InformationWeek
Defining The Business Value Of Technology
November 17, 1997
Extranet Is All Aces
Ace Hardware's Acenet gives retailers Internet access to legacy apps and dataBy Lenny Liebmann
The authors of that recipe are the Acenet 2000 team at Ace Hardware Inc. Beginning in June 1996, Ace, a $2.8 billion company in Oak Brook, Ill., set out to give its worldwide network of independently owned retailers Web access to Ace's core mainframe applications. The real development work started about a year ago. And when the target delivery date arrived-coinciding with the company's biannual dealers' convention last April-the extranet was ready.
Ace went into the project with several advantages that many extranet implementers lack. First, even though Ace's dealers own their stores and ope
rate them however they see fit, they still have very close business ties to Ace. In fact, Ace essentially functions as a dealer cooperative-rather than a franchiser-letting members buy goods at a low price and piggyback on a variety of operational and marketing support services. "We're all fighting for market share," says Chris Deboo, Ace's manager of corporate IS. "The better the services we provide to the retailer, the more we differentiate ourselves from the competition."
A second advantage: More than half of Ace's 5,000 stores were already connected to centralized host applications via remote 3270 terminals rented from Ace and linked to the company's mainframe over a dial-up network provided by IBM. That's not to say the existing system was perfect, however.
Dumb Terminal And Dumber
The use of a dial-in network also had its drawbacks. As do most dial-up network providers, IBM charged Ace users by the minute. That meant stores' staff would log on to the system, execute basic tasks, and then quickly log off. "We encourage dealers to take advantage of all the applications we provide, but the more they used it, the higher their costs were," says Deboo. "It was kind of a contradiction."
In turn, that kept dealers from tapping into Ace's rich lode of applications. Those include ordering applications that provide information on inventory levels at the closest warehouse; inventory management apps that help prompt dealers to reorder items based on their weekly sell-through; and margin-management and pricing tools
that help store owners maintain profitability as their costs fluctuate.
Ace also wanted to get out of the terminal-leasing business. "It didn't make sense for the dealers to have a separate piece of hardware for dealing with us," says Phil Barnes, Acenet 2000 project manager. "We wanted to go to the type of standard PC platform that they could also use for their other retail applications."
So Ace decided to go with an end-to-end Microsoft solution. Since Ace primarily wanted to improve the look and feel of its applications, its first instinct was to use Visual Basic to develop a graphical, Windows-based client. "We were originally grappling with the idea of developing Visual Basic applications and distributing those out to the dealers as the front end," says Barnes.
But it didn't work out that way. "With the surge in the popularity of Internet technology, the browsers just jumped out at us as the right choice for the end-user interface," Barnes says.
Barnes and his associates reasoned that by using
browser-equipped PCs, Ace could let dealers purchase their own machines or use ones they already owned. At the same time, the dealers could use the Net as their communications infrastructure, and this would eliminate the usage charges that had previously kept dealers from using Ace's rich portfolio of legacy applications.
The IS group's pitch to Ace upper management succeeded, and they were given the green light. Soon after, though, several challenges emerged. Ace's IS staff is strong on legacy programming skills-there are some 80 Cobol coders in-house-but had no experience in the technologies needed to develop a Web application and browser-based client.
Barnes also needed development tools that would let his team write code to link specific legacy data sources to his new extranet applications. "This was not just a matter of `screen-scraping,'" he insists. "We have a tremendous investment in data and application logic on the mainframe. That's what we wanted to be able to leverage to create our new Web a
pplications."
To address Ace's skills gap, Barnes brought on two outside VB programmers to take care of middle-tier application logic. Meanwhile, five Ace employees ramped up quickly on the client-side technologies-most notably Microsoft's ActiveX-and links to Ace's mainframe.
