Todd Shryock

Tuesday, 22 June 2004 13:25

Technically speaking

Len Pagon Jr. has led Brulant from being a single-platform programming house to becoming a full-service management consulting and technology integration firm.

The transformation didn't come easy, and it meant weathering upheavals in the tech industry, changes in business demands, a name change and even having to buy back a controlling interest in his company.

But through it all, Pagon has stayed focus on growth and the ideals that set his company apart from the competition. Through his roles as a programmer in Brulant's start-up phase, to business development, branch management and ultimately CEO, he has acquired a unique perspective for integrating business strategy, operations, information technology and marketing to rapidly leverage the Internet.

Pagon credits Brulant's market position for its success. The company has the benefits and capabilities of a large firm while providing the attention, fee structure and customer service of a local firm. Brulant employs a practical, hands-on approach to implementing systems at typically less than half the cost of a Big 5 firm.

Some of the unique approaches the company takes are:

 

* Time-to-value. Brulant created a time-to-value business model that enables it to drive significant value in shorter time frames with lower risk that delivers results rapidly and within budget.

 

* SWAT team approach. The company uses the same services a larger firm would while using small, nimble teams focusing on short-term intense projects and the time-to-value methodology. The end result is high client satisfaction with accelerated results at lower costs.

 

* Client-focus business model. Brulant manages the firm through client-driven practices with senior level executives responsible for running them. The company also has knowledge leaders who are responsible for turning custom projects into repeatable solutions that they are able to leverage across Brulant's client base to reduce risk and costs. How to reach: Brulant, (216) 518-7900

Tuesday, 22 June 2004 13:21

Part of the solution

Ray Dalton saw an opportunity in the $3.8 billion medical equipment parts market.

Prices for replacement parts continued to rise because a staggering 94 percent of the market was controlled by original equipment manufacturers that were getting margins of up to 350 percent. If technicians wanted to order from someone other than the OEM, they had to wade through thousands of small niche firms to find the part at a cheaper price.

Dalton created PartsSource in March 2001 to provide parts for all 2,500 makes of hospital equipment.

The results have been impressive; the company has doubled its sales in each of the last two years and continues to grow.

"There is no place else in the world where a hospital can pick up one part for any of the 2,500 makes and models of equipment from 7,500 different suppliers that is all cataloged electronically," says Dalton. "Our value equation saves the customer three hours on every part they buy, and they save 15 to 52 percent in dollars. Saving both time and money is pretty key in the health care industry.

"Our short-term challenge is to make sure we do not run out of high-quality parts to ship. No one else in the world is doing this, so we are having to find new supply channels that didn't exist before. We are spending a lot of time shoring that up."

The company recently made three acquisitions to help secure that supply, and is focusing on building depth in its supply chain.

"We are comfortable the supply is out there, it just has to be organized," says Dalton. "We have to make sure suppliers can deliver what they say they can." How to reach: PartsSource (330) 963-7030 or www.mypartssource.com

Tuesday, 22 June 2004 12:36

Just say no

In the rush to find profits in a slow economy, business leaders find themselves scrounging up new prospects wherever they can find them.

But Kim DeMotte, author of "The Positive Power of No," says that can be a big mistake.

"In practical terms, the positive power of no is that distinct advantage you get when you are as clear about what you don't want as much as what you want," says DeMotte. "Why you would say no to potential business is because you don't have the resources to say yes. The word 'focus' has been the key word in management training for the last 25 to 30 years: focus on audience, products or whatever. We haven't been taught the flip side that anything that falls outside that focus needs to be rejected."

DeMotte says that in the sales process, businesses are spending too much time qualifying prospects rather than disqualifying them. You should spend more energy (and money) trying to disqualify prospects from your database, so that what you are left with is a group of prospects that is highly qualified and more likely to need -- and thus buy -- your product. You might even save some money in the process.

For example, a publishing company had a database of 14,000 prospects that it had accumulated over a 15-year period from various lists, tradeshows and associations. Each year, the company spent about $27 in direct mail costs on each person on this list. That added up to an annual expense of $378,000 in direct mail costs to so-called prospects.

In one 30-day telephone sampling of the database, the company discovered that 42 percent of these prospects were out of business, had moved, no longer had a working phone number or didn't have and never would have any use for the publisher's products or services. The company was spending $158,760 a year on people who would never need its product or service.

DeMotte says companies would be better served using low-cost call centers to contact everyone in their database of prospects to ask a battery of questions to determine what each prospect's potential need for your product really is. Once the list is whittled down, it can then be handed to the sales force, which is now prospecting off a list of highly qualified people who showed a definite interest in your product.

