The past year has been a wild ride for Joseph Keithley.
His company, Solon-based Keithley Instruments, finally began reaping the rewards of sweeping internal changes made within the organization over the past several years. The results have been impressive, with strong revenue figures, a skyrocketing stock price and an impressive resume that includes the likes of Motorola and Nokia.
Keithley took over as CEO of the 54-year-old company in 1993, after his father, Joseph F. Keithley, stepped down. Over the next several years, the younger Keithley reorganized and rejuvenated the high-tech measuring device manufacturer, concentrating on high growth markets like telecommunications and the semiconductor industry and selling off unprofitable parts of the business. The results speak for themselves.
Keithley Instruments has consistently reached more than $100 million in revenue the past several years. Meanwhile, sales are up 50 percent over what they were 12 months ago, a fact Keithley attributes to the companys ability to keep up with the incredible growth rate of the technology industry.
The industries we focus on are the ones that are growing fast and companies that are growing fast in those industries, he says. And, I dont see other companies organizing themselves to do that and then modifying their new product process, their new manufacturing process to enable that to occur.
Add to that recognition by Ernst & Young LLP as Entrepreneur Of The Year in the Technology category, and Keithleys success has not been overshadowed by much.
Although Keithley Instruments may be thought of primarily as a manufacturing firm, its research and development arm is what, in Keithleys eyes, has been the driver of his companys success.
Weve taken a fundamental measuring capability, and instead of doing a product push, weve been really creative at the market, he explains.
That means being able to react quickly to customer demand, especially in a world in which cellular phones and laptop computers shrink in size with every passing day, requiring new, more precise measuring devices to test them. Being able to deliver quickly on those customer needs is what Keithley sees as his firms edge.
They are rich with new product ideas for us, and every new product idea we get back from them, we feed back to them through the product, he explains. It is rewarding because we are solving problems, and these are guys who are going nuts because of the demand for their product. I think thats just generated enthusiasm, energy and a lot of more goodwill in working with the customers.
For Keithley, that has meant implementing a fast-track product development program not only to meet customer demand, but also to beat the competition to the punch. In the past five years, Keithley Instruments has introduced several new products designed specifically for certain target audiences. It has required a substantial investment in new technical staff and equipment, but Keithley says being an industry innovator is one of the most satisfying parts of his job.
I really enjoy working with the young people and sorting out the customer problems and profiling the opportunities, he says. I really enjoy making the customer visits and seeing how our products are used and how application support is used. So, those are two aspects of what gives me great pleasure.
Keithleys work over the past several years has not been lost on Wall Street. During the past year, shares of Keithley Instruments reached a 52-week high in mid-March of $74 a share, a stellar rise from its 52-week low of less than $7 a share. As far as the companys recent rise to being regarded as one of Northeast Ohios most high-profile companies, Keithley admits it is the first time since he took the helm of the company that hes felt comfortable being recognized as one of the regions leading entrepreneurs.
The work that weve been doing the last several years is finally at a point where someone else would take notice, he says. Before that, I wouldnt have had the temerity to stand up and say, Hey, look at me. How to reach: Keithley Instruments, (440) 248-0400
Jim Vickers (firstname.lastname@example.org) is an associate editor at SBN Cleveland.
The proliferation of dot-com solution providers always seemed to leave someone unhappy. Either the company was forced to give away too much and watch its profits dwindle or it was the buyers who were squeezed, leaving them uninterested in the approach.
Thats when the vice president of Weatherchem Corp. found eWinWin.
There truly is a win-win here for both sides of sales transactions, said Ostrowski. We reviewed a number of e-commerce competitors and chose eWinWin because its demand aggregation approach offers real benefits to both buyers and suppliers in an online environment.
As its name suggests, eWinWin founder and owner Greg Mesaros wanted to develop an e-commerce solution that offered benefits to buyers and sellers. He calls it the Demand Aggregation System.
For this particular dot-com, we provide turnkey business to business e-commerce solutions for suppliers, he says. Were taking the old business models and totally putting them on their side.
To understand how the system works, you must understand the word aggregation. Its a word that permeates the literature of eWinWin and the speech of its owners. Aggregation, as they employ the term, is to bring together a companys clients and use their collective buying power.
A manufacturer like Weatherchem, which produces several types of packaging products, contacts eWinWin and creates an online deal room. In the deal room, Weatherchem offers a product at a certain price for a certain quantity with a predetermined ship date. Weatherchem can then contact any or all of its customers for that product and invite them into the deal room. As the quantity of orders increases, the price decreases.
Companies like Weatherchem use molds to produce products. It can take as long as 12 hours to switch from one to another, and that dead time is potential lost revenue. Predetermining ship dates allows the company to be more economical.
The approach offers other savings as well, including better scheduling, improved operating efficiency, better management of working capital, lower transaction costs, access to hard-to-reach customers and a live database of buyers.
A lot of suppliers look at e-commerce and they get scared, says Gerardo Orlando, executive vice president of business affairs for eWinWin. Really, this is something thats very pro-supplier. The supplier can become more efficient, and they can use this as a tool to become a better manufacturer.
The buyer wins, because as more people buy, the price decreases. A buyer might even be willing to purchase more of a product in advance, knowing it comes at a lower price.
