Those lists and histories already sat on Boelter's IBM AS/400; all he had to do was make them available on a protected basis over the Web. Working with Ironside Technologies, a systems developer in Toronto, Boelter and administrator of electronic commerce Sheril Immekus developed the template for a slick, Java-based electronic catalog that mimics the company's paper version and pulls data from the minicomputer. Customers entering a user ID and password can look up products and place new orders. The site also tracks standing orders and lets customers resubmit or add to them with just a few clicks. "The goal is to provide whatever information they ask for over the Web," says Boelter.
Although purchasing managers can search for new items on-line, they must still call a sales representative for quotes, since numerous variables are considered in pricing a first-time sale. And before they can access the system for the first time, users must register either on-line or over the phone, allowing Boelter to certify that they are, in fact, customers or potential customers. "We aren't using it as a marketing tool," says Boelter. "We're just trying to make it a service for customers who are serious about using it."
Some of those serious customers use the site for more than procurement. Recently, a longtime customer who owns seven restaurants came to Boelter with a problem: his independently managed locations were not complying with corporate ordering rules. "Ordinarily, there wouldn't be much we could do," says Boelter. "But with the Web we have ways to solve his problems."
Because the Web server snatches information from the customer database, Boelter and Immekus can compile reports on individuals' buying activity and post them as pages on the site. That one-on-one service can be provided quickly using Microsoft FrontPage and Adobe Photoshop. The restaurant owner now uses the site to run store-specific reports on purchases made within a given time period. Or he can check individual products--such as martini glasses--to see if all his restaurants are buying the same kind.
Other customers have similar arrangements. The Chicago Hilton, for example, doesn't order so much as a napkin ring over Boelter's site, but the purchasing manager visits it weekly to view a report that stacks his budget against purchases made from Boelter. "It's a way for me to make his life easier," says Boelter. "And it doesn't cost me that much to do it."
Specifically, Boelter has spent about $200,000 on the entire system. That sounds pretty economical in light of the $180,000 cost of printing and mailing a paper catalog twice a year--less so when you consider that only 30 of the company's 2,000 customers buy on-line regularly. (Boelter has done $75,000 in on-line transactions since the system was launched, in December 1997.) About 5 more customers begin using the Web service each month, although not all of them stick with it. Usually, those who back out do so for technological reasons beyond Boelter's control. For example, one customer begged off after having difficulties accessing its own Internet provider. "This is often just as much a discovery process for our customers as it is for us," says Boelter.
Immekus is complacent about the fact that many customers simply prefer doing the paper and phone thing. "Just as you'll always find folks who don't like using voice mail, we'll always have customers who need to talk with a salesperson to place their orders," she says, leaning back in her chair in the nondescript warehouse that abuts the Boelter Cos.' offices. In that low-tech setting, the issue of Wired magazine lying next to her computer looks as out of place as a nonalcoholic brew in a Milwaukee sports arena. On its neon green cover, Godzilla stomps across a city behind the headline: "Forget the Dow! Here Comes the New Economy!" For the Boelter Cos. and others like it, that message is both a promise and a warning: there's still time to tame the beast.
Joshua Macht is an associate editor at Inc.
A more modest proposal
EDI on the Internet is for everyone
Kaya Erk hates saying no to customers. So when a Fortune 500 computer manufacturer asked Erk's $20-million company to send its invoices over a value-added network, he deftly skirted the issue. That's because the CEO of Kycon Inc., in San Jose, Calif., had priced electronic data interchange (EDI) systems and knew that, in his case, it would cost $25,000 just to set up the software and $1,500 a month for the proprietary line. "We didn't do enough business with them to make it worth it," says Erk, whose company makes computer and telecommunications connectors.
Fortunately, a number of start-ups and stalwarts are making it possible to do EDI over the Web, where it is both cheaper and easier to manage. For example, General Electric Information Services now lets small companies fire EDI-formatted invoices and purchase orders through their browsers to a large customer's EDI mailbox. There's no software to download: companies pay a $25 introductory fee, and after that it's $65 a month plus $1.50 per transaction. Other EDI providers, including Harbinger, offer similar services.
Erk went a different route. Succumbing to customer pressure last year, he dropped $199 on EC Exchange from the EC Co., based in nearby Palo Alto. Now he simply dials into the EC Co.'s Web server and from there transmits an EDI form to his customers' EDI mailbox. The secured Internet line costs about $30 a month for each address; transactions under 10KB are 45¢ apiece.
Erk now does about 50 EDI transactions a week with eight companies. Each new engagement involves a little setup time, but that's "easily managed," says Erk, who also wants to do EDI with small suppliers. "The best part is that the large companies don't do a thing to their EDI systems," says Erk. "And yet we don't have to do too much, either."