"The difference between our system and most teleprospecting is that most are getting paid on the number of leads or appointments they set up, which puts the call center rep in the position of doing the best job to convince the guy on the other end of the phone that he wants to deal with a salesperson," says DeMotte. "We're the antithesis of that. We only turn them over to a salesperson if they ask us to. Most organizations who do this can get by with fewer salespeople because they are all not running to unqualified prospects.

"Most salespeople don't do well at making prospecting calls. There are thousands of potential people to call on any given day, and 98.5 percent of them don't want to talk to you. If you put prospecting in a call center that can make 50 disqualifying calls in an hour, you can find the 1 to 1.5 percent that do want to talk to you today about what you have to sell. Because their income usually depends on talking to someone, the salesperson will spend time trying to find out if they ever buy widgets. They've wasted five to 10 minutes and gotten nowhere." How to reach: Kim DeMotte, www.powerofno.com


Defining the perfect customer

You might look at your biggest customers as your most loyal ones and devote the most resources to them.

Maybe you should give them to your competitors instead.

"Customer loyalty can be overrated," says Kim DeMotte, author of "The Power of No." "If I look at and rank a business's top 10 clients, the largest, most loyal customers are probably producing the lowest net profits. They might make up 30 to 40 percent of sales, but only make up 8 to 9 percent in net profits. If you filled that capacity with a smaller clientele, your profits would probably be significantly higher.

"It's work. It's easier to keep a client than find a new one, but larger clients blackmail their suppliers."

Wal-Mart is one of the most notorious businesses for putting demands on its suppliers.

"There are companies out there that have Wal-Mart as their largest customer and their profitability stinks. Why? They are legendary for dictating prices. They make you bring it in, stock it, they don't count it as inventory until it crosses the scanner, and then they take 60 days to pay you."

"Sometimes loyalty is overrated. Look at the relationship you have with your top 10 clients. Is it worth giving up what you give them to keep them? With a good prospect system it is easier to find new businesses that need services and are willing to pay you for them."

Tuesday, 22 June 2004 12:32

Choosing counsel

Your business may be chugging along just fine in the legal arena using only your Uncle Louie's neighbor's friend whose real specialty is maritime salvage law, but what do you do when you need a lawyer with the right specialty?

Having a friend of the family check some boilerplate documents or give a contract a read-through is one thing, but what if you are sued by a large corporation, accused of creating a hostile work environment or have to navigate a bankruptcy?

"There are a number of different avenues to find a good lawyer," says Steve Kaufman, former president of the Cleveland Bar Association and a business litigation partner with the law firm of Thompson Hine. "You have to recognize nowadays that each area is more and more specialized. Lawyers are forced to spend a lot of time maintaining current knowledge in a particular area of practice."

There are three main avenues of finding a lawyer.

* Ask your current general lawyer for a recommendation for someone who spends most of his or her time on the area of law you need guidance in.

* Call the bar association. The bar has referral panels grouped by areas of expertise. They will give you several names to contact.

* Consult a legal directory. A directory such as Martindale-Hubbell, which is also available online, has lawyers listed by areas of practice.

"Once you identify some prospects, it is important to speak to several and, in effect, interview them about their background and experience," says Kaufman. "You have to do due diligence with the prospects. Do they have the experience and time to work on the particular problem you are bringing them?

"You have to make sure the chemistry is right. Oftentimes, even if they have good experience, if the chemistry isn't right, the relationship will not be successful."

Start searching for the right lawyer with a phone call to identify whether the person is qualified and available to handle the case. Also make sure there are no conflicts of interest.

"Once you are satisfied, I recommend a face-to-face meeting," says Kaufman. "You can learn a lot about the chemistry you'll have. You can see what the office looks like and how organized the person is. You can see a lot in a meeting."

When asking about experience, find out how many cases the prospective attorney has litigated that are similar to yours and how successful he or she was in those cases. If you think the matter might go to trial, find out how skilled the attorney is in trial work.

"Find out whether it will be him or her handling your case or whether it will be brought into the firm and handled by someone else," says Kaufman.

Also, get an estimate from the lawyer of projected costs, which can vary greatly among firms because of size and experience differentials.

"If the lawyer has enough experience in the area you need, they should be able to give you a rough range, even if it's a wide one, of bottom and top end estimates," says Kaufman.

With everything else in place, don't forget to look for one intangible: passion.

"The biggest intangible is how much passion and how much energy a lawyer brings to a matter," says Kaufman. "It's the last variable in the equation. Make sure the person representing you has fire in their belly, a high level of energy and wants to represent you. It's a variable that makes a difference in a case." How to reach: Cleveland Bar Association, (216) 696-3525; Martindale-Hubbell, www.martindale.com

Wednesday, 26 May 2004 12:25

Disappearing doctors

When Dr. Domingo Gonzalez, a board certified neurosurgeon, reopened his practice in 2001, he never thought he would be out of business by 2004.

