DES PLAINES, ILL. (03/27/2000) - US Office Products Co. (USOP), which racked up $3.2 billion last year through direct sales to businesses using its print catalog, is aggressively pushing into e-commerce to fend off dot-com upstarts and traditional rivals.
Acknowledging it has had to play catch-up in the e-commerce game, USOP ended last year by launching a business-to-business Web site at USOPnet.com, which some online corporate procurement managers claim is the best they've seen.
Nothing is as easy as it looks, though, especially when it comes to Web integration. The older electronic data interchange-based order fulfillment system that USOP uses to support print-catalog sales wasn't meant to be connected to the Web.
In response to the technology-integration challenge, USOP took an inventive approach. USOPnet, the company's division in charge of e-commerce strategy, tapped one of its main wholesale distributors, United Stationers, for help.
United Stationers, which had already begun Web-enabling its back-end systems, agreed to handle the fulfillment of orders coming in from USOPnet.com's Web server farm.
So when an online buyer at USOPnet.com checks inventory availability and order status at the Web site, he's actually looking into the United Stationers warehouse system.
"For this new business, we had a difficult time creating a state-of-the-art Web site with a link to our legacy [order fulfillment] software, called Trinity," says Brad Schrader, USOPnet e-commerce president.
USOPnet runs a private T-1 line down the road to nearby United Stationers, where the wholesaler has set up what it calls a TCP Interlink Module application server to transfer Web sales data into its back-end systems. Using this system, customers can get a real-time view of inventory and shipping status, whereas it takes USOP's RS/6000-based Trinity system about 15 minutes to retrieve the same sort of data.
Real-time response on order status for customers is critical in building a site oriented toward customer self-service, say members of the USOPnet team involved in this multimillion dollar e-commerce push.
USOP's first stab at e-commerce two years ago resulted in a catalog site that's still operational, called MyUSOPnet.com, used by fewer than 4,000 of USOP's 300,000 customers. It didn't have the kind of self-service features that make online buying as easy as it could be.
"We're bringing innovative tools to the site that should allow us to win new customers," says Gary Taylor, the e-commerce vice president of customer experience.
One of those main tools is the site's online procurement-management application, which was written by USOPnet's staff. It's available as a service to let corporate managers restrict and control employee online purchasing at USOPnet.com.
A corporation that sets up an online account may decide that it wants to have all employee requisitions approved by a supervisor. In that case, the USOPnet.com procurement-management application would send each online order to the supervisor by e-mail, with a hyperlink to the order requiring approval, and wait for approval before shipping the items.
With the USOPnet.com procurement-management tool, the purchasing supervisor can also set limits on purchases or restrict the kinds of items ordered. The Web site bills customers based on prearranged contract pricing and can generate periodic electronic reports to the supervisor.
Such rules-based controls are typically found in expensive intranet-based software packages from the likes of Ariba, Claris and Commerce One.
"We said to ourselves, 'Our core customers may not be able to afford to buy that kind of software, but we can give them access to that kind of functionality for free at our site,'" Taylor says.
Customers at USOPnet.com can also use an online data-mining tool to make inquiries about their order histories and receive broadcast reports. This is the same MicroStrategy tool used internally at USOP to extract business intelligence from a data warehouse running on a Microsoft SQL Server 7.0 system.
The site's catalog search engine is powered by Mercado Software's IntuiFind, which runs on a separate Windows NT application server. It zooms through the 23,000 items USOP has for sale and can search across multiple catalogs.
USOPnet believes this search capability will let the site host multiple third-party catalogs, a project planned for later this year.
"It's better than the other Web sites I've seen," says Wayne Hong, facilities manager at Inventa, which buys about half its supplies - about $120,000 worth - from USOP. Inventa recently started placing orders at USOPnet.com.
"I like using the online product search, which lets me actually see the product," Hong notes, although he thinks there are still a few glitches related to catalog numbering.
Managing e-mail questions remains a challenge for USOP, as it does for all e-commerce companies. USOPnet relies on Convergis, a Cincinnati service provider using the Kana Communications e-mail management package, to respond to routine questions about office products.
Convergis is instructed to send tougher questions to USOPnet sales representatives or the accounting department, depending on the nature of the question.
"We have a one-day turnaround requirement for e-mail," says Vivian Harvanek, USOPnet's manager of customer relations, who can access the hosted application at Convergis to see the status of all e-mail to her company. "Mostly, these questions can get what I'd call canned responses."
Harvanek says one reason USOPnet decided to outsource e-mail response this way was the need to get its e-commerce operation up and running as quickly as possible.
According to USOP executives, the strategy behind the e-commerce push is to give the firm's 300,000 print catalog customers a good reason to take purchasing online, while bringing new customers directly onto the self-serve environment of USOPnet.com.
"We're encouraging this because, frankly, it saves us money, since the customer service order-entry costs are significant," Schrader says. "With USOPnet.com, we can process orders faster and error rates go down."
USOP is even offering bonuses to its sales force to convince customers that online purchasing is the way to go. In addition, USOP hopes to see all customers using its older e-commerce site migrate to the new one, so it can stop running parallel e-commerce sites.