Making CORESense of Online Retailing

By Gerry Blackwell | Posted December 14, 2006

Enterprise resource planning (ERP) software that manages virtually every aspect of a company's business can deliver huge productivity benefits and other efficiencies, but it's well out of the reach of most small businesses — mainly because it's too expensive and a bear to implement. However, small firms can reap many of the same benefits using all-in-one software-as-a-service (SaaS) products such as the solution COREsense, Inc. offers retailers.

Unity Electronics, a multi-channel online computer and consumer electronics retailer with annual revenues just under $10 million, has been using the COREsense solution for four years now. President and CEO Russ Hedgpeth says the product helped his company reduce by half the time it takes staff to process orders and increased order throughput by 50 percent. "Within the first eight months, all development costs and all other costs associated with making the switch to COREsense were paid off in additional profits," Hedgpeth says.

A Complete Solution
The COREsense solution manages multi-channel retailing with a consolidated catalog that supports multiple e-commerce and online marketplaces, point-of-sale and catalog call centers. The software manages the entire order processing life cycle, from order capture to delivery, automating and managing in-stock, drop-ship and multi-location sourcing, warehouse pick-and-pack functions, payment processing and shipping.

COREsense also manages inventory and supplier relationships with integrated purchasing and receiving, reorder management, support for multiple warehouses and barcode management. Plus it offers basic customer relationship management (CRM), providing centralized e-mail management, 24/7 self-service, customer service tools and integrated e-mail marketing.

COREsense offers the solution as a service. The company hosts the program code and subscribers' data. You can access it from any Internet-connected computer. It also means subscribers don't have to worry about managing the software or hardware for it to run on and costs are predictable. One-time start-up costs start at about $25,000 and go up, depending on complexity of customization required. Monthly software licensing, hosting and technical support fees start at about $1,500.

Replacing a Hodgepodge
Before Unity switched to COREsense, it was using a mix of individual programs such as Microsoft Office Excel and Intuit's QuickBooks financial software, along with custom software it developed using contract coders based in Russia. It was not long after the company switched its basic strategy from wholesaling to online retailing that Hedgpeth realized he needed a better, more integrated solution.

"We wanted to get rid of the hodgepodge of programs we were using," he says. "An integrated solution would mean less chance of errors, less redundancy and not so many log-ins. As it was, there were just too many points where errors could occur." The approach the firm had been taking was like trying to build a car from scratch, he says. "With COREsense, you get a Toyota Camry and only have to do slight modifications to it."

The problems became acute when Unity moved from selling on Yahoo only to a multi-channel approach that involved selling from its own Web site, eBay and Amazon as well. None of the management systems these channels provide allow retailers to process orders from other channels. That meant logging on to three or four different systems to process all the orders. And in some cases, if order volumes from one channel were too small to warrant using the automated processes provided, staff would process them manually — which created one more place to give birth to errors.

The Benefits of Consolidation
COREsense eliminates all of that. "It becomes a kind of translator," Hedgpeth explains. "It knows one [channel] wants to talk in EDI [Electronic Data Interchange], one in e-mails, one with a proprietary system. We log into the COREsense back office and process all orders the same way. It doesn't matter where they came from. It's one log-in and everyone in the building sees exactly the same thing. That piece alone was probably worth going over to COREsense. It's huge, just massive."

Consolidating the catalog also paid dividends. In the past, if Unity only had a small number of a particular item or if margins on an item were slim, it might not bother publishing on all channels because it wasn't worth it. Now it inserts products into the consolidated catalog, and they're automatically pushed out to all channels. "It means we're able to get a lot more eyeballs on those products," Hedgpeth says.

Unity also consolidates its Inventory. The company has a 10,000-square foot warehouse in Union City, California. While it does about 20 percent of its business on a drop-ship basis, the company maintains inventory of anywhere from $1 million to $4 million. In the past, it was possible to oversell a product. If an order came in from one channel, pushing the stock level to zero, inventory might not be updated in time on the other channels to prevent another order coming in for a now out-of-stock item. COREsense manages inventory in one place and updates all channels in real time.

Bonus Extras
When Hedgpeth went looking for a new solution, he wasn't even thinking about things like CRM. But the COREsense CRM functions have turned out to be a terrific bonus. For example, when staff are processing orders or dealing with problems, all customer profile information is displayed along with information about the current order. "Now, if someone else picks up the ball, they can see all the background," Hedgpeth says. "That sounds small, but if you start having three customer service agents all using different e-mail addresses, it can get pretty scattered."

Unity is also using the COREsense e-mail campaign functions which, again, consolidate and centralize everything. The company does about two campaigns a month. Instead of logging on to multiple accounts to use the channel provider's separate e-mail functions, it logs in to COREsense and creates one e-mail campaign that goes out automatically to customers on all channels. COREsense also manages all the details of providing opt-in and opt-out capabilities, and it measures click through — "so you can tell right away if it worked, which is kind of nice," Hedgpeth says. "I can't stress enough the benefits of the one log-in."

COREsense wasn't the only contender. Hedgpeth also considered a similar solution from iCode (now Everest Software). "iCode had a very slick marketing presentation," Hedgpeth says. "When we first looked at it, we thought, 'They're it.' But when you drilled down and asked, 'Can the system do this or that or the other,' they'd say 'Let me get back to you on that,' and often the answer was no. There were some big pieces missing."

Unity had to do a fair amount of customization of COREsense to make it work the way the company works, and Hedgpeth won't say how much it cost. The coding was all done by COREsense. "Their rates are fair — thank goodness," he says. Implementation otherwise went smoothly. "COREsense asked the right questions at beginning to make sure they got all the data from our old systems over in as clean and seamless a way as possible." Unity staff did have to learn new processes, but as Hedgpeth says, "That's normal."

And, he says, more than worth the trouble given the benefits the company has seen from using the new solution.

Based in London, Canada, Gerry Blackwell has been writing about information technology and telecommunications for a variety of print and online publications since the 1980s. Just for fun, he also authors features and columns on digital photography for Here's How, a spiffy Canadian consumer technology magazine.

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