Doug Gantenbein, Angela Garber, David Myron, and Amy Blankstein (with reporting by John F. Moore)
Will Fix It Plumbing
San Antonio, Tex.
6-year-old plumbing and air-conditioner repair company
The Fix Is In
Six years ago Will Hawkins started Will Fix it Plumbing out of his San Antonio, Texas, basement. Initially, he relied on his friend Stacy Keller — now the full-time controller — to handle his books. During the first few years the company experienced moderate growth, adding just a few trucks to the fleet, but then everything took off.
The company grew from a 3-truck operation doing just $250,000 in business to a 45-employee, 28-truck operation pulling in $3.2 million in revenues. Both Hawkins and Keller credit a new communications and accounting package for the jump.
“All of our communications changed from being totally paper-based, to being totally computer-driven,” Keller says. “It simplified the entire process, from the time customers call to the time we get to their homes.”
In the beginning, Keller says, calls came in on Hawkins’ cell phone. He scribbled down the information on scrap paper and passed the details on to whichever technician that was available to make the repairs. At tax time, Hawkins brought Keller bags full of receipts. Then, three years ago, the company implemented a better system. This included a phone system with caller ID and a software package, Service First Accounting from KRS Software, tailored to the plumbing industry that handles paging, dispatching, inventory, and billing.
Keller says that caller ID, used in conjunction with the software package, has made a big difference. “We can see who’s calling and pull up the customer’s information before we even pick up the phone,” she says. “If the customer is past due on a bill, we can see that and let him know that we’ll need to pick up a check. That way we won’t have to continue to service a customer behind on his bills.”
When a call comes in, the call center operator enters information into the system and sends it downstairs to the dispatching center, where the information pops up on the dispatcher’s screen. When a service technician is available to take the call, the dispatcher forwards the information along.
The paging system not only allows Will Fix It to send new jobs to technicians while they’re on the road, but also allowed the company to expand its service area. Without setting up a second operations center, Will Fix It now also services homes and businesses in Laredo and Austin.
Hawkins says that he is now considering new technology purchases. “I’m looking into laptops and laptop printers, a GPS systems for the trucks, and a barcode system for inventory,” he says. “If I can keep the guys from turning right when they should have turned left and can expedite their paperwork, I can get one more invoice per truck each day.” And that type of foresight can raise profits dramatically.
One more job per truck may not sound like much, but according to Hawkins, it adds up. “At $400 per customer, and 25 trucks, that’s an extra $10,000 a day. Times 5, times 52, that’s $2.6 million a year,” he says. “That’s without buying another truck, hiring another technician, or buying any more equipment.”
It’s hard to argue with math like that.
New York, N.Y.
7-year-old investment firm
Bulls, Bears, and Backups
In an industry that evaluates everything in profits and losses, Dan E. Kornstein says his only loss when it comes to technology has been his eyesight.
For Blaylock and Partners, a New York-based investment banking and securities brokerage firm with seats on the Nasdaq exchange, state-of-the-art technology is essential. According to Kornstein, senior vice president of administration and strategy, much of the firm’s success is attributable to what he calls a “90’s phenomenon” — the proliferation of technology among investment firms.
For starters, the “phenomenon” has enhanced the information retrieval process for small investment firms. Internet access enables Blaylock to get the same access to investment information and analysis as large investment firms. This includes the ability to receive information on company and market developments from Internet news feeds provided by Bloomberg and Reuters. “We are information hogs,” Kornstein says. “We use news feeds minute by minute.”
After the information is received, the firm analyzes it with the help of financial modeling software. These models, such as forecasting investments based on varying return rates, help Blaylock’s portfolio managers determine which stocks and bonds to select for its client base, which includes large financial institutions, leading insurance companies, banks, and government entities.
Finally, once a stock or bond is purchased, it must pass through a clearance and settlement (or back-office) process. This is where stocks or bonds change hands from a seller to a buyer. Ten years ago this process took up to six days to complete, Kornstein says. Thanks to computer technology, this process can be completed from anywhere in the world in three days or less.
And, of course, Blaylock would be remiss if it didn’t have its own Web presence (www.blaylocklp.com). Here, clients can obtain their financial information. Within the next two years, Kornstein expects to offer clients the ability to conduct trades from Blaylock’s Web site.
