Chicago (1685)

Thursday, 25 June 2009 20:00

Securing the future

Written by
Winners
Technology

Dan Moceri and Greg Lernihan founded Convergint with the intent to grow three businesses: security, fire and life safety, and building automation.

But shortly after Sept. 11, 2001, the duo shifted their focus to becoming an industry leader in digital security technologies. This technology and the market for it did not gain acceptance for a few years, but they persisted in building out the capabilities.

Today, Convergint Technologies LLC is recognized as an industry leader, and its clients include Boeing, Dell, Capital One, Chevron, UnitedHealth Care Group and Valero.

Convergint faces two types of competitors: large, multinational companies and local integrators. Moceri and Lernihan were committed to building a company that leveraged the advantages of both large and small companies. Their vision was for Convergint to have the business acumen, financial capital and professionalism of a Fortune 500 company, with the nimbleness, customer focus and colleague-friendly atmosphere of a small business.

Their major challenge was building the infrastructure to support the number of people needed to generate the required revenue long term. Initially, they outsourced key elements of their business, so that they could focus all of their attention on attracting the right people, securing customers and executing the business.

The two leaders defied normal start-up processes and hired leadership before the company began earning revenue. They secured top product lines that had previously not been given to other companies without first proving sales. With those product lines secured, the key differentiator moving forward was excellent people with the belief that great people will follow great leaders.

For More Information: Convergint Technologies LLC, www.convergint.com

Thursday, 25 June 2009 20:00

Technically speaking

Written by
Winner
Services

Chris Dalton, president and CEO of Acquity Group, co-founded his company after he saw that the evolving business environment demanded highly tailored, integrated solutions that were both creative and technologically sound. He led the company to meet this demand and helped develop the firm’s forward-thinking approach to integrating strategy, technology and design services to create comprehensive end-to-end digital solutions for clients.

Not many technology professionals would have started an IT consultancy in the immediate aftermath of the burst of the dot-com bubble, but Dalton and his partners felt it was the perfect moment.

“I had seen enough examples of what didn’t work and knew that if we put together the right kind of consultancy, based on what defunct dot-com firms had not done, we couldn’t lose,” says Dalton.

Eight years later, with a compound annual growth rate of 60 percent and nearly 300 employees, Dalton’s gut instinct is proving right on the money. Acquity Group has thrived in a competitive arena that averages a high failure rate and has been profitable since day one.

Dalton’s leadership and his focused vision have helped the firm build an impressive client list that includes Motorola, General Motors, Ritz Carlton, Kohl’s, Procter & Gamble and American Express. He is focused on helping these companies compete in today’s digital marketplace by implementing holistic, strategic solutions.

Dalton’s drive, determination and commitment to excellence and community carry through in his establishment of the Acquity Cares program, a public outreach initiative.

Also, in 2007, Dalton was inducted into the University of Illinois at Chicago’s Institute for Entrepreneurial studies Entrepreneurship Hall of Fame.

How to reach: Acquity Group, www.acquitygroup.com

Thursday, 25 June 2009 20:00

Building chemistry

Written by
Winner
Private Equity/Venture Capital

Ira Boots has spent the last 30 years working his way through the ranks at Berry Plastics Corp.

Now, as chairman and CEO, he’s focused on making sure Berry continues the success he’s contributed to through the years.

Working his way through the organization has given Boots a deep knowledge of the plastics packaging industry and allowed him to share his progressive business style. The result is a highly focused, knowledgeable and motivated management team.

His business concept of placing employee needs first, coupled with his engineering drive to be the low-cost manufacturer with highly innovative products, has been a formula for success.

Boots and his management team are well recognized in the plastics industry’s mergers and acquisitions arena as the result of the successful acquisition and integration of 28 companies in the last 20 years. His philosophy of absorbing the best practices of the new businesses, growing not just in size and reach but in skills, has contributed to the success of the mergers. Boots stresses the importance of fully integrating each acquisition by educating new companies in the Berry program and stressing the importance of looking for the best practices within acquired companies.

Through disciplined acquisitions and new product development, Berry has grown rapidly in the past decade. Long a well-respected name on Wall Street, Boots has been able to interface with top financial institutions and has leveraged top investors to help fuel large stages of growth. Boots has also built Berry’s marketplace reputation by offering top-of-the-line customer service and product quality as well as competitive pricing, which has given it a competitive advantage within the industry.

For More Information: Berry Plastics Corp., www.berryplastics.com

Thursday, 25 June 2009 20:00

On the road

Written by
Winner
Master

Daniel Arnold has forged his own path as an entrepreneur and is a true visionary.

