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Creating a Faithful Following: Retain Customers with Customer Loyalty Functionality in Microsoft Dynamics CRM

December 20th, 2012 Ashley Harbaugh No comments

“Customers are fickle.” “Customers don’t care if they switch to your competitor.” “Customers only care about their bottom line.”

The conventional wisdom says that with how technologically savvy and budget conscious shoppers are these days, customers have higher expectations and greater demands. And if a store doesn’t fulfill those demands, they have no problem hopping over to the competitor who can.

Now, this is certainly true. Customers want to get the best bang for their buck (who doesn’t?), and they want a quick, easy, painless shopping experience to facilitate it. And since the Internet offers a virtually limitless amount of retail choices to browse, customers can turn to whichever computer device that’s handy – mobile phone, tablet, desktop PC – and do some in-depth research with just a few clicks of a button. Knowledge makes for more discerning individuals –the 21st century shopper has instant access to that knowledge any time, in any place.   

So yes, customers tend to be a little picky about where they spend their hard-earned cash. But here’s a secret:

Customers want to stick with one company.

Just think about it: do you prefer having  a go-to store where you know you’ll get what you need, or do you prefer the search and struggle to find the right one? Maybe I’m not very adventurous when it comes to shopping endeavors, but I know I prefer the first option.  

In a report for Retail TouchPoints Magazine titled “SoLoMo And The New Frontier Of Customer Loyalty”, Nikki Baird, Managing Partner, Retail Systems Research (RSR) states,  “Customers are willing to be loyal to merchants, but it’s simply too easy for retailers to break trust with those customers through disconnected messaging and pricing across channels, and inconsistently applied policies across channels.”

Loyalty programs are a key strategy in motivating your customers to stay. Not only do they play on shoppers’ universal love for good bargains, but they also signal to your customers that you care about their business – so much so, that you’re willing to give them some special stuff. And if your company puts loyalty programs in place, then you also need the right loyalty management tools.

Staying Connected

But like Nikki Baird says, retailers need to be connected and consistent. With Microsoft Dynamics CRM, companies are able to effectively manage loyalty programs all in one central place, which reduces confusion and misinformation across the organization. By seeing your loyalty programs, as well as the customers who are using those programs, you’re able to get a better understanding of what your customers are responding to – and how you can continue encouraging that response.

With Microsoft Dynamics CRM, you’re able to set up a dashboard containing charts of all the loyalty program data you need. The data in these charts are real-time, so you always have an up-to-date, accurate view of loyalty program performance.

I’m sure the visual people (like me) will agree: the fact that Microsoft Dynamics CRM has dashboards displaying whichever data charts an employee needs is a huge bonus. With the ability to open up Microsoft Dynamics CRM and see an overview of data such as average sale by loyalty segment, sales by channel, top 5 loyalty program members, etc., you’re better able to measure how well a particular loyalty program is doing, as well as who is engaged in the program. And by getting that information in easily digestible, instantly recognizable charts, the faster you’re able to process it – and strategize.

Setting Up Your Loyalty Program

So, where to start? First, decide on how you want to structure your program. One way is to allow shoppers to opt in. Since customers like having choice and getting good deals, advertising that you have a great rewards program available will encourage participation. By guaranteeing to shoppers that filling out a loyalty membership form on your online store (or at your physical store) will lead to regular, or even occasional, exclusive special offers, you create a very persuasive offer for customers to stick around.     

Speaking of exclusivity, it goes hand-in-hand with a very common human trait – everyone wants to be in the cool kids club. Cater to this desire to be elite by offering different membership levels in your loyalty program, as well as different perks for belonging to each level.  For example, Gold members receive 10% off on their purchases plus certain offers, Platinum members receive 15% off purchases plus even bigger special offers, etc.

Allow shoppers to opt in to your loyalty programs. Also, set up different membership tiers, and offer corresponding privileges for members of those tiers, to create a sense of distinction and exclusivity. 

