Chicago-based TruServ is a new entity, formed in 1997 by a corporate merger, but its True Value hardware stores - a name familiar to hardware buyers since 1948 - are not. Recently, the company became concerned that its cooperative network of storeowners was relying too much on consumer sales and missing out on the lucrative industrial market. So last May, as other companies were sacrificing their Internet initiatives to the angry gods of the stock exchange and the bottom line, TruServ launched its customised Internet catalogues, allowing store owners to market themselves to large companies. TruServ provides the back-end order-taking and fulfilment capabilities (powered by Net Warehouse, an online ordering application the company spent $US1 million to develop); storeowners handle the marketing of the site and provide customised pricing schemes and home pages for each corporate customer. To date, 150 out of 7638 True Value stores have signed on to the program.

One store in New Jersey, Warrenville Hardware, has already saved a large corporate account by using the online catalogues, says the store's owner, Bill MacDonald. MacDonald believes that his shop would have lost a $US1 million contract with Lucent Technologies if he hadn't been able to respond to Lucent's request for an online ordering system. He has also begun offering the service to other corporate customers, such as Chubb & Son, an international insurance provider also based in New Jersey. "The catalogues help us keep business and increase business," MacDonald says. TruServ implemented this project even while CIO Neil Hastie's budget dropped from $US58 million in December 1999 to $US34 million this year. Hastie's response has been to streamline his software development process. He instituted a quality control program in which IT employees reviewed every step of the development process before executing it. So rather than building something and spending an average of 23 man-hours per day to fix it, as was previously the case, Hastie says his staff now spends an average of one hour per day debugging software that has been carefully reviewed throughout its development cycle.

"The quality is built in throughout the development life cycle," says Hastie, who spent 18 years at Illinois-based Fel-Pro, which was purchased in 1989 by Federal-Mogul Corporation, an auto industry supplier headquartered in Michigan. "We build quality in to the process, not at the endgame." Hastie also reduced costs by letting his staff shrink and killing lifeless projects. He pulled the plug on a data warehouse for a customer service application that was soaking up resources but that no one was using. He says he's overseen a staff reduction of 35 per cent to 40 per cent since he arrived. Sometimes, hard times leave you no choice.