There really is an incentive for all the buyers to come back to the site to see if the price is going down to see if they can get even more of the product, Orlando says. So what this system does is it really goes to the cost of the goods themselves. And that is all tied to the efficiencies that the suppliers get through the system, through being able to plan their production better.
Currently, eWinWin offers four variations on the theme. In addition to those of suppliers, there are deal rooms sponsored by associations and buyers and cooperative deal rooms. Each company works with an eWinWin action manager who helps the company facilitate the process.
The company also hopes to create deal rooms up and down the supply chain. In that way, a company like Weatherchem could purchase its materials at a lower price and its clients can then sell their wares in their own deal room. And at each step in the process, eWinWin takes a cut.
eWinWin makes money three ways: through a fee for setting up the deal room, a monthly hosting fee and a transaction fee based on the amount of merchandise sold.
This is the perfect e-commerce model for Cleveland because it serves manufacturing operations.
We love being the underdog, Mesaros says. People are not looking at Cleveland right now for e-commerce solutions. And were sitting back going, theres no better place to be than Cleveland, because thats where our customers are.
If the solution works, Mesaros and Orlando think they might be able to meld their approach with other industries, including energy, natural gas and even bandwidth. But for now, their attention is on manufacturers and building their own operation.
Theres nothing that really prepares you for an Internet start-up, Mesaros says. As cliché as that may sound to show you how old I am when I went to graduate school they actually taught you how to make money. Turn a profit. Thats not what a dot-com is scaling your model, creating satisfied customers and managing your cash flow, and then getting to the next level. This is a different form of the economy.
At eWinWin, however, the plan is to turn a profit.
Were going to be first and our goal is to always be better than everyone else, Orlando says. By being first, you have a head start both on technology and experience, and as we do this with more and more customers, well learn more and more and continuously improve our product.
How to reach: eWinWin, (216) 348-9700
Daniel G. Jacobs (email@example.com) is senior editor of SBN.
One of my staff members received the "I Love You" virus a few months back, the very same morning that it made international news.
While other businesses scrambled to minimize the damage, we were lucky. Because our e-mail system uses Eudora instead of Microsoft Outlook, SBN wasn't infected. Never mind the fact that the staff member spent nearly half an hour trying to find a way to open the file.
Over the days that followed, I spoke with dozens of business owners who bemoaned the fact that they were picking up the pieces after one of their own executed the attachment. What amazed them most was the speed at which the virus leapt into their systems and wreaked havoc. But what amazes me most is the speed with which that virus -- and others like it -- spread over the Internet from their point of origin.
In our quest for speed, we've unknowingly unleashed the dark side that efficiency brings with it. But, as with any innovation, we must accept the bad with the good. In the early 1900s, automobiles (and the highway systems that followed) decreased the time it took to travel between home and work, allowing people to live greater distances away from the companies for which they worked.
I'd be willing to bet that there were fewer people trampled by horse-drawn carriages in the 1800s than people injured in auto wrecks during the 1900s.
Speed, however, isn't a bad thing as long as we're willing to recognize the inherent dangers that accompany it. Think about your business. Has your Web initiative made it easier for customers to place orders for products and services? If so, were you prepared for the influx of orders that accompanied more open access to your firm? And, have your shipping, billing and accounts receivable departments been able to step up their pace to keep up?
In our business -- information dissemination -- readers have become more demanding about the smart ideas we provide them with to help them grow their businesses. Business owners regularly ask me when SBN would use its Web initiative to provide smart ideas more frequently than just monthly.
Well, that time has arrived.
You may have noticed on our Web site -- www.sbn-online.com -- a new section under the Cleveland edition called "Top Stories." In it, we'll provide more smart ideas nearly every day. Most of the items you'll find under "Top Stories" won't appear in the monthly print version of SBN, but they'll be every bit as helpful in aiding your pursuit of entrepreneurship.
The next time you see a member of our editorial team around town, be prepared. The information they gather or event they attend may very well end up on our Web site within hours after you see them.
On a final note, we're pleased to welcome Courie Weston into the SBN ranks as a full-time reporter. Courie is a recent graduate of Case Western Reserve University. And, if her name sounds familiar, it's no surprise. Courie's been an editorial intern with SBN since January.Dustin S. Klein (firstname.lastname@example.org) is editor of SBN
Tyler, president and CEO of Xtrasource, was not only a finalist, but also a winner in the 1993 competition as head of Universal Electronic Inc.
Its quite flattering, Tyler says of the experience. You get a chance to meet a lot of very interesting people with similar problems and ideas.
It was that experience with UEI that led to his current venture. Tyler took UEI, a producer of universal remote control products, to $100 million and led it through a public offering in 1993.
As with all high flying companies, we had our ups and we had our downs, he says. In 1995, I decided Id had enough there.
At UEI, Tyler learned the art of customer service. It began with a couple of people answering questions and ballooned to a help desk operation in which 450 people responded to 250,000 calls a month. When he left UEI, Tyler investigated and found that teleservices was a $90 billion market, and the help desk portion accounted for $15 billion.
