Graybar's customers are primarily contractors, industrial plants, telephone companies, power utilities and commercial users. The company is a distributor of products manufactured by industry leaders such as General Electric Lighting, Square D Company, Cooper Industries, Lithonia Lighting, and Avaya Communication.

A few years ago Graybar experienced a 22% increase in year-over-year sales, which was not matched by similar growth in credit department personnel. Part of this rapid top-line growth was fueled by sales to new customers. The associated increase in the volume of new customer credit applications forced Graybar's credit analysts to focus much more of their time on processing credit applications, taking valuable time away from cash flow generating activities such as collections. The company also felt strong competitive pressures to improve its credit decision turnaround time, while protecting itself against credit losses in a deteriorating economic environment.

"Graybar has a very decentralized credit organization. A uniform method of gathering customer credit information was not employed across all locations. In many cases, this resulted in a lack of consistency in credit decisions as well", said Martin Beagen, assistant treasurer at Graybar. "With our company's growth and the changing credit atmosphere, we needed an application that could both speed up our decisions and provide consistency across the organization."

Graybar chose eCredit to help make credit decisions more quickly and consistently across its decentralized organization. The eCredit solution took Graybar's existing credit decision scorecard and automated it from start to finish, creating a unified, Internet-based network that employees across the country can access. This ensured that Graybar was extending credit using a consistent, objective methodology company-wide. Before implementation of the eCredit system, the credit department processed customer credit applications manually. Credit bureau reports, when obtained at all, were ordered on-line or by phone or fax. Trade references were obtained, usually by fax but sometimes by mail. On average, the entire process took about 40 minutes of direct labor per application, spread out over 2-3 days. With eCredit, credit department employees enter the customer data on a credit application residing at eCredit's website, where it is processed automatically in about 30 seconds. The system has real-time access to data and scores from credit bureaus such as Experian, and returns a credit-limit recommendation using the company's own proprietary scorecard as well as the raw credit bureau data retrieved. The system now processes about 1,300 applications per month, and the improvements in efficiency allowed the company to re-deploy 4.5 full-time equivalents (FTEs) to higher value-add activities.

"As a result of the eCredit system, our turnaround time for credit applications has dropped from 2-3 days down to 2 minutes," said Beagen. "And because we're saving time on application processing, our credit analysts can spend their time more effectively-on complex, high-dollar credit evaluations, lease financing opportunities, customer service and collections."

Graybar estimates it achieved full payback on the eCredit system in eight months, not including the improvement in its credit and collection performance since implementation. "The eCredit product was exactly what we were looking for-delivered on time and within budget," said Beagen.

"We are very, very pleased." As the system showed tangible cost-savings and process improvement, the image of the credit department within the company was also enhanced. According to Beagen, "All too often, the credit department is considered a back-room or black-box operation. Helped by the eCredit system, the credit department can show both internal and external customers that the credit decision process is scientific, efficient and consistent, as well as a key contributor to Graybar's overall financial performance."