A company's struggle to upgrade its computer system is detailed, while advice on lessons learned is offered.
Changing computer systems can be hell, as one company found out. But the benefits of upgrading can often beat the heat
QUICK START
Challenge: To get a better handle on how customers are doing and how well ProSalon is meeting their needs
Solution: A turnkey system that not only analyzes customer sales but also manages the inventory and order-fulfillment needs of distributors
Resources: A turnkey tracking system from DSM; ClipperShip software from Tracer Research to enhance DSM's parcel-tracking ability
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Steve Cowan makes a strong visual impression -- John Goodman crossed with Elvis comes to mind -- that at this particular moment is heightened by his having situated his substantial bulk on a small sofa in his company's tiny conference room. The room itself is a slightly tacky affair, a partially walled-in space that looks like a lazy afterthought to the warehouse that houses it and the rest of the company's cramped offices.
Though generally soft-spoken and mildly restrained, right now Cowan is experiencing an emotional high. He is reminiscing about the first computer he bought for his Joliet, Ill., hair-salon product-distribution company, Professional Salon Concepts (PSC), back in 1985. The computer, a $2,000 IBM PC-XT, came with only DOS, he recalls, and he couldn't do anything with it the first day except format floppies. So he stayed up late into the night, lost in a sort of techno trance state, formatting floppies. "I was the first person in my family to own a computer," he says, beaming.
The mood shifts, though, when a minute later Cowan describes how it went when he turned on his company's new $200,000 computer system last April. His face darkens with the memory, as he describes a scene that evokes one of the middle levels of hell from Dante's Inferno. The scene includes some people weeping openly, others frantically yelling "Fire!" and still others moving through the tortured group inflicting even more pain.
He's not kidding. In addition to the personal trauma, the move to the new system precipitated a plunge in sales, one of the few in the company's 11-year history, and almost caused Professional Salon Concepts to flub hundreds of critical shipments to customers. Five months later, the system still doesn't do everything he needs and expects it to do, including some things the old system did.
No wonder he looks back so fondly on his disk-formatting days. But all in all, Cowan believes that stepping up to the new system was the right move -- at the least, it was a sort of necessary evil. The system, he explains, represents a milestone in his ongoing quest to get a better handle on what his customers are doing and how well his business is meeting their needs. "We have questions we've wanted answers to for years, and we're always coming up with new questions," he says. The new system, he contends, should be able to provide the answers, even if he has to go through hell to get them. And despite the setbacks involved in getting the system up to speed, he insists the company is already running more smoothly than it ever has.
Cowan was in the salon-distribution business for a long time before he began worrying about an information gap. He started in 1972, at the age of 16, working for his father's barber and beauty-salon distribution business, freezing or roasting, depending on the season, in a delivery truck as he tried to pick orders while barbers made a game of pinching combs behind his back. When he was 18, his father sold the business, and Cowan spent most of the next decade working for another distributor. He was good at his work, quickly climbing to the position of vice-president and general manager, but he grew restless. "When I was 16 and making a lot of money, everyone thought I was terrific," he says. "But when I was 27, I realized I wasn't a boy wonder anymore. I felt I either had to find some way to have an impact in this business or get out of it."
So he started his own regional distributorship, focusing on a then little-known line of salon products that carried the name of celebrity hairstylist Paul Mitchell. He hired four people and rented a small warehouse to serve as both office and inventory space. No one bought the products. He gave away free samples; the hairstylists said they hated them. He let three of his four employees go, and moved his inventory out of the warehouse in the middle of the night to a basement location.
Desperate, he decided to try one more tack: he offered to bring in a top hairstylist to a salon after closing time to provide the owner and the employees with a free two-hour hands-on course on how to get the most out of the products. The first salon to take him up on the offer sent Cowan home that evening with a $1,000 order. Cowan realized he had stumbled onto a vision, a way of making an impact. "So many distributors walk into salons with the idea of taking money from the salon," he says. "I decided I would go in there with the idea of helping the owner and the hairstylists make money, by creating an information-rich environment." It just so happened that providing such an environment for one evening allowed him to spend as much time with the owner as the average order-grabbing salesperson does in nearly a year's worth of sales calls -- figuring about three minutes per call and one call per week. By growing owners' and stylists' loyalty, he guessed, he could grow orders. Cowan declared that he wouldn't sell to a salon unless it let him run a course there first.
PSC, which moved into its current warehouse/office space in 1988, now has 45 employees and 3,000 salon customers in Illinois and Indiana combined, and 1993 revenues were $7 million. Keeping the tacky warehouse-based offices when the company can afford plush digs is Cowan's way of reminding himself that what counts is what goes on in the salons. In 1985 Cowan installed a $3,000 PC accounting-software package on that first PC-XT; though he added PCs over the coming years, he continued to run the company on the same software. He didn't have much motivation to upgrade. He and his 15 salespeople knew the company's customers well, thanks to the courses.
