New Directions
Now that the hype is over, distributors are taking a more practical look at e-business solutions
By Joe Nowlan, Associate Editor -- Industrial Distribution, 2/1/2004
Remember the Y2K"scare"? How time itself would come to an end because every machine known to man would not be able to tell the difference between 1900 and 2000?
It's good for a laugh to think back on what seems like many years ago. But for some in the e-business field, a look back at that non-scare shows that it might have ended up being good for more than just a laugh.
Paula Giovannetti, director of electronic commerce for the Industrial Supply Manufacturers Assn. says a lot of overdue thinking and reacting resulted from those days.
"Whether the world would have come to an end because we didn't have those two digits in there for the century, I couldn't tell you," she laughs. "And it did turn out to be a non-event for a lot of people. But I think it went a long way towards companies, for example, getting their accounting or warehouse management systems updated. People spent some time and money and said, 'As long as we have to fix this thing, what else do we need to do?'"
Like the fellow who starts to read the instructions on an appliance only after seeing how much he can do on his own, many who are involved in e-business today are learning more each day, both about what to do and what not to do.
"We're actually seeing real benefits from some of the Y2K stuff we had to do," says Giovannetti.
Today, e-business can be defined as practically any electronic business solution that companies can use to make their lives easier. A general look at e-business—and its related industries—shows that manufacturers and distributors have become better educated about e-business and its related technology and language. As a result, many are using e-biz and related software for more and more functions such as inventory control, profit analysis and market forecasting. While this increase in knowledge and education is vital, more is needed.
Customers are more savvyMike Hennel is president of Silvon Software, a supply chain-focused performance management solutions provider located in Westmont, Ill. He sees a savvier group of customers than he did years ago.
"We used to sell tools to IT people and then work with them on a technical consultant basis," he says. "Now the approach is to go in and educate them after we understand their business and how they work. Or maybe go in and do a workshop where we start laying out to them what the vision can be."
Alas, from Hennel's perspective, not all customers, or potential customers, with whom he meets have moved up on the "maturation curve" of technology. Some companies, he says, "still rely on the fact that Joe Blow, for instance, in inventory control knows how items move and he'll 'tweak' things."
But what happens when Joe Blow retires and a company has to modernize? Hennel tells the story of a company he visited last year. He received a tour as part of the getting-to-know-you phase, he recalls. This company was using the "Joe Blow System" of inventory control. It consisted of an enormous manila folder.
"You opened it up, and there were about 200 of those yellow sticky notes!" he laughs. "For real long-term plans, Joe Blow would write information on the folder's cover! These businesses change and many Joe Blows are starting to retire. So various businesses are in need of someone to help them improve their business. And it's not a technology issue. It's more like 'How can you help me walk, before I run?'"
It is at this particular stage of the e-biz curve—the teaching stage—that Giovannetti says errors of omission, as well as commission, have been made over the years. She says the training and teaching methods used by many companies have been inadequate, especially in terms of technology sophistication. For these reasons, she says, "If I were running a company today, I'd have a vice president of education."
These days, she explains, "You have new people in new jobs, old people in new jobs, old people whose jobs have changed. And we don't train these people properly, so they often just try to figure it out as best they can."
She refers to better financial times for what she feels is a common example.
"Back when we had money, a lot of us bought all new stuff, like a fairly expensive phone system," she says. "Find me five people in your company today who can make a conference phone call!"
While he's not announcing his candidacy for vice president of education, Hennel agrees to a great extent.
"We certainly can't be of help to someone if they don't have the fundamentals or at least the foundation in place," he says.
When Hennel refers to a savvier customer these days, he could well be talking about the MJ Pipe and Supply Co. in Rochester, N.Y., a 12-person distributorship serving the water-sewer industry. Its owner-president is Mike Dooley, who candidly describes his company as, "a baby guy as opposed to one of the real large guys. We sell to the ditch diggers, and most of them aren't ordering over the Web."
Nonetheless, MJ Pipe is a company that thought it could use the help of Silvon—which, at first, was more than Silvon thought.
Dooley initiated the first meeting, asking Silvon to build "a technology road map for me," he says. Silvon, however, thought MJ Pipe might be a bit too small to take advantage of their product, their Stratum software. Rather then feel rejected, it was an honest, clear-eyed answer that Dooley found "refreshing."
"I was sort of impressed at hearing that," he says, "as opposed to their thinking 'here's another fish we have on the line.'"
The two met, though, and Silvon realized that Dooley and his company did, indeed, have the technical savvy and foundation for them to work together.
Silvon's approach "wasn't from a 'techy' standpoint but more from a business solution standpoint. That's very important," Dooley says.
MJ Pipe has been using Silvon's Stratum software, specifically its Sale Performance Module. Silvon's efforts have enabled MJ Pipe to more accurately gauge their customers' profitability, by breaking them down by segment, individually or by invoice.
More mature, realisticSo with MJ Pipe as an example of a savvier e-business user, where does the industry go from here? A consistently more mature attitude, for one thing; and a more realistic level of awareness about what businesses should expect e-biz to do for them, and—equally important in many cases—what it should not.
Somewhat tongue in cheek, Giovannetti compares the e-business world to a love affair or a marriage.
In the early days of e-business and the Web, when a new technological development came along, "We were in that starry-eyed, honeymoon stage," she says. "But now we're down to the married couple's 'let's get this to work' stage. I see people looking at it as more of a business decision than before."
Hennel sees the road ahead in much the same vein.
"What people are looking for are not the projects that are going to radically change their business," he says. "They are looking for the projects that will enhance their business."


















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