Microsoft “Makeovers” Help Midsize Companies Grow, Compete, Win

REDMOND, Wash. , Sept. 6, 2005 – It’s nothing new to reality TV. Houses, would-be spouses and seekers of plastic surgery-enhanced beauty have all been subject to “extreme makeovers.” But a technology makeover?

That’s what an Arizona-based construction company and a German outdoor clothing, equipment and footwear specialist — both midsize companies with lean IT staffs – have undergone in recent months, with help from Microsoft. Schuck and Sons Construction Company Inc. and Jack Wolfskin are now running their businesses on a nearly complete stack of Microsoft products. And although the implementations are still in varying stages, officials at both companies already are making “before” and “after” comparisons, and liking what they see.

“We’re enjoying double-digit growth, and I don’t think we would be doing that if we had stayed with our previous solution,” says Severin Canisius, IT manager at Jack Wolfskin, which employs 200 people at its headquarters in Idstein, Germany, operates 65 franchise stores in Europe and Southeast Asia, and is on target to open 20 new stores in Germany this year alone.

Schuck and Sons is also growing fast. It employs 500 people at its plant in Glendale, Ariz., plus another 800 field carpenters, and has acquired a lumberyard and a manufacturing plant in the region in the past three years. “And we’re planning to do more,” says vice president Mark Sidell. “We know that our new Microsoft stack is going to adapt to any new business that we acquire relatively easily. Our efficiency will increase dramatically.”

Why did the companies choose Microsoft solutions? Part of the appeal, they say, is the fact that the Microsoft products are truly optimized for the midsize space. That is, they offer more out-of-the-box functionality than competing products, and the flexibility to grow and adapt as the companies do. That’s critical for companies like Jack Wolfskin and Schuck and Sons that require the same degree of IT sophistication as larger companies in order to drive profitable growth, but have smaller IT budgets. Jack Wolfskin has seven full-time IT professionals at its headquarters and its warehouse and distribution center in Hamburg. Schuck and Sons has just three full-time IT professionals.

“Before” and “after” videos of the makeovers at both companies will be screened at the Microsoft Business Summit taking place on Microsoft’s Redmond campus Sept. 7. The event features a company strategy and technology roadmap for midsize companies.

Schuck and Sons – “Before” And “After”

Schuck and Sons’ extreme makeover began in May, and is being implemented with the help of Irvine, Calif.-based Iteration2, a Microsoft Business Solutions Gold Certified Partner. Before that, the company ran a mixture of non-Microsoft systems in the various departments on its 26-acre (.11 sq. km.) plant – ISM Subcontractor Management software in accounting, Timberline software in estimating, RTA in its garage, MiTek in engineering.

Incompatibilities among the systems led to operational inefficiencies. For example, employees had to print information from the Timberline system, then manually take it to the minicomputer running the 20-year-old ISM program and key it back into the system. “It created a lot of duplicate work and paperwork,” Sidell says. “Our decision to switch to a Microsoft stack was based on the fact that the Microsoft solution could be used enterprise-wide across all departments and all locations.”

The company’s new stack solution from Microsoft consists of Microsoft Business Solutions Axapta – a multi-language enterprise resource planning (ERP) solution designed for mid-size and larger companies and optimized for manufacturing and e-business; Microsoft Exchange Server for e-mail; Microsoft Windows Mobile; Microsoft SQL Server; and Microsoft Office Word, Excel and Access. (The company was already running Microsoft Office before the makeover, including Outlook, Excel and Word. It will keep the specialized MiTek software it uses to design trusses, but will now have the opportunity to connect it to the rest of the system through Microsoft Axapta.)

The new system is still in testing and expected to go live later this year. “But the employees are already excited to see what this solution can do because of the way Iteration2 has involved them in the implementation process,” Sidell says.

