Case Studies

Electronics Distribution & IT Services: Standardization Improves On-time Delivery 30%

IT Reseller and Value-add Services Provider
North America

Client Situation

The new COO was a recent external hire tasked with transforming this super-regional, wholesale reseller of IT products into a national competitor. But the term “national” was misleading, since it was dominated by much larger, global-scale resellers who primarily targeted multinational customers. The executive leadership team (ELT) believed that the needs of North American-only, national customers provided a segment that the global resellers overlooked and struggled to serve profitably. This national strategy looked great on paper, but it depended on the ability to achieve more profitable execution than current levels. The COO launched an internal analysis of the company’s past decade of profitability, performance management, and improvement capabilities. The findings did not inspire confidence.

Over the past decade, the company had pursued performance improvement by investing relentlessly in technology, deploying a leading customer relationship management (CRM) system, upgrading its existing enterprise resource planning (ERP) application, and acquiring a host of ancillary applications: best-of-breed accounts payable (A/P) and accounts receivable (A/R), a new general ledger (G/L), a new workforce-management application, and several more.

Each new technology arrived as a disruptive, costly, “big bang” event promising breakthrough results. In practice, the promised paybacks never materialized, and each technology created as many issues as it claimed to resolve. For example, few, if any, practical provisions were made for connectivity and interoperability, requiring that skilled employees add new, costly drudge tasks such as “swivel-chair” data transfers and reconciliations between applications. The technologies claimed impressive functionality, such as built-in artificial intelligence (AI), automated reporting, workflow, and more. However, these features came with drawbacks. Some were too complex or time-consuming to be used by average employees. Others were costly add-ons that triggered still more layers of manual data transfers and reconciliations. 

The COO felt that standardization could help “de-layer” and simplify these interconnections so that automation (APIs, RPA, AI/ML, and workflow) could perform these tasks. She also wanted an improvement approach that was the opposite of the previous “big bang” disruptions: it had to be consistent and build in cumulative operational capabilities that could survive employee turnover.

Project Overview

Project Sponsor: Chief Operating Officer

Client: IT Wholesale, Services 

Implementation Results
  • Operating cost: Down 15%

  • Break-even point: 5 mos.

  • ROI (12 month): 6x

  • Rework activities: Down 40%

  • Customer onboarding cycle time: Down 25%

  • On-time deliveries: Up 30%

  • Avoidable customer contacts: Down 60%

  • Salesperson “uptime”: Up 50%

Client Description, Project Scope, Objectives

The wholesaler is an IT reseller and services organization, headquartered in the western U.S. Originally launched a half century ago, the business remains privately held, but with significant investment from a consortium of private equity (PE) firms. The PE board members help moderate the “sales-at-any-cost” culture to include an emphasis on sustainable shareholder value. They backed the new COO’s cautious approach to ensuring a profitable national scale-up.

The outside investors were drawn to The Lab’s rapid, data-driven assessment that prioritized process standardization prior to automation. The project scope included documentation of existing end-to-end business processes from marketing and sales through fulfillment and product returns. Their primary objective was to discover valuable opportunities to optimize the past investments in technology to help scale up existing operations to the national level while increasing margins.

Initiative Objectives:
  • Increase sales effectiveness

  • Optimize order-to-cash process

  • Improve customer service levels

  • Enable new technology

  • Upgrade performance management capabilities

Overview: Phase I, Analysis and Design

The National Scale and Profitability (NSP) initiative began with an eight-week Phase I analysis covering the major end-to-end business processes, including:

  • Sales
  • Purchasing
  • Customer onboarding
  • Order management
  • Order fulfillment
  • Customer service
  • Product returns

The Lab’s database of wholesale distribution standardization templates—including industry-standard KPIs, related data definitions, process maps, benchmarks, best practices, automation “use cases,” and more—enabled rapid, remote documentation and analysis of more than 85 percent of employee work activities (approximately two minutes each), while only requiring one hour per week of any subject matter expert’s (SME’s) time. The analysis was conducted across all U.S. locations.

During the Phase I analytical effort, The Lab identified over 200 improvements. Just over 60 percent of these represented non-technology standardization improvements that boosted operational effectiveness, reduced avoidable rework, and/or enabled automation. While the remaining improvements were technology-dependent, no new systems were required. Roughly half could be automated using the existing technology after the work was standardized. The remainder were automated using robotic process automation (RPA), and small, low-code applications (e.g., automated forms, onboarding apps, etc.). Most of the necessary technologies were already deployed in the business. Many could be further augmented with artificial intelligence (AI) for simple decision-making and proactive, real-time notifications.

Better yet, all improvements could begin implementation immediately. Progress could be achieved incrementally, without the risk of a “big bang” event. Each area could proceed at its own pace as part of a coordinated, transformational roadmap.

Phase I Findings

The end-to-end flow, or value stream, from sales prospecting through returned goods processing, was fragmented, poorly documented, and included few Key Performance Indicators (KPIs):


The sales organization dominated operations and their actions, often costly and counter-productive, were generally unchallenged. For example, reps often delayed order submission to increase their incentive compensation.

Order management and fulfillment.

