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A season of change Featured

5:33am EDT January 27, 2006
A little more than a decade ago, Randy Mahaffey decided that technology was the future and he jumped on the bandwagon.

Mahaffey, president and CEO of Ply Mart Inc., called a technology-savvy friend and asked if him to create a Web site for his company. For that job, he paid $10,000.

“That was to make a statement,” Mahaffey says. “We’ve always been an innovative company.”

Although it was expensive statement, it was the start of the building supplies dealer’s move toward the 21st century.

Mahaffey knows his company has come a long way, but he is not satisfied with his success. He plans to continue adding services and products to please clients and increase Ply Mart’s revenue, specifically from online orders, which have increased between 37 percent and 54 percent each year since 2002.

Smart Business spoke with Mahaffey about how he used technology his company in order to move ahead of the competition.

How did you recognize it was time to add technology to your company?
I was, and am, personally, very weak technologywise, and by hearing all the conversation and all the talk, I began to realize that as president of the company, I had an obligation to get us to the forefront. We were either going to take advantage of the opportunities out there or one of our competitors would, and we have moved ahead.

How did you start the process?
We began to put a big emphasis on technology six years ago, and we established a technology team of employees who showed an interest in technology.

We have two people who write code on our payroll. That’s a huge step.

We don’t feel like we’re in the stratosphere yet. We have a lot to do. We’re glad we’re here, but we wish we were further on down the road than where we are. There are a lot more opportunities out there that we need to take advantage of.

What challenges did you face in implementing technology?
Those meetings, by the time they ended, the people were ready to scratch each other’s eyes out. They were the most contested meetings because of such variation in the level of knowledge that people had about the technology.

There was always an argument. They might look at me and say, ‘You’re the president of the company. This is your idea, but you won’t allocate enough funds to do what we need to do.’ I don’t know how many times I heard that. Certainly, in our industry, you don’t give anyone a blank check for anything. It had to be justified when you take those first two, three or four steps before you make the big leap.

They were tough meetings, and I am so proud of the head of our IT department. It was a difficult grind, and there were plenty of reasons to be discouraged because some of the things that we did right off the bat just didn’t work. But I guess I’m telling you the negatives because I’m so proud of how the people persisted through them and embraced technology as a strategy.

How has technology improved the company?
In one division, we have a product called TurboTicket. Our salesmen use the notebook computers. They enter the orders in the field, and the orders are transmitted back. Some of the more proficient salespeople are incredibly productive.

One of our highest producers said, ‘At 5:30 in the afternoon, I turn that computer off, and my attention is toward my family.’ He’s got four kids, and that’s a homerun there because that computer is not going to have the communication errors that orders that are called in are going to have — or hand-written or faxed in.

All of these things are to drive productivity and drive down operating costs.

I will say this: We are not getting, yet, the payback I expected out of technology. We’re getting some, and I’m very optimistic that we’re going to get what I expected at some point in time, but it’s just been slower to get where we wanted to go. It’s like a lot of stuff; you just don’t get instant results.

How has technology helped your customers?
We have our express programs, ExpressPay and ExpressBooks. You don’t have to mess with paper, don’t have to mess with envelopes, don’t have to file it. It is extremely convenient.

Our ExpressBooks program allows our customers to automatically do their cost accounting. We had one customer the other day who said, ‘I think you all have saved me a carpel tunnel claim.’ They don’t have to enter those invoices in there. That’s technology we’ve developed ourselves.

What obstacles have you overcome while growing the company?
Getting people to change is the biggest obstacle you have associated with technology, and getting people to believe that these products and services that we have developed are good for our customers and good for our company. That’s difficult to get them to buy into.

Getting the change in attitudes and change in habits sometimes can be hard. Getting customers to change their habits is difficult, but unless we show them some extraordinary value, then why should they change? That’s our job, to show them a better mousetrap.

How do you do that?
It’s like a lot of things — it’s a persistent effort. This is going to save us time, save us money. It’s going to be more accurate. It’s continuing to go back to those things, and once you get somebody who’s doing something well — using the technology well — then you go use that story.

‘Hey, did you hear about Bill? How many tickets he’s done? Yeah, he turns that thing off at 5:30. Then he spends his time with his family.’ You tell the success stories over and over, and people have an innate, not jealousy, but they want to have what other people have — they perceive it to be better. Then you play off of that.

How do you provide value to your customers?
Driving productivity and providing extraordinary value to our customer — if we’re not satisfying one of those two objectives, then we need to say, ‘What in the heck are we doing?’ We don’t need technology just to do cute stuff.

I think strategically, and I think in terms of value. What can we develop that will give us the biggest bang to the buck? How can we leverage what we have?

I want to see what we can do that’s difficult for somebody — for our competitor — to replicate that will give our customer extraordinary value. We never had a customer that said, ‘Develop this ... give me a program where I can pay online or develop me a program that will help me with my accounting.’

I heard a great speaker, Peter Schutz [retired CEO of Porsche AG Worldwide]. He talked about how you have to think beyond even where your customer is thinking, try to determine what the needs are, and give them something they’ve never thought about.

That’s a pretty challenging statement to even think beyond where they are, but I think we did that to an extent. I think, as we go forward, that will be the challenge. I don’t know what the next program is that we’ll do. There will be something, and we’ll try to capture more of the market share.

Make ’em so happy they can’t leave you.

How to reach: Ply Mart Inc., www.plymart.com