Planning capabilities within Microsoft Axapta are expected to create significant savings for Schuck and Sons by enabling staff to more effectively manage inventory – among the company’s more expensive assets. Drop-down menus and point-and-click options will enable employees company-wide to input data faster, more accurately and more easily. And because employees at the front end of the business process – in the field or in the yard – will input data directly into the system instead of handwriting it on pieces of paper for others to key in, back-office employees will be freed up to focus on real accounting and financial tasks, Sidell says.

Sidell says he expects that with the new system the accounting staff will be able to close the company’s books in five days instead of the current 20 days. “That means we can get information back to the operating staff much faster if there’s a problem, so that maybe they can fix it in time to impact that following month, versus having to wait that entire following month to get the information,” he says.

The watchword for Sidell is efficiency: “If we can be more efficient internally, ultimately that is going to help us be more efficient in serving our customers,” he says.

Jack Wolfskin — “Before” And “After”

Jack Wolfskin’s technology makeover was less extreme than Schuck and Sons’ because the company has been running a complete Microsoft stack since approximately 2000, when it migrated its ERP system from an HP UNIX-based “black box” to Microsoft Business Solutions Navision. But the system was not fully integrated until more recently, Canisius says.

Today, the company has an impressive implementation of Microsoft systems. In addition to Microsoft Navision, it uses Microsoft Exchange Server, Enterprise Edition, for messaging and collaboration, Microsoft BizTalk Server 2003 and Microsoft Windows SharePoint Portal Server and Live Communication Server. It has also fully integrated into Microsoft Navision its own business-to-business Web portal – dubbed “e-wolf” – which it developed in-house using Microsoft Visual Studio 2003 and the Microsoft .NET Framework.

The highly customized Web portal enables the company to serve its customers round the clock – something it could not do with the previous solution – providing them with real-time item availability and individual pricing information, order placement and tracking. Dealers can also use the platform to browse and shop with customers, and to place orders for items the dealer does not have in stock, which can then be delivered directly to the customer. The “e-wolf” solution cut delivery times almost in half, from about 40 hours to 20 hours, and was a hit with customers. More than half of the company’s direct orders are now done over the “e-wolf” platform, contributing to a faster-than-expected return on investment (ROI) of less than one year, Canisius says.

Since 2003, the company has also introduced Microsoft Retail Management System as the mandatory cashier system to all its new franchise stores, and is poised to open its 30th new store running that system, Canisius says. “Before switching to Microsoft Retail Management System, we used a variety of systems at our franchises, which hindered our efforts to expand,” he says. “There’s no really efficient way to manage your stores if you’re not relying on a fully integrated system, and you can only produce an integrated system if you have the same system out there in the stores.”

The company has streamlined the system to the point where new stores can be set up at headquarters without IT staff having to go to the new franchise site, saving significant time and resources. “The store people take the cashier systems with them and hook everything up, and they’re up and running,” Canisius says. The company expects to reach the 100-store mark across Europe and Japan some time in 2006, or 2007 at the latest, he says.

The Server’s The Thing

Some of the most dramatic elements of the Jack Wolfskin makeover are in the server area. Before beginning the makeover project, the company’s integrated Microsoft stack essentially supported only what Canisius calls “structured processes” – purchasing, sales, warehouse and distribution and the like. The addition this summer of Microsoft SharePoint Portal Server and Live Communication Server enabled the system to support more creative, unstructured processes as well. That makes it much easier for the company’s information workers to exchange information and coordinate with multiple parties in multiple departments when carrying out relatively unstructured tasks such as setting up new stores, Canisius says.

A huge server-dependent benefit came when Jack Wolfskin added Microsoft BizTalk Server 2003 to its stack, building on it a business-to-business solution that enabled the company to double its revenue with the largest outdoor retailer in Germany. The in-house solution – which went into production in only three months – enables Jack Wolfskin to exchange information about items, orders, deliveries and invoices with other key customers, too. Like “e-wolf,” this e-commerce solution requires a minimum of resources and already has saved the company the equivalent of 12 additional employee positions, Canisius says. The broader message, for Canisius, is clear: “Even if you are running an all-Microsoft stack and are already very highly integrated, there’s still a lot more you can do to advance your business.”