Microsoft Dynamics CRM allows you to create different membership tiers or award levels, providing the CRM users in your organization insight into each level of your loyalty program. With Microsoft Dynamics CRM, you can identify and name each level, set up the reward that each member receives from that particular level (such as if the level correlates to earning a certain number of redeemable points that can be applied to future purchases), and even purchase ranges for levels (like if individuals who purchase 1,000 items automatically make the Bronze level, those who purchase 10,000 items make Gold, etc.). By standardizing this information and making it accessible to all sales and customer service representatives, businesses are able to keep loyalty processes transparent and easy-to-understand, which directly leads to better communication with customers.   

In addition to membership tiers, you have other options for structuring your loyalty program. For example, just like with many supermarkets nowadays, you can offer a “club” style program – a program that provides special deals only to club members.

Discount-based programs are also effective, because it’s quite difficult to turn down the chance to pay less on something you like. Offering regular contests or raffles in a customer newsletter that a shopper can sign up for is also a useful tactic. Implementing a raffle for customers who spend over X amount of money is another alternative.

You can also create a program where if customers buy X number of items, they get the Xth one free. This loyalty program is actually in use at a Greek restaurant just down the street from work. The restaurant gives diners a small card with two rows of five empty boxes – every time you come to eat, the waiter stamps a box. If you fill up all the boxes and bring in the card, then you get your meal free. It certainly works – a co-worker of mine was on a mission to fill up his boxes to get his free meal, and he won. Obviously, so did the restaurant!

The ability to easily set up different loyalty program levels enables you to make whichever changes or updates you wish with your loyalty program. With Microsoft Dynamics CRM’s reporting capabilities, you can drill down into such information as what the average sale is per loyalty segment in dollar amounts – which translates into a better understanding of how well each loyalty program segment is operating (and which ones should receive even more targeted marketing).      

Word of Mouth – Making Your Loyalty Programs Go Viral

People love sharing a great story, and you know what stories customers love to tell? Stories about amazing special offers! Think of the last time you got an unexpected special something from a store, or got something for an unbelievable price. Here’s a personal example: my sister was recently in need of a new microwave. She searched high and low for a microwave that was in her budget, but after seeing them go within the range of $60 – $100 and up (which was more than she wanted to spend), she wasn’t feeling too optimistic. However, it all brightened up for her one day when she saw that microwaves were on sale for $25 at a small mom-and-pop shop near her place (yes, for only $25! How awesome is that?). Needless to say, that shop made a sale – and my sister gained a microwave.  

From that one promotion, that little shop made an enthusiastic and loyal customer. My sister told me about her purchase, told my family and her friends, and even posted it on her Facebook status. She has also since re-visited that store and made several other purchases as well, and has even taken friends with her too.

The power of the promotion should not be underestimated. If you give customers an exciting special offer, they’re going to share it with others. And if people hear that by signing up for a loyalty program with your company is going to give them offers that are too good to be true, they’re going to sign on the dotted line faster than you can say “customer retention”.

With Microsoft Dynamics CRM, you’re able to create and track promotions that are targeted to each loyalty level. By putting a targeted marketing strategy in place for each of your loyalty members, you prove that you understand what these valued customers need and want. And loyalty is all about satisfying the customers’ needs. For example, if you segment your loyalty membership by the number of orders that are placed, Double Diamond Plus members who routinely order 10,000 items per month are not going to fully appreciate a Buy One, Get Two Free special offer that perhaps the 20-items-a-month Bronze member would enjoy.  

By creating targeted special offers that promote your loyalty programs, you increase your rate of customer conversion and organic, word-of-mouth advertising.

But not only are you able to simply set up the promotions in Microsoft Dynamics CRM, you’re also able to see the sales that are a direct result of those promotions. For example, the customers who buy an item after receiving a promotion saying they get 10% off a purchase if they punching in the code, or the customers who get a free gift with purchase when they type in their member ID, that information is relayed into Microsoft Dynamics CRM. With that information provided in real-time right at your fingertips, you see the results of each promotion over time, which enables you to start developing even more targeted marketing campaigns. And the more targeted a campaign, the greater the chance that a customer will convert. Making your offers too good to pass up means that customers won’t pass them up; instead, they’ll pass them on.

