Economic Benefits

The eBIZ adoption brings benefits which may vary on their extend and rapidity based on the fashion companies’ legacy systems. Here they are.


Benefits commonly associated to the electronic documents interchange are relevant to:

  • Increase in efficiency, by decreasing operating costs. These benefits can be labelled as static benefits and can be measured according to a “before and after” approach. They mainly improve the cost competitiveness of the company.
  • Increase in effectiveness, by reducing lead time, response times and increase flexibility. These benefits can be labelled dynamic benefits and enable companies to provide better services to the customer. Due to their enabling nature, the actual positive outcome will only accrue to those companies that implement coherent market strategies. They improve mostly non-price competitiveness.
  • Reduction of software implementation costs. The XML based eBIZ Reference Architecture implementation has generally lower software development costs and lower deployment costs in comparison to the existing EDI systems.

The eBIZ adoption brings benefits which may vary on their extend and rapidity based on the fashion companies’ legacy systems, and for instance:

  • Fashion companies new to electronic documents exchange, the upgrade to e-Business, from communication tools like fax/ phone/ email, generates the widest leap in terms of improvement. Benefits are large and normally gained in the short term;
  • Companies formerly using legacy proprietary electronic documents exchange systems but new to an open standard system. For these type of companies benefits are lower in the short term and express their potential as the company business network increases (new customers, new suppliers) or in the long term thanks to lower software maintenance and development costs.

The companies involved in the pilots focused mainly on the improvement of orders processing. A survey carried out on a sample of participating companies immediately after the implementation showed large gains from the eBIZ adoption in orders processing time.

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Gains in order processing time from adopting eBIZ in a sample of pilots participants.



Real cases from the pilots

Medium-large clothing:
A Medium-large clothing company, exchanging order documents with a medium size textile company. Both based in a “high labour cost” European Country and using a fax/email system for document exchange before eBIZ.

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At the end of the pilot implementation, the eBIZ compliant system covered around 30% of the overall customer orders and around 10% of the overall orders of the supplier. The gain in order processing time is calculated in 80% for the supplier and 50% for the customer. Assuming this rate of adoption, the actual cumulated gain for one year can be calculated to around 100 orders’manager mandays. The potential gain, when all the orders of the two companies will be processed through eBIZ, exceeds 400 orders’manager mandays, that amount to over 100.000 Euros of labour cost in just one year.

Early evidence from the pilot show errors in order processing dropping from a 10% average to virtually null.
The average response time for an order halved.

Small footwear company:
A Small footwear company, exchanging order documents with a very small component supplier and selling to a small chain of large surface specialised stores. Both based in a “low labour cost” European Country and using a fax/email system for document exchange before eBIZ.

At the end of the pilot implementation, the eBIZ compliant system currently covered just a small fraction of the overall orders for all the participants. The companies involved are very small and need strong support to expand the number of suppliers/customers committed to eBIZ. As the legacy systems were very inefficient (mainly phone/fax) the gains in order processing time experimented with the pilot implementation are huge (over 90% of time is saved in order processing). Given the current low rate of adoption, the actual cumulated gain for one year are limited to around 10 orders’manager mandays (expected to grow to 20 days within 2010). The potential gain, when all the orders of the two companies will be processed through eBIZ, on the other hand is substantial, exceeding 380 order manager mandays, that amount to over 40.000 Euros of labour cost in just one year.
Early evidence from the pilot show errors in order processing dropping from a 10% average to around 1%. The average response time for an order halved.


Large retailing chain of independent stores:
A Large retailing chain of independent stores, order and stock availability documents are among the stores the central buying organisation and the apparel producer. The retailers and the buying organisation are based in a “high labour cost” the clothing producer is based in a “low labour cost” European Country and using a fax/email system for document exchange before eBIZ.

At the end of the pilot implementation, the eBIZ compliant system currently covered around 1% of the overall orders of the central buying organisation, a coverage of 30% is expected within 2010. The gain in order processing time is estimated to around 75% for the central buying organisation and higher for the clothing supplier. Assuming the expected end of 2010 rate of adoption, the actual cumulated savings for one year can be calculated to around 220 orders’manager mandays that amount to over 23.000 Euros of labour cost in just one year.
The potential gain, when all the orders of the two companies will be processed through eBIZ, exceeds 750 orders’manager mandays, that amount to around 85.000 Euros of labour cost in just one year.
The average response time for an order dropped dramatically from a full day with very long dead times, to around 5 minutes.