Warehousing, accounting, payroll management, purchasing, sales data and website hosting — vital operations to any distributor — can all fall under the information technology (IT) umbrella.

“Knowledge is power,” says Bo Ochsner, vice president of National Paper and Sanitary Supply, Omaha. “Even the phrase ‘information technology’ connotes knowledge, and if you can make more information accessible to your employees and your customers, then it will impact your business.”

From the very small two-person company, to the gargantuan master distributor, technology applications are providing a sizable advantage. Community Clean of Franklin, Ind., is one of those distributors for which information technologies have made an impact recently.

“Our company has always been made up of just my son and myself,” says owner Robert Sauer. “We’ve been in business for about seven years, but it was just last year that we computerized and started using a new distribution software program.”

Tasks that once took days, like sales tax calculations, now take only minutes for Sauer, and he’s thrilled by future IT possibilities. But few distributors have the on-staff expertise needed to manage and run IT applications.

“We’ve hired a woman who manages the technology applications part-time, but we’re looking at other possibilities, and it may be that we could hire her to work full-time, or even add another IT employee,” he says.

Community Clean has been successful with its new IT program, but how can other jan/san distributors make a smooth technology transition? The best way is by hiring qualified staff to manage the systems, says David Stamm, president of Stamm Business Technologies, a consulting firm in Milwaukee. “Unfortunately, there are a lot of ‘pseudo-IT guys’ who just kind of got thrown into it,” he says. Giving an IT title to an employee doesn’t mean that he or she is right for the job.

Who Calls the Shots?
As companies grow, their technology needs become more complex. In the sanitary supply industry, oftentimes an employee who is good with computers gradually is relegated to the role of technology “expert,” until a full-time IT person becomes a necessity.

“Some of the more savvy distributors are hiring an IT person,” says Timmy King, chief information officer for Pro-Link, Canton, Mass. “For those companies, it’s usually not just someone to work on the computers, but also someone who can streamline overall operations: accounting and ordering, for example.”

For those distributors who need to hire a full-time IT professional, the screening process can be intimidating. Many business owners don’t even know the terminology, much less how to evaluate the best candidates.

“The first thing you always want to look at is their prior experience,” says Stamm. “Obviously there is going to be a big difference between someone who has run an IT department before, and someone who is straight out of college.”

Stamm Business Technologies specializes in providing outsourcing resources for companies, but they’ve recently started helping companies hire their own IT staff.

“We were billing a lot of companies for small things that they could have been taking care of themselves,” he says. Working with potential employers, Stamm’s company now gives applicants a skills test that produces information employers can use to evaluate candidates. “A lot of people list things on their resume, but then they can’t do those things when they’re actually hired, and we don’t want to see our clients burned on that.”

Vesting the Vendors
Each IT person usually has a particular system that he or she prefers using. With the multitude of platforms available — UNIX, Linux or Microsoft Windows — distributors should be wary of applicants who aren’t willing to investigate other systems.

“An IT person who is chained to one system is selling a tool and trying to fit it to the job, rather than finding the right tool for the job,” says Stamm. Distributors are wise to talk to other companies, even in different industries, as they look for the right IT fit for their own companies.

BCB Janitorial Supply in Hackensack, N.J., started its IT program in 1985 and now employs one full-time IT professional. Barbara Casse-Bender, the president and owner of the company, had planned to investigate several different IT hardware vendors before choosing the appropriate one. But after talking with one of her suppliers, a wholesaler who she had done a lot of business with and trusted, she decided to invest in the same IT provider that the wholesaler was using.

“This particular wholesaler is a very bright guy who has a master’s degree in accounting, and he had already done a lot of research on IT vendors,” she says. “So I figured, why not make use of that knowledge if he’s someone I trust.”

Asking suppliers how they manage their IT needs — from staffing to hardware — is a good place to start, according to King. But there are other avenues to explore as well.

“You really have to do a thorough investigation,” he says. “The real answer for distributors is to find out what they need and then find out what is available.”

IT professionals need to get continuous training, because their job requires finding solutions for a variety of new situations, says Stamm.

“Some people do formal training, but others just read a lot of IT trade magazines,” he says. “And then there are also a lot of people who just make it a lifestyle. Whenever we’re doing any hiring, I’m always keen to listen for the person who has four computers at home and enjoys creating new networks.”

In or Out?
Outsourcing decisions, like everything else, is usually determined by cost, says King. “You have to have a pretty big company — at least $15 million to $20 million in annual sales — to hire two or three full-time employees and start an IT department,” he says. “Sure there are some large distributors that have IT departments, but they are usually the companies that have multiple sites.”

Ultimately, the responsibility for setting up the right IT fit for any company rests with the owner. But even after an adequate suitor has been selected, distributors must consistently evaluate the efficiency of that system. As companies grow, the next decision is whether to keep IT control in-house or to hire a specialized company to outsource.

“If I ever started to need another IT person, I would probably outsource because then it would become a cost-effective decision,” says Casse-Bender. “I’m not in the computer game; I’m in the distribution game. Some people are in distribution and they grow in their technology, while others grow and start doing contract cleaning. I think that if I was growing, I would try to stay with my core business, which is distribution. I would probably sell office supplies before I started hiring other technology employees.”

Today’s buzzword for Casse-Bender’s outsourcing philosophy is core-competency. “Core-competence thinking is typically a prescription for companies to outsource IT-intensive processes because the IT elements that drive process capabilities rarely qualify as a core competence. In contrast, outsourcing vendors make IT the focus of their business,” says the February issue of Optimize magazine.

Sauer, whose company started using computers only a year ago, would rather hire another employee or two and make IT part of his core competency. “We have a website now that we’re using to serve our existing customers with e-commerce, and we need to do whatever we can, technology-wise, to stay competitive. However, outsourcing would give too much control to someone else.”

But distributors shouldn’t let their eyes get bigger than their needs when it comes to expanding their IT resources, says Stamm. “If full-time employees aren’t busy enough, they usually just create projects in order to keep themselves busy. They might set up a new server, even though the company doesn’t need it.”

Technology Within Your Grasp

TechWeb with the power and scope of 13 technology publications, InternetWeek, Insurance & Technology, Optimize, and Wall Street & Technology, can all be accessed through TechWeb. The site provides news updates, reviews, hardware and software analysis, security information, and e-business management advice — all in one place.

A perfect resource for business owners who are interested in information technology (IT), the site includes an online dictionary with more than 20,000 IT terms and definitions. In February 2003, TechWeb conducted a national IT salary survey of business owners to determine the average wages of IT professionals. Log on to find results.

There’s also access to technology features that cover a range of topics from new Linux standards to the outsourcing of IT solutions.

It’s the Law

Having a hard time keeping up with ever-changing codes and regulations? Looking for a comprehensive website with daily updates on federal and state laws? The Legal Information Institute, maintained by Cornell Law School, has won numerous awards for making legal information accessible to the general public through its website.

The site also includes analysis of new regulations and links to lawyers, organizations, law journals and other academic resources.




POSTED ON: 3/1/2003