But investing so much in technology means you’ve got a lot riding on it. A dictate by the Security and Exchange Commission required Blaylock and thousands of other firms to be Y2K compliant the weekend before the new year’s opening bell. That’s why last New Year’s Eve Joel Wyman and Damian Dicks of the N.Y.-based technology solutions provider ISYS conducted a midnight vigil at Blaylock’s office. Wyman, ISYS’s president, and Dicks, the chief technical officer, worked all night to ensure the company met the deadline.
In Times Square, a couple of blocks away from Blaylock’s office, crowds were celebrating — but Dicks was still worried because the area was thought to be a likely target for terrorist bombing. Meanwhile, they tested Blaylock’s date-sensitive hardware and software, and found it had emerged unscathed.
Why does a company like Blaylock and Partners go through this kind of trouble? “To stay in business,” Kornstein says.
— David Myron
30-year-old independent bookseller
Want to try a tough business? Run an independent bookstore. With Tyrannosaurs like Barnes & Noble and Amazon.com stomping the literary landscape, the small, local bookstore has about as much chance of surviving as one of those goats lowered into the cage in Jurassic Park.
Still, Powell’s Books Inc. in Portland, Ore., is surviving — in fact, it’s prospering. In the past 20 years, owner Michael Powell has turned his father’s bookstore into a case study of how to survive in a brutally competitive industry. From a flagship store in Northwest Portland, six other local outlets, and a thriving Web site, Powell’s will likely manage $40 million in sales for 2000, up from $33 million in 1999. Part of its success is due to its quirky mix of stock, with 70 percent of its inventory comprised of used and rare books. Plus Portland has a strong sense of community, and locals willingly support a venture such as Powell’s. But ever since the company moved its accounting to PCs in the late 1980s, it has continually been investing in technology.
Powell’s small-store feel and big-store reach makes it a challenge to find the right technology, as does its unusual mix of books, the Internet, and bricks-and-mortar. Its inventory system, for instance, was modified in-house to accommodate the mix of new, old, and rare titles. But by managing its 4.5-million books on a computerized system, Powell’s is able to operate like a much larger bookstore. That makes suppliers happier and cut costs. “We’re able to get the same offers from book publishers as Barnes & Noble and Borders, since we have similar sophistication in our system,” says Powell. “That helps our margins.”
The Internet is where Powell’s has made its biggest push recently, with about 20 percent of sales now coming through the company’s quirky, comprehensive Web site (www.powells.com). The whole site is designed and produced in-house, and it complements the store’s particular way of thinking about and marketing its books. “The Web allows us to sell a broader range of books in a wider geographical area,” Powell says. “Mastering the technology and inventing new interfaces has been a big piece of what we do.”
Powell pushes for more technology, though he concedes he’s not a particularly sophisticated user himself. One goal: A wireless PC that he can carry into another book store and instantly compare inventory and prices to those in his own stores. It’s all in an effort to keep pace with not only competitors, but also customers. “Customers expect more today,” he says. “They want you to be able to tell them what you have, and get it to them quickly. So you’d better be able to get your hands on the right book when they ask for it.”
21-year-old business development consultancy
Jay M. Jaffe recently had to break up a conference call he was on with some business associates. The reason? “I needed to go inside and put on more sunscreen,” he says with a chuckle. At the time he was in Avon, Colo. — where he spends his time when not at his other residence in Bethesda, Md. But both locales act as his “office.” Jaffe’s company, Jaffe Associates, is a true virtual company. Its 30-odd employees, scattered around North America and England, connect only via digital means. The only concession the legal consulting firm makes to the brick-and-mortar world are small offices in Bethesda and London for conference rooms and paper file storage.
Jaffe isn’t shy about trying anything and everything to give his business an edge. His company conducts meetings using Web cams, uses Microsoft Outlook on a central server that everyone in the company can access, and keeps its employees in touch on the road with Palm-type devices and wireless phones. The company Web site (www.get-serious.com) markets the firm and gives clients a contact point. And some 4,000 journalists receive regular e-mails in which Jaffe’s legal clients are highlighted as possible sources for current news stories.
Jaffe himself was quick to adopt BlackBerry, the wireless e-mail device from Research in Motion. “The other day I was in a car between Washington and New York, got an e-mail from an associate, and called him to talk about it,” Jaffe says. “‘Oh, what a coincidence, I just sent you an e-mail on that,’ he said to me. ‘I know,’ I told him. ‘That’s why I’m calling you.'”
