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Viru Elektrikaubandus on switching software for the first time in almost 30 years

Source: Äri-IT, spring 2022

Viru Elektrikaubandus has been operating in the market for the wholesale and project-based sale of electrical goods since 1994. The company, which started in Lääne-Viru County, now has sales offices in Tallinn, Tartu, and Rakvere. Despite their long history, however, it was only last year that the company decided to switch to new software, the idea for this, by the way, was proposed by the employees.

‘Our company is indeed a little unusual in that the need for changing software came not from the top down but from the bottom up. Our employees wanted more, and this also motivated the management to take action. And thanks to this, the deployment of the new software also made them work harder,’ noted Urmas Mülla, the head of Viru Elektrikaubandus, which has just over 40 employees.

He added that the market has seen many changes over the past 30 years. ‘It might seem like an electrical wire is just a wire, but both the products and the requirements imposed on them have changed. Take light bulbs, for instance: until five years ago, incandescent lamps were the norm, but now they are no longer produced in the European Union, and we have switched over to LED bulbs. And while in industrial automation, equipment used to be surrounded by people, now automation control and testing roles have been replaced by sensors and detectors.’

As for the past year, Mülla said the period has been fairly confusing for the company. ‘Back in spring, no one knew where would be at in autumn, and it’s rather difficult to make plans like this. Nevertheless, compared to 2020, we managed to increase our turnover by around 10%, but did not quite reach 2019 levels. Still, 2021 was a decent year in terms of financial performance, although the outlook for the future remains unclear. Our annual turnover in recent years has been a little over 10 million euros. We are in a time of rapid change; inflation is high, and electrical engineers are extremely difficult to find. While our company is sales-oriented, our customer service representatives are all electrical engineers. The labour shortages mean that wage pressures are mounting rapidly… How do you remain sustainable in such a competitive environment?’

The management of Viru Elektrikaubandus saw a solution in the digitisation of the company’s operations, which was embarked on in 2021, and to which significant resources will be devoted this year as well. ‘The software change was preceded by a full year’s worth of hard work and there is still a long way to go – the users need to learn how to operate with the new application. It needs to be expanded and customised to achieve maximum efficiency,’ Mülla said.

IT WAS TOUGH AT FIRST, BUT NOW OUR STAFF ARE BEAMING WITH JOY

For the deployment of the new software, Viru Elektrikaubandus turned to BCS Itera, who caught the eye of their management in the first half of 2019 at a morning seminar, where a plan to do something about the company’s software and digital capabilities with a view to growth and development was being discussed. The reason was obvious: both the environment and Viru Elektrikaubandus had clearly outgrown the software they were using. ‘It had become evident that the software as a tool was no longer providing us with as many opportunities as we needed. We discussed the matter with our employees and realised that it was holding back our overall development. We wanted our digitisation solution to offer more opportunities for sustainable operation than we could make use of,’ Mülla explained. ‘It was a big step because we had never changed software before. We had only heard from our suppliers and partners that it would not be easy and would require major changes in how our people conceptualise things.’

He admitted that leaving the long-familiar comfort zone was difficult, and implementing the changes was not easy, but now it looks like everything is starting to work out. ‘Like every company, our team, too, includes people who are more open to change and those who are less so. In hindsight, I think maybe we bit off a little more than we could chew at first by seeking to adopt all of the upgrades at once: sales, accounting, warehousing, HR management, and banking modules. But now we’ve reached a point where most of our staff are beaming with joy!’

The development process is still ongoing, but the customer analysis view, for example, is already much better and much clearer. And there are still many functionalities that Viru Elektrikaubandus has not yet fully adopted, but they are constantly discovering new things and have realised that this development is an ongoing one and the ceiling is high up in the sky. Mülla added that there are a multitude of minute details, which at first do not appear to matter much, but actually contribute greatly to ease of use and provide a real leap forward for the company.

For the customers of Viru Elektrikaubandus, the new software has come with an updated customer portal. Although the company mainly offers engineering solutions that are developed in close co-operation with partners, the portal can be used for ordering products by customers who do not need consultation services. Regardless, bucking convention, Viru Elektrikaubandus is not all that focused on the online store, but oriented towards added value.

WHAT STARTED OUT AS A STANDARD SOLUTION QUICKLY TURNED INTO A CUSTOM ONE

While the company initially accepted an offer for a standard solution, it soon became clear that the software would need some changes after all. ‘This is actually perfectly normal, because no two companies are alike. Still, we were surprised by how the standard solution swiftly became quite specific, as our sales process had seemed par for the course to us. Our partnership with Itera went smoothly, despite the fact that software development is a completely alien world for our electrical engineers and sales enterprise! Itera’s strength is definitely their salespeople, and what they were telling us did occasionally sound too good to be true… There was a bit of tension there, but the whole integration and deployment process is extremely complex, after all. Fortunately, they have professional developers who tolerate stress very well and are able to find a reasonable solution in any situation,’ Mülla explained.

As to what has changed at the company, he noted the following: ‘Before, our warehouse people had to track down goods with the help of paper documents, but now the order picking processes is executed using Business Central on a tablet. Power BI, too, is an excellent analytics system, which is used by around half of our employees – some for compiling analytics reports and others for viewing them. What’s really great is that while, before, we used to just see what the software had to offer us, now we are able to create the content we need ourselves, and get much more out of the software.’

ONE KEY TO THE COMPANY’S SUCCESS: PERFORMANCE PAY DEPENDS ON EVERYONE’S CONTRIBUTIONS

Estonian-owned Viru Elektrikaubandus is engaged solely in B2B sales. The company’s selection of goods ranges from simple light bulbs to sophisticated automation equipment, and includes more than 30,000 products. They serve around 2,000 regular customers, who are roughly divided into four groups: 1) construction companies that install electrical equipment; 2) equipment manufacturers who need electrical materials; 3) industrial enterprises that purchase electrical equipment for maintenance, investment, and reconstruction; and 4) distributors of building materials, i.e. hardware stores.

Mülla believes that one of the reasons for the success of the company is that the employee’s wages depend on performance pay. ‘If we work hard together and it shows in our monthly results, it will immediately be reflected in our staff’s bank accounts. We were also fortunate in that we had already been allowing our engineers to work from home before the coronavirus pandemic, so when the emergency situation was declared, our people were used to it and we had the technology in place. And since performance pay depends on everyone’s combined contributions, we do not have to worry that our people are not working hard enough at home,’ the head of the company said.

He added that employees are also motivated by a fitness benefit, which has been met with enthusiasm. ‘We are giving our people the opportunity and the means to work, and those that want to will do it. Those that don’t probably won’t last long, as it does not take long for the team to notice when someone is not pulling their weight. We are extremely pleased that more than half of our 40 employees have been here for over 10 years! It shows that we are on the right track.’