Arnold, founder, owner and president of Road Ranger LLC, is rarely swayed by conventional thinking and often garners negative initial reactions from conservative business professionals, only to later have them acknowledge the genius in his foresight. He fears no decision other than that of making no decision, and he has a voracious appetite for attacking problems and adversity.

He originally founded Road Ranger with $5,000 in 1984, and for the next six years, he fought against stiff competition and put all of his resources at risk to take market share from established competitors. He gained notice, selling the operating assets of the company in 1990 to Phillips Petroleum. But his interest in mastering the industry didn’t go away, and he jumped back into the business in 1997, when it was struggling and began growing Road Ranger again.

Today, those who choose Road Ranger as an employer are people who are attracted to and fed by the entrepreneurial spirit that Arnold conveys in every interaction with employees.

He has a deep desire to lead and to be the first to market with new offerings at Road Ranger, which runs convenience stores. It is not enough for him to execute successfully on proven concepts; instead, he drives the company to offer products and value to the customer that it has not seen before.

In addition, Arnold has created a unique image with Road Ranger that the public recognizes and that sets it apart from its competitors. The company has gained regional name recognition and influence by selling Road Ranger proprietary coffee, drinks and fast-food items.

Going forward, Arnold is pushing Road Ranger toward national influence through continued expansion ideas and exciting new image presentations.

For More Information: Road Ranger, www.roadrangerusa.com

Thursday, 25 June 2009 20:00

Money mover

Written by
Finalist
Investment/Financial Services

From a standing start, John Rutledge, founder, president and CEO of Oxford Capital Group LLC, has created a highly scalable and flexible business model.

That model allows him to remain lean at the corporate headquarters level while overseeing assets worth billions of dollars and employing thousands. It also allows him to lead, coordinate and employ hundreds of project-level people who work on his large-scale real estate developments without having to dramatically staff up at the corporate office. As a result, the efficiency, productivity and profitability per employee at Oxford are unusually high.

Rutledge has adapted his company for numerous opportunities as he developed momentum over the years. He started in Chicagoland, then expanded into a national footprint. He has continued to challenge himself and his team by taking on increasingly large-scale and complicated adaptive reuse projects, including converting high-rise office buildings and apartment buildings into hotels, as well as developing and investing across the spectrum, from the upper-midscale to luxury, branded to boutique and full-service to extended stay. In each case, he looks at the best way to optimize a piece of real estate, and he describes himself as commercially agnostic, priding himself on having no ego in terms of whether to develop or acquire a moderate or a higher-end product.

Oxford’s projects have become renowned for their visionary creativity in seeing opportunity where others see only obstacles for success and for executing complicated, multidimensional projects, frequently where other people fear to tread. Oxford has also gone green, opening its first LEED-certified hotel in Chicago.

Rutledge’s team is also known for its keen aesthetic eye and sense of detail, the quality level of the final physical product, and ultimately, for the service its guests experience from all of the operating team members and associates. He also believes that he and his team should be tough on the issues but soft on the people.

For More Information: Oxford Capital Group LLC, www.oxford-capital.com

Thursday, 25 June 2009 20:00

Measure your broker

Written by

In the current economy, businesses need every edge they can get to stay competitive and protect themselves from risks.

And when covering those risks, if they make a mistake in insurance coverage, it usually doesn’t surface until after a disaster or liability occurs.

To ensure that doesn’t happen, businesses need to make sure they’re covered by a reputable broker who will go above and beyond to make sure those kinds of potentially catastrophic — and costly — gaps in coverage aren’t overlooked, says Rob Wilson, president of Employco Group, a division of The Wilson Companies.

“You need to be sure that your broker/representative has the technical knowledge to cost-effectively arrange your insurance program so it properly protects your assets and earning power,” says Wilson. “If your insurance program is deficient, you could be out of business at the time of a major loss.”

Smart Business spoke with Wilson about what business owners should expect from their brokers regarding service, offerings and risk management tools.

What is the broker’s role in helping businesses achieve a competitive edge through risk management?

The broker’s role is to design a comprehensive insurance program that properly insures the assets and earning power of the business owner on a cost-effective basis.

The broker must be sure that he or she has provided all insurable alternatives to the business owner so the owner can reach a conclusion of how best to protect the business.

What can happen if a business is not properly covered?

In the event of a major fire or other catastrophe, you need to have an insurance program that will enable you to be in the same position after the loss as you were before the loss.

