated revenue gains. The following sections
address both cost and revenue considerations.
B2B companies that fall short of customer expec-
tations risk losing them to competitors who have
stepped up their game. Offering a superior e-com-
merce experience makes excellent economic sense.
There is a compelling return on investment oppor-
tunity, grounded in significant potential cost savings
and increased revenues.
This paper provides a framework for building an
ROI model that can be used to demonstrate the
advantages of a new e-commerce implementation to
senior executives and board members.
Building a B2B
E-Commerce ROI Model
Before a company selects a new e-commerce platform, busi-
ness stakeholders and the technology implementation team
should establish a consensus on all strategic objectives.
Most companies create a business case that highlights the
investment required compared to the cost savings and revenue
improvements of a modern e-commerce platform. Then, they
input the expected benefits into the annual budget process
to ensure a full business commitment to the new commerce
model enabled by the platform.
Two major categories feed into this business case and
→ Hard cost savings such as reduced order processing costs,
lower cost of goods and supplies, and increased efficiencies
in sales and marketing expenses.
→ Revenue gains that can be expected from increased agility,
real-time updates (products, pricing) for customers, and
improvements in the customer ordering experience, includ-
A Systematic Approach
for Evaluating New Projects
Calculate the Total Cost of Ownership (TCO) of the new
B2B e-commerce platform by including:
→ Total one-time, purchase price of the platform
→ Cost of implementing the platform
→ Ongoing operating and maintenance costs
→ Potential upgrade costs
Determine the business benefits (savings and improved
revenues or margins).
Map the TCO against the sum of the business benefits to
determine the ROI. Then, examine the five-year ROI, and
evaluate the results at various levels of growth and
3Whitepaper ROI Model
Potential Cost Savings
Entering and Servicing Orders
Perhaps the most obvious efficiency is in decreasing the cost
of entering and servicing orders. In most B2B firms, order
costs may range from $ 50 to $ 150 per order without an
e-commerce system. This can drop to $ 25 or less with a best-
of-breed platform integrated with back office systems. These
e-commerce systems can reduce lead times and manual data
errors by offering self-service to customers and automatically
processing orders through one or more systems.
Estimating this number is not complicated. Start with the
number of minutes a sales or customer service team spends
entering each order, plus the aggregated time they spend up-
dating, editing, or otherwise reviewing an order. Then think for-
ward to how this process could be improved with e-commerce
automation in place:
→ Pre-population of order history to select from, the ability
to specify or update recurring orders, and a potential for
mobile ordering while at a customer site (eliminating a
subsequent order entry step).
→ Continuous updates of products and prices, eliminating
the need for follow-up activities to adjust the order with
the new information, then communicate it to the customer.
→ Customers assume most of the burden of the order entry
process, possibly supplemented by chat or call center
→ Customers can view orders, shipping status, and make
adjustments 24/7 without having to send a fax or email, or
make a call.
Once these efficiencies have been achieved, an organization may choose to invest the labor savings from their sales and order
entry teams into the redeployment of personnel, rather than post the savings to the bottom line. In that case, they may opt for
additional revenue-generating activities.
Imagine how much more productive a sales team could be if they spent 90% of their time selling instead of 30% of their time
selling and the rest of their time servicing existing orders.
Reducing or Eliminating Printing and Mailing Costs
A typical large cost savings achieved from implementing an
e-commerce platform is in printing and mailing catalogs and
product literature to customers. A 100-page product catalog
mailed to thousands of customers can cost hundreds of thou-
sands of dollars per year to produce and distribute.
→ Reduced mailing costs alone can sometimes pay back the
cost of a new e-commerce system.
→ Even if a main catalog is still sent (perhaps to selected
customers), updates, additions, and corrections are
instantaneous and can eliminate the need to create and
In addition to the cost savings associated with moving company
product information online, B2B customers will gain a better
shopping and buying experience.
Fewer Processing Errors and Reduced Lead Times
Traditional, manual order entry systems have a high poten-
tial for human error. Perhaps an incorrect discount code is
entered. An invoice might be sent to the wrong customer bill-to
address. Maybe the order entry team forgets to check a box
for a regulatory or compliance concern. Any number of other
“honest mistakes” can take place. How many hours will the
order team spend on the phone with customers trying to fix
With an automated, self-service ordering environment pro-
vided by a state-of-the-art e-commerce system, the number
of errors is decreased significantly. The vendor’s order entry
team no longer has to serve as the middleman by inputting
orders into the system of record – and they no longer have
to struggle to read illegible faxes or strain to understand the
regional accents of international customers dialing in on less
than perfect telephone circuits.
