S. David Bent, senior VP and corporate CIO of United Stationers, took the unusual move of buying a software company, MBS Development, and kept it as an independent business unit to supply his firm with back-end ecommerce systems that fit its business model.
United Stationers is a distributor of products from 1,000 manufacturers, serving as intermediary between makers of paper products and janitorial suppliers and the 25,000 resellers who supply businesses. It has a 100,000-product catalogue and Bent noted that office supplies have now become the second largest category of online ecommerce after Amazon.com.
United Stationer's largest reseller is Staples, producing $600 million a year in revenues. A total of $9.8 billion in office supplies is bought on line each year now, compared to $24.5 billion spent on Amazon.com merchandise of all sorts. Although Staples accounts for the largest piece of United's $5 billion in revenues, it still gets the majority of its revenue from small resellers selling to small and medium-sized businesses.
As United Stationers saw online business in office supplies growing, it realized many members of its small reseller base would not be able to keep up unless United supplied them with online services that could modernize their order taking and other business processes. Until it acquired MBS, the main selling tool it offered resellers was a paper catalogue with the reseller's brand on it.
MBS built backend systems that provide software as a service order taking, cross-manufacturer item aggregation and order fulfillment. The resellers buy the software as a service from United and link their websites to its backend systems. It added its Orbit Point system as a software-as-a-service host for additional services, such as marketing, customer service, delivery logistics, accounting and other IT services. United's largest resellers buy its software to run on-premises as well, he said.
The hosted software as a services systems produced by MBS "blew away our expectations," Bent said. Recently, 250 resellers banded together and bid against Office Depot, which had held a federal government office supply contract for 14 years. Three weeks ago the association won the contract, he said. Office Depot's previous dominance had been based on online information and ordering systems that the smaller firms, until now, hadn't been able to match.
The MBS systems from United are more complicated than simply capturing orders. Describing what's in inventory required connection to United's 67 distribution centers and linking information on products from many different manufacturers to fulfill a single order. United was in a position to do it, but the small resellers could not.
Bob Friday, Chief AI Officer for Juniper Networks, explains how the advanced technology is transforming operations.
Contact center leaders from 8x8, Awaken Intelligence, and 360insight discuss the importance of agent experience.
AI may force enterprises to rewire parts of their data centers so they are fully optimized to run such workloads. The question is do you use Ethernet or InfiniBand?