If your insurance program fails to meet your needs, you could lose your business.

How do business owners know when it’s time to look for another broker?

It’s time to look for a new broker when you never see your broker and he or she does not schedule regular meetings.

Another reason for change is when the broker does not conduct annual reviews with you to update your file and incorporate any changes in your insurance program. For example, an increase or reduction in your inventory, a new building addition or a major swing in your payroll would require changes in your insurance program.

In addition, it’s time for a change if your broker is rarely available to answer your questions.

What should business owners expect brokers to bring to the table?

Your broker should provide a detailed summary of your exposures and a set of insurance specifications designed for your business. He or she will review with you a summary of your insurance coverage and a detailed premium summary, along with quotes from alternate insurance companies.

How much should you expect your broker to know about your business or industry?

A broker may know little about your business at the time of your first meeting. However, he or she must spend the time with you and other key employees to understand your company and learn as much as possible about your business.

Your broker needs to know the why, where and what about your operations and exposures and should take the time to learn these things in order to serve you more effectively.

How can business owners make sure their broker is accountable?

There are commitments a broker should make to confirm what the client should expect in the future.

The broker should be able to provide you with a time line of the services that he or she will provide, and when they should be provided. For example, you should know when you should expect delivery of your new and renewal policies or when you should receive your binder, coverage changes and answers to your technical questions.

How can business owners find a good broker?

You can narrow the field by asking your CPA, your attorney and business associates for names of reputable brokers. In the interview process with several brokers, you should determine if the broker has professional designations, such as the CPCU or AAI designations. These would indicate that the brokers take their business seriously.

Ask for a few references, as well as the names of the insurance companies that they represent. You may want to visit their offices and meet the employees that will be handling your day-to-day work, such as certificates of insurance and coverage changes.

You should also inquire about technical skills and the ability to properly service your account.

Rob Wilson is president of Employco Group Inc., a division of The Wilson Companies, which handles human resources outsourcing, staffing and insurance for 400 small and medium-sized Midwest companies. Reach him at (630) 286-7345 or robwilson@employco.com.

Thursday, 25 June 2009 20:00

In alignment

Written by

Although most organizations have performance measurement processes in place, many don’t align those measurements with the goals of the organization. And incentives, which can be a good idea, too often encourage managers to make decisions that are for the best of the division over the best interests of the company as a whole.

Implementing a holistic performance measurement process can help you set goals, evaluate employees based on their adherence to those goals and ensure that the actions of your employees have the impact that you intend on your company.

By doing so, you can align individual goals with your company’s objectives, focus your training efforts where they are most needed and build a practical program for feedback on performance, says Harry Cendrowski, CPA, ABV, CFF, CFE, CVA, CFD, CFFA and managing member of Cendrowski Corporate Advisors LLC.

Smart Business spoke with Cendrowski about how to incentivize your employees in a way that benefits your entire organization.

What is a holistic performance measurement process?

A holistic performance measurement process is composed of the following primary components: strategic and operational goals set by the organization and a system to evaluate employees based on their adherence to these goals.

Many organizations have performance measurement processes in place for employees. These processes try to translate the overarching strategic and operational goals of the organization to employees through goal-setting processes.

When employees attain goals set for them, they are rewarded with merit pay or bonuses. However, a holistic performance measurement process will not only ensure that goal-setting processes are in place for employees, it will also make certain that employees are properly incentivized to the benefit of the entire organization.

For instance, many buyers in purchasing divisions today are measured on the amount they save on purchased parts year-over-year. A buyer measured on this metric may choose to award a contract to a new vendor on the basis of cost without considering the parent company’s relationship with established vendors, the quality of the goods received or the financial stability of the supplier.

Thus, while the buyer meets his goal — and improves the purchasing division’s performance — the parent company may suffer as a result of the improper incentives presented to the employee.

What kinds of organizations that often lack holistic metrics could benefit from them?

Large, bureaucratic organizations often have difficulty evaluating metrics from a holistic perspective. Divisions within these types of organizations frequently operate as autocratic entities with little to no interaction between other divisions. While this type of organizational structure may incentivize division-level managers to make decisions in the best interests of their division, they may not look out for the organization as a whole, simply because it is not in their best interest.

Organizations that lack a rigid bureaucratic structure are sometimes better at establishing holistic performance measurement processes because of their flat structure. Lacking discrete divisions, managers of such organizations are more likely to look out for the entire team, rather than their staff members. However, this is not always true, especially in small businesses.