It was a much bigger business than I was competing in with Universal, he says. And I felt that we had the experience of operating a help desk and that we know how to market and support on a global basis. Thats why we started Xtrasource, and thats how we made the transition.
His company now outsources customer service via telephone, e-mail and the Internet. There are about 600 companies that offer the services Xtrasource provides, but most are entirely located within the United States. Xtrasource is one of five or six companies that provides help desk services on a global scale.
Its a very fragmented market. Tyler has opened offices in the Netherlands and France and has a partner in Asia, in addition to facilities in Kent and Raleigh, N.C. The company has plans to open an office in Sao Palo, Brazil, in the third quarter of this year.
Xtrasource has about 900 employees who answer about 50,000 calls a day about some 500 products.
The company offers support in 25 languages in more than 40 countries, through the use of sophisticated software that tracks where calls come from and sends them to the appropriate operator.
Its unlikely that we can dominate this market, but we should be able to command a reasonable share after a period of time, Tyler says. Were the smallest, but were the newest, too.
In its four years of existence, Tyler says the company has doubled its revenue each year.
Our goal in life is to be a global player, which we are already, he says.
Fueling some of that global growth is the Internet. About 10 percent of the calls Xtrasource operators answer come through the Web, in the form of e-mail or Internet chat. In the next five years, as technology integrates telephones, computers and the Internet, Tyler expects that number to increase to 80 percent. How to reach: Xtrasource, (330) 673-3316
Daniel G. Jacobs (email@example.com) is senior editor of SBN Cleveland.
The pair, which worked together in Fishman's last venture, toy retailer All Wound Up, kept of a log of ideas from which they intended to make their next millions. As they met, the two considered which of those possibilities -- jotted down over the years --made sense to pursue.
"Stuart and I were arguing," recalls Khosla. "He liked three of the 32 and I like three of the 32, but there was no overlap. As we were explaining to each other what we liked about the ideas, this idea really came down between us and sat down on the table and said, 'I'm here. I'm the one.'
"We looked at each other and said, 'OK, we'll break for 24 hours because this one seems too obvious, because it incorporates the skill sets that we've learned and it's in an area which is a very large market and fragmented."
The idea that evolved, No. 33, was to create an Internet Web site that sold high-quality furniture at prices well below what any ordinary retailer could offer, while at the same time still giving customers an opportunity to sit on and touch the merchandise.
"It's really the convergence of standard retailing and Internet retailing in the most cost effective manner," Khosla says of the company that's been named OneWorld2U.
In the process, co-founders Fishman and Khosla developed a new e-business model. Recognizing that the Internet creates a cheaper, faster and more efficient operation, they landed upon what they hope is the perfect Internet business model. By giving their virtual business a physical presence in the traditional retail world without the huge overhead normally associated with running brick-and-mortar operations, the pair aims to effect real change in this developing marketplace.
As Khosla says, they are now in the business of "clicks and temporary bricks."
The methodology behind the idea is simple: OneWorld2U will sent up temporary showrooms at two-week intervals in cities around the country, where people can view the furniture they are buying online. They launched their first showroom July 29 in Cleveland at Tower City Center.
Even before they launched a site, the model received validation. The initial round of capital was oversubscribed. And those who got in early included some pretty heavy hitters in the local investment community.
"You've got the absolute best horse you could probably ride to this kind of party," says Boake Sells, former CEO of Revco Drug Stores and COO of Dayton Hudson (now Target). Sells is an investor in OneWorld2U and had held a stake in All Wound Up.
The business model
In the mad rush to turn the Internet into their business gold mine, many entrepreneurs forget one basic tenet: A business is expected to turn a profit. With very few exceptions, the only companies able to make a successful foray into e-commerce are those with solid brick-and-mortar histories.
Fishman and Khosla plan to join that select group. Their site offers hundreds of pieces of furniture directly from factories around the world. By eliminating middleman markups, they can offer furniture at rates far below those of the retailers with whom they compete.
"If you've been furniture shopping, you know every time you go into a furniture store, it seems like it's your lucky day, because the whole store is 50 (percent) off," says Sells. "And not only that, it's also your lucky day because it's Thursday, so you get an extra 10. The furniture people have ruined their pricing integrity. Stu is going to bring a one-price concept. This is a fair price for good furniture."
The concept is so radical a departure, and has such potential to disrupt the traditional marketplace that, after reviewing the business plan, their accountant half-jokingly suggested Fishman and Khosla walk around in flak jackets should their peers hire hit men.
"Because there are so many middlemen cut out, we think (the cost of our merchandise) is going to end up somewhere around 42 to 45 percent of discounted retail in a typical store," Fishman says. "So if something in a typical store (retails for) $1,000 and they say their price is $800, we're going to shoot to be 42 to 45 percent of that $800."
The Internet forces business to run cheaper, faster and, one might argue, too efficiently. An online business can run operations so cheaply that consumers disbelieve the prices they're offered. It's a problem Fishman and Khosla have embraced.
"One of our real concerns is that most people, when a deal seems too good to be true, it usually is," Fishman says. "So they aren't going to believe the values that we're offering. So what we're going to do is we're going to something called TIMS -- Temporary Internet Mobile Showrooms. We're going to go into each city. We're going to set up a Temporary Internet Mobile Showroom where people can actually come in and see the furniture that they're buying."