4Whitepaper ROI Model
To estimate the total value of the potential cost savings when
processing errors are reduced, consider the following scenarios.
When an incorrect item or quantity is entered into an order:
→ At a minimum, the seller will have to pay to ship the correct
item to the customer, and they may have to absorb the cost
of shipping back the incorrect item (or just write it off).
A shipment is sent to the wrong customer location:
→ The item will have to be returned (if economically feasible)
and re-shipped to the correct location.
Incorrect orders also generate workload for the accounts
→ The reconciliation process requires time from both the
seller and the buyer.
Electronic invoicing systems embedded in today’s e-commerce
platforms provide a strong level of cost savings. The ability
to automatically generate an invoice the second a shipment
arrives at a customer’s location (and in some instances, when
it the shipment leaves the seller’s warehouse) can greatly
decrease a company’s accounts receivable days. Electronic
payment processing capabilities within e-commerce platforms
can also hasten access to funds, as described here:
A customer places a $10,000 order. The order is processed
in one week and ships. The shipment takes a week to arrive.
An invoice is sent to the customer and arrives in a week. The
invoice winds its way through the buyer’s internal mail system
and is paid two weeks later by check. The check is mailed and
reaches the seller in another week. The seller takes the check
to bank three days later and waits a few days for the check to
clear. In this scenario, the seller has access to their payment
six weeks after the order is placed.
After E-Commerce Deployment
A customer places a $10,000 order and pays via ACH on the
seller’s e-commerce platform. The order is processed in one
week and ships. The shipment takes a week to arrive. When
the goods are unloaded from the trailer at the buyer’s ware-
house, an ACH transaction is initiated, and the seller receives
the funds within three days. In this best-case scenario, the
seller has access to their payment in two and a half weeks.
→ A big benefit in this instance is the reduction in receivables
balances multiplied by the cost of capital to the company.
Sunsetting Legacy Systems
Implementing a leading e-commerce platform can render a
variety of legacy systems obsolete – including systems like
order entry and fulfillment. These legacy solutions can be quite
costly to maintain, both in terms of the technology and staffing.
Many companies find that the cost savings enjoyed by sunset-
ting even one legacy system will go a long way towards offset-
ting the cost of funding an e-commerce platform.
Potential Revenue Gains
The potential revenue upside can be substantial. The best
run companies are increasingly finding that an e-commerce
business powered by a modern e-commerce platform can be
essential to growing their market share. This share gain comes
at the expense of less sophisticated competitors who are un-
able to match the customer experience.
Increasing Customer Satisfaction
The biggest revenue gains achieved from implementing an
e-commerce platform come from more satisfied customers.
This rising tide occurs because customers are able to shop
and purchase on their own terms. They’re able to browse and
purchase 24/7/365 from virtually anywhere they choose – from
their office on a web browser, in their warehouse on a tablet, or
on their couch at home using a smartphone.
→ Customers prefer to make their purchases from online
environments for increased ease and convenience, includ-
ing self-service, which favors sellers who are e-commerce
→ E-Commerce enabled ordering often leads to higher aver-
age purchase amounts.
Saving the Sale
An agile e-commerce platform allows buyers to more easily
locate substitute products for items that may be out of stock or
discontinued. For example, a seller might have plenty of nine-
inch bolts but may be out of the nut and washer required for a
particular assembly. If an e-commerce platform can suggest a
substitute bolt and washer set, more sales are likely to be made.
→ The strength and agility of an e-commerce platform to
recommend alternate products contribute to both larger
order sizes and, in some instances, to “saving” a lost sale.
→ Over time, larger orders and fewer lost sales result in
lower customer attrition and higher revenues.
5Whitepaper ROI Model
Another way in which companies can leverage an e-commerce
platform to increase revenues is through targeted selling. E-Com-
merce systems excel in tailoring promotions and offers to past
behaviors as well as the self-identified customer preferences.
