Technology Management in Growth Companies
In our 1994 Inc. 500 survey, we asked the CEOs of the fastest-growing privately held small companies to identify the areas of their businesses in which they use computers. The result? An overwhelming majority of the CEOs gave answers that were tabulated as "all" -- suggesting that computers are integrated throughout their companies. However, only 132 CEOs told us they had hired management-information-systems directors -- significantly fewer than the number who said they had hired chief financial officers, personnel directors, chief operating officers, sales directors, or marketing directors.
Does that mean most Inc. 500 CEOs are technology whiz kids, capable of single-handedly mastering the minutiae of information systems? Not necessarily.
CEO/Company Name: Becky Wright, The Country Peddlers and Co. of America, Alsip, Ill.
Business Description: Sells decorative accessories through home parties
1993 Sales: $7.8 million
# of Employees: 90 year-round employees
Computer system: Digital VAX, with prepackaged software, modified. The VAX is "easily expandable. It will work for a $300-million-a-year company, which we intend on being, God willing."
Most recent big decision: Buying that system and software this year, for about $250,000, caused Wright "a lot of sleepless nights. That was a great deal of money -- and it's not a decision we could make a mistake on."
Biggest competitive advantage: "There would be no Country Peddlers without the computer." When Wright and her sister Lisa Brandau first attempted to distribute handcrafted items through home parties, their company wasn't computerized. A nightmarish Christmas season in 1985, when the company ended up giving $40,000 in customer refunds, persuaded them to change.
Who makes investment decisions: Wright, with extensive research. Before the recent purchase, she considered many systems, talked to members of her trade association, and checked many customer references. Wright just hired the company's first MIS person.
Next steps: Over the next few years, Wright wants "peddlers" to start logging orders into the computer from out in the field.
Most satisfying tool: The reports that Wright's new computer system generates, which help her analyze business trends.
Most frustrating one: No particular tool. Wright's challenge is getting her company to update its ways of doing business.* * *
CEO/Company Name: Bob Olsen, Peregrine Outfitters, Williston, Vt.
Business Description: Wholesaler of outdoor accessories and books
1993 Sales: $3.9 million
# of Employees: 24 employees
Computer system: A Pentium-based server that networks machines using both UNIX and Windows. "It is not easy working in the UNIX world." But UNIX permits several applications to run simultaneously, so "it's worthwhile because of the productivity we get."
Most recent big decision: This year Peregrine installed a major $30,000 to $35,000 software and hardware upgrade, a new phone system, and -- reluctantly -- voice mail.
Biggest competitive advantage: Better customer service and improved delivery and response times.
Who makes investment decisions: Olsen, with advice from a computer consultant who is a trusted, longtime friend. Olsen relies on one small local vendor -- despite the temptation to give mail order a try. "One computer vendor for hardware and software keeps things simple. Let them decide whether it's a hardware or a software problem."
Next steps: Olsen foresees many loose odds and ends after this year's major changes. For example, the company's database changes are only half implemented.
Most satisfying -- and most frustrating -- tool: The computer. "I get more satisfaction and agony out of the computer system than out of anything else."* * *
CEO/Company Name: Doug Martin, Nest Entertainment, Irving, Tex.
Business Description: Producer of children's videos, movies, and related products
1993 Sales: $55 million
# of Employees: 347 employees
Computer system: Hewlett-Packard midrange computer.
Most recent big decision: New software system brought up in October 1993. How did the changeover go? "No comment." However, the CEO who oversaw the software transition is gone. "Anytime somebody tries to sell you a software system by telling you you're going to be leading edge, run for the exit. You never want to be leading edge. You want reliability."
Biggest competitive advantage: "Our ability to communicate with the consumer."
Who makes investment decisions: Technical people present options to the management team.
Next steps: Upgrade warehousing technology, to prepare economically for rapid growth.
Most satisfying tool: The phone. "I'm not an E-mail person. I know how to use it, but I'd rather talk."
Most frustrating one: The pager. "I leave it at the office most of the time."