Long-Term Customers = Long-Term Profits

By building close relationships with your customers, you foster connections that translate to long-term business revenues. And with the rise of loyalty program popularity among consumers, it’s time to tap in now. According to the 2011 Colloquy Loyalty Census, “for the first time in history the number of loyalty memberships in the U.S. exceeds 2 billion, netting out to more than 18 memberships per household.”  Go out and make your loyalty program is one of those 18 memberships in each U.S. household.

If you have any questions on Microsoft Dynamics CRM for loyalty program management, feel free to email us at crm@ignify.com.

Ashley Harbaugh is a Product Marketing Specialist at Ignify. Ignify is a technology provider of CRM, eCommerce and ERP, software solutions to businesses and public sector organizations. Ignify has been included as the fastest growing business in North America for 5 years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine and ranked as one of 100 most innovative companies in the world in the Red Herring Global 100 in 2011.

4 Ways to Increase Holiday Shopper Retention and Revenue with Multi-Channel Retail

December 16th, 2012 Ashley Harbaugh No comments

It’s that time of year again: the holiday season.  And retailers can be glad that consumers are feeling jollier about the current economy than in years past. According to Deloitte’s 2012 Annual Holiday Survey, 50% of those surveyed said that they expect the economy to improve in 2013, a significant increase from 33% in 2011. More survey respondents also feel their own financial situations have improved, with 28% of respondents saying their situation is better than the previous year, compared to 21% in 2011.

But just because shoppers are feeling more positive about finances this year, don’t think they’ll be spending their money willy-nilly. Lessons from the recession are still fresh in everyone’s minds, and people are better prepared for how they spend their money. According to Accenture’s Holiday Shopping Survey, 51% say they will be paying for their holiday shopping with cash put aside for that purpose, compared to 45 percent in 2011. Also, only 5% of survey respondents expect to be “extravagant” in their holiday shopping. 

So what’s the best approach for reaching these cautiously optimistic, budget-conscious shoppers? The answer: a multi-channel approach.

According to Deloitte’s 2012 Annual Holiday Survey, the average gift spend among consumers who plan to hit the Internet, their smartphones, and stores this holiday season is $600 – an amount that is 71% higher than those who plan to shop only in stores.

By offering consumers a retail platform that combines the Internet, mobile devices, and brick-and-mortar stores, merchants gain valuable footholds into important retail channels. And with these footholds, merchants encourage cross-channel jumping – increasing presence means increasing the potential customer pool.

In keeping with the holiday spirit, we’re giving you four tips on how to improve your different retail channels to lure in those existing and potential customers.

  1.  Enhance the Usability of Your Online Store

    The Internet remains one of the primary shopping destinations for holiday shoppers. According to a study by the National Retail Federation, 51.8% of U.S. consumers will shop online this holiday season – which is up from 46.7% last year. These results represent the first time with this annual survey that more than half of shoppers plan to buy gifts and other items via the web.

    It’s no secret why people prefer the web – online stores provide shoppers convenience and ease. Who wouldn’t prefer buying the top sellers of the season from the comfort of their own home instead of fighting the crazy holiday crowds at the mall? Online stores are a significant, lucrative driver of holiday retail sales for merchants. According to a forecast by Shop.Org, the National Retail Federation’s digital division, online holiday spending this year would increase by about 12% from 2011 to reach between $92 and $96 billion.

    To capture a slice of these online revenues, merchants need to make sure their web store can handle higher volumes of traffic. Make navigating around your store simple, smooth, and intuitive – clearly and prominently mark the different areas that customers typically want immediate access to (such as a search box, new product arrivals, promotions, shipment information, etc. – see the image below for an example). Holiday shoppers are in a time crunch – they don’t want to think about where they need to click to find out what your top selling item is; they just want to click it. 

    Enhance the Usability of Your Online Store

    By placing clear and distinctive labels on your site, customers will be able to easily navigate around. The less effort it takes for them to find what they’re looking for means the higher the chance they’ll return.

    Remember that nothing says “don’t come back” like a buggy, confusing, non-functional site. Be sure you’re constantly on the lookout for any broken links, errors, or other undesirable features.

  2. Optimize Your Store for Mobile Devices

    With mobile devices being one of the foremost consumer technology platforms, retailers need to have an online store that caters to the mobile-based shopper as well as the desktop computer-based shopper. 

