Business and Management
Submitted By gefstathiou
Magirus was a German company and a main IBM distributor for midrange computers in Europe. IBM consider Magirus as a partner and a key account, and Magirus was making big profit selling the IBM products.
Magirus at start was ordering products from IBM using Lotus Notes, a program made by IBM and customized for Magirus needs.IBM didn’t have a common direct linkage with its partners around Europe. Every company needed to order products from IBM had a different type of proccesion.
Another point we need to refer is that IBM changed all the time its systems for ordering dissatisfying its partners that couldn’t follow this changes.Thus the companies couldn’t trust IBM, cause it didn’t have established practises and taking decissions without consider their needs.
So we can see that IBM didn’t have a satisfactory communication in B2B.
Both IBM and Magirus seems to be initiative companies for different reasons.
IBM needs was to establish a global system for communication via its partners, and saw an oppurtinity creating a system with Magirus that would use after for all of its partners.On the other side, Magirus wanted efficiancy in ordering items, looking for fast, low cost, and not complex proccedures.
At the during of their collaboration, they had some communications problems they wanted to solve.IBM first invention was in PC/S system, an organization structure for ordering that was not succed because of the incompability of the pre-exist ordering system of Magirus. Magirus didn’t have another choice except using PC/S system although needed to pass two times all orders, loosing that way time, efforts and money.Without smooth communication between Magirus and IBM opportunities where given to the competitors of IBM.
The second invention, EDI, it was an effort that failed according to its limited capability and some technical problems.
The third and last invention, XML, was budget by IBM at all and it was an easy to use system with flexibility and multiple functions. Using internet as way of communication and not an custom built intranet had lower using costs.
Serving all the usual needs of ordering proccedures XML was a system that covers all formats of each client. Finally XML was a system that you could use 24 per 7.
At conclusion, after many efforts, IBM embrace the demands of its partners developing a system that was globaly and could used by everyone in the community.
For Magirus IBM was not just a supplier, was a big ammount of its profits.
It wasn’t only the sales of IBM’s midrange computers that brought earnings in Magirus, but the range of other services that Magirus offered in the last customers of IBM computers.
Thus Magirus didn’t want to loose their partnership although had communications problems and complexity in their procedures.
Idealy, Magirus would want less costly transactions with IBM not only in fixed costs but in time consuming work.
Magirus had a vision of a “safe” cooperation with IBM based on a standard system with inovations but not dramatically changes that could affect its way of work.
By adopting first the new system, Magirus was building a strong relationship with the giant of computers industry.
IBM EMEA’s huge size combined with its matrix structure was an obstacle for the communication between company and distributors. Thats because it was divided in different groups, with markets in different countries that have unique procedures, ideas and cultures.
Moreover, multiple changes in its systems and processes made IBM not a good ally for doing bussiness.
Margins disapointment for the lack of smooth cooperation was a trigger for IBM to see an opportunity.
The opportunity to established an European common system for all its clients.
XML wasn’t only a pilot for orders, it was the entry of IBM EMEA to the world of B2B.
That’s the reason why IBM invest such an amount in the cooperation with Margins.
Better comunication, common platform for orders and sales, understanding of clients needs, lower costs, less work labour is only some of the advantages that XML system offering at IBM.
Additional the new system provides client satisfaction that until now felt that IBM didn’t give attention to their needs and didn’t do anything to provide better colaboration.
A common platform, means a common B2B strategy and opens the doors to new clients that will now have no worries about the complexity of the IBM systems.
EDI and XML was based in the same idea and platform. IBM developed both systems to provide a common ordering pilot for its clients, sending e-documents from one application to another all over the Europe.
EDI had limited tecnological bounderies instead of XML that hasn’t.
Moreover, XML was more common for all IBM’s partners and it was more flexible and easy to use. EDI had connectivity problems with the software that been used by the IBM’s clients.
XML had lower fixed costs because instead of using VANS intranet technology, it was using common internet connection.
In addition, each participating company using EDI had to configure its information systems to send and receive eDocuments, however XML could send and receive any eDocument, in any digital format.
Finally, XML was active throughout the day in real-time while the EDI collecting the data throughout the day and sent them at midnight.
Its obvious that XML is a more improved version of EDI, but EDI was the precursor of XML.
First of all Boullery understood that was further margin for expanding XML. For that he had two axes. At first he had to assure property and lives for further development. On the other hand he wanted to invite more Europe partners to participate in B2B ordering. In this case he utilized the positive impressions of the successful course of XML.
Boullery identified the companies in different countries that he could make his approaches.
He chose three important companies. CGI, Logix and Tech Data Midrange. And the three companies are rapid growing and profitable.
CGI was an Italy company and had only one supplier the IBM. Logix was a French company and also had only IBM for supplier. Finally Tech Data Midrange headquarted in United States and except IBM collaborated with Hewlett-Packard, it’s biggest competitor.
The conditions were not yet appropriate for them to accept his proposal. And that because they didn’t have a lot of experience with XML and they were not familiar with this new system. In addition IBM also had not inform them adequately for the abilities and capabilities of XML and did not give them incentives to replace the old system EDI.
Another Boullery’s false was that didn’t show them the perspective and the future of XML in further exploring B2B ordering. And it was not obvious to them the margin of an extense investment.
Although Boullery’s approach to expanding in Europe through these companies was right because were in big territories and geographies and were companies with year to year growth.Even if they did not accept his proposal, he stang their interest.
It also wanted to expand the XML system for other products too and not only for midrange computers, so to have a