Another Microsoft server benefit cited by both companies is support for multiple languages. Jack Wolfskin has four language versions integrated into the system — German, English, Italian and Dutch — and since most of the standard requests are handled automatically by the system, the company does not need many employees who speak those languages. “This will help us significantly with our European expansion,” Canisius says.

Sidell echoes the sentiment: “At Schuck and Sons, we have a large number of Hispanic workers, and they can work in the program in Spanish,” he says. “That is a huge advantage for us.”

Mobile and Connected

One of the main benefits of the tech makeover at Schuck and Sons is in communication, particularly between the field and the main office, company officials say. Currently, employees in the field use pencil and paper to record all manner of data – from labor hours on jobs, to project status, to material changes in homes being built. Once the new solution is implemented, capabilities in Microsoft Axapta and Iteration2’s Commander Series Solution – a dispatch and scheduling application built on Microsoft .NET – will make it possible for employees in the yard or many miles away to input such data into the system, wirelessly in real-time, via laptops or hand-held devices.

For example, estimators predict the amount of lumber needed for a house, but the actual material required is not known until the house is built, and there’s usually a discrepancy between the two quantities. “With the new solution, that can be changed in the field, and then when we build that type of house again, we’ll already have the correct amount of lumber needed in the system and available at the job site,” Sidell says.

The customized solution that Iteration2 built on top of Microsoft Axapta will use a combination of cellular networks and wireless hotspots enabling employees at construction sites to input manufacturing, production and shipping updates using Microsoft Windows Mobile on Intermec handheld devices, while employees at the company’s 26-acre site will make updates via handhelds over a wireless local area network (LAN). “Unlike in the previous paper-based environment, which allowed errors and time lapses in information, the updates will be real time and visible to the whole team,” says Iteration2 Vice President Greg Carter.

Using the same technologies, supervisors in the field will be able to wirelessly assign activities to other crew members, even if they are at other job sites. “So they won’t have to drive to a different job site or get on a cell phone,” Carter says. “This flexibility will help ensure that the right work is being done at the right time.”

The Buzz Around Midsize Companies

Canisius says the term “midsize” has become a buzzword in Germany in recent years. “Every company is offering solutions for the midsize space, but many of those products are simply high-end enterprise solutions with a reduced price tag – you still have to put a lot of money into customizing them to make solutions that really work for you and your customers,” he says.

But he says that’s not so with Microsoft’s products: “You only have to acquire a minimum of extra know-how before you are able to put that product into production. From my point of view, that’s something that separates the Microsoft systems from other systems in the market.”

He says the Microsoft platform empowers companies like his to be independent of expensive IT consultants, as do development tools such as Visual Studio and the .NET Framework. “The first time I got to see the .NET Framework, it was like a revelation to me,” he says. “The things I envisioned that would be possible with it overwhelmed me because it’s so easy to take the product and make it a solution.”

For Sidell, a Microsoft solution was an obvious choice, given the powerful capabilities of the Microsoft stack: “We have construction, we have manufacturing, we have wholesale sales, we have retail sales and multiple locations,” he says. “Just the complexity of our business really made it difficult for some of the competing products to do everything.”

Winning With Partnerships

Another Microsoft differentiator – and a key reason Jack Wolfskin and Schuck and Sons are betting their future business on Microsoft – is the trusted advisor relationship made possible by the local Microsoft partner channel. Canisius says Jack Wolfskin relied on two partners – HP for hardware and Microsoft for software. “We want to be independent, fast and flexible, and that is only possible in my view if you use the Microsoft platform,” he says.

For Sidell, having the focused support of Microsoft and Iteration2 – winner of the 2005 Microsoft Business Solutions Outstanding Partner of the Year award – was indispensable. “This project is very difficult,” he says. “If you don’t have that partner relationship, it could be a nightmare to go through.

“Microsoft has individuals that focus on businesses our size, and there’s a local office, so we know them very well,” Sidell says. “It really doesn’t feel like such a big company working with a small company – it’s really a partnership among the three of us.”

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