Small businesses also have issues with establishing holistic performance measurement processes. However, the issues they possess generally relate to their lack of concrete strategic and operational goals. Many small businesses grow so fast that their owners sometimes forget to lay out future state plans. This creates issues for employees when they aren’t exactly sure what goal they are working toward.

At one small business, employees were told that the company was striving to become a high-quality, low-cost provider of services. However, when push came to shove, employees were confused about whether they should err on the side of high quality or low cost. The firm’s lack of a mission statement created significant issues for employees.

How can organizations avoid such practices in decision-making?

When incentivizing employees, it’s always important to remember the adage, ‘What gets measured gets done.’ If an employee’s merit pay is based on achieving a certain goal, he will generally try his best to achieve it — sometimes by any means necessary.

There are instances where plant managers of manufacturing operations were measured on the number of products they shipped each month. While this metric was well intentioned in that it incentivized managers to keep the production line moving, plant managers would purposefully order all goods shipped to retailers at the end of each month, irrespective of final quality inspection results.

Products that were produced midmonth with defects would be reworked prior to shipment if necessary; however, goods produced at the end of the month were often shipped to retailers with defects. One can imagine the harm this could cause the organization if retailers did not detect these defects before they sold the goods to customers.

When organizations wish to incentivize employees, they should be aware of adverse consequences that their metrics may cause. For instance, if the plant manager in the above example had been measured on both quality levels and the number of products shipped per month, he may have made different decisions.

Tuesday, 26 May 2009 20:00

Loan to own

Written by

In today’s economic climate, many businesses are struggling, and lending institutions aren’t extending credit as freely as in the past.

And that can present an opportunity for investors to take control of a company without buying it outright, providing capital to a business that needs money to continue operating.

“Business owners often view control as related to ownership of the company,” says Matthew R. Zakaras, a partner with Levenfeld Pearlstein, LLC. “But you can often control a company through leverage by buying its debt (preferably at a discount), or issuing new debt because, as a secured lender, your consent is required to sell the business. In addition, loan documents can contain covenants that require the lender’s consent for major decisions. Loan-to-own opportunities arise most often when the target is in a distressed situation, i.e., when debt is putting tension on an otherwise profitable business. A loan-to-own strategy can be the first step in a transaction that enables an acquirer to unlock value in a debt-burdened company.”

Smart Business spoke with Zakaras about the viability of the loan-to-own strategy and the steps to taking control of a distressed business.

What is ‘loan-to-own,’ and how does it work?

There is nothing new about loan-to-own strategies; we are just seeing more of them given the economic climate and the lack of available financing alternatives. Loan-to-own strategies are used by private equity and other investors to purchase companies as an alternative to conventional asset, stock or merger transactions.

A lot of times, loan-to-own transactions are utilized because the target business needs working capital and cannot obtain financing from conventional lending sources. Investor-lenders are looking to structure the transaction to reduce downside risk. For this reason, the investment is structured as a secured loan so that the investor-lender is among the first to be paid in a liquidation or bankruptcy of the target.

Also, these investors are sometimes looking for a toehold position in the company. The investment may be small in the beginning, but it often increases as the target continues to need working capital for survival. As more money is loaned, the investor-lender gains more control of the target.

Loan-to-own strategies are also used when a target’s balance sheet shows more liabilities than assets and the secured lenders are unwilling to release their liens because they will not receive full value at closing. Acquirers are often in a better position dealing with the secured lenders of the target directly, rather than negotiating through the company that has been unable to meet its debt service obligations.

Once the acquirer buys the secured debt of the target, it has control over the sale and can often negotiate a lower purchase price with the target because, as a secured lender, the acquirer can also foreclose on the target’s assets if the purchased debt is in default.

When would a business owner use loan-to-own strategies?

Usually, business owners are forced into the situation because they either need working capital, or they are unable to sell their business because there is more debt than assets on their balance sheet. Ultimately, it comes down to leverage: How can an acquirer structure a transaction to reduce risk, obtain control and capture maximum value?

What are the steps involved, and what are the different types of strategies?

The steps in a loan-to-own transaction vary on a transaction-by-transaction basis, and, as we discussed earlier, there is nothing new about the loan-to-own strategy. If the investor-lender is loaning money to the target, the loan documentation is very similar to any other secured loan.

The investor-lender will want extensive representations and warranties, and covenants related to the target’s business. The investor-lender will also want the right to foreclose on the target’s assets in the event of a default.