The lack of order-status transparency drove excessively high levels of costly customer queries for updates, further eroding margins. Order documentation was under-standardized and often informal, making it difficult to resolve disputes in favor of the company. Product returns, like orders, were often timed to benefit monthly margins and related compensation. This often resulted in expiration of return cycles from manufacturers—leaving the company with obsolete or unsellable goods. A relatively new enterprise resource planning (ERP) system was also under-utilized because order processing and warehouse staff preferred their familiar spreadsheets and email.

Customer service.

As a result of all of the above, customer experience suffered, while order-management costs increased and inventory management was unnecessarily difficult. A state-of-the-art customer relationship management (CRM) application was underutilized because sales reps disliked the transparency it delivered. Pricing discipline was lax, fees were waived, and unexplained discounts proliferated.


Project Scope:
  • Sales
  • Purchasing
  • Customer Onboarding
  • Order Management
  • Order Fulfillment
  • Customer Service
  • Product Returns
Assets & Deliverables: Phase I, Analysis and design 
  • 10+ major end-to-end business processes documented at nano-scale detail
  • 85+ process-standardization opportunities identified
  • 70+ automation candidates identified
  • 45+ advanced analytics and KPI use-cases identified
  • Upgraded dashboards and reports (financial, operational)
  • AI/ML driven alerts and recommendations
  • Improved insights: operational, strategic


Implementation, Phase II

The COO and the PE board members knew that the business needed a “transformation,” but were loath to use that word; they wanted change without disruption. From the analysis they knew they had sufficient, up-to-date technology infrastructure (cloud-based ERP and CRM systems). They worked with The Lab to craft a “light-touch, minimally-invasive” approach to standardization implementation. It began with a curated list of “Super KPIs.” These were performance indicators that subtly delivered three critical transformational capabilities at non-disruptive “nano-scale”:


Which customers were likely to leave? Which were candidates for profitable cross-sales? Which orders were likely to require substitutions? Data analysis helped select KPIs that answered many of these critical questions.


Who should be notified to avoid the consequences of errors or customer dissatisfaction? Who should be notified of promising sales opportunities? KPIs linked with RPA bots, and sometimes basic artificial intelligence (AI), can easily deliver preemptive capabilities.


What root causes can be addressed to institutionalize the learnings from above? Selected KPIs can point the way and store many of the insights to help improve forms, business processes, and organizational responses.

This is how the executive leadership team (ELT) was able to gradually transform the enterprise without disruption. Only the “critical few” data elements, dashboards, and work activities were changed at each step, supported by fact-based data analysis. Notifications could be sent confidentially to employees and managers to help them predict and preempt, avoiding uncomfortable “coaching” sessions.

Improvement goals were established for each Super KPI, and the organizations involved were free to perform the work with any mix of resources they chose: internal resources, The Lab’s resources, or others.

Implementation Examples

The Lab implemented more than 200 standardization improvements that reduced rework, improved service levels, and enabled automation across the enterprise. Examples:


Analysis revealed that onboarding—of both new customers and new individual orders—was responsible for over half of all rework and corrections throughout the organization. This squandered 15 to 20 percent of organizational capacity and increased employee dissatisfaction. These errors also contributed to most (70 percent) of the margin leakage through underpricing, fee and shipping-cost waivers, and more. A simple, low-cost onboarding application and digital forms standardized intake data and enabled proactive automated reporting of intake quality, reducing errors by one-third within the first three months of operation.

Sales Prospecting.

Individual reps performed prospecting activities as they saw fit. Almost no quantitative, data-driven analysis supported targeting or prospecting efforts. Profitability-driven cross-selling was unknown. Prospects were maintained by each sales rep—outside of the CRM—who viewed them as their personal property… and took them when they left the company for a competitor. Working with The Lab, customer data was compiled, standardized, and centralized alongside prospect data and connected to the ERP. Profitability analysis and likelihood-to-buy were automated with RPA and the CRM. Prioritized lists were pushed to reps. Sales activity reports with effectiveness results were automated—along with notifications to reps and managers.

Order Management.

Since most functions already existed, unused, in the CRM application, the challenge was to stimulate use of the system. Once onboarding (see above) captured customer account or order information, RPA notification bots were developed to alert relevant workers and management whenever data “exited” the CRM system. Individual employees’ spreadsheets were addressed individually and incorporated into the CRM workflow and related applications. 

The Lab Makes it Easy

Organization-friendly engagement design

At The Lab, we’ve spent three decades refining every aspect of our transformation engagement model. We’ve made it easy for clients—from the C-Suite to the front line—to understand and manage the initiative:

  • Minimal use of client time: One to two hours each week, maximum.
  • Measurable benefits: Typical 12-month ROI is 3x to 5x.
  • Pre-built templates and tools: Process maps, data models, bots, and more.
  • U.S.-based, remote delivery: Nothing is ever outsourced or offshored.

Designed to reduce risk, increase success

Since 1993, The Lab has led the industry in eliminating risk for our clients. Whether your engagement involves a handful of bots or wall-to-wall transformation, we make it easy to do business with us:

  • Fixed pricing and clearly defined scope
  • Early-out checkpoints and options
  • Money-back guarantees

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Rapidly accelerate—and monetize—your strategic initiatives, including process improvement, org design, intelligent automation, analytics, AI, and more.

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