That ability to see and feel the value is key.
"The way we look at it is that it is just a more efficient business model," Khosla says. "If our consumers are given the opportunity to understand the business model, they will understand what the brand is. The brand is the business model. Get it at the factory, use third party inspection, check the hell out of it, make sure it's of the quality level that we want and ship it directly to the consumer. It's a very efficient model."
The ability to execute the TIMS is a skill Fishman and Khosla learned at All Wound Up, which in most markets is only open during the Christmas selling season. The stores are quickly opened and closed as needed.
"Those are the two things (retailers) hate," Khosla says. "That's what we've done for the last five years is open and shut down stores. That's really what these Temporary Internet Mobile Showrooms are."
They believe the skill set is so unique that they've followed in the footsteps of Amazon.com with its one-click technology and applied for a business process patent on the TIMS concept.
Learning from the past
Fishman lives for start-ups. It's a knot in his stomach fueled half by nerves and half by adrenaline. It's that drive that led him to build All Wound Up into a national chain for which he gained recognition as an Ernst & Young Entrepreneur Of The Year before selling the company to Border's Books & Music.
"This is what I love doing," Fishman says. "What we're doing here today is the biggest kick because you envision something, you dream it and then you have to make it happen. It's scary. It's a little bit like riding a roller coaster. There are so many ups and downs and so many thrills.
"To me, starting up a business is the most creative process around. Everything is always changing, evolving. It's sort of like trying to get your arms around a giant amoeba; it's always changing shapes on you and you've got to run with the flow. It's intense. You get to make so many decisions that are going to really affect the future. That's really why it's so much fun."
It is also the reason Fishman left his position at Border's to found OneWorld2U with Khosla.
With each new venture -- Fishman has been involved in a few prior to All Wound Up -- he's gained insight into the process, developed skills and learned to apply them to each new enterprise. Now, Fishman and Khosla have applied their skills to OneWorld2U.
"We have an understanding of not only what works, but what doesn't work and what to avoid," Khosla says. "So we've built this business model not only for what works, but to stay away from what we knew was taught in the last business model. We've been very careful about that. We've spent a lot of time making sure that the business model itself was rock solid."
The business model is simple to understand, yet difficult to execute. Fishman and Khosla were able to work their way back through the layers of middlemen: retailers, distributors, warehousers, importers and exporters that mark up the price of a product before it gets to the consumer.
"Not everybody has those layers," Fishman says. "A lot of people have those layers. Some people only have a couple of layers, but there always seems to be layers involved somewhere. We got back to the factory and we're going to do it through the Internet."
But it hasn't been easy to peel back the layers.
"For a while there, for a few years, it seems that every time we were up the river, we found out there's one more layer -- there's one more layer," Khosla says.
Over more than four years, visiting countries around the world, the pair slowly learned the process.
"We've been in towns that are so small it's shocking," Fishman explains. "We've flown into cities and then have had to take little commuter planes back into the boondocks, and then, on this one particular trip, we took a 75-kilometer (46.5-mile) car ride that took us four hours. The reason it took us so long is because the road looked like it had been through a world war."
Many of the places they visited were quite remote.
"We're actually going into towns where people stop us on the street and ask us if they can take their picture with us because they've never seen an American or an Indian," Khosla says. "We had people trying out their English on us, because they've learned English, but they've never actually spoken to an English-speaking person. One gentleman one time asked Stuart, 'What time is it?' Ten minutes later, he asked me, 'What time is it?' practicing."
"The real goal behind this is to develop a brand, a true Internet brand, where when people think of OneWorld2U they think of high quality, expensive goods that they pay rock-bottom prices for," Fishman says. "If we can really establish that brand, we'll have a huge operation here."
Fishman's optimism is well-founded. There is huge opportunity in the $201 billion fragmented furniture market industry for someone who can become a dominant player online.
"And we knew if we were going to work as hard as we were, we wanted to do something with a big vision," Fishman says. "We had lots of little ideas that would have been 10- or 20- or $50 million businesses, not that there's anything wrong with that, but we both wanted a shot at a brass ring. Neither one of us was born particularly lucky."We knew that we wouldn't be the people to take a company public, which is running $15 million in losses and have a $5 billion valuation. We figured by the time we got to market, we'd need to have a rock-solid business model." How to reach: OneWorld2U.com, www.oneworld2u.com
Daniel G. Jacobs (firstname.lastname@example.org) is senior editor of SBN.
Family Heritage Life Insurance Co. of America got its start when Howard Lewis left his high-paying corporate position to work on fulfilling his long-time dream of owning a business.
He was not alone, either, having convinced a few others to join him on his quest to find the financial resources necessary to make his vision a reality.
We sort of jumped out of the airplane, says Lewis, company president. We went from a senior corporate executive position with all the perks that go with that sort of career, and suddenly we were paying the bills, and if it got done, we had to do it.
Lewis and a handful of other managers banded together to build the new business. The biggest factors in his decision to invest his time and resources in a start-up were his desire to have an equity position in a company and his desire to provide that same opportunity for all of his employees.