Gonzalez, who practiced in Canton from 1972 to 1980 before returning to his native Argentina, was able to get malpractice insurance in the first two years back in practice that protected him against any claim for the rest of the patient's life. By 2003, coverage had been reduced to specific claims, and the cost was $13,000 per year.

But he was shocked when insurance for the next year skyrocketed to $52,000.

"I couldn't afford that," says Gonzalez, who now works part-time in Lorain assisting other neurosurgeons with patient screenings. "I was forced to close. It's not because I had 1,000 claims, I just had one claim, and I'm not even sure it will ever go through. The situation is really bad."

Gonzalez says insurance companies are paying doctors less, overhead costs to run a practice are increasing and malpractice insurance costs -- especially for high-risk specialists like neurosurgeons and obstetricians/gynecologists -- are spiraling out of control.

According to the Ohio State Medical Association, Gonzalez's case isn't unique.

"The major dilemma right now is that liability insurance for physicians is becoming unavailable in some cases and out of reach affordability-wise in others," says Tim Maglione, senior director of government relations for the OSMA. "There are OB/GYNs paying anywhere from $80,000 to $140,000 per year just for insurance. What is happening is some doctors have to make a tough choice as to whether to stay in practice with those types of increases.

"Another example is neurosurgeons are paying premiums for one individual from $150,000 to $200,000 a year just for liability insurance. It's driving very good doctors out of practice."

The states that don't have this problem are the ones that have enacted tort reform that puts limits on how juries decide malpractice cases. They also have a mechanism in place that screens out frivolous cases early in the process.

Ohio has recently enacted a tort reform bill, and Maglione is hopeful that some sort of screening process will follow.

"How this affects employers is in the availability of health care services for employees," says Maglione. "Physicians don't have the ability to negotiate higher reimbursements from the managed care companies. For most employers, if the prices or costs of providing a product go up, they can increase their prices, but in medicine, that isn't a reality."

With fewer doctors, wait times increase. Doctors also have to practice "defensive medicine" to protect themselves from lawsuits.

"Doctors are doing a number of tests and procedures, not because they are clinically required or justified, but just to protect them from lawsuits," says Maglione. "It does drive up the cost of health care and is reflected in the premiums that employers pay.

"We're hoping employers will raise awareness with their employees about the litigation crisis the state is experiencing. It's not just in medicine, but in the manufacturing and service sectors. We're trying to educate people that unnecessary and frivolous lawsuits hurt Ohio's competitiveness, whether the suit is against a physician or a small business. We've got to do something about these lawyers that continue to advertise with the free consultation, no-money-down, risk-free offers that almost create a lottery-like atmosphere in the calls for lawsuits."

Gonzalez hopes the situation will change, but is pessimistic it will happen soon enough to help him.

"Many doctors are closing offices and leaving the state," says Gonzalez.

Maglione agrees.

"When a child comes into an emergency room with head trauma, they Doctors) are the ones that are going to be there to help," says Maglione. "If malpractice costs drives them out, who is going to be there?" How to reach: OSMA, (800) 766-6762

Thursday, 29 April 2004 06:18

X-ray vision

Nov. 21, 2002, was Jerry Cirino's first official day on the job as president and CEO of the newly formed SourceOne Healthcare Technologies.

He had just created a company that had $1.3 billion in sales and a 52 percent market share in the $2.5 billion U.S. medical imaging distribution market, delivering products including X-ray film and digital imaging equipment to hospitals and medical centers. He had combined the Health Care Products division of Royal Philips Electronics in Cleveland and its arch-rival, Diagnostic Imaging of Jacksonville, Fla., a division of PSS World Medical.

Most of his key executive positions were vacant, entire departments didn't even exist and there was no headquarters.

To add to the problem, both companies were individually projecting million-dollar losses. His job was to now take two negatives and make them into a positive. For Cirino, this wasn't some temporary turnaround assignment from a parent company. This was his idea. As a 20-year veteran of the medical imaging industry, the former No. 2 man at Picker International -- which became a division of Marconi in 1982 before it was bought by Royal Philips in 2001 -- and as the head of its distribution business, he knew the industry, the competition, the vendors and the customers.

"After Philips bought Marconi, they decided to sell off the distribution company I used to run," says Cirino. "I left Philips at the time with the specific purpose of wanting to find the financial backing to buy back the company.

"My business model revolved around not only buying the assets here, but also that of the largest competitor sometime afterwards. There was no set timetable, but both businesses were underperforming, and the real opportunity was to bring them together and realize the synergies from that and to combine the strengths of both companies."

Cirino understood the potential of the merger and was confident things could be turned around. He had produced earnings growth of 55 percent and 25 percent in 2000 and 2001 respectively while serving as executive vice president of Marconi. He had restructured Marconi's European and Latin American subsidiaries and improved earnings 25 percent in the first year of implementation.

