Arrow Electronics is the world’s largest distributor of components and enterprise computing systems.
Relying on manual management of a complicated subscription service was not allowing them to scale.
Zuora helped Arrow automate their subscription management - pricing, billing and finance.
Arrow is now thinking further and leveraging subscription management to build an ecosystem of solution providers.
Arrow Electronics started in 1935 by selling radio sets. Today it operates as a valued supply chain partner in 56 countries and is a $23 billion business. For many decades, Arrow was a straightforward and extremely profitable parts warehouse business. But, the company recognized a decade ago that they needed to shift their business model from a commodity provider towards value-added services. Arrow’s customers used to come to them asking for isolated components. But they were increasingly looking for integrated outcomes.
As a result, Arrow started thinking in terms of desired outcomes rather than stand-alone devices. They now offer design engineering services and system administration to help innovators bring their ideas to fruition and close gaps in knowledge and skill sets. Arrow’s subscription service allows manufacturers to search over 300 million electronic parts for cross references, lifecycle,parametric, obsoleteness forecasts, regulation compliance, and inventory data. They can then apply that data to the manufacturer’s bill of materials(BOM) and active updates can be sent to manufacturers as updates to these components are made.
While Arrow’s work and vision was undoubtedly ahead of the curve, their billing and financial processes were unfortunately not. Relying on manual management of such a complicated subscription service was not allowing them to scale.
And where there’s subscription, there’s Zuora. Zuora helped Arrow automate their subscription management.
Pricing was simple with monthly and annual plans that offered very limited room for customization. With Zuora’s flexibility, Arrow can now iterate and test new models such as pay-per-use, usage models, etc. Manually generated invoices were sent to customers as large Excel files - no doubt an inefficient and error-prone process. Everyone was billed in USD irrespective of the fact that many customers were in Europe and Asia. Zuora automated accurate billing and also helped with multi-currency including electronic payment transactions.
Upgrades and renewals were also processed via massive spreadsheets. Today, customers can manage their subscriptions online and information automatically flows into billing and finance. In addition, Zuora helps Arrow with revenue recognition, reporting and Zuora’s seamless Salesforce integration.
Arrow is now thinking further and leveraging subscription management, connectivity, design engineering, and enterprise computing to build an ecosystem of solution providers.
Arrow’s subscription service allows manufacturers to search over 300 million electronic parts for cross references, lifecycle,parametric, obsoleteness forecasts, regulation compliance, and inventory data.
“If you had shoes that had sensors in them you could charge for how many kilometers do you want to walk per month! Those kinds of business models never existed before.” – Matt Anderson, Chief Digital Officer & President, Arrow Electronics.