When the investor-lender purchases the debt, there is a loan purchase agreement, and the important thing to remember is that the investor-lender is stepping into the shoes of the original lender, and so its remedies vis-À-vis the target are contained in the loan documentation that the target negotiated with the original lender.

In both situations, the investor-lender may need to coordinate its efforts with, and may needed to subordinate its position to, the target’s senior lender.

What should investors look for when determining if using a loan-to-own strategy to purchase a company is a sound investment?

Investors ultimately need to look at the underlying business fundamentals of the target. Like any other transaction, the investor needs to ask himself, ‘Does this company have a reason to exist?’ If so, the investor should look at the target’s balance sheet to determine what debt can be shed to make the target more profitable.

The investor-lender also needs to understand the value of the target, and where the investor-lender stands in line in the event of a bankruptcy or liquidation. This understanding also underlies the price points that are negotiated with the secured lenders and the target. It is no different than buying a company through any other type of asset sale, stock sale, etc. Investors still need to conduct proper due diligence. In the acquisition of distressed companies, it is important to understand the debt and capital structure of the target as it relates to its value and the amount of the investment.

matthew R. zakaras is a parner with Levenfeld Pearlstein, LLC. Reach him at (312) 476-7567 or mzakaras@lplegal.com.

Tuesday, 26 May 2009 20:00

Shifting gears

Written by

Jay Mandel and his company, Tri Star Metals LLC, had never worked with a public relations firm before, until he, along with other shareholders and external partner Hagener-Feinstahl, bought out the company’s three founding shareholders.

While no negative changes were made, Mandel and his team knew there would be some worries from employees at the company, which produces and distributes stainless steel and aluminum products. So they hired a PR firm, which, along with an outside consultant, helped in the transition by preparing Mandel and his team for questions they might be asked.

“Those were two incredibly valuable assets,” says Mandel, president of the $40 million company.

Smart Business spoke with Mandel about how to prepare employees for an acquisition.

Q. What lessons did you learn from the outside help?

Those of us who were deeply involved in the transaction, we had it in our head why we wanted to do this and the strengths. We really needed to be able to effectively communicate those ideas to everybody, whether it’s the people working on our shop floor, to the people in accounting, to our salespeople.

We really need to be able to explain to them what the benefits are so they could effectively communicate it, not only to themselves and their families but to our customers and our other suppliers.

And our management consultant, the other thing I think he really did was he did spend some time to sit down and say to us, ‘Here are some of the weaknesses each of the individual, key managers has and areas you need to work on.’

Q. What advice would you have on managing through an acquisition?

First and foremost, you need to spend time trying to anticipate what your employees’ needs and concerns are.

You really need to sit down and try to put yourself in their position, what are going to be their thoughts and concerns and how is it going to impact their life. It’s really easy for companies, when you do a transition like we have, to sit there, look at the big, macroeconomic benefits and look at the synergies and the strengths that it is going to bring to both companies. But it’s more important to sometimes also sit down and say, ‘OK, how is this going to impact our employees and what thoughts or concerns are going to come up for them as we go down this road?’

Q. What advice would you have on how to anticipate employee concerns during an acquisition?

Going outside your organization and sitting down with experts who have gone through these transactions before is definitely a positive.

The other thing is I think you get so busy closing the deal and meeting with the banks and the lawyers (you need) to spend some time with your employees. Sit down with them on a one-on-one or each department group basis and have an informal setting where you can really sit down and talk about thoughts and concerns in a very relaxed atmosphere.

Q. How do you set up a relaxed atmosphere?

A lot of our key managers and employees we went out to dinner one-on-one before the announcement was made and told them on a one-on-one dinner or lunch what was going on. In that environment, it’s relaxed. The person is getting a lot of attention, and we made sure to try to talk as little as possible and listen.

Q. How did you determine the employees you took out to dinner?

We based it on a couple of factors. We wanted to make sure the managers of each department were brought into the loop before we made the general announcement, so they could be prepped then to answer the questions and concerns of all of their people that work underneath them in each individual department.

We also looked at the people who had been here 10-plus years and really had a lot invested in Tri Star. We felt we owed them the special attention and more time because they have got a lot invested in this company and, therefore, they really should be included in the group and have a chance to bring out their thoughts and concerns. And that whole series of lunches and dinners brought out a lot of questions and concerns that we were then able to answer for the rest of the employees.

We started about a week and half before the announcement so that we had enough time to take out all the key managers and top salespeople. We made sure we did a dinner or lunch with each personal one. It was Dan (Buba, Tri Star’s CEO) and I at the dinner. Most of these dinners end up being two- to three-hour affairs because most of them were pretty shocked and then a lot of questions came up, and it also gave us an opportunity to explain to them why we saw this as a good opportunity.