And while with the Health Care Products division of Marconi, Cirino is credited with doubling the division's sales to more than $500 million while maintaining substantial profit margins.

This was a man who knew how to turn a loser into a winner.

Cirino found his financial backing at Platinum Equity, a Los Angeles-based private equity firm that saw the same potential. On Nov. 18, they closed the deal on Diagnostic Imaging, followed two days later by the closing on Marconi.

"Within three days, we had closed on both acquisitions," says Cirino. "The original plan called for about six months between acquisitions, but things happened that changed that. Both sellers were persistent about getting the transaction complete."

Cirino officially took the helm on Nov. 21 and immediately flew to Jacksonville to meet with the employees of the former Diagnostic Imaging to explain what was happening. The next day, he returned to Cleveland and did the same with employees here.

"The people here knew me from my days at Picker," says Cirino. "The Jacksonville people knew me as the guy that led their competitor."

Now both groups knew him as president and CEO.

The transformation had begun.

Taking charge
The first thing Cirino had to do was get an assessment of the overall situation.

"We took a quick look at the financial situation we had walked into," says Cirino. "We had a fairly good idea from the due diligence process, but until you really get in, you don't really find out everything. You always find something.

"What we walked into was a financial picture that wasn't good at all. Projections for '03 were a range of break-even at best to a multimillion dollar loss on the EBITDA line."

The integration of the company from two separate entities into one needed to happen as soon as possible to get things going in the right direction.

"We had done a lot of the pre-work, but we really couldn't finalize our plan and strategy for integrating the two companies until we got in here," says Cirino. "We had to turn around the sales and performance.

"We put together 10 staff-driven integration teams. I appointed one senior executive from the company in Florida as vice president of integration. His job was integration czar. He had broad authority to work with and direct the 10 teams. These teams were all along disciplinary lines -- marketing, operations and so on. Each team had a chair, but the chairperson reported to the czar of integration. There was fast progress because of the fact that we didn't have the bureaucracy to work through to get this done."

Speed was of the essence, and the list of problems that needed solving was long.

"I was very familiar with the business because I had been in it for 20 years," says Cirino. "I knew our suppliers and customers. We opted out of certain products. We were able to make a lot of quick decisions without six months of analysis. We simply didn't have time to do that."

Costs were eliminated. Redundant jobs were dropped. Sales force compensation was changed to emphasize more profitable lines and better rates were obtained from suppliers reflecting on the company's newfound strength in the market.

In the company's first quarter, SourceOne doubled the EBITDA of what Diagnostic Imaging and Health Care Products had done combined in the previous quarter and three times what Cirino thought the company would do.

"We had an extremely profitable first quarter," says Cirino. "We had only gotten through maybe a third of the integration activities, so we had quite a ways to go."

When SourceOne was formed, it was missing key elements at the corporate level.

"Because of the way we got both companies -- they were both carve-outs from larger companies -- they didn't come with infrastructure, which was a big challenge for us, especially in the first six months," says Cirino. "For example, here we were sitting on a $1.3 billion company with virtually no HR department. The business we bought in Florida came with zero HR people.

"We had a couple of people here that had been part of the Picker-Philips group. But we had no treasury department, no bank management and no accounts payable department. We had to set up entire departments that we simply didn't have."

Despite the challenges, Cirino says building departments from the ground up really paid off for the company.

"It was a once-in-a-lifetime opportunity," he says. "Here we are behaving entrepreneurially like a start-up company, but being a $1 billion-plus business. We had no policy manual. We had no policies on vacation, conflicts of interest or the other things that other companies had. From that standpoint, it was a great opportunity to invent and not deal with stuff that was legacy that we didn't like.

"We were able to put together policies that we felt were the right things for this company."

In addition, most of the executive staff at both locations had been let go so Cirino could build his own team from scratch.

"It made for a pretty intense first 30 to 60 days for the company," says Cirino. "We had to figure out how we were going to accomplish all that and do all the executive recruiting and so on. We also knew that by the time we put together an infrastructure of legal, IT, finance and so on, we were going to need a bigger place to go to."

Location, location, location
In most acquisitions, a larger company buys a smaller company. The larger company absorbs whatever it needs from the smaller one and gets rid of the rest in one way or another. Corporate functions are usually picked up by the larger entity at its headquarters.

Cirino didn't have that luxury. The acquisitions he and Platinum Equity made were just pieces of larger companies. Not only did he not have a corporate infrastructure, he didn't even have a building to call home.

"We were operating in both Jacksonville and Cleveland. In Cleveland we were still in the old Picker building in Highland Heights, and the building in Jacksonville belonged to PSS," says Cirino. "We had transition agreements with both companies for several months, but two reasons compelled us to move: One, the transition agreements were very expensive, and two, there was also a time limit."

