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OPERATIONS

Managing Sudden Sales Increases

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In the wake of the September 11th attacks, many businesses are struggling with decreasing sales figures. On the other hand, some companies are seeing the opposite effect: a dramatic increase in demand for their products and services. Managing a sudden upturn in sales can be just as difficult as managing a sudden downturn, especially if you lack the resources to bump up production or provide more services.

We spoke with three CEOs of IT firms who experienced this kind of increase in demand after September 11th. Here's their advice on how to best handle sudden increases in demand.

Dean Ansari, CEO, NetDIVE
Have a future growth plan in place.
Dean Ansari, CEO of NetDIVE, a provider of Web-conferencing software and solutions, saw sales more than double in the weeks after the Sept 11 attacks. "Our products enable people to communicate and collaborate through the Internet, decreasing -- or even eliminating -- the need to travel for a conference. There was a real heightened awareness of this recently," he says.

As a result of the spike in interest and sales for its Internet-conferencing products, NetDIVE had to scale up two key areas of its business: the support department and bandwidth. In the days after the attacks, NetDIVE hired several new support people (software engineers). How did they do it so quickly? "We always have resumes in the pipeline," says Ansari. "So we had a pool of candidates to draw from." The firm also "brought new machines online and increased bandwidth to the necessary amount within a matter of hours."

According to Ansari, adjusting to the demand wasn't too difficult a transition because NetDIVE had a growth plan in place ahead of time--a plan that included a 50% increase in development and support efforts for its products. That increase was to include manpower, hardware, and bandwidth. Granted, the plan would normally have been executed over a matter of months or years--not days. But it at least provided a valuable framework for growth. "Due to the increase in orders and interest, we thought it was prudent to bring on people and machines. It was on our plan to grow the support group and to increase bandwidth. We expected sales to increase over time--we just had to accelerate the plan's timing much faster than planned in the past few weeks."

George Kurtz, CEO, Foundstone
Listen to your customers and react quickly.
Call volume at Foundstone, a data and computer security firm, increased 35% in the days after the attacks, says CEO George Kurtz. And the Irvine, Calif.-based company closed quite a few larger-than-usual deals--six-figure deals for Fortune 100 companies--during that period as well. And not only were they larger than usual; the speed of service requested was unusual, too. "The notable item is the speed in which they closed," says Kurtz. "These companies wanted our services immediately."

All of this was happening during a time when Foundstone was scrambling to deal with the effects of the attacks. Although Foundstone is based in California, it has offices and training centers nationwide--including one in the World Trade Center. Fortunately, all of Foundstone's WTC employees were unharmed.

How did Foundstone handle the chaos? In short, they listened carefully to what customers were saying. Within a day, for example, customers were calling with concerns about the vulnerability of their systems to cyberterrorist attacks. And a week later, when the destructive "Nimda" computer worm started spreading, calls piled in about how to protect against it. Foundstone monitored these calls and concerns, and quickly addressed them. One of the first steps was to quickly create new packages and offerings to clients that focused on the cyberterrorism and viruses. For example, they immediately created a Nimda package as call volume about the virus soared. And they also put together a new cyberterrorism package in the aftermath of the attacks. "We wrote a tool that would quickly identify the systems infected by Nimda and that would help remove the worm from each system," explains Kurtz. "We packaged up a specific 'Incident Response' offering tailored at organizations that needed our expertise in containing the Nimda worm in their environment and then helped them secure their critical systems. This entailed immediately dispatching our personnel on-site within hours to help fix the problem."

"The tough part is in the short term," continues Kurtz. "Because of the new security fears, everyone wants everything done within the next two weeks. So of course we' re working extra hours and weekends to get things done in that time span."

Seymour Friedel, CEO, Zydacron
Be a "well-oiled company."
"Well-oiled companies are prepared for fluctuations, even major ones," says Seymour Friedel, founder and CEO of Manchester, NH-based Zydacron, a designer and manufacturer of videoconferencing technology. "Well-oiled means that all of your systems are in good shape--financial, billing, manufacturing, your pipeline of parts, Web site and ordering systems, etc.--so you're prepared to deal with rapid changes in workflow," he explains.

To be more specific, Friedel lists three key steps, specifically geared toward manufacturing, to being "well-oiled":

  1. The product must be "manufacturable." First, it must require low labor content, so that "you can double factory input without doubling the staff." Second, it must entail very good design, so that "a high percentage of the pieces that come off the line work the first time."
  2. You must have tight control over your inventory. Know what you have in stock and have the ability to get additional materials on short notice. You should also have a good relationship with your parts suppliers.
  3. You must have a modular manufacturing process. "If you run out of capacity, it is easy to replicate another manufacturing module to increase production," explains Friedel.

Zydacron's Web site hits jumped tenfold in the wake of the September 11 attacks and orders increased significantly. "We have had requests for quotes for amounts that we haven' t seen in a long time, if ever. We've also had an increase in military requests," says Friedel. Luckily, he continues, "there is plenty of excess capacity out there in terms of available parts. If this had happened when there was a parts shortage, we would have had to really scramble." What would they have done in that case? "We would have found excess parts somewhere else. Or moved to a parts substitution if necessary."

Friedel says that Zydacron keeps close tabs on inventory and returned goods, and also keeps a close eye on customer support calls. This way, they quickly are aware of any product problems. Employees of Zydacron are all "extolled to ensure the product lives up to customer expectations," says Friedel. By being well-oiled in these ways, Zydacron is prepared to handle sudden influxes of orders on the spot.

Copyright © 2001 Inc.com LLC.

Last updated: Oct 16, 2001




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