How to reach: Tri Star Metals LLC, (800) 541-2294 or www.tristarmetals.com

Saturday, 25 April 2009 20:00

Delivering data

Written by
As customer demand for real-time information continues to heighten in the ever more dynamic world of logistics, the need for tailored data synchronization through EDI implementation has become more apparent than ever before.In its simplest terms, EDI, or electronic data interchange, is essentially defined as the structured transmission of electronic data from one trading partner to another. With its ability to automate and integrate processes including tracking and tracing, status messaging, reporting and invoicing, EDI gives logistics providers the flexibility to craft creative solutions for their customers.

“Contending with today’s industry challenges warrants sales professionals to extend the depth of their knowledge base well beyond advising customers on how to schedule a pickup or track a shipment,” says Ray Fennelly, director of business development for AIT Worldwide Logistics, Inc. “Customers now require a flexible technology infrastructure tailored to the data distribution of their supply chain, and sales representatives must be able to deliver more than just a canned IT solution to drive those demands.”

Smart Business sat down with Fennelly to discuss how EDI has transformed sales and supply chain relationships.

What are the major benefits of EDI?

Humanizing our business in the age of gadgets and gizmos cannot be underestimated — after all, we are not just moving boxes from point A to point B. In addition to being logistics consultants to our customers, we must also serve as communications and IT consultants.

While it’s imperative not to remove the personal aspect from the business, juggling various phone calls, faxes and e-mails can be extremely difficult to manage and lead to major miscommunications or disruptions in delivering information and product on time.

Furthermore, customer service representatives can’t be held accountable for remembering every last nuance of each customer relationship; Web-based solutions facilitate this process.

Unfortunately, the industry is not infallible — delays do occur and mistakes will be made. However, a comprehensive tech-driven solution can dramatically reduce those setbacks by automating data transmission, minimizing potential for human error, and providing increased work flow and communication efficiencies.

In essence, sharing data in an integrated environment allows customers to view their supply chain as a ‘glass pipeline’ of sorts: At any point along the life cycle of their shipments, they receive instant visibility to shipping activity, lane segments, trade profiles, on-time percentage and financial data.

Describe the potential pitfalls that can occur with EDI implementation.

Mutual commitment to resources required — particularly in terms of money, training, manpower and time — is, without a doubt, one of the largest concerns. Make no mistake; getting two IT platforms to speak to each other can be a time-consuming, costly, highly involved process. Can both organizations dedicate the proper internal resources until the information exchange environment has been successfully and accurately implemented?

EDI hinges on cooperation and collaboration. If set up properly, its short-term expense results in significant long-term savings for both parties. However, the value of EDI’s flexibility is lost if expectations between the two companies are not properly communicated, understood, mutually agreed upon or executed.

While it is important for you and your customer to engage in detailed discussions and plot project road maps and flow charts, it is ultimately your responsibility to generate results for your customer based on its prioritized business needs and efficiencies.

How do you determine whether or not it is a sound business strategy to apply EDI to a customer relationship?

Because of its perceived complexity, EDI can seem imposing and overwhelming to customers, especially those with whom you have been doing business for years or even decades. In encouraging them to move from paper to electronic processes, those concerns are certainly legitimate.From a cost-of-implementation and training standpoint, in today’s economy, especially, you can’t and most certainly shouldn’t expect a customer to implement EDI unless it makes sense for the data flow of its supply chain.

It should never be the goal on a sales representative’s first visit to set customers up with EDI; you can’t automatically presume they need it. After all, their definition of the term might radically differ from yours. You must first become attuned to the customer’s shipping trends and volumes to analyze the data flow of its supply chain.

Oftentimes, the need for EDI doesn’t present itself until long after the maturation of your customer relationship, when trust has been ascribed and the foundation of the partnership has been established.

At the end of the day, it is incumbent upon logistics providers to take a consultative approach in sitting down with their customers, mutually deciding on the most beneficial Web-based solution for their business and delivering value to their supply chain based on those demands.

RAY FENNELLY is the director of corporate development for AIT Worldwide Logistics, Inc., headquartered in Itasca, Ill. Spanning numerous nationwide locations and an ever-increasing network of international partnerships, the global transportation and logistics provider delivers tailored solutions for a wide variety of vertical markets and industries. Reach him at rfennelly@aitworldwide.com or (800) 669-4AIT.