Technolo$y helps LBM businesses weather economic storm

D utlptNc MATERIAL business leadI-lers have been forced to make some tough decisions in the current recession. Although a natural instinct is to cut spending across all depart-

By Jim Hassenstab, DMSi

ments, it's not always the best one. Technology investments can actually help your business weather through the current economic storm.

Increase productivity while reducin$ costs

Information systems streamline business operations and help you do more with less. By investing in new technologies and automating business processes, you can run your business more efficiently. It may even be a good time to consider moving your systems "into the clouds."

Cloud computing, also known as Software as a Service (SaaS), is the future of technology. It's a viable option for many companies to reduce costs and eliminate many of the issues that can accompany traditional software models. With a minimal investment, customers can access software over the Internet and never have to worry about investing in new infrastructure, training new personnel, or licensing new software.

"I first saw software hosted through the Internet at a NAWLA tradeshow and its potential was obvious to me," says David Zappone, general manager of Timber Trading Group, Worcester,

"The SaaS program allows everyone in our office to be more mobile, more productive, and offer customers realtime answers when out of the office."

Gain competitive advantage and customer loyalty

With both businesses and consumers strictly evaluating their budgets and spending, it is more important than ever to differentiate yourself from the competition. While your competitors are cutting their technology budgets, you have the opportunity to expand market share. By leveraging technology, you can create innovative products and services or implement a new business approach to increase customer loyalty.

Optimizing the transportation process is one of the most impactful ways to reduce overhead. A centralized dispatch solution can significantly cut transportation costs and maximize profitability of sales. In addition, these solutions improve customer service by reducing wait time and eliminating backorders.

"We feel that our ODT (order delivery tracking) software gives us the real-time information we need to make sound financial and customer service decisions that are so critical to our business, especially in the current economic environment," says Alan Harwood, c.f.o. of Epperson Specialty Woods, Statesville, N.C. "ODT has become a critical component within our daily operation, as well as a contributor to the long-term profitability of our business."

Know your business

In the modern business world, knowledge is the single most important factor that can make or break a company. A good business intelligence system will help monitor various data, such as sales, profits, amounts lost in small transaction fees, and amounts paid originally. By pinpointing exactly where costs need to be cut or new systems put in place, your company is poised to increase profitability.

Viewing and interacting with data is now easier than ever before when using business intelligence applications. Information that used to take hours to compile is now just a few clicks away, allowing business owners to make key decisions quickly. Business intelligence applications allow users to interactively zero in on answers to business performance questions, instantly detect trends, and respond to the ever-changing events occurring in distribution.

"Before, if someone called asking for information, I ran to the cabinet to pull their file," says Mike Finn, vice president of SEEMAC Inc., Carmel, In. "A report was only upto-date the day it was printed. Today,I tap into the computer to retrieve real-time information. If everyone is doing their job, the information is always current."

Invest in the future

The economy will rebound eventually, and you need to be ready to hit the ground running when it does. While business has slowed and workloads have decreased, it is a perfect time to plan and implement IT infrastructure improvements. This way, when business does pick up, you will be better prepared and able to respond to growth.

In business, as in nature, the strong survive. Rather than trying to coast through the down economy, building material companies should consider ways to strengthen, improve, and grow business. This will better your chances of "survival" and enhance the future of your company.

- Jim Hassenstab is c.e.o. of Distribution Management Systems Inc., Omaha, Ne. He can be reached at (800) 347-6720 or jhassenstab@ dmsi.com.