Platinum Equity left the decision of where to locate the corporate headquarters completely up to Cirino. The two obvious choices were Cleveland and Jacksonville.

In January 2003, Cirino was on a business trip when his cell phone rang. It was Gov. Jeb Bush of Florida, lobbying him to locate the headquarters for the new company in Florida.

"He wanted us to establish the headquarters in Jacksonville, which in January, is pretty tempting," Cirino jokes.

But Cirino -- a native Clevelander who grew up in Little Italy -- ultimately decided on Cleveland. The next question was, where in Cleveland?

"We ended up doing a four-city competition between Highland Heights, Mentor, Solon and Willoughby," says Cirino. "We looked at the facilities available and what incentives the cities were willing to offer to bring in 300 jobs, which is a pretty big plum."

Mentor won.

"We liked the building and felt the city was right for us," says Cirino. "The city met with us and worked with the building owner. They put together an incentive package that was not tax abatement. We didn't have three or four months to make a decision.

"This was January, and we needed to get the project going to build out the office. Mentor was the choice because of the building, the business-friendly nature of the people and the economic development department."

The "building" was basically a shell with dirt floors and 27-foot ceilings, and Cirino wanted the company in by July. The plans were approved by the city and the project started in February. On July 4 weekend, SourceOne moved into its new home.

"We brought about 175 people from Highland Heights and migrated others from Florida or other parts of the country," says Cirino. "We centralized everything here. There are about 140 jobs that are new to Ohio that we brought here."

Culture creation
A new company means a new culture for the employees. But for Cirino, the culture was far more complex than just incorporating one into the other.

"You obviously have culture differences when you are merging a company," says Cirino. "Because the company in Florida was less than 10 years old, and they came about by the parent company acquiring a bunch of local independent X-ray distributors -- 57 of them over about a six- or seven-year period had been aggregated together -- they never centralized their business. We, up here, had been centralized for decades. We had one culture up here. Diagnostic Imaging, because of how they came to be, arguably had a large number of cultures we had to work through.

"When you merge a company, it is nice to be able to find out what the two cultures are and what the new one is going to be. We had not just two cultures but numerous cultures. We decided to establish the culture we wanted for SourceOne very quickly before an ad hoc culture developed on its own. We felt we had to do that very very quickly."

In February 2003, Cirino brought in a facilitator to work with him and his staff to determine what kind of culture the new entity would have.

"We sort of locked ourselves away for several days to work on our culture," says Cirino. "Remember, these were two companies that competed with one another in the marketplace, and now they are together."

In March, the company rolled out its Mission-Vision-Value statement. It focuses on results, accountability and teamwork. Every employee is given a laminated card with the statement on it.

"You see those words a lot when you walk into every corporate lobby and see it hanging on a plaque on the wall and stuff like that," says Cirino. "We didn't want it to be 'stuff like that.' We wanted it to be something that is really understood by employees and that we live with it and show it by example in everything that we do. We have a rule here at the headquarters that if you are asked for your card and you don't have it, it is a $50 fine. I've given a few fines over the past few months, but most people keep them out. It's a way of showing that I think it is important. If the CEO doesn't show that he or she believes in it or thinks about it, then it will never happen. It will just be a plaque on the wall.

"I'm delighted with the way the employees have embraced our mission, vision and values. We've done it three times faster than I ever thought we would. It's never finished, and you've never established your culture firmly or finally, but I think we are very far along."

Cirino credits the quick adaptation to the fact that the culture truly is new, and not just one company's or the other's. It takes parts from each and incorporates new ideas.

"This was truly a SourceOne, independently arrived at set of values and mission for the company," says Cirino. "This is what we want going forward without relationship to what either company has done in the past."

Cirino has quarterly meetings to keep everyone updated on where the company is and what the plans are. He also meets with groups of 10 or so employees twice a year with no supervisors present.

"It lets me talk to 10 people who are really down in the weeds getting the work done," says Cirino. "I found that it's a great way for me to get the pulse of the company at a critical time. I came away with lots of good information and ideas from the employees."

Not every idea is a strategic breakthrough, but sometimes the little things can help everyone serve the customer better. During a meeting with some of the employees from the call center, they said they needed better copiers.

"They do a lot of copying of customer orders and such," says Cirino. "To be honest, I didn't even know what brand of copiers we had. With everything going on last year, it wasn't real high on the priority list. Apparently we had copiers that were breaking down all the time and weren't printing well, didn't collate the way they were supposed to and were keeping people from doing their jobs faster.

"We were asking people to work a lot of hours and take responsibility, so I walked out of the room and went to the person that runs our facility and said, 'Change out the copiers.' I was told five reasons why we can't. I didn't care. The people that use them think they are trash. Let's get them fixed.

