E-commerce makes its impact

Paul Gay looks at how Siemens Automation and Drives Division is bucking market trends with a bullish revenue forecast for the coming year. The company is using E-commerce as a tool to achieve growth

Automation and drives users are changing the way they purchase products with the development of the Internet and E-commerce. Following in the footsteps of the consumer markets, industrial equipment suppliers are taking advantage of IT technologies to sell their products.

Automation giant Siemens is a case in point of a company really getting involved with e-commerce. On 1st January this year, Siemens was transacting just 1% of its Automation and Drives Division’s business electronically. Half way through the year this figure had risen to 22%. And according to managing director Graham Phillips, 50% of the division’s business will be carried out electronically by the turn of the millennium.

The current system handles orders and invoicing but Siemens is developing an electronic mall along the lines of Internet retailing operations. The mall was launched at this year’s Hannover Fair and includes details of the division’s full product range in one database. Automation and Drives is the lead division in the mall project and a UK version will be ready in October. The electronic system will also be available in Sweden and Norway and is currently undergoing customer trials in Germany.

“We want to grow the division at 15% per year,” said Phillips, “and this is against a market growth estimated at 2% for each of the next five years.” E-commerce is one way Phillips hopes to achieve this bullish target. The division is also being reorganised so that a customer will only see one sales person from the division.

Instead of being serviced by a different person for low voltage control, PLCs and drives product groups, one sales engineer will deal with all products. The good news for the sales force is that their numbers will not be reduced. After the reorganisation the sales force will have effectively tripled.

A system of key account managers to span different countries and industry boards to co-ordinate divisions will also streamline the sales process and improve customer service, claimed Phillips.

Customer service should also benefit from the implementation of a SAP R3 system and SIEBEL, a customer database that tracks sales calls to assist the telesales operation. The company’s investment in customer management systems in the UK during the last 18 months has amounted to £2.5million. The division now has 73 people dealing with customer support issues and a further 25 engineers deal with some 60,000 technical support telephone calls each year. Added to this, 16 mobile technical engineers make 2,500 technical support visits every year.

Automation and drives division is the company’s most profitable business worldwide, employing some 53,000 people. Siemens as a whole is the World’s sixth biggest employer. The company reinvests 8% of its turnover each year in research and development.

Customer help desk: 0161 446 5308 http://www.siemens-industry.co.uk