We were at a company where we didnt have an equity position, explains Lewis. We were building the business and we were well paid, but we didnt have an equity position. Our dream was to create a business where everybody would have an opportunity to own stock in the company and be part of what they were building.
The Southwestern Co. supplied Lewis with $3 million and extended a line of credit of $14 million to get Family Heritage off the ground. However, that show of support did not come before more than 18 months of due diligence on the part of Southwestern. Ten years later, Family Heritage boasts assets approaching $75 million and cumulative net profits in excess of $21 million.
Lewis recalls the companys early days, which often entailed 100 hour work weeks, an entrepreneurs basic training, of sorts.
Its kind of like, you wouldnt take a million for the experience, but they couldnt give you a million dollars to do it again, jokes Lewis. Youre looking at a lot of 100 hour weeks, but the joy of the business is the opportunity it offers for the people who affiliate with us.
Lewis believes the main driver of the companys success has been his ability to give ordinary people the responsibility and stake in the company that push them to create extraordinary results. He says it is one of his favorite things about being an entrepreneur.
We believe we are a company where a persons true potential will rise to the top and they can be everything that they can be. Man, woman, without regard to religion, race or creed, says Lewis.
When you see people come in here who were making $20,000 to $25,000 a year, who are now making in excess of $100,000 a year and have a significant shareholder stake there is a joy and an excitement in that. How to reach: Family heritage Life Insurance Co. of America, (216) 520-2800
Jim Vickers (email@example.com) is an associate editor at SBN Cleveland.
Weve had so many nice things happen, says Alayne Reitman, president of the technology-based operation. Its just fun. Somebody came up to me at Innovest (an annual venture capital conference held this year in Columbus in May) and said, How does it feel to be the belle of the ball?
It has taken a lot of hard work for the owners of Embedded Planet to make it to the dance. Delivering the crowning touch, Ernst & Young named the companys management trio Entrepreneurs Of The Year in the Emerging Entrepreneur category. Honored with Reitman were Robert Applebaum, vice president, and Ramon Molnar. But there is still a lot of work to do.
The nicest thing about it right now, Reitman says, or at least for me personally, its local Cleveland recognition. Its Northeast Ohio recognition. Its promoting the work were doing so that other people see that its happening.
We are still really just coming out of a true start-up phase. We have been going for now two years. And weve been designing product and working with our engineering team. Its really now just six months since weve had any kind of sales and marketing.
She says the company expects its sales to pick up briskly in the next year, and were going to end up hiring a lot of people over the next 12 months. Its past that initial stage of Do we have the right concept?
Embedded Planet is looking to raise $30 million and clearly has a concept that has caught peoples attention. So what is it exactly that it does?
We are simplifying the way technology is implemented, so it allows people to build products more quickly, have the adoption of technology reach the masses much less expensively, Reitman says. One practical application of the companys technology is telemedicine. This is where a nurse can visit a remote area, perform a few medical tests, and have a physician half way across the country review the data and make recommendations.
Its the type of technological revolution thats in the right place at the right time. Many people walk around with cell phones, pagers, laptop computers and Palm Pilots, and as Reitman says, the complexity has gone up with each new device designed to make our lives easier.
The next phase of this evolution is the ability of all these devices to communicate with one another, actually flow from one to the other reasonably seamlessly. And thats really where I think were all going to see an impact, Reitman says.
To get to that point, to be the company that leads the way, Embedded Planet is looking for venture capital financing.
It will really allow us to move full force on the marketing and sales initiatives and to continue to address and grow our engineering resources, Reitman says. Weve been trying to run a little bit of a balancing act a little bit here, a little bit there. When we raise the $30 million, we think we can generate a significant amount of marketing and sales activity, which ought to then accelerate our revenue growth. Thats the next step.
Like many young companies, Embedded Planet has yet to turn a profit. But the plans are in place. The company should bring in $9 million in revenue this year, and within three to four years, Reitman projects revenue of $300 million.
The secret to our success is our skill in creating and motivating teams. We employ the imagery of the Army Rangers or the Navy Seals to motivate our teams to the challenges ahead, Reitman says. Our staff believes they are able to tackle these challenges better than anyone else and knows that their efforts will impact lives around the world. We hire the brightest, most talented individuals we can find, wherever they live, and we encourage confidence in the individual and the team.
An individuals personal goals and ability to work within our culture is as important their technical ability.
The amount of work can prove difficult at times, she says.
We work very hard, and the hours are long, and we dont always get great feedback. In these long days, and sometimes long nights, of working to get this business up and running, its really nice to get this kind of recognition.
I feel a little bit like the belle of the ball. How to reach: Embedded Planet LLC, (440) 646-0077
Daniel G. Jacobs (firstname.lastname@example.org) is senior editor of SBN Cleveland.
Business in the 21st century is moving at an incredible pace, and that speed is increasing. Businesses, however, can only operate as fast as the technology they employ.
For small- and mid-sized businesses, finding technology that fits their business strategy can be difficult. In the telecom marketplace, words like digital and analog, and acronyms like DSL, T-1 and ISDN sometimes make a simple search for new technology solutions sound like walking down a circus midway.
Business decision-makers must sort through all the information, find out which technologies best fit their business needs and make decisions that will enable their companies to thrive. Voice-over-DSL (VoDSL) is one such technology.