Jaffe Associates had been inching toward total virtuality for quite a while, but the technology has only recently reached the point where it’s feasible. “We started to lease office space in 1979,” Jaffe says. “But we really couldn’t do what we’re doing now until the early 1990s.”
In early summer Jaffe’s company started using an ASP-based billing service. Rather than write billable hours on slips of paper or individual PCs, Jaffe employees enter them into a Timesolv.com form and upload them onto the site, where they are all automatically collected and collated. “Tracking time and billing in a company like ours is a necessary evil — it has to be done but nobody likes doing it,” Jaffe says.
When Jaffe considers such a big technological decision, he looks for immediate usefulness and an intuitive interface. New software or gadgets are assigned to a sub-group within the company for in-house beta testing. The product is then either pushed into company-wide use or junked. “We don’t have time to go down a dead-end path,” he says.
Still, even the best make mistakes. In the early 1990s the firm moved from DOS-based PCs to Macs and then back to DOS in order to tailor its system to that of a major client — who then switched to Windows-based machines. “That cost us about a half million dollars,” he says.
Jaffe sees virtual as the way for firms like his to go. Most professional services companies, he notes, spend about 8 to 12 percent of their income on real estate. His firm spends less than one percent. His next objective is to get his company’s associates on DSL lines, then take advantage of Microsoft’s NetMeeting 3.0 for teleconferencing (now one-way at Jaffe due to limited bandwidth), collaboration, and file transfer. “Technology just keeps getting better,” Jaffe says. “It really does give us the virtual water cooler.”
McLean, Va. and Washington, D.C.
32-year-old architecture and interior design firm
Doug Carter founded Davis, Carter, Scott in 1968, back when Northern Virginia was largely pastureland, architects produced designs with pencil and paper, and the electronic calculator was the size of a typewriter. The architecture firm’s history reflects the region’s evolution from a sleepy suburban outpost housing federal government commuters to a high-tech boom town. The Dulles Toll Road, once known chiefly as the conduit to Dulles International Airport, hosts a rapidly growing number of corporate headquarters for major technology firms. Carter’s firm built just about every other building on this stretch.
arter chalks up his firm’s continuing viability to an early and consistent commitment to technology — it was one of the first to incorporate computer-aided design, back in the early 1980s. “People who didn’t make the commitment spent an awful lot of time trying to play catch up and, to a large degree, lost out on the race,” Carter reflects.
He readily admits that he has neither the interest nor the expertise to stay up to speed with those changes. Instead, he depends on staffers like Chris Garwood who do. “He knows a thousand times more about computers and software than I do, so he could very easily bamboozle me if he were so inclined,” he jokes.
Garwood, an architect who’s been with the firm for six years, is one of several employees on the computer-aided design committee, the group Carter entrusts with the technological direction of the company. “There are very few things they come for that I don’t say yes to,” Carter says. “They have enough wisdom to hold off recommending a purchase until we can incorporate it into our system easily.”
While the PC and computer-aided design have had an impact on the design process itself, the e-mail system and the firm’s Web site have sped DCS’ communications with clients and contractors. “Four years ago, if we produced design drawings and a client wanted those drawings sent to Boston, we’d have to FedEx a disk to them.” Garwood says. “Now it’s as easy as attaching those drawings to an e-mail and hitting send.”
DCS initially launched its Web site, www.dcsdesign.com, as an extension of its marketing efforts. Recently, however, the firm began taking small steps in the direction of Web-based project management by posting design drawings and concepts on private pages they set up for clients to view with their Web browsers. “We’re able to look at it at the same time our client’s looking at it and get instant feedback.” Garwood says. “It reinforces the design process so you can keep moving. You’re able to go through more iterations.” The next step is the construction of an intranet. In addition to allowing clients and contractors secure access, DCS will have an accessible way to store information on past projects.
Many application service providers, including bid.com and buzzsaw.com, are now going after the building and construction industry, but Garwood is taking a wait-and-see approach. “A lot of those will fall out of the game,” he says. “Until that shakes out, it’s not in our best interest to jump into it.” Garwood says he takes the same approach for any technology decision. “You have to look at what’s happening in the marketplace at a high level, look down the road to not only where we are going, but also where the market is going.”
–Amy H. Blankstein