Foreign Aid

Problem: Inefficient foreign money transfers
Solution: An automated exchange service
Payoff: A 20-fold increase in transaction speed; major savings in transfer fees

For Spencer Bond, it wasn't the exorbitant fees that his bank charged him for foreign money transfers that was so irritating. It wasn't even the fact that frequently his overseas suppliers would try to cash the drafts that he had sent overnight, only to find that Bond's bank hadn't processed the paperwork and wouldn't honor the checks. No, what really got him riled was the hour a week that he wasted on the transfer process.

Every week, some sort of problem would crop up. "Like I'd go into the bank and they'd say, 'Well, the person who handles those is out right now, but maybe Kevin can do them. He's never done one before.' So I'd have to walk through the paperwork all over again," Bond says. "That took a lot of time. And the biggest factor in business today is time. It's the one valuable asset none of us can buy more of."

Bond's company, Corbeau USA LLC, based in Sandy, Utah, distributes aftermarket automobile bucket seats and office chairs, 90% of which the company buys from overseas suppliers and 20% of which it sells overseas. Obviously, processing foreign transfers is key to Bond's small business.

But his local bank wasn't making it easy. To get a foreign draft, Bond had to go to the bank in person, fill out paperwork, and then pay a transaction fee of $35 to $75. He also had to pay the "spread," or the difference between the buying price and the selling price of a foreign currency, turned into percentage points. That spread gets higher the smaller a transaction is. So a company requesting drafts totaling, say, $5,000 might pay 1.6% of the total draft amount, whereas a company requesting drafts totaling more than $10,000 might pay just 1.54%. To lower the percentage charges, Bond used to save up his drafts until they exceeded the cutoff point for a price break and then buy several at once.

That all changed two years ago, when Bond idly punched in a few keywords on a Web search engine and discovered Sonnet Financial's FXChange service, now called Sonnet FX (800-272-8339; $399 for the proprietary software, free over the Web). Sonnet Financial works as an aggregator, each day pulling together small exchange transactions from many companies and then shopping that one large purchase among many banks for the best rates. Sonnet Financial's star buying power commands the lowest rates of all--"interbank" rates available only for million-dollar-plus trades. Instead of charging a percentage for each trade, Sonnet Financial charges users a fixed fee of $40 to $150, depending on the size of their transactions.

Fed up with the cost and bother of bank drafts, Bond gave Sonnet Financial's 60-day money-back guarantee a try. After installing the company's proprietary software, he registered Corbeau USA's information and bank-account numbers over the service's secure modem line and started making transactions. To his delight, the process took only a few minutes.

Now, every time Bond makes a transaction, he simply fills out a computer form and sends it by modem to Sonnet Financial, which either makes an electronic transfer or mails a check in the appropriate currency to Bond or Bond's payee after transferring the money from Bond's bank to its own. "We've saved thousands just in transfer fees," Bond says, adding that he no longer has to delay payments by stockpiling his drafts. He estimates that the software paid for itself within 90 days. But more important to him is the time savings. "We used to say, 'Who wants to do the transfers?' and nobody wanted to do it," Bond says. "Now I do them myself in two or three minutes over my morning coffee." -- Phaedra Hise

First-Class Delivery

Problem: Finding more efficient delivery routes
Solution: Mapping software that links to customer-delivery forecasting
Payoff: Increased deliveries, faster route planning

When Philadelphia weather turns bad, Ruggieri & Sons gets a blizzard of orders. The $4-million family-owned heating-fuel distributor prides itself on using fewer trucks than its competitors to serve more customers. In the past, during the heart of the winter season each of Ruggieri's four trucks would make 25 to 40 stops a day and deliver from 6,000 to 10,000 gallons of heating fuel. Since each delivery averaged more than 200 gallons, the drivers had to reload their truck tanks at least once during the day at various fuel terminals scattered around the city.

Every evening co-owner Joe Ruggieri would map each truck's route by hand, relying on his "between the ears" knowledge of Philadelphia streets, as well as faxes of the next day's terminal prices and a list of customers who needed fuel. The list came to him from Advanced Digital Data Inc. (ADD Systems)--a company in Flanders, N.J., that also managed his payroll, accounting, and customer-delivery forecasting--over a computer in his office. "We want the drivers to get the most out of the day that they can," he says.

But the winter of 1995-1996 changed all that. That season 63 inches of snow fell on the city, and Ruggieri & Sons was deluged with 2,000 emergency phone calls a month--1,550 more than the company received during an average winter month. "I was routing trucks until 2 or 3 in the morning," Ruggieri says. When the frenzy of that winter melted away, Ruggieri began to investigate ways to make emergency situations less chaotic. "I started to think, 'There must be some mapping software out there," he says.

Together with ADD Systems, Rug-gieri researched the options and ultimately settled on Lightstone Group's RiMMS software (516-294-7505; $20,000, but price varies based on number of sites, fleet size, and mapping requirements). The program runs on Ruggieri's new Digital PC and is linked to ADD's customer database and forecasting application through the same 56K leased line that used to tie his terminal to the data company.

Now when it's time for Ruggieri to route the next day's deliveries, he logs on to ADD's wide-area network through the dedicated line and clicks on the button that downloads the customer-delivery information into RiMMS--information including the 100 customers most in need of fuel, the average number of gallons each normally receives, and any special delivery instructions (for example, "This customer pays COD" or "Fill connection is in the back"). He then clicks on the RiMMS "create map" icon, and within seconds a road map--whose geographic area Ruggieri has specified--loads onto the screen with dots showing the 100 delivery points and the locations of the fuel-reloading terminals. Last, Ruggieri hits the print icon, and RiMMS processes and prints out customer-delivery tickets, organized according to the most efficient routes. The program also has an option that provides detailed driving instructions for the shortest route between point A and point B in either map or text form, but generally Ruggieri bypasses it, since his drivers know the city well. "In less than 10 minutes, the software has routed all the drivers for the day," Ruggieri says.

Ruggieri & Sons' four drivers now make about 7% more stops a day than they used to and travel fewer miles. As for Ruggieri, he's cut his route-planning time by a whopping 75%. "In a small business such as ours, you wear many hats," he says. "The more time you have to spend routing trucks, the less time you have to spend growing the business, looking for acquisitions, and working on customer relations. There are 26 hours' worth of work and only 24 hours in a day. Anything that helps you whittle that down helps." --Emily Esterson