GE Access, Sun Aim To Solve Pain Of Contract Processing

"It wasn't doing any good, so after a while we stopped bothering," said one solution provider at GE Access' annual New Frontiers Conference earlier this month.

But Sun didn't forget. Behind the scenes, GE Access and Sun have taken steps to address the problem, which has prevented end users from receiving warranty certificates for months. Authorizations that used to average 36 days now take 15 days, and the companies believe they can get it down to four days, executives said.

"Service authorizations have always been extremely painful. We had some customers that had contracts that took as long as a year," said Anna McDermott, vice president of the Sun business group at GE Access, based here. "We had huge customer [satisfaction issues with it."

GE Access and Sun entered into a joint program to improve the process, and results are finally showing, executives said.

"For the last year and a half, it was a case of [finger-pointing," said McDermott. "But as a team, we were able to get down to the root causes [of the problem."

Together, the companies found that there were 267 steps from the time a solution provider turned in a contract to the time the contract was approved by Sun.

"There were too many processes and a lack of automation. Every night, we were sending a courier with a stack of contracts out to [Sun's Broomfield, [Colo., office," McDermott said. "They were entering the same info, and that's where errors can start to occur. Now we EDI the contracts. It eliminates that next level of data entry."

Because Sun processed the service contracts manually, when the contracts started piling up the manufacturer focused on those that had the most immediate financial impact, said Gary Grimes, vice president of U.S. partner management and sales operations at Sun.

"We're very conservative in our accounting practices, especially at the end of a quarter," Grimes said. "If we get a $3 million service renewal order that doesn't commence until October, we don't feel compelled to get that order processed this quarter. What we do is prioritize by revenue impact in the current quarter. We spend our energies getting those completed. Orders can sit around. That's a great lag effect, and we're addressing it."

The delay in Sun service contract authorizations is the largest issue that resellers have with the manufacturer, said Steve Chase, executive vice president of Alphanumeric Systems, Raleigh, N.C.

"Why does it take six months to get a Sun contract in place? It's got to be simpler," said Chase. "If we can go to retail and buy a SKU for a two-year service contract for any product just like that, you ought to be able to do that [with Sun."

The backlog of contracts at the end of June was the lowest in more than two years, McDermott said.

"We have a lot further to go, but the improvement has been tremendous," she said. "Hopefully, with the new process, we can decrease the backlog."

"I'm glad to see changes in the service contracts," said Jim Stanton, director of consulting at Applied Solutions, Dallas. "They said it's gone from 36 days to 15 days. We haven't seen that, but we have seen improvement. That's one of the biggest challenges we have right now."

The long-term answer is an IT solution, but for the immediate future, the companies worked to decrease the number of steps involved in contract authorization, McDermott said.

"One of the root causes was discrepancies," she said. "Either the serial number was wrong or data was missing. We had no visibility into validating the information going to Sun. Now we're able to do that."