When facing a sceptical board and promising he could build a sales tool of unparalleled power and versatility, Laurence Bloch was taking a huge gamble. He then knowingly increased the stakes even further by changing roles from general manager of operations and logistics to a full-time IT position. "The gamble for me was that if it didn't work, I would need to walk out the front door," Bloch explains.
The system Bloch wanted to build for Skansen Giftware back in 1996 involved image-to-database technology that could run on a laptop computer. He had the support of the then managing director, who, he says, had an exceptional vision on technology. "He knew exactly what he wanted, if not how to get it." At the same time, the board was probably correct in its view that it would prefer to sponsor known solutions rather than unknown technology, Bloch concedes. "The technology didn't exist. WC Penfold was working on a system, and Woolworths was working on one and they couldn't get it right from an imaging perspective. It hadn't been done successfully anywhere in the world.
"I sold the argument to the board at that time that each sales rep's selling potential would go up by 20 per cent at least. Of course, that's a lot of return and that was enough for the board to say: 'Yes, we'll go with it', which they did."So Bloch set to work on the development of his Order And Sales Imaging System (Oasis), in order to overcome sales inhibitors that had bothered him since he first joined Skansen Giftware some two years earlier.
"Basically, the problem I recognised when I arrived was that we had about 10,000 stock units of product and the sales reps needed wheelbarrows to carry all their catalogues. There were mountains of catalogues," Bloch says. "The retailers' store time was very precious, so the reps were only displaying a small quantity of our stock, and probably only goods that they liked or were used to showing. They were also walking around with manual price lists that were pretty much out of date the second they walked out of this building. So we were losing a lot of money in sales potential that wasn't being realised."What the company needed, Bloch felt, was a portable medium that would allow the capture of images of all of Skansen's products and its use as some kind of presentation tool. "At that time, we couldn't get a notebook computer with a hard drive big enough to house a large number of images," he says. "Also, the speeds were slow and, from a server point of view, to drive any sort of application NT was not then a standard."But, having received the green light, Bloch still needed to make some assumptions about technology and begin developing Oasis. "I worked backwards by developing it from a sales person's perspective instead of from a technical perspective. I asked: What do you need? What is your best dream for a sales tool? "And we worked backwards in the hope that there would be a notebook big enough to house all our images when our development was finished, and that NT would become a standard. Thank goodness we were right."The development team made several other gambles in those early days. "We decided three-and-a-half years ago to stay with the Microsoft products, because we believed that was where the world was going to go. And guess what? That's where the world went," Bloch jokes. "Whether it's good stuff or bad stuff, it's become an acceptable standard. Everybody's using Windows 95 or Windows 98, and most people are using some kind of Microsoft tool. It has become an accepted business standard."The product Bloch devised, and had a Melbourne software house develop, contains on a notebook computer a full complement of images of every product Skansen handles. It also holds a relational database that "twins" the company's financial legacy system. "The reps have all their customers, all their debtors information, back orders, forward orders, history, prices and images on the notebook," Bloch explains. "They basically call up a search, see the image and stock status, and place the order directly against the image. The error content is non-existent. The reps can't make a mistake unless they see something that isn't there."The system offers considerable advantages over straight Internet order and imaging systems, Bloch believes. "Internet ordering is limited: you see the product and you buy it. But Oasis gives the rep the history of the customer, credit information, invoice history, and purchase order history. It also allows the reps to create a presentation so that they can walk in to see the retailer and give the presentation without the setting up, searching and stagnation.
"Anybody in our organisation who travels has a notebook computer, and anybody who has to deal with any kind of display or customer presentation will have Oasis on their machine. They don't have to be sales reps: some people just use it as a presentation tool."Further advantages come for the sales reps when it is time to lodge their orders. "Every night the rep simply pushes a button on the notebook, which collates all the day's orders into one compressed file. Over the Internet those orders are sent directly into the order entry process, bypassing all manual order entry inputs, and at the same time the system grabs any incremental change data from the day before. Information about new products, changed prices, stock in hand and any new images is placed on the notebook transparent to the user, who then has a complete picture of what happened the day before."Bloch adopted an interesting approach to Oasis support when he made senior employees responsible for supporting other staff. "We decided to utilise our people in the field as support, rather than put on an internal help desk," he explains. "In other words, state managers will basically be the support for their sales reps. So they were trained as advanced users and handle the day-to-day user issues.
"They reacted well to that, because it keeps them in touch with their sales people and any problems they may be having, and it gives them knowledge of the system that's generating the revenue for their budgets. We have actually turned our people into support people and users at the same time, and the knowledge growth and personal training in that is immense," Bloch says. "I think if we had left it to some kind of structured process, with a help desk, it would not have been as beneficial as having someone out there in the field actually seeing the issues at the coal face. It has helped us, too, with the development, with fine-tuning and with fixes."The Big PictureWhen work started on Oasis, Bloch could not afford any tunnel vision. His development had to run parallel with an overhaul of Skansen's legacy system.
"It was another nightmare that had to be tackled from an IT perspective," he says. "When I got here five years ago they hadn't had an upgrade of the system since 1986. It had about two-and-a-half thousand programs in it and was basically useless. The reports were wrong and the figures didn't balance. It was just a means of invoicing and landing shipments as far as I was concerned.
"We had to decide whether to go and find something brand new or bring [the existing system] up to standard. I decided to keep it for the sake of the end users. The company had just listed on the stock exchange and had just moved from the western seaboard to the east; but the people had a familiarity with the system and I didn't want them to start with something new."The legacy system, known as Online 2000, ran under SCO Unix in the Advanced Pick environment, with which Bloch had come into contact while working in a previous job as manager of the Lionel Singer Group of Companies. "It's an excellent system, still used today, and with a very large user base in Australia. It's a very good manufacturing and distribution system," he acknowledges.