    According to the National Retail Federation survey, 46.1% of respondents owned smartphones while 22.4% owned tablets. Of those respondents who own mobile devices, 52.9% of smartphone owners and 64.1% of tablet owners will use their devices to research products and buy.

    Optimize Your Store for Mobile Devices                         

    Making a sleek, user-friendly interface for mobile devices makes mobile shoppers keep coming back.

    When creating a mobile store, remember to keep it simple and clean – resist the temptation to clutter up your storefront. This shopping medium is different from a regular online store in that you have a far more limited amount of screen space, so you need to fill it with the right stuff. Mobile shoppers want instant access to information about products and prices, and they want the ability to purchase items as easily as purchasing from a desktop computer. Also, just like with your regular online store, continually check your mobile offering for any bugs or issues.

    Of critical importance: make sure your mobile store supports all the popular mobile devices, such as iPhone, Android phones, Windows Phone 7, iPad, HP Slate, and all Windows 7 Tablets. People are connected to the technology world through a bunch of different hand-held machines these days; you want them to be able to access your store no matter which of them they are using.

    For more information on what customers are looking for in a mobile store, and what you can do about it, read our article Mobile Commerce to Get Ahead of the Retail Game.    

  3. Enhance the In-Store Experience

    Although consumers are becoming increasingly more reliant on technology, do not think that brick-and-mortar store locations are simultaneously becoming obsolete. Physical retail locations present their own unique advantages to both the retailer and the customer, and customers will still be flocking to them this holiday season. For example, according to Deloitte, 51% of consumers plan to visit discount stores this holiday season, with 45% planning to shop on the Internet – making discount stores and the Internet the top two holiday shopping destinations.

    However, brick-and-mortar store retailers need to be aware of “showrooming” – a trend where shoppers see a product in a physical store, and then search online for the best price and purchase online. The best way to tackle this is by keeping in mind that consumers essentially want a simple, seamless, convenient shopping experience that gives them value for their dollar. Retailers can do this by price matching against online competitors, and by strengthening customer service and product availability. By showing that you’re actively involved in giving your customers the best experience – with helpful, attentive store associates and systems that deliver – shoppers will recognize it and return. 

  4. Offer Discounts, Giveaways, and Gift Cards

    Because it can’t be reiterated enough – people don’t want to part with their hard-earned cash these days. Even though there’s more optimism with the economy, and even though people are spending more, that doesn’t mean they want to pay full price. And consumers not wanting to pay full price is becoming a key part of their shopping strategy.

    According to Accenture, discounts and promotions on holiday gift items remain a driver for the vast majority of shoppers, cited by 82% as important. Also, 78% of respondents say that at least half of their holiday shopping purchases will be discounted items, and 50% will be looking for a discount between 20 – 40% off the original price.

    Offer Discounts, Giveaways, and Gift Cards

    With more customers seeking out bargains and discounts, make sure your deals are front-and-center on your stores – both brick-and-mortar and online.

    Another thing to keep in mind when issuing discounts is to make your discounts enhance and add value to the purchase. For example, follow up with the customers who abandoned their shopping carts during the purchase process, and offer them a discount if they come back and complete it. Unfortunately, many online retailers are not doing this. According to a 2011 study by email marketing firm Listrak, only 14.6% of the Top 1000 web retailers use email campaigns as a way to retarget shoppers that have added items to their carts and then left. Don’t be like your apathetic competitors – make the effort to re-capture this important customer segment, and reap the benefits.

    One more thing to keep in mind is the hottest must-have of the holiday season: gift cards. According to Deloitte, 45% of surveyed consumers say the gift they wish to receive is gift cards/gift certificates.  With gift cards topping most consumers’ wish lists, and therefore topping most consumers’ to-buy lists as well, make sure your customers can easily and painlessly purchase gift cards either online or in your store. 

Multi-Channel Retail = Larger Consumer Outreach

As consumers become ever more technologically savvy, they are increasingly taking charge of the shopping experience. As they identify and utilize different sources of information and retail channels to achieve their shopping goals, merchants need to keep their finger on the pulse of customer needs and expectations. By finding the right systems for keeping you on top of shifting retail trends, your company will continue to grow and evolve with the customer. 