Here’s an example to consider. A customer visits a company’s
website powered by a leading e-commerce platform. The
e-commerce platform recognizes that this customer regularly
orders an industrial component at least once per quarter, and
they frequently pay for expedited shipping. The platform could
offer the customer a discount if they purchase two of the item
or include free expedited shipping if they buy three or more of
New Product Launches
E-Commerce platforms increase revenues for B2B sellers by
helping them take quicker advantage of new product launches.
The best e-commerce platforms allow sellers to dynamically
add products at any time and begin processing orders for that
item immediately. This can also greatly increase the effective-
ness of promoting substitute or replacement products.
→ Without an e-commerce platform, a vendor would have to
alert customers by producing and shipping a new catalog
or catalog addendum.
→ This would cost more and would delay the company’s abil-
ity to begin accepting orders for the new product.
→ Without an e-commerce platform, replacement or substi-
tute product information must be supplied by customer
service reps. Otherwise, customer errors may lead to
returns and their associated costs.
Perhaps the greatest opportunity for
revenue gains in implementing an e-
commerce platform comes from providing
the salesforce with mobile capability to
interact with the platform and close sales
→ By using the e-commerce platform, the salesforce can
have more visibility into their customer’s activity, and pro-
vide more effective service.
→ The salesforce and customer service / order entry teams
can be redeployed to more valued-added activities such as
proactive selling (upselling/cross-selling).
as a Multiplier
These cost savings and revenue boosters are impressive, but
it’s important to remember that speed-to-market with an e-
commerce platform can act as a multiplier of these benefits.
The sooner a company can start saving money and earning
incremental revenues, the quicker it will be able to pay back
the investment made in the platform. With this in mind, here
are a few capabilities to look for in an e-commerce platform
that typically lead to a speedier implementation.
Flexible Deployment Options
There is frequently a trade-off between on-demand solutions
(which allow for a quicker go-to-market strategy) and on-
premise solutions (that are slower to implement but can have a
greater breadth and depth of functionality). Companies should
choose a vendor who doesn't compromise – one who offers
the same full functionality available on-demand or on-premise
– with an ability to start with on-demand and then bring the
same solution in-house, if desired, in the future.
6Whitepaper ROI Model
Critical Features in an e-Commerce Platform
Feature Set and Agility
Picking the right solution requires an in-depth evaluation of a
platform’s feature set and capabilities. The success of a B2B
system rollout is dependent on the ability to mirror internal
business processes and expose them to end-users. Each busi-
ness is unique, and finding the right combination of out-of-the-
box features is difficult. A platform’s ease of configuration to
closely match internal process is an important consideration
– including the ability to tailor processes and workflows, build
extensions for custom functions, and maintain a clean upgrade
path for future enhancements.
Whether an on-demand, on-premise, or hybrid solution best
suits a company’s needs, another way to get to market faster
is to adopt an e-commerce platform that offers ready-made
integrations to be used either with tools already instrumental
in a company’s success or those likely to be used in the near
future. These may include social media tools, mobile tools,
marketing tools, or analytics tools.
Optimizing the ROI Model
Customers are increasingly demanding feature-rich, high-
performance shopping experiences across all of their digital
touchpoints – especially their newer mobile devices. B2C com-
panies took an early lead in satisfying these expectations, and
now B2B companies are under heavy pressure to implement
platforms that equal or exceed the best consumer properties.
Depending on the nature of a company’s business lines, and
the issues that need to be addressed by a new e-commerce
system, there are a dozen or more elements that may be
included in an ROI model.
By selecting and considering the right criteria, implementers
can often cost-justify the entire e-commerce system, paving
the way to additional expense savings and increased revenues.
While positive ROI can usually be easily achieved, imple-
menting the right e-commerce system is not always as
simple. Every e-commerce implementation is unique, but
there are several foundational capabilities that most
business customers will need:
→ Real-time Pricing and Inventory – If customers can’t
tell what is in stock and what is being discounted,
companies won’t realize the true benefit of their e-
→ Robust Product Information – Customers must be able
to dive deep into product details, regardless of whether
they’re at their desk or on a mobile device.
→ Conforming to Existing Processes – A platform that
matches existing internal processes will speed adoption
and increase ROI.
→ Global Functionality – Platforms that don’t support
global customers with multi-language and multi-cur-
rency capabilities leave money on the table.