The enhanced version of Online 2000 that now runs Skansen's main legacy systems has been adapted to support Oasis users. "We basically incorporated into it the facility to produce the information for Oasis so that at the end of every day it creates about 15 files of change data and uses a bridge between our Unix and our NT environments. This creates a virtual driver on the Unix box and sends the information over to the NT environment. The Oasis server in the NT environment grabs all that information and splits it up into the rep areas.
When the reps dial in over the Internet the NT processor sends the files off to their notebook computers," Bloch explains.
"The sales team reckons Oasis has increased their revenue by between 15 per cent and 20 per cent. It's now the only way they sell in this organisation.
There are other benefits and efficiencies as well; for example, the error content is down by at least 60 per cent, and the turnaround has been reduced from about five days to between one and two days now," he says. "It has become just a process. When you have manual entry it takes only one customer service person to be sick for one day and everything starts falling behind. This system is no longer reliant on people: it just requires someone to push the button.""Taking all these positives into account, like any system, Oasis still requires manual assistance at times, due to data corruptions, order duplications and user error. However, we are continuing to streamline these processes to keep the system as automatically transparent as possible," Bloch admits.
There are further developments in store for Oasis, Bloch says. "We're looking at adding audio to our images, especially in our CD business. We will probably arrange it so that you'll bring up a CD title and see the picture of the front cover of the CD and you'll be able to play about 10 seconds of each track. It's capable of video presentation as well.
"We've built Oasis in such a way that it's a vanilla product with 150 plugs sitting outside it that we can plug in. It's capable of anything.
"I believe it has pretty much revolutionised the way of selling in our industry, and it's right up there with anything else in any other industry," he says. "This product is not only for Skansen, it's for anybody who has a widget -- or 1000 widgets. If you've got products to display, this is the way to do it."New HorizonsHaving won his great gamble, Bloch has now found other windmills to tilt at.
"We are very focused on e-commerce and closely involved in EDI with the major retailers," he explains. "We place purchase orders into their stores and subsequently they do the same with us. It's reverse purchasing, which is like a minimum and maximum stock criteria the department stores set. As soon as their stock drops to a certain level, we automatically send a purchase order into the store via EDI and top it up. It's automatic authorisation. It's more effective, more efficient: we're merchandising electronically.
"I'm now bent on point-of-sale software. I want to sponsor a computer till/register in every single store. We will pay for it and in return get a certain amount of merchandising space and carte blanche to reinforce our product lines. And every time a product's sold its barcode is scanned, and at night there's a big pool of data showing daily stock movements of our products.
At the same time we can send information on best sellers and specials to our customers. That way we would become part of the retailer," he says.
Looking a Gift House in the Mouth
Skansen Giftware is one of the largest giftware distribution companies in Australasia. It handles "contemporary giftware", including calendars, boxer shorts and decorative socks, as well as glassware, ceramics and collectibles.
The company employs between 120 and 150 people and, with about 15,000 product items, generates revenue of about $50 million a year.
Following a recent merger with Brisbane company MRA International, Skansen has moved into the distribution of CDs and videos, and even has its own range of brands and titles. This area of the business has not yet been consolidated into the Oasis sales tool.
Offices in every large Australian city, as well as Auckland and London and branches in the US, are linked by what Laurence Bloch describes as a "most sophisticated" network. "We work on a frame relay system, so all our branch offices are connected by frame to our main legacy system here. There's no IT processing at all in our branch offices; no banks of computers to back up, no procedures to follow other than to switch on and work. Everything is controlled from the central control room," he explains.
Midnight at the Oasis (31-12-99)
The millennium bug is vexing Skansen's Laurence Bloch as it is every IS manager, even though he feels he is on top of the problem. "We have met the deadline on all our core systems and the notebook side of Oasis is done," he claims. "We are just working on the server side, which was developed for NT 3.51 because NT 4 wasn't available at that time. The difference between the two versions is long file names, which 3.51 doesn't like. That is where the conversion factor has to come in, but from a data perspective that is all fine."Like all other companies Skansen retains some concerns about the compliance of its suppliers. "I developed a Y2K strategy about a year and a half ago. We have, of course, notified all of our suppliers and sent out forms like everybody else and got only two back, like everybody else," he says. "But we built a contingency plan and we have a number of suppliers for each particular product. A lot of our suppliers have factories in the Asian region. Quite a few of them have no Y2K implications: a kiln is a kiln and it makes a ceramic mug.
However, it does have implications for shipping and freighting and we've considered those.
"Our big season is Christmas; so, in a worst case scenario: if it hits us, it will happen in January, which is a quiet time for us, and we can probably handle that from a business perspective," Bloch says. "Operations here on January the first will be business as normal. We've put a lot of time, effort and money into making sure it's going to happen. We won't let the millennium affect our business."Fun on the WebWith the URL www.fun.com.au, the Web already plays a big part in Skansen's business and will inevitably be strengthened. From a marketing perspective the company has two sites: one developed for retail customers, who are able to place orders over the Internet; and the other for internal customers.
Skansen staff conceptualise the design, but go outside for the coding, Laurence Bloch explains. "We get independents to house it on our behalf, which means they actually run it. They are our ordering house. We have one drop a week and they distribute from that drop to their customers, who are the people placing orders. So they are our customer, and whoever orders is theirs. We want to keep it that way. The last thing we want to do is start dropping one pair of socks to two million people once a week."With some 12,000 hits a week, the commercial site is proving to be a money spinner. So popular is an interactive Skansen site for the Beanie Kids dolls that Bloch is planning a number of marketing initiatives built on the Web.
"We're getting involved in a more interactive approach in promoting our products -- turning them into things you can actually interact with," he says.
"Anything sells if it is marketed correctly."
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