Business computer software

There are at least a couple of competing views of business. One is that nobody makes any money until somebody makes something. Another is that nobody makes any money until someone sells something.

Of course, both of those notions can be thrown into a cocked hat if someone makes something and it is more expensive than the market can bear due to bad sourcing decisions. Or if someone sells something and they're selling it at a loss.

Richard T. Hahn, president and CEO of Salion [Austin, TX), points out that much of the technology that is available to companies tends to assist activities that occur after business has been acquired. That is, supply chain management [SCM] helps with sourcing. Enterprise resource planning [ERP] is useful for managing manufacturing resources. And computer-aided design [CAD] and product data management [PDM] Facilitate product lifecycle management. All are post-order oriented.

"What about business acquisition?" Hahn asks. Rhetorically. Because Salion, of course, has an answer to improving top-line revenues.

But, first, it is instructive to take a look at some of the issues that he IDs as being difficult for suppliers. Take the e-procurement sites. The on-line marketplaces. The reverse auctions. Hahn points out that these are buyer-Focused. They Facilitate the buyer reaching more potential suppliers. Because there are more suppliers who may be involved in going after a given piece of business, there is the likelihood that margins will be driven down more than they would be when the group of suppliers was smaller. This is due to the Fact that the number of companies receiving a request For quotation [RFQ] was limited in order to control the costs at the buyer associated with handling the paperwork associated with the bids. But all that is changed. It is e-fficient. For the buyer. OF course, given the nature of the industry--as in the need to get business--Hahn suggests that there is a tendency For supplier company personnel to chase opportunities--and they chase too many phantoms.

According to Hahn, on average, auto suppliers win about 5% of the business they pursue. But in order to pursue it, they invest lots of time and effort. And money. Sometimes, he suggests, business is lost because of an overlooked something, be it a change in specification or a fax with some new information about the REQ.

The typical business acquisition process, Hahn explains, starts and ends with the customer. Requirements are gathered. The opportunity is assessed. Then, assuming that the supplier is interested in the opportunity, an array of functions is involved, including product design, manufacturing process design, plant Facilities and equipment, purchasing, and sub suppliers. Financial review and pricing are next. Then the quote is reviewed. And delivered to the customer. Then there is a wait. Hahn maintains that there are several areas within that sequence where there is lost profit and/or revenue.

The First Failing is an inability to prioritize opportunities, to target the business that is most likely to be won--and to be profitable. Changes are often occurring, which costs money, as the various Functions that are providing their input For the bid need to adjust their approaches in response to the changed requirements. Often, the communication of the changes occurs via phone, Fax, postal mail, and e-mail, which can be missed or misplaced. Because there is no access to history--or no easy access--there is the proverbial reinvention of the wheel in terms of the product design, and there can be profound inconsistencies with regard to pricing.

The Salion alternative to all of this is set of web-based software packages that provide the following capabilities:

* Determine good business opportunities and automatically respond to non-target business [this can be based on a history of what was won in the past--and what cost money in the past]

* Track all people and activities involved so that resources are optimized (organizing the participants and allowing them to coordinate through one tool keeps things From Falling through the cracks)

* Provide a means of collaborative communication (which is secure such that, For example, sub suppliers get to see what is germane to them, period]

* Provide a link to the marketplaces and exchanges (the so-called Business Acquisition Process must be an engaged activity)

* Maintain a knowledge repository of things including drawings, documents, cost and design data For purposes of creating new proposals (reuse means reduced investment).

Hahn says that a company can install a Salion solution in 80 days.

What's more, Hahn states that the return on investment should be realized within 90 days--and For the suppliers with annual revenues in excess of $25-million that use the Salion solution, Hahn is committed to helping them realize a minimum savings of $1-million in the first year.