News

By Joe Nowlan, Associate Editor

Excerpted Industrial Distribution, June 2004

Many companies concern themselves with the "next big thing" in technology. There's always something new around the next corner it seems, and many find the ongoing temptation to remain on the cutting edge hard to resist.

But for most companies, it isn't falling in love with the "next big thing" they worry about, but rather, realizing that they've stayed too long with an outdated system. "We've always done it this way" may be human nature, but can often lead to chaos.

Dillon Supply found itself in the latter situation. But realizing their technology needed to be upgraded dramatically was just the first step.

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"Volkswagen to a Porsche"

At one time, Dillon Supply was viewed as being at the forefront in its use of technology. It was using computers before many of its competitors. In fact, it designed its original software some 20 years ago.

Dillon is based in Raleigh, N.C. with 22 branches in Virginia, Tennessee, South and North Carolina, Kentucky and Georgia. It handles an array of industrial, steel and safety-related products.

Dillon's current president is Dean Wagoner. Back then, he recalls, "Dillon Supply was really cutting edge with the software they had. I was with a competitor at the time, and I recall hearing about Dillon being on a computer system while the company I was with was not."

Over the years, though, little effort was made to maintain that technological edge. In addition, Dillon's software was still being used in virtually every phase of its operation-covering accounting, receivables, payables, inventory, and purchasing. So when Wagoner took over Dillon in mid-2001, he knew going in that upgrading the technology would have to be among the first tasks he would tackle.

"We were running software developed in-house by a gentleman who was about to retire," Wagoner says, in setting the scene. "It had been enhanced somewhat over the years, but had not been upgraded as much as it should have."

Wagoner consulted with Sylvain Fournier, Dillon's IT manager, "and we felt that for us to grow and improve as a business," Wagoner says, "we had to have more cutting-edge software in house that would give us the tools we needed to be a more profitable, more efficient company."

"There are so many things that require knowledge and new technology," Fournier says, referring to working with their customers using EDI and XML, among others, "and we didn't have that in house."

Price to pay

Beginning in mid-2002, Wagoner and Fournier looked at several packages, gradually narrowing the list down to a few parties before hearing serious proposals. The change was necessary and both knew that this would require far more than a minimal investment.

However, from an IT perspective, Fournier says that price-wise "the timing was pretty good. While the price is always 'too high,' there were not many people investing [in IT] at the time. So it may have been a little bit easier to negotiate the price down."

As president, Wagoner experienced a modest amount of initial sticker shock, he admits.

"To be honest, it was a shocker at what the price tag was for putting together something like this," he says today. "But it was a complete overhaul. We didn't put a limit on what the cost would be because it was something we realized we had to do. We had to make the commitment regardless of the cost. It was a must-change situation we were in."

They eventually settled on Prophet 21, whose executive vice-president, Doug Levin, oversaw the installation and implementation-a process that Wagoner now describes as going "from a Volkswagen to a Porsche."

Levin was pleased to find that the change, radical and extensive as it would be for Dillon Supply, was driven from the top down.

It was vital, Levin says, to have "Wagoner drive through to the entire company why this was important to do. He also explained to the employees how it would benefit them and got many of them involved in the front end of our presentations."

Dillon employees overall were happy to see the changes.

"Salespeople, branch managers included, were very excited," Fournier says.

Some were a bit concerned, though, as it did mean that Dillon would be eliminating some jobs, especially in what had been the clerical end of things. However, Dillon was able to retrain several of them.

"We discussed with branch management that a lot of these jobs would be eliminated," Wagoner says. "If they had people who could be retrained and put into other areas of the business, it would be in sales or sales support. So we did as much as we could to relocate and retrain people, to put them in a position where they could stay. For others-and we were honest with them up front-there would not be a job available."

Are some companies pleased at new software packages until they realize it may well eliminate jobs?

"That was awkward about 10 years ago," Levin says, "but now everybody's looking for that. It's what they want. They want to do more with less."

The process, from signing on with Prophet 21 to going live, took just less than a year, Fournier says. Dillon and its more than 300 users are pleased at the results so far.

"We got to a point, five or six months after going live, where we were pushing new things," Fournier says. "And that is why we made the move-to be able to go forward and reach the goals we have."

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