VoDSL is an innovative way to use a DSL line. It takes a normal DSL line and splits it into separate voice and data channels. Utilizing VoDSL, businesses can access up to 24 voice lines with value-added services including high-speed Internet access -- giving them enhanced services at a cost savings.
Because small businesses tend to be a more cost-conscious customer group, many are ideal candidates for VoDSL, which bundles local, long distance and data services across a single access line and saves money. In fact, International Data Corporation (IDC), a research analyst group, has observed a trend among small businesses noting growth in integrated voice and data.
Although it is a DSL service and requires the same prequalification as regular DSL services, VoDSL should not be confused with the voice capabilities of other DSL services. VoDSL packetizes the voice and data, and sends both over a single DSL line.
As an integrated solution for small- to mid-size businesses, VoDSL allows customers to operate voice and data over a single line. Since packet-based VoDSL voice lines only require bandwidth when a call is active, data services are enabled when calls are not active. In other words, when the customer picks up a telephone handset to make a call, the DSL data traffic is throttled back to provide the bandwidth required for the voice conversation.
Because of this dynamic bandwidth, VoDSL is an attractive and less expensive alternative to traditional phone lines.
Voice-over-DSL works by using an integrated access device at the end-user location. Using a symmetrical DSL (SDSL), voice and data lines are connected, through this device, to the telephone company's central office. The end-user location must be within a certain distance from the central office. This prequalification ensures both the quality and speed of the voice and data traffic over VoDSL.
The VoDSL device packetizes all of a user's traffic and prioritizes the voice and data packets, giving priority to voice transmissions. Symmetrical DSL (SDSL) differs from other types of DSL because the outgoing and incoming data travel at the same speed. VoDSL should not be confused with the voice capability of ADSL, which enables a single voice signal to run along a copper line using a splitter.
In addition to the cost savings, VoDSL has several other benefits, including:
Fast Web access -- Enables employees to have direct Internet access without dial-up and empowers your business with high-speed capabilities like videoconferencing.
Excellent voice services -- Provides the same quality of service as traditional business lines with additional features not found on traditional lines.
Cost savings -- Small businesses now have access to extensive high-speed Internet capabilities without outrageous expenses.
As you search for providers, make sure to ask questions and weigh all options before making a purchase. Some things to ask your service provider about before you buy:
Service guarantees -- Ask what kind of service guarantees you will receive and compare them with other providers.
Equipment monitoring and management -- The provider should have systems in place to monitor your equipment. With 24/7 monitoring by trained professionals, you can count on a maximization of performance and a minimization of downtime.
Network security protection -- Your provider should maintain a secure connection between your on-site equipment and the provider's network to prevent information from falling into hostile hands.
Matthew Wajda is director of sales, commercial, for the state of Ohio at ICG Communications.
Is VoDSL right for you?
Some issues to consider when determining whether VoDSL can help your business:
- Is your business a moderate-to-heavy user of toll calling?
- Does it have between four and 24 phone lines?
- Have you considered purchasing some form of Internet connectivity? (i.e., dial-up, ISDN, T1 or DSL)
- Is your business interested in maintaining enhanced calling features, such as call waiting, call forwarding, speed dialing, caller ID or three-way calling?
If you answer yes to all of these questions, you should explore VoDSL as an option for your business.
That means it's time for a commitment to improve your service standards. Service excellence is not just a competitive edge. In many industries, it is the competitive edge.
Service can be, and often is, the new standard by which customers judge an organization's performance. An increase in customer satisfaction can yield a measurable rise in profits. If your service is just OK -- that is, no complaints -- it isn't going to give you the competitive edge you are looking for. Remember, your competition is always just over your shoulder. Stumble, and it could seize that edge of service excellence and take your customers with it.
So where do you start?
If you're like most companies, you'll try the front line, with the people who have face-to-face (or phone-to-phone) contact with the customer. This is a mistake. Instead, start with management. Quality service is orientation of all resources and people in a company toward customer satisfaction.
Management commitment is especially important. Management needs to embrace and develop the service culture because it should lead and motivate all employees. If your management doesn't commit, your employees will know it.
To maintain management commitment, hold regular executive sessions. Work to avoid management isolation. Make it clear that quality service is expected and even demanded. Commitment must be real and honest.
All too often, management tends to be reluctant in committing to service as a strategy for improvement and business growth. But remember this: When customers are presented with a choice between companies, and those companies offer comparable quality product and pricing, the distinct difference of service quality becomes the deciding factor in where they take their business.
With that in mind, it is critical to give your customer the service perception of a company that induces them to do business with the company again.
To do that, your management team will need to identify and implement long-term strategies such as continually evaluating the organizational environment, policies and procedures, management responsiveness to employees and responsiveness to customers. You want a whole organization approach focused on consideration of the successful customer experience. Ensuring your customers' wants and needs are represented in decision-making planning and meetings does this.
You will need to motivate and teach customer service skills. Examine and correct anything that gets in the way of superior employee performance. Understand that many employees today do not know service skills, and it is your responsibility to teach them. Only then can you hold them accountable. Be sure to reward high-performing service employees.