"That wasn't a big strategic issue for the company, but it's a great example of how employees offered input and we got it changed. It mattered to our employees who are trying to service our customers. We were slowing them down when we wanted them to hurry up. These meetings really kept my eyes on how we were doing in that very important first year."

A new culture was also instilled at the executive level.

"I kept several people on both companies' staffs, but the vast majority of executives I separated from the company," says Cirino. "It wasn't until May or June where I had most of the major functions filled. I waited and did a lot of interviews. I wanted to make sure I had all 'A' players. There are no 'B' players on my team."

Chemistry is important to the success of the executive team.

"I want the staff to not always agree necessarily, but I wanted professional people" says Cirino. "I want constructive chemistry on my team. Even when you are disagreeing with the team, they need to be dealing with each other on a professional level and not personally. I've seen it differently, and it can be very, very destructive and the company is not served well. I don't put up with any destructive commentary by one staff member about another. I saw some of that in the past, and it is a massive waste of time.

"Don't come in here and tell me about Jim. If you have a problem with Jim's program, we'll get Jim in here and talk it through. There is no behind-the-scenes stuff and no political maneuvering. We're all in this together, and we all want to win. This team is doing a good job of that."

With a new CEO, new faces in the executive offices, a new name and a new headquarters, it was easier for everyone to accept SourceOne as a new company.

"We do have a new company," says Cirino. "There are remnants of both of the old companies, but we are a brand new company. That's the key to what we are doing as a company, because it helps take our minds off the past. Forget the past. Let's look forward."

Now that the company has mostly completed the integration, it can focus solely on its business.

"We are now looking at strategically where to take this company and how we will transition from the analog world with products like X-ray film into the digital world and information management systems, as well as looking at acquisitions" says Cirino. "We have an aggressive interest in doing acquisitions to grow the company now that we are past the integration. We know where we need to go, we are just looking for the right partners and to develop good relationships with suppliers, and I think we can score big in the next couple of months."

Integrating any acquisition will probably seem easy compared to what SourceOne has been through in the past.

"We could not have gotten through this without highly dedicated and focused people," says Cirino. "There were lots of people reacting to the new company, but it was the day-to-day communication from our people that helped our customers feel comfortable with what SourceOne was. It was a tough transition, but our people did a phenomenal job."

How to reach: SourceOne Healthcare Technologies, (440) 701-1200

Thursday, 29 April 2004 06:06

Taste of success

When you are in the food business, flavor is everything.

The Biery Cheese Co. knows that fact well. The company has received numerous awards for its products and continues to innovate by creating new flavors for a classic product: cheese.

"We have 18 varieties of flavor cheeses, which would be things like hot pepper, cheese and onion, cheese and pepperoni, and garden spicy," says Dennis Biery, the company's president. "We added cheese and horseradish last year."

The company was founded in 1929 by Biery's grandfather, and at the time, it had one product: Swiss cheese wheels. But times have changed, and so has the company. Biery now has 60 varieties of cheese and more than 600 individual product items which are sold to more than 350 customers in all 50 states.

"Besides the flavor cheeses, we manufacture processed cheeses like American cheese," says Biery. "We supply to a mix of retail stores and food service distributors which deliver to the restaurant trade. Our business is probably 60 percent retail and 40 percent food service."

Providing a good product mix and innovative new flavors is only part of the battle in the crowded cheese industry.

"The other part of our business is packaging," says Biery. "The largest part of that is doing private-label packaging for stores. In that end of the business, the sliced-shingle product is the highest volume. It's pre-packaged slices in a resealable bag for the food service trades."

Restaurants want a product that doesn't vary in taste or weight so that every customer receives food that is consistent each time it is ordered.

"There is also a consumer demand for pre-sliced cheese, as well as in delis," says Biery.

The key is to offer all the varieties a customer may want in the form they need it: bulk pack, pre-sliced, portion-controlled slices or in resealable packages.

With a broad product line, Biery can focus on flavor, an area in which the company excels.

In 2003, it took two medals in the United States Cheese Makers Contest -- a gold for its colored American cheese and a silver for Biery hot pepper cheese. In the World Cheese Contest, the company brought home three medals -- a gold for its white American cheese, a gold for its hot pepper and a bronze for its cheddar and horseradish.

"We've done very well in the competitions," says Biery. "In the world competition, there are entries from everywhere. There were entries from 26 countries. These are some of the best cheesemakers in the world."

While Biery doesn't export directly, some of its distributors sell to Canada and Puerto Rico.

The popularity of the company's cheese in the United States has led to increased growth. It saw sales rise more than 20 percent in 2003, and as a result, expanded its facility. It is in the process of installing more than $3 million in new equipment and facilities.