To learn more about important strategies that can help improve your retail operations, check out our infographic 10 Multi-channel Strategies to Keep You On Top.

If you have any questions, or if you would like more information on which retail systems can benefit your company, email us at retail@ignify.com.

Ashley Harbaugh is a Product Marketing Specialist at Ignify. Ignify is a technology provider of CRM, eCommerce and ERP, software solutions to businesses and public sector organizations. Ignify has been included as the fastest growing business in North America for 5 years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine and ranked as one of 100 most innovative companies in the world in the Red Herring Global 100 in 2011.

Microsoft Dynamics AX Spotlight in Accounting and Financial ERP Systems Buyer’s Guide by Technology Evaluation Center

December 12th, 2012 Ashley Harbaugh No comments

Ignify customer ESI Enterprises’ use of Microsoft Dynamics AX has been cited as an important financial software success story in the Technology Evaluation Center’s (TEC) Financial Software Packages for Medium and Large Enterprises Buyer's Guide.

A major distributor and contract manufacturer serving North America, Canada, and Mexico, ESI Enterprises works closely with customers to provide consumer durable products at low prices, with an emphasis placed on offering branded consumer electronics, appliances, housewares, sporting goods, toys, and other general merchandise. The company actively seeks opportunities to purchase a variety of consumer products from a variety of sources, and using a skilled team of buyers with global connections, ESI Enterprises frequently seeks out specific products desired by clients.

Previously using an outdated enterprise resource planning (ERP) system that could not adequately support the company’s technological or business growth, ESI Enterprises experienced disconnected manual systems that created processing inefficiencies and a lack of data insight. After evaluating multiple software systems, ESI Enterprises found that Microsoft Dynamics AX’s platform flexibility would provide a solid, adaptable foundation for growing with the company’s business development.

By creating a system that made inventory management, warehouse and delivery information, and financial data transparent and instantly accessible by system users, ESI Enterprises benefits from greater visibility of crucial business processes and the ability to strategize more effectively.

In regards to the company’s financial processes, the financial analysis and reporting capabilities of Microsoft Dynamics AX allows ESI Enterprises’ team to gain a consolidated overview of data that allows them to more effectively evaluate the financial health of the organization. With analysis services, reporting services, key performance indicators (KPIs), Management Reporter, Excel, and the system’s seamless integration with many third-party tools, the quality of analysis that the ESI Enterprises finance department delivers has improved with increased visibility and greater data access.

The ESI Enterprises case study in the Buyer’s Guide delves into the specifics of how ESI Enterprises operates with Microsoft Dynamics AX, and the benefits the company receives from using the system. To view the case study, please download the Buyer’s Guide here.

Ashley Harbaugh is a Product Marketing Specialist at Ignify. Ignify is a technology provider of CRM, eCommerce and ERP, software solutions to businesses and public sector organizations. Ignify has been included as the fastest growing business in North America for 5 years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine and ranked as one of 100 most innovative companies in the world in the Red Herring Global 100 in 2011.

Improve Supply Chain and Procurement Processes with UNSPSC Codes in Microsoft Dynamics AX 2012

December 5th, 2012 Partha Chattopadhyay No comments

With the growth of the business at Ignify, we felt the necessity of having a product code to reduce the effort in our supply chain functions. Efforts were made to generate an in-house product code, a code that took a long time to build and was not capable of increasing efficiency outside the organization in such areas as purchasing and outsourcing products.

Many other businesses have been in the same situation as Ignify – today’s customers demand faster fulfilment at lower cost (especially customers who conduct business through the Web, such as e-commerce). The need to approach procurement more strategically has never been greater. All of these combine to make fast, simple, accurate classification of goods and services an imperative in the marketplace.

Luckily, there is a single coding convention that all companies can draw from so that all speak the same language to speed-up and rationalize processes. And that code is called the UNSPSC.

