When A/R Stands for Competitive Advantage

Office Depot takes its accounts receivable processes online


Companies with multiple product lines or subsidiaries, or enterprises that have gone through repeated acquisitions, frequently confront the challenge of creating a unified customer experience, particularly around how they bill their clients, since merging, replacing or upgrading disparate legacy financial, billing and customer systems can be an expensive, lengthy process.

Such was the dilemma facing Delray Beach, Fla.-based Office Depot, the $14 billion office supplies company. In addition to its retail outlets, Office Depot operates an online B2B network that serves business customers who generate some 1.5 million transactions and more than 100,000 invoices monthly. As part of its growth strategy, Office Depot has been acquiring new companies and product lines, but with each acquisition, Office Depot had to incorporate the legacy billing systems and financial procedures from these entities into its existing online experience.

With the promise of more acquisitions to come, Office Depot needed a strategy to keep its customer experience intact while minimizing the costs of replacing or upgrading back-end systems. Jan Gallagher, director of customer account system operations with Office Depot, says that from the start, the company viewed this project as an opportunity to gain a competitive advantage. "Pencils, pens and paper actually can only become so exciting, so we wanted to give the sales force an edge when they're talking with clients," she says. Giving customers the opportunity to view all their office supplies billing and procurement information online, alleviating them of the need to get on the phone with a customer service rep and freeing them of the tyranny of paper invoices, seemed like just the ticket.

Moving Toward e-Billing

Beginning in the summer of 2001, Office Depot reviewed an assortment of options to address this challenge, including offerings from various payment solution providers and financial institutions, before settling on an application from an enabler called Avolent. Founded in 1995 and based in San Francisco, Avolent offers solutions for e-billing and cash-flow optimization, with the goals of giving large enterprises visibility into, and control over, their inbound cash flow. Gallagher says that the solution provider particularly impressed Office Depot with its willingness to invest the time necessary to understand the complexities of the office supplier's business.

For its implementation, Office Depot selected Avolent's BizCast e-billing application. Using the application's visual data mapping tool and suite of adapters to back-end systems, Office Depot figured it would be able to take feeds from all the appropriate back-end systems and provide its customers with the ability to view and pay consolidated bills online, and also allow the company's own finance team to reconcile the transaction activity back to the appropriate back-end system, with an electronic invoice auto-matched to proof of delivery.

The company initiated a pilot project with the BizCast application in December 2001, rolling out the solution to a set of 36 customers. During the pilot, the solution allowed both the customers and Office Depot's own sales reps to go into the application online and review invoices and accounts receivable information, print or e-mail invoices, look at usage reports and do other simple reporting. Importantly, Gallagher and her team initiated a marketing campaign to promote awareness of the system and its capabilities, both internally with the Office Depot sales force and externally with the company's customers. "We felt that if our customers and our sales force loved it, then we would be comfortable in rolling it out in our entire customer base," explains Gallagher.

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