"We remodeled three of our existing rooms and built two new ones," says Biery. "We are in the third phase and are adding a 30,000-square-foot cooler and expanding our production lines. We have already added two additional production lines, and once we get the cooler done, will add two more.

"The expansion will give us an additional 10 million pounds of capacity per year. We make about 30 million pounds per year now," he says.

The company has added 45 jobs and expects to add 20 more when the expansion is complete.

"We are focused on a superior product, superior service and competitive prices," says Biery. "Those are our three bullets of service. Our success has been an effort of three generations, and my son has been in the business since 1992, so now four generations. It wouldn't have been possible without the efforts of four generations of great employees." How to reach: Biery Cheese Co., (330) 875-3381

Thursday, 11 March 2004 12:01

Buying power

Slow computers mean slow productivity, so upgrades are a common business practice.

Key Bank has put its upgrade process onto a regular schedule to maximize its buying power and reduce support costs.

"Prior to 2002, the lines of business within the bank bought their own PCs," says Jeffrey Glover, vice president of Key. "The managers would put a budget together and buy what they needed."

Standards were set by the technology group as to what types of computers and software could be purchased, but each line was replacing machines independently.

"We had profitable lines getting new PCs every 18 months or two years, while other lines that were basically not profit centers would get hand-me-down PCs or wouldn't get them at all," Glover says. "Lines of business in the middle might get them if they had a good year; if not, they would have to keep what they had."

All these independent decisions meant some departments had machines running outdated operating systems with processors that were slow by today's standards.

"We determined that if we centralized the budget within the technology group and could forecast replacing the computers, we could save money," says Glover. "We are doing it on a three-year cycle, replacing one-third of the computers each year. By the end of the year, we will have replaced approximately 18,000 computers, and the oldest one will only be three years old. Everyone will be on a newer operating system - either Windows 2000 or XP."

By buying computers in bulk, Key is able to leverage buying power to save on purchasing costs, but the program has also made support personnel more efficient.

"We can roll out applications easier," says Glover. "We don't have to worry about a department having six-year-old computers that are not compatible. It's easier to support the applications, and we did some things with the security features of the newer operating systems that weren't available on Windows 95.

"In 2003, we saved $800,000. What's not factored in are the lower support calls. Our number of calls has gone down. Productivity has increased. Instead of working on a junky 200 megahertz PC, someone is now working on a 2 gigahertz PC. They are working faster and better."

The biggest challenge in rolling out the program was convincing managers who had been in charge of purchasing computers to give up that authority to the technology group.

"They were a little apprehensive at first," says Glover. "It was more of a trust factor than anything. People with bigger PC budgets wanted to keep that within their department, and even in other areas with smaller budgets, they didn't want their work to be disrupted by the upgrades."

An internal Web site was set up that contained frequently asked questions about the program and explained how it would benefit everyone and how it would be implemented.

There was also an e-mail address and phone number for employees to use to get questions answered.

"The biggest question was, 'When do I get my new PC?'" says Glover.

Even though some employees didn't necessarily need the computing speed to do their jobs, Glover says the upgrades were still important.

"It's hard to gauge what applications they might need in a few years," he says. "We need to keep pace with the marketplace. The new Microsoft Office or OS won't run on older machines." How to reach: Key Bank, (800) 600-2680


PC planning

Replacing 6,000 computers a year isn't something you can take lightly.

Key Bank has implemented a PC procurement program that replaces one-third of the company's computers each year. To further complicate matters, throw in 906 branches scattered across 12 states, and you have the potential for a logistical nightmare.

And that doesn't even take into account the fact that some lines of business within the bank only have a handful of computers, while others have thousands that need replacing at one time.

"Planning is really huge," says Jeffrey Glover, vice president of Key. "We have to really plot out our strategy. We've gotten off to a slow start each year and haven't really replaced a lot of computers in January and February. The reason for that is we spend a lot of time planning out the next six to nine months. Once we get the process rolling, it goes really smooth."

Most of the planning focuses on the replacement schedule.

"It's based on a combination of line of business and geography," says Glover. "We might go to a remote office and replace all the PCs there over the course of a couple of days and evenings. For the larger offices here in Cleveland, like the operations center in Brooklyn, we'll be replacing PCs throughout the year.

"For the bigger offices, we might focus more by line of business. Whenever we can, we replace PCs to coincide with any new applications they may be getting this year."

Thursday, 11 March 2004 11:55

Keeping watch

Antares Management Solutions understands pressure.

As a provider of business processes and information technology outsourcing solutions, the company's customers expect their networks to be running all the time. They need access to their information, and if they are paying Antares to handle that aspect of the business for them, they have little tolerance for excuses.

As a result, Westlake-based Antares takes a proactive approach to try to prevent problems before they occur.