UNSPSC code, the United Nations Standard Products and Services code® (UNSPSC®), offers a single global classification system. It provides an open, global multi-sector standard for efficient, accurate classification of products and services. The code’s hierarchical convention can be used for:

  • Company-wide visibility of spend analysis
  • Cost-effective procurement optimization
  • Full exploitation of electronic commerce capabilities

The availability of UNSPSC codes is simple; users can search http://www.unspsc.org/  to locate commodity codes that can be used by his company. The user can then browse and download the current version of the code at no cost from the website.

Use of UNSPSC code enables businesses to prevent duplicated effort by allowing every trading partner to code differently. These already available codes also mean that businesses can save time and resources by not needing to create the typical home-grown coding systems, which can take a year or more to develop. 

Advantages of UNSPSC

The main advantages of UNSPSC codes are:

  • The UNSPSC is available in 10 languages: Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Portuguese and Spanish.
  • Standard codes eliminate ambiguity.
  • Segments exist for Raw Materials, Industrial Equipment, Components and Supplies, End-Use Products, and Services.
  • There is a comprehensive categorization of codes, with over 20,000 categories available for businesses to use.
  • UNSPSC codes are responsive to the marketplace.

UNSPSC Design

The UNSPSC code is designed as a hierarchical 4-level tree structure: Segment, Family, Class and Commodity. These levels allow analysis by drilling down or rolling up to analyze expenditures. Each level in the hierarchy has its own unique number.

– Note: “Commodity” is not defined as bulk materials but in the broader sense as any article of commerce, including capital equipment, high-value products, and professional services.

  • Category titles are unambiguous and mutually exclusive.
  • Products appear in only one category; categories each have only have one parent.
  • Products are grouped according to dominant usage in the world market.

Please see Figure 1 for a description of each level in the UNSPSC code hierarchy.

UNSPSC Hierarchy

The purpose of the hierarchical structure is to enable collaborative commerce. Hierarchical organization allows a given company to focus on a level of specificity that best suits its purposes and situation.

“Root” = All Products and Services (implied)

The UNSPSC code’s hierarchical structure

Fig 1: The UNSPSC code’s hierarchical structure.

The following figure shows how UNSPSC hierarchy works with a real-life example.

UNSPSC Hierarchy Example

UNSPSC hierarchy  with a real-life example

Fig 2: UNSPSC hierarchy with a real-life example.

According to the above example of UNSPSC code:

44101501 Photocopiers – this is the number code referring to photocopiers.

44103103 Toner – this is the number code referring to toner.

UNSPSC Code Structure

Segment 44000000 Office Equipment and Accessories and Supplies

Family 44100000 Office machines and their supplies and accessories

Class 44103100 Printer and facsimile and photocopier supplies

Commodity 44103103 Toner

44103103 = Toner

UNSPSC Components

  • UNSPSC Code: 8 digits, e.g. 44103103
  • Title: The product that is identified by the code can be given a natural language text title up to 120 characters long, e.g. “Toner”
  • Definition: The product identified by the code can also be given a free-form text definition that gives a concise explanation of what the product is or does
  • Business Function: The 2-digit, optional Business Function codes can identify if the product/service is for Rental or Lease, Maintenance or Repair, Manufacturer, Wholesale, Retail, Recycle, Installation

How to use UNSPSC in Microsoft Dynamics AX 2012 Product?

Let us describe how we can use UNSPSC in Microsoft Dynamics AX 2012 Product. It has the following steps:

  • Creation of UNSPSC Category hierarchy types
  • Creation of UNSPSC Category hierarchy
  • Attaching UNSPSC codes to Products

Creation of UNSPSC Category Hierarchy Types and Category Hierarchies

Go to Product Information Management > Set up > Categories.

Two menus are available:

  • Category hierarchies
  • Category hierarchy types

The navigation  path for category hierarchies and category hierarchy types

Fig 3: The navigation path for category hierarchies and category hierarchy types.

Click Category hierarchies > Category hierarchy types and find UNSPSC and UNSPSC category hierarchy available. This is available out-of-the-box in Microsoft Dynamics AX 2012.

Category hierarchy types setup

Fig 4: Category hierarchy types setup.

Category hierarchies’ setup

Fig 5: Category hierarchies’ setup.

Click Edit to open the UNSPSC Category hierarchy.

