Cisco Helps Otto Group Link the World on the WebTo improve service performance and cut costs, Otto - the world's largest mail-order retail company - decided to complement its front-office operations with back-office networks linking the suppliers, logistics companies, and banks the company works with each day. Background Challenge [ Return to Top ] Solution Otto's relationship with Cisco Systems® began as a normal infrastructure supplier relationship. Cisco® then carried out an Internet Capability Assessment Tool (ICAT) survey covering eight different functions within Otto, which led to a number of follow up workshops. It enabled Otto to complement its own understanding of its internal Internet capabilities with a valuable external perspective. At an operational level this led to the introduction of SAP self-service tools for the Human Resources (HR) department, increasing productivity for HR staff. An initial calculation revealed that an annual US$110,000 has been saved when reduced SAP license costs were factored in. A best-practice exchange on network management with Cisco also resulted in service level agreement (SLA) monitoring and business continuity measures being introduced. [ Return to Top ] Results Otto already has 1,000 of its suppliers connected in Germany. By the end of 2003, some 90 percent of all German suppliers will be connected and the vast majority of transactions will be carried out online. The rollout to other group companies abroad is being taken step by step. When completed, all 40 of the company's sourcing markets—from China to Brazil—will be connected online to Otto Group companies. An investment of US$8 million into this B2B platform will see Otto realizing substantial gains of initially US$4 million per annum, achieving a complete return on investment (ROI) in year two and large recurring ROI in subsequent years. This ROI will increase further as more Otto business units are brought onto the platform. [ Return to Top ] Next Steps Bolero is an umbrella organisation that is driving down the time and cost of international trade by electronically linking importers, exporters, banks, customs bureaus, and shippers. A number of cross-industry organisations ranging from exporters and importers to banks and shippers jointly own it. Otto has a leadership role within the project and recently launched a trade platform in Hong Kong, called Tradelink Otto Bolero Interface, that streamlines the entire international trade cycle by facilitating electronic business transactions between all parties. Processes that once took up to three weeks to complete can now be finished in three days. Furthermore, a sweeping logistics function is also in the process of being rolled out. This includes the ELOG (electronic logistics) project tracking and tracing system that allows Otto to know where goods are in the shipping process. Transportation companies involved in forwarding goods input status information, giving Otto an airport-to-dockyard view of when goods are due to arrive. With the projected increase in Internet sales, logistics is set to become ever more important. To this end, systems and processes have been built that not only interact with other projects such as the Bolero project and the B2B marketplace but also help ensure the company is deploying technology to promote growth, improve communication, and cut costs. These infrastructure projects are designed to overlap, yielding further gains. [ Return to Top ] What Cisco Offers
Christoph Dyballa, Vice President IT Systems Logistics, Otto Group, values the relationship with Cisco. "Working with Cisco has helped our focus and provided new ideas. And something that is more valuable than you can imagine is the chemistry between Cisco and us. We can jointly explore concepts that lead to vast business improvements." Further Reading Otto Group Snapshot
September 18, 2003 [ Return to Top ] |