Your goal is to develop a service initiative that sets service standards that are practiced by everyone. Another goal is to see service as the product. You must really know that quality service can only be achieved through long-term commitment; it is not just a passing phase. Walk the talk -- with a team made up of everyone in the organization.
Pam Schuck (email@example.com) is president of STRIVE Training, which specializes in motivating customer service for businesses. She can be reached at (440) 235-5498.
An enormous white fish glides out from between two rocks inside the gargantuan aquarium that reaches from floor to ceiling and divides Robert Fortney's office in half.
The 6'9" president of Fortney & Weygandt Inc. is seated in a nearby chair, watching the fish make its looping orbits around the glass tank as he tries to find the right words to explain why his construction firm has grown so quickly during the past decade.
Fortney is quick to point out that his North Olmsted-based general contracting firm is a business in the field of construction, not the other way around. Ironically, he has never set foot upon a bulldozer. And, despite his towering frame and a deep booming voice that makes him seem like he could make a serious go at a professional wrestling career, the success of F&W is fueled more by brains than brawn.
"My strength is systems and organization," explains Fortney, who bought out his former partner, Bob Weygandt, in 1982, four years after the firm was founded. "I'm the guy who can fit those two extra glasses in the dishwasher and the extra suitcase in the back of the car."
More important, Fortney's embarked on a never-ending search to improve upon existing methods of doing business. And while that is at the core of F&W's business philosophy, it's Fortney's ability to deliver on his vision that drives the company's fortunes.
In an industry in which most large construction companies work on perhaps a dozen projects a year, F&W is an anomaly. Nearly 75 percent of the firm's annual revenue is derived from more than 100 unique projects. Combined with rollout work the firm does on a consistent basis for companies including Kmart Corp. and Applebee's, the number of projects per year tops 1,000.
This ability to handle such incredible volume is another part of Fortney's blueprint. But he has also spurred growth at his 250-employee company by integrating new technology into an industry in which mountains of paper and handwritten reports from the field are the longstanding norm.
By harnessing the Internet to reduce loads of time-consuming, unwieldy internal paperwork and improve communication with his base of subcontractors, Fortney has set himself apart from his competitors. In fact, he just may be one of the first digital-age construction firms in the nation.
But Fortney doesn't want to keep all this innovation to himself. He says it's something others in the industry need to embrace as well. Toward that goal, he's launched a business to business e-commerce site that will, for a fee, let anyone shrink the nightmarish paper shuffling that has long been viewed as a necessary evil of the bidding process.
And for those old-school naysayers who chuckle at the thought of laptops at a construction site, Fortney intends to have the last laugh. Microsoft Corp. recently tabbed F&W for a case study, an honor the software giant usually reserves for high-profile Fortune 500 companies.
"We got tired of running with the pack and doing what the industry does," explains Fortney. "We basically said, 'Screw it, let's not worry about it.'"
This path-less-trodden mentality appears to be the difference between Fortney and his competitors. Today, F&W is closing in on revenue of $100 million a year. Fortney is sold on the belief that technology will help it grow even more. While other industries charge full force toward the electronic age, the construction industry seems mired in its traditional past.
But like every other step of the journeys he's traveled, Fortney intends to buck tradition here as well. If there is one person well positioned enough to help the construction industry's transition to the electronic age, it just may be the no-nonsense, tell-it-like-it-is Fortney. Here's why.Ten years ago, Fortney looked around his industry and realized the traditional general contracting business model no longer appealed to him.
At the time, most firms survived off a handful of high-ticket projects, which made competition for landing prized contracts a high-pressure challenge. Rather than fall in with his competitors, Fortney says he believed he could increase revenue by creating a higher quality organization from the inside out.
"We took the corporation and divided it into 200 different parts," he says. "Our goal became to take each and every one of those parts and improve it on a continuous basis. With every step we take, a secondary byproduct of that is more volume. A tertiary byproduct is more profitability on that volume."
Creating a culture dependent on constant improvement did not mean that workers were charged with bettering only the facets of business for which they were responsible. Any aspect of the company was fair game for improvement. But that led to another problem.
Fortney discovered that American workers were not especially fond of making suggestions to management. That's in distinct contrast with foreign competitors. For example, the average Japanese worker turns in 30 to 40 workplace suggestions a year. Fortney says studies show American workers are lucky if they turn in three or four comment cards over the course of an entire lifetime.
The solution: Fortney's Opportunities For Improvement program -- or OFI for short. When a worker makes a viable suggestion, he or she is entered into a quarterly drawing for $1,000. The incentive-laden program helps build employee confidence in making suggestions. Fortney now collects about 500 comment cards a year.
"I believe very strongly that cognizance of a problem eliminates 60 to 70 percent of the problem," he says. "Just being aware that there is a situation comes very close to eliminating it. We work hard to get our people to suggest opportunities for improvement.
"It doesn't need to be a $3 million cost saver. It does not need to save 500 hours a year. It can be something extremely simple."
The walls in the lobby of F&W's headquarters are decorated with framed pictures and letters of thanks from people with whom the firm has worked over the years.
The photograph collection of churches, restaurants and hotels serves as evidence of the importance and power that relationships hold in the business world. Fortney says these relationships are much too rare in the construction industry.
