Abt Electronics, Inc. was using a slow, outdated and inflexible product package to calculate and track vendor incentives that left the retailer vulnerable to inaccurate billing and financial losses.
Abt’s new incentive management solution helped the company maintain up-to-date, accurate information for hundreds of vendor incentive programs.
Accelerates processesand fosters greater productivity
Accurately calculates compensationin real-time and maximizes profit
Offers flexibilitywithin the solution to mold to the client’s needs
Business challenge story
Standing the test of time
Abt, a family-owned business founded in 1936 just outside a bustling downtown Chicago, Illinois, first started as a small electronics store after Jewel Abt gave her husband, David, USD 800 to begin his entrepreneurial career. Eighty-three years later, after escaping a crashing economy and witnessing country-wide shutdowns and liquidations within the industry, Abt has grown to become one of the largest independent single-store appliance and electronics retailers in the US.
Today, a great deal of Abt’s revenue comes in the form of percentage-based vendor rebates. The company sells various products from multiple vendors and then gets paid out based on those product sales. There is also a percentage of money to be reimbursed from vendors by advertising their products as well as vendor sales performance incentive funds (SPIFFs,) which are tied to tiered models.
For a thriving company that carries tens of thousands of products, keeping detailed records of so many vendors, incentives and invoices was an enormous and time-consuming task, and too complicated for Abt’s existing system. Employees spent long hours updating the system’s complex records and calculating thousands of vendor incentives. This inevitably led to risk of inaccuracies, which had the potential to leave a great deal of money on the table.
Abt needed to put forth a new solution that would align with its unique set of needs and was flexible enough to grow alongside the retailer for the next 83 years — and, to top it off, could hold large amounts of data all in one place.
Chris Hoeflich, Manager of Vendor Incentives at Abt, explains: “We decided that we needed to upgrade to something before the whole system just crashed on us and we lost all of our data.”
Painting a blank canvas
Abt looked to put to rest the archaic, slow and buggy system that had been in place since the early 1990s and implement a modern, flexible and low-maintenance solution that would be able to track the ever-expanding list of vendors working with the retailer.
“It was very hard,” says Hoeflich. “We could not find other products that did what we’re doing [now] with the system.”
That was until Abt engaged with WorkCentive and selected IBM® Incentive Compensation Management software, based on its flexibility, accuracy and wide range of uses.
Together, Abt and WorkCentive’s Chief Executive Officer (CEO) and Founder, Noah Bass, extensively mapped out an ideal solution from scratch. The two teams collaborated closely to pinpoint what they wanted out of the program.
“I think one of the things that's really good about our relationship and something that we as a company pride ourselves on, is the idea that it has to always be a collaborative effort,” says Bass.
Incentive Compensation Management software provides up-to-date tracking of vendor incentives — which includes calculating rebates automatically for tens of thousands of purchases. The solution also provides Abt with accurate co-op billing calculations, allowing the retailer to determine the percentage to charge vendors for advertising their products while supporting various other compensation tracking needs for the company.
Putting the system to work
With the Incentive Compensation Management up and running within six weeks, Abt employees found themselves with more work — in a good way. Simply put, the solution allowed them to spend more time focusing on other facets of running the company instead of manually calculating thousands upon thousands of data-driven invoices.
“I can't even tell you how much time it saved,” says Hoeflich. “Now it's all the system doing it where with the old system, we'd have to review the purchases, confirm the accuracy, and continually update the programs.
“The way we have it set up, there are tiers, and when our purchases hit those tiers, the percentages change automatically. So, in a way, we could have missed anything in the old days. In the new days, we don't miss that because the system's automatically telling us where we're supposed to be and what we're earning.”
When it comes to working with millions of dollars in revenue, that’s a big deal. Now, no one needs to perform calculations by hand, and the data couldn’t be any more accurate.
Hoeflich adds: “The biggest benefit we received from IBM Incentive Compensation Management is that our information is very accurate, up-to-date, and it’s centrally located.”
Hoeflich concludes that the partnership between Abt and WorkCentive made all the difference, saying: “Noah knows our business, and since it's different from what Incentive Compensation Management is traditionally used for, I think it's important to have a person who fully understands the way we're doing it and using it.”
Abt Electronics, Inc.
Abt, a family-owned business founded in 1936 and operating out of Glenview, Illinois, currently ranks as one of the largest independent single-store appliance and electronics retailers in the US. The company carries tens of thousands of products in a variety of categories, including appliances, electronics, custom kitchens, furniture, mattresses, watches, fitness equipment and more.
About WorkCentive Inc.
IBM Business Partner WorkCentive, founded in 2014 in Toronto, Ontario, offers software implementations and specializes IBM Incentive Compensation Management software. The company provides customized training to clients, guiding them through the best way of using the solution.
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