"We work with IntelliNet, and what they provide us with is network monitoring of our systems for our clients and ourselves," says Kenneth Sidon, Antares president. "We guarantee a certain availability and uptime to our customers, which is the reason why this issue is so critical to us. They make sure our lines are secure and monitor to see if there is a problem happening. If they find something, they alert us, and we work together to make the changes and fixes before it becomes a problem."

IntelliNet, a Richmond Heights-based provider of managed services for enterprise networks, monitors the systems remotely. In most cases, Antares' customers never see any disruption of service when a problem is identified.

"One of our primary service-level agreements is availability," says Sidon. "If their systems and services are down, they're losing money and opportunities, and we are not providing the quality services we guaranteed them. Since our company is based on the high-quality delivery of product and services, it's vital we are working.

"When a potential customer asks to talk to a customer, we don't just give them a few names, we give them the whole client list and tell them to call whoever they want. If we're delivering that kind of quality to everyone and that's what we are made of, then anyone we work with, whether it is a partner or vendor, needs to be in the same mind frame we are in order to ensure that we successfully meet our goals."

IntelliNet monitors activity on each server and continually checks for problems -- a potential equipment failure, line failure, a high volume of activity on the line or a lot of noise on the line.

"Many times, these types of problems would go unnoticed until something failed," says Sidon. "This way, we see something developing before it causes a problem and we can replace the equipment or redistribute the load. Now people never even know we had a situation that would have caused an outage in the past. This is going on 24 hours a day.

"Everything has to be clicking -- the network, lines and volume all have to be balanced. It allows us to sleep at night and focus on what could go wrong on the other 60 to 70 percent of the business that would lower our service level to our customers. When you are working in a highly technical arena, it's hard to get a true appreciation of what a company like IntelliNet is performing for you. It's like turning on the TV and expecting it to work. People don't understand all the little things that had to happen to have that TV work.

"Without them, we'd be filling a major hole some other way. With them, it allows us to focus on what we do best. The technology is always changing, and they have to stay up on that. It is a costly environment to try to take on yourself." How to reach: Antares Management Solutions, (866) 268-2737; IntelliNet, (216) 289-4100

Wednesday, 25 February 2004 19:00

Growth spurt

There's no stopping until he has his own blimp.

That's the goal Thesportsking.com's president Tom Mercadante has set for his young company.

While it might sound unreasonable, the company's Web site has grown at a rapid clip, moving from 66,000 hits and sports coverage of one city in September 2000 to 8.8 million hits and coverage of 60 cities in December 2003.

Managing the growth of the business has been a challenge for Mercadante.

"We've grown every single month," he says. "There hasn't been one month where we didn't exceed the previous month's total."

Thesportsking.com caters to sports enthusiasts looking for up-to-the-minute updates and expert predictions and opinions.

The original business plan called for selling franchises of the original site in other cities, each with its own local content to supplement the national news. Each franchisee would be responsible for providing the local news, as well as selling advertising to local businesses.

"I had my work cut out for me," says Mercadante. "I would have to put an ad in the city's local paper, make appointments and hope to hire some enterprising person that could be responsible every day to keep the page fresh and sell advertising. If they don't work out, then I have to go back and hire someone else. There was a lot of risk involved and a lot of headaches."

As the business grew, Mercadante developed a good relationship with a Las Vegas-based gaming company that was very happy with its ad and the number of people it attracted through Thesportsking.com site.

"I talked to them about wanting to expand, but I really wanted to launch something substantial; I didn't just want five cities. They came back and said, 'Why don't we just do it? We'll facilitate it and get the site done.' They facilitated a 60-city rollout with one swing of the bat."

The content was configured to update automatically, freeing both Mercadante and future franchisees from constantly update the site.

"Now all I have to do is go to people and tell them to sell it," says Mercadante. "It's all there. The teams and the page are already set up and taking care of it. With the partnership, we are able to advertise nationally in all markets and develop a brand."

He says it will be easier to fill the remaining franchises because buyers only have to handle the sales aspect and not the publishing aspect of the business.

The partnership also allowed him to streamline his operation in Cleveland.

"When we were just a Cleveland sports site, I had more employees then than I do now," says Mercadante. "All my administration costs -- sales, Web design, server costs and the people that handle troubleshooting -- are all handled through them. I probably had about 20 employees at the peak, but it's now down to six, though I have the resources of a large division of a corporation.

"It's really freed me up to focus on the larger aspects of the business. We're talking to bigger and more prestigious advertisers. I'm doing things a president should be doing and not spell checking and proofreading the Web site.

"I'm proud of the product we are putting out. The sky is the limit to the amount of visitors we can attract and keep. We want to compete with the big boys. When people are looking for sports information, we want them to look at Thesportsking.com." How to reach: www.thesportsking.com