"If you have a legal problem, you work on relationships," he says. "It becomes obvious that the person you have the relationship with has your interests at heart and is not trying to make his $100 or $200 an hour. Construction should be the same way."
F&W forged a long-term relationship with Radio Shack more than a decade ago. Today, Fortney has 50 employees exclusively assigned to the rollout arm of the firm, which makes up a significant portion of the company's annual revenue.
Rollout, explains Fortney, is the term used to describe a job that's the same each time, such as building a photo lab in a Kmart. No matter where the store is located, the photo lab is in the same place within the store with the same specifications every time.
This strategy has helped F&W establish long-lasting relationships with Kmart Corp., Applebee's, CVS, Petland and a number of other high-profile chains, which continuously feed business to F&W.
"The niche that we position ourselves in is that of rollout work where there is a pre-established learning curve," Fortney says. "Once you learn the curve, you're immediately more competitive than anybody who doesn't know it. That way, you can make higher profits."
And though he declines to talk specifics, Fortney says F&W's profit margins are "substantially better" than the slim 1 to 2 percent considered standard for the industry. Moreover, the rollout program has helped Fortney forge longstanding business relationships that are not solely dependent upon submitting the lowest bid.
"General contracting is a service industry," he says. "You won't change this overnight, but the entire bid process is confrontational. We believe that you work on a negotiated basis. When you do taxes on April 15, you don't ask three accountants to give you bids."
Technology has had a major impact on Fortney's business. His ability to embrace it has aided in the re-engineering of his long-range vision.
But when Fortney asked his base of subcontractors a little more than a year ago to get comfortable with the idea of bidding on F&W projects via a corporate extranet, he was surprised by the response. It seemed that many of them didn't want to wait a year or two for the technology to be developed.
"We were inundated by people saying, 'Why do I have to wait when I'm ready now?'" he says. "We were shocked. It was the masses telling Big Brother, 'Hey, you're behind. We want it now.'"
The reaction spurred plans for www.fwprojects.com, a password-protected extranet launched last August. The plans and specifications for every F&W project are included on the site. So far, it has been a success, with more than 1,000 registered users and 20,000 hits a week.
Fortney reached the conclusion that such an idea was "way too good" to keep to himself and began work on www.constructionbidding.com, a business-to-business e-commerce initiative that takes the premise of FW Projects and offers it to the industry as a whole. The site, which is in beta testing, has only been around for few months but already receives a few thousand hits a week.
Other start-up Web companies are trying to cash in on the same e-commerce model, but Fortney's is the only one that is not a purely subscription-based service. In fact, Fortney has borrowed a page from Amazon.com in his jump to the Web, applying for a business method patent on the idea.
"Time is money, and if I can do it faster and cheaper than you can, then I want you to use the same system you've always used because I can't be right," he says with a sarcastic lilt in his voice. "You must be right and I must be wrong. I don't mind that."
The Internet strategies are only a piece of Fortney's overall plan to use technology to evolve F&W into a more efficient company. The development of a single-entry data system, which is about 70 percent complete, and the use of the firm's Superview 2000 program are two of the other applications Fortney sees as key components. The latter, a system that instantly e-mails every superintendent memo and report from the field to the proper files at F&W's North Olmsted headquarters, is the one that spurred Microsoft's interest in documenting Fortney's system in action.
"My goal is within five years to have my project managers go out to a work site with a laptop, hold a meeting, and before the meeting is over, have a copy of the minutes in the owner's file," he says. "It will be all voice recognition and technology along those lines. That will increase our efficiency to a multiple that most of the industry doesn't exist on right now."
There's little debate about the vast financial opportunities that exist within the construction field. With billions of dollars on the table each year, it's no wonder the industry is so highly fragmented.
There are no big-time national players, and even the biggest of the big control no more than one-half of 1 percent of market share. Compared with nearly any other industry, construction has yet to meet an age of heavy consolidation.
"Construction is the last vestige of the American economy that is still controlled by the moms and pops," Fortney says. "Every other company, from medical insurance to automobiles to restaurants to lodging to everything else, has gone to the nationals. The construction industry on the contracting side has not done that, but I see that starting to happen."
As evidence, he points to First Energy's recent purchase of several small HVAC firms in anticipation of energy deregulation. But major consolidation is still years away. If and when the industry reaches that bridge, firms will need to work out the logistics of such a huge undertaking.
Fortney believes it is the efficiencies created by the Internet and new software applications like the ones he is currently using that will allow construction companies to become national players.
"If you can actually market and establish some guidelines and procedures, take your technology and use your buying power, you could be an extreme force," he says.
Even after building F&W from a tiny company pulling in a few million dollars each year to one speeding toward the $100 million milestone, Fortney is not tipping his hand when it comes to whether he expects his firm to play a role in this future. "When, where, why and how we participate in that is not yet determined," he says, though he jokingly admits that bit of information and 50 cents will get you a cup of coffee. "I think it definitely requires to be looked at and I think that's really the important part, realizing it's there to look at in the first place." How to reach: Fortney & Weygandt, Inc., (440) 716-4000, www.fw.projects.com
Jim Vickers (firstname.lastname@example.org) is an associate editor at SBN.