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CRM in Action: ON Semiconductor Knows When the Price Is Right
Benefits have translated to a more than 100 percent ROI in less than one year.
For the rest of the June 2004 issue of CRM magazine please click here
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Challenge: With a rising number of purchasers, large product portfolios, changing customer needs, globalization, and intense competition all signaling the urgency for fast, accurate pricing, ON Semiconductor went on a mission to improve price execution. The global supplier of more than 15,000 semiconductor components pinpointed several hurdles it needed to overcome, including an inconsistency of mainframe systems and emails for price delivery, a lack of defined pricing rules, few metrics for measuring price effectiveness, and an inability to quickly and accurately respond to large, bulk quotes and contract requests. Solution: The automation of Azerity's ProChannel solution for interactive quote management provided much needed relief from the manual, resource-intensive processes that the company had been tolerating. The solution, according to George Stelling, ON's vice president of operations, sales, and marketing, "allowed us to leverage best practices from other semiconductor suppliers already using the software and also to reengineer how we deliver prices to both internal and external constituencies." ON's newfound ease in quote building for both types of customers has led to dramatic improvements in quote and contract service levels. The company has also experienced price erosion reductions rooted in ProChannel's rules-based pricing system, and real-time, global visibility into quote activity. Benefits: ON Semiconductor's new focus on pricing has gained the company $54 million in revenue, a 10 percent increase in bookings, and a 400 percent increase in dollar level of quote activity. It also reduced price erosion 20 percent. These benefits have translated to a more than 100 percent ROI in less than one year.
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