Producer Profile
Juan’s Ready Mix 2016 revenue: $475 million Locations: 85 plants EBITDA: 10.4%
The expense of a ticket
Juan’s Ready Mix was concerned about the costs associated with IT support for the quote-to-cash process. The CFO reviewed the spending on IT support and made a list of the process:| • Hardware – servers – data center – installation – configuration – switches – routers – security fees – energy (power and cooling) – maintenance and annual support | • Software – Systems for dispatch – DB – security – mix management – quality control – annual support – other | • Connectivity – Systems for dispatch – installation – configuration – support fee – T1 – trunk – modem – router – wiring – internet line between server locations and remote sites |
| • Servers, switches, routers, security fees – installation – configuration – maintenance – annual support | • Labor – Employee support, maintenance and configuration of software and hardware – Contractors for configuration, training, support and maintenance – Training expenses |
The cost of the Cloud
The CFO created a technology focus group to scour the marketplace for SaaS (Software as a Service) offerings to improve the quote-to-cash process. Given the extreme age and technical obsolescence of the core dispatch software, it was difficult to find suitable “plug-in” alternatives for functional areas such as CRM. However, several component packages were identified as well as a promising quote-to-cash offering. The SaaS offerings were found to have several key features, first of which was Total Cost of Ownership (TCO). The pricing model was based on usage and thus scaled with the seasonal volume. Further, there was no need for servers, data centers, support software, or the hoard of staff required for support. Finally, and somewhat unexpectedly, data exchange and security were much better since the SaaS offerings were all based on modern tools. As a result of the focus group’s findings, Juan’s Ready Mix began migrating away from outdated, client-server tools to modern, Cloud-based systems. The economics justified the change; but more importantly, the modern tools enabled Juan’s Ready Mix to improve business processes to reduce costs for the producer and its customers. Customers loved being able to see daily activity on mobile phones, salesmen could quote on tablets, and so much more.Economic impact
Juan’s Ready Mix has started the process of switching from client-server based software to SaaS. The first target was an isolated group of five plants and included a complete transition to SaaS. The all-in costs of the SaaS, prior to staff training, amounted to $2.50 per ticket. This equated to a savings of $1.85, with the (invaluable) bonus of empowering better business processes. The CFO plans to complete the company-wide transition in 2019, anticipating a $1,115,000 savings, or 2.3% EBITDA improvement.EXPO CONCRETO AMCI 2019
Sysdyne will be attending Expo Concreto AMCI 2019 in Puerto Vallarta, Jal., Mexico, August 21-23.
The Mexican Association of Independent Concrete Manufacturers/Producers (AMCI) organizes one of the largest events in Mexico within the Concrete and Construction Industry, Expo Concreto AMCI 2019, which will be based at the Sheraton Buganvilias Resort & Convention Center, Puerto Vallarta, Jalisco, August 21-23 2019.
To learn more, visit AMCI’s website
