A New Recipe for e-Configuration
Godard Abel always thought he would go into the family business, but who knew he would transform it? "We're bringing the new revolution to how you sell and distribute industrial products," says Abel, whose company, BigMachines.com, offers applications to help companies configure, buy and sell complex products via the Internet. His grandfather founded an industrial pump business in Germany that designed heavy-duty pumps, initially to remove sludge and waste water from coal mines. When Abel's father assumed leadership of the business in 1973, he took Abel Pumps global and opened a U.S. subsidiary in 1980. Meanwhile, Abel attended MIT, where he studied mechanical engineering and earned his bachelor's and master's degrees. While at MIT, he got involved
in computer science. When Abel developed a software simulation program for a
manufacturing process, he knew he was really interested in software.
BigMachines eSales digitizes custom engineering algorithms to enable selection of optimal products, provides dynamic pricing, automates configuration and supports interactive commerce transactions. The software also presents searchable catalog functionality, branding and channel management, globalization and integration with e-procurement platforms and vertical exchanges. The solution can either be hosted by BigMachines, or integrated into a legacy system.
Sales, Marketing and Distribution
Combining domain knowledge with Internet technology delivers value to businesses, and the area of dynamic pricing and configuration tools is one of the hot new application markets, according to AMR Research's "Report on Enterprise Applications." Abel garnered his vertical expertise not just from the family business, but also from working at McKinsey & Company as a consultant to industrial companies on business and selling strategies. Abel noticed that a lot of companies had streamlined their manufacturing processes, reducing costs by introducing Japanese manufacturing techniques and ERP systems. Abel felt that more could be done in the sales, marketing and distribution side of the industrial vertical.
Abel saw more potential in a B2B application, especially with the highly complex pumps that Abel Pumps engineered for its customers. The configuration process traditionally took time and a lot of work by sales team application engineers who had to incorporate unique requirements, such as the type of slurry being pumped, the appropriate housing needed, and the flow rate and pressure
stipulations, into the design. Abel thought that reducing time and making the configuration process more efficient with an Internet-based solution was an excellent opportunity. Through research, Abel found that the industrial vertical was wide open. Using Cisco as an example of an impressive business case, Abel convinced his father that by leveraging the Internet they could bring significant selling-cost reductions to industrial companies.
Abel also convinced Vic Alston, whom he had worked with at Niku, to become vice president of software engineering at BigMachines. Alston had been working at Andale, a leading e-commerce auction technology provider, where he was director of engineering and had helped small businesses sell over the Internet. Abel brought in Eugene Chiu, with whom he had worked at both McKinsey and Niku, for business development. With his dream team chosen, Scully Brothers awarded BigMachine's first-round financing.
Abel now had to convince an industry that he could help companies save money and become more efficient on the front end of their businesses. He became an Internet evangelical, going to trade shows and speaking at Hydraulic Institute meetings. At many trade shows, other than the big gorillas, his was the only software company present.
The other thing Abel did was make sure the software itself was easy to use. The software was designed using a 100-percent Java standard and open architecture and is administerable via the Internet. With its Web-based browser interface, "your average product engineer can maintain the configurator and the software application without knowing a speck of programming language. With the use of a mouse and a keyboard they can point and click and set up the configurator," says Larry Phillips, BigMachine's vice president of product marketing.
Reducing Sell Cycles By Two-thirds
BigMachines now has five customers,
including Abel Roper. Roper acquired the family pump business and has now gone live with BigMachines. Abel says it takes about three to five months to get a typical $100-million-dollar manufacturer fully implemented. Larger companies usually roll out the solution by business units, which can take about nine months. Phillips says that customers have reported a reduction in quote creation costs by 50 to 80 percent and BigMachines is expecting its solutions to help its customers reduce sell-cycle times by two-thirds. In addition to saving time, BigMachines's collaborative commerce applications help reduce design errors
inherent in manual, paper-based configuration processes. For example, threaded online discussions eliminate information variability and engineering
Abel describes the other benefits BigMachines offers as well. "Traditionally, you have to wait to see how many orders
you have gotten. Now, you can get a much better sense much earlier in the selling process in terms of how many requests for quotation you're getting and how many quotations are actually going out. You can really see much more in depth how effective your channel is. You can see how each distributor is doing in each region, and you have that information much sooner. So you're really taking out a lot of the lag that you traditionally have in information so
that you can really run your whole business a lot more effectively."