Category hierarchy UNSPSC

Fig 6: Category hierarchy UNSPSC

The following page will open to create a New Hierarchy.

UNSPSC Category hierarchy page in edit mode

Fig 7: UNSPSC Category hierarchy page in edit mode.

Click “New Hierarchy node”.

Category hierarchy page to create a new hierarchy node

Fig 8: Category hierarchy page to create a new hierarchy node.

Create a new Segment by entering the Name of the Segment and the Code. In the example below, we have “Office Equipment and Accessories and Supplies” and 44000000.

UNSPSC Segment code created

Fig 9: UNSPSC Segment code created.

Place the cursor on the created segment and click “New Hierarchy node”.

Create a new Family by entering the Name of the Family and the Code. In the example below, we have “Office machines and their supplies and accessories” and 44100000.

UNSPSC Family code created

Fig 10: UNSPSC Family code created.

Place the cursor on the created Family and click “New Hierarchy node”.

Create a new Class by entering the Name of the Class and the Code. In the example below, we have “Printer and facsimile and photocopier supplies” and 44103100.

UNSPSC Class code created

Fig 11: UNSPSC Class code created.

Place the cursor on the created Class and click “New Hierarchy node”.

Create a new Commodity by entering the Name of the Commodity and the Code. In the example below, we have “Toner” and  44103103.

UNSPSC Commodity code created

Fig 12: UNSPSC Commodity code created.

The above steps describe the creation of the Segment, Class, Family and Commodity hierarchy of UNSPSC in Microsoft Dynamics AX 2012.

The user can also add multiple Classes under one Segment, multiple Families under one Class, and multiple Commodities under one Family.

Alternately, the user can use an available inbound port named CatImpService for importing Code categories.

Attaching UNSPSC codes to Products

After creating or importing UNSPSC codes, the user needs to attach them to Products.

To attach UNSPSC codes to Products, the user needs to go to Product information management > Area page > Released Products.

Select a Product and click Product category.

Released Product page in Microsoft Dynamics AX 2012

Fig 13: Released Product page in Microsoft Dynamics AX 2012.

Select UNSPSC as a Category Hierarchy from the dropdown, and also as a Category from the dropdown.

Adding Category Hierarchy to a Product

Fig 14: Adding Category Hierarchy to a Product.

Adding Category to a Product

Fig 15: Adding Category to a Product.

Category Hierarchy and Category added to a Product

Fig 16: Category Hierarchy and Category added to a Product.

The Value of Implementing UNSPSC

Implementation of UNSPSC helps to collaborate with customers or suppliers through the use of a common classification system. With this collaboration, businesses reduce inventory through product standardization, and automate the gathering and analyzing of spend data – which allows a uniform, enterprise-wise view of spend. It also helps to run centralized procurement functions, leverage volume for better pricing, and reduce off-contract spend at higher prices.

Value for Suppliers

Implementation of UNSPSC helps facilitate sales function, particularly through Internet exchanges. It helps suppliers to qualify as a preferred supplier to customers with e-procurement initiatives; speed up new product introductions using Web services, XML, etc.; and facilitate globalization of the business. It helps collect consistent sales data across channels and regions, as well as help businesses collaborate with customers to improve contract compliance, increasing the supplier’s market share – a win-win.

Conclusion

Given that this functionality is available out-of-the-box in Microsoft Dynamics AX 2012, every business who has implemented the system can gain the benefits of using UNSPSC code in their Product. If you have any questions about using UNSPSC code in Microsoft Dynamics AX 2012, or questions about Microsoft Dynamics AX 2012 in general, please email us at dynamics@ignify.com.

Partha Chattopadhyay is a Manager in the Microsoft Dynamics AX practice at Ignify. Ignify is a leading provider of Microsoft Dynamics ERP solutions to mid-market and Enterprise businesses. Ignify has been ranked as Microsoft Partner of the Year Winner in 2012, 2011 and 2010, and in the Microsoft Dynamics Inner Circle, Microsoft Dynamics Presidents Club in 2009. Ignify has offices and team members in Southern California, Northern California, Arizona, Tennessee, Illinois, Washington, Canada, Singapore, Malaysia, India, Philippines, and Jakarta.