Earlier this month, I had the pleasure of presenting at Salesforce’s Manufacturing Summit with Savant Systems, a leader in smart home solutions and parent company of GE Lighting. Angela Larson, General Manager of Professional Solutions, and Beth LeClerc, Vice President of Business Systems Architecture & Web Services, showed how they work together to streamline processes and data flows using Salesforce and Propel.
Connecting customers and product records on the Salesforce platform has allowed Savant to:
- Reduce their completed product time to market by 74%
- Grow revenue 35% over two years while keeping costs down
- Reduce order and account management labor by 50%
- Save over 1,000 customer service hours each year
If you would like to learn how they accomplished these results, Angie and Beth’s 30-minute presentation is both fun and informative, including Beth’s overview of their tech stack on the Salesforce platform.
Towards the end of the presentation, Angie and Beth shared an amazing story about how Savant acquired one of their suppliers, J Geiger, and had their products available for sale on the Savant website the same day the acquisition closed. That type of speed is unheard of, and it rightfully generated a lot of interest from the audience.
Accelerating Time to Value
Savant’s fast integration of J Geiger was not by chance. It was the direct result of years of collaboration between Beth and Angie to align IT strategy with the business needs. Angie’s team lays out the company’s business objectives, Beth’s team provides different technology options, and the two collaborate to find the right solution for today and for the future. It seems simple enough, and yet it’s shocking how many manufacturers struggle to create a successful partnership between their business and IT teams. Those companies are missing opportunities to grow revenue and profits.
Savant’s ability to integrate J Geiger so quickly has a huge impact on Return on Investment (ROI). The ROI of an acquisition depends on three key variables:
- The upfront investment, including amounts paid and employees’ time
- The revenues and profits generated after the investment
- The amount of time between the upfront investment and profit generation
In short, higher ROI is driven by any combination of lower upfront investment, higher post-investment profit, and less time between the two. Lower ROI is the opposite.
If we remove the amount paid by Savant (which was not disclosed) and the post-investment profits (which will take time to determine), we’re left with two key ROI drivers. The amount of time employees spent on the acquisition was significantly reduced, and the time between the investment and revenue generation was almost zero. The time-to-value on this acquisition is off the charts.
IT’s Impact on Corporate Strategy
This acquisition is a great example of how a strong IT strategy improves overall corporate strategy. When all other variables are held constant, the ability to positively impact an acquisition’s ROI increases the number of acquisition targets for any given company.
The J Geiger acquisition was made possible in part by a tech stack that allows product information to be easily loaded into Propel and immediately distributed to Savant’s online store powered by Salesforce Commerce Cloud. It’s even more impressive when we account for two additional variables that came with J Geiger: Savant was selling shades for the first time, which means they had to account for customization (windows come in various shapes and sizes) and textiles using a solution that was never intended for these items. And they did so without skipping a beat thanks to the flexibility Beth’s team built into Savant’s tech stack.
Now let’s take the flip side of a company that does not have a flexible tech stack. Or a tech stack where product information does not automatically flow from your product lifecycle management (PLM) solution to your ecommerce site. Or one that requires so much time from IT to maintain custom code, patches, or integration, that your IT team is simply too busy to take on additional projects like a strategic integration.
Companies with disconnected and inflexible IT stacks simply don’t have as many options as companies with connected and flexible IT infrastructures. There are fewer acquisitions that are ROI positive. There are fewer new projects that can be supported by the existing tech team. It’s more difficult to take advantage of the latest technology improvements to help their business teams achieve their goals.
This divergence will only increase in the coming years. As AI and large language models become more prevalent, companies that can extract large amounts of standardized data from their tech stacks will be poised to reap the efficiencies that come with them.
IT leaders cannot afford to take a break-fix approach to their tech stacks. The companies that are waiting on long-needed upgrades will only find themselves further and further behind competitors.
When it comes to technology, the difference between the haves and have-nots is impactful. That’s why IT leaders have become so important. The technology is out there and ready to use, but you need a strategic and tactical leader to ensure it’s used correctly. And business leaders who embrace partnering with IT to unlock its full value. People like Beth and Angie are proof that IT leaders are more valuable than ever to companies’ corporate strategy.
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