→ Borrowing Consumer Features – The most successful
B2B platforms borrow heavily from the features of lead-
ing consumer platforms, such as personalization and
→ Scalability – Prepare for success: an e-commerce
platform should be able to scale without limits and go
global, if and when desired.
→ Flexibility – Select a flexible solution that provides the
ability to conform to existing processes and support
BECOME PART OF THE
74 K$667$ 50,000 K$ 100,000 K
YEARLY COST SAvINGS $ 1,561 K
SPENT ENTERING AN ORDER
SPENT ENTERING AN ORDER
POST ECOMMERCE SYSTEMS
60 60 % 24 36 2,698 K 22.31 $70 K
YEARLY COST SAvINGS $ 543 K
OF CUSTOMER SERvICE PER ORDER
% OF THOSE
THAT CAN SELF
SERvE WITH AN
74962,51 K 65 % 50 % 45 1,096 K 9.06 $60 K
YEARLY COST SAvINGS $ 325 K
OF ONLINE CATALOGS
200 K $2.50 $0.75 50 %
YEARLY COST SAvINGS $ 140 K
SYSTEM ERROR RATE
SYSTEM ERROR RATE
74 K $ 471 %5 %
YEARLY COST SAvINGS $ 51 K
OPT IN FOR
IN PRINTING /
AR DAYS PRE
AR DAYS POST
74 K $ 667 $ 0.75 $ 28 K $ 23 K44 1050 % 1 %
YEARLY COST SAvINGS $ 70 K
40 K 30 K
YEARLY REvENUE BENEFIT $ 250 K
SALES THAT BECOME
PART OF THE ONLINE CHANNEL
% BUMP DUE TO INCREASED
SATISFACTION / COMPETITIvE ADvANTAGE
$ 50,000 K 0.50 %
YEARLY REvENUE BENEFIT $ 50 K
SALES THAT BECOME
PART OF THE ONLINE CHANNEL
% BUMP DUE MORE
$ 50,000 K 0.10 %
YEARLY REvENUE BENEFIT $ 125 K
More / Better Promotions
SALES THAT BECOME
PART OF THE ONLINE CHANNEL
% BUMP DUE TO
MORE & BETTER PROMOTIONS
$ 50,000 K 0.25 %
YEARLY REvENUE BENEFIT $ 5,826 K
ROI PAYBACK 63 DAYS
COST AT END OF YEAR ONE $ 1,002 K
Cost of System
$ 475 K $ 364 K $ 78 K $ 85 K
YEARLY REvENUE BENEFIT $ 208 K
quicker Additions to Product Catalog
PART OF THE
HOW MUCH MORE
NEW PRODUCTS (% OF YEAR)
% OF SALES
THAT COME FROM
$ 50,000 K 10 % 8.33 % 50 %
YEARLY REvENUE BENEFIT $ 2,500 K
Sales Force Automation
OF SAvED TIME*
% OF SALES
THAT FREE UP
$ 100,000 K 5 % 50 % * Relative to the Rest of their Time How Productive Are They in the Saved Time
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10Whitepaper ROI Model
About hybris software
hybris software, an SAP Company, helps businesses around the globe sell more goods, services and digital content through every touchpoint, channel and
device. hybris delivers OmniCommerce™: state-of-the-art master data management for commerce and unified commerce processes that give a business a
single view of its customers, products and orders, and its customers a single view of the business. hybris’ omni-channel software is built on a single platform,
based on open standards, that is agile to support limitless innovation, efficient to drive the best TCO, and scalable and extensible to be the last commerce
platform companies will ever need. Both principal industry analyst firms rank hybris as a “leader” and list its commerce platform among the top two or three in
the market. The same software is available on-premise, on-demand and managed hosted, giving merchants of all sizes maximum flexibility. Over 500 companies
have chosen hybris, including global B2B sites W.W.Grainger, Rexel, General Electric, Thomson Reuters and 3M as well as consumer brands Toys“R”Us, Metro,
Bridgestone, Levi’s, Nikon, Galeries Lafayette, Migros, Nespresso and Lufthansa. hybris is the future of commerce™. www.hybris.com | firstname.lastname@example.org
Version: December 2013 Subject to change without prior notice © hybris
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