To build those links, Barnes and his team selected Interprise/CPE from Precise Software Solutions Inc. in Braintree, Mass. Founded in Israel in 1991, Precise provides middleware for synchronous application-to-application messaging. The Interprise/CPE toolkit met Ace's specific needs, since it supported both the IBM MVS mainframe platform that housed the company's core data and the Microsoft OLE services residing on the Web server. "A VB OLE server sitting on the Web host passes parameters to CPE, which communicates with a complementary CPE component sitting on our mainframe," explains Barnes. "So the Cobol programs can pretty much run unmodified."
Rate Of Change
There were also advantages to such a turn-on-a-dime attitude among the developers. Ace's electronic services department is responsible for managing the data services that Ace provides to its dealers, so it served as the development team's customer during the project. Barnes' team was able to keep that department in the loop as the project moved forward, and responded quickly to the feedback it was given about functionality and interface design. "One of the beauties of the
Web environment seems to be that the developers can show us things fast," says Frank Murphy, manager of Ace's electronic services. "So they never really have an opportunity to get off track."
Of course, the Internet culture's rapid pace of change doesn't affect only development efforts-it also affects the computing environment. When dealers used terminals over which Ace exercised complete control, there was little opportunity for client-side configuration changes to affect application stability. Now, with dealers using their own PCs, Ace has to guard against potential disruptions on the desktop.
"When they log on, we let them know if they need to download something," Barnes says. "But you can't do it automatically, because they might have a customer there and not be able to wait for the transfer." After three notifications, though, Ace goes ahead and sends the file, he adds.
Even with such controls, Acenet 2000 is still vulnerable to changes in software Ace doesn't control. For example, Microsoft's f
ailure to provide full backward compatibility when it launched Internet Explorer 4.0 temporarily threw a wrench into Acenet 2000's works-just as it did to countless other Web development projects. "That was very frustrating," says Barnes. "You get things working perfectly with 3.x, and then-bam!"
Network performance could also be an issue in moving from private dial-in lines to the Internet. But Barnes says that by encouraging dealers to use IBM as their Internet service provider, Ace gains more control of end-to-end performance than it would if everyone connected via different ISPs.
Security is also a concern for Ace. So Acenet 2000 encrypts all the data traveling over the network, forming a virtual private network of sorts between the dealers and Ace headquarters.
Ace anticipates its total investment will reach $2.4 million by the end of 1999. Even with all the difficulties, Ace expects the project to deliver a threefold return, mainly by improving supply management, reducing development costs, and c
ementing bonds between the dealers and the hardware cooperative.
Many of the first wave of dealers who have made the transition from the old system to the new one are enthusiastic about accessing their Ace applications from the same machine they use to do their oth-er work-without worrying about how long they leave the applications open. "I can place my order at 11 a.m., see what's being back-ordered by 3 p.m., and print out tickets from my point-of-sale system only for the goods I'm actually receiving," says Mike Pecoraro, owner of Cross Bay Hardware, a 2,500-square-foot Ace retailer in Howard Beach, N.Y. "That way, when the order comes in, I can tell if something's wrong just by looking at my tickets. That's fantastic."
Deboo took the time to demonstrate Ace's new Web tools to dealers at the hardware retailer's April convention. "Showing them the applications was fun, because you could see their eyes light up,'' she says. "They saw the benefits of what we'd done right away."
ooking for a recipe for a successful extranet project? Start with several thousand independent but closely allied retailers and an existing dial-up network. Then add a gung-ho IT department and a niche development tool that happens to fit the applications' requirements perfectly. Cook under intense heat for 10 months, and-voilà!-the project is ready to serve.
The most glaring problem was a user-hostile, command-line interface. Not only did the dumb-terminal approach make the system hard to use, but it also prevented dealers from linking Ace's legacy applications to
shrink-wrapped, PC-based retail and general productivity software that is increasingly popular among dealers. Also, relying on existing 3270 session formats made it difficult for Ace's IT department to give dealers different ways of viewing and working with the company's legacy data.
Barnes and his team also had to cope with a fundamental di
fference between Web development and legacy development: the rate of change. "It's pretty intense to keep track of all the versions of these different components," he notes. In fact, three-quarters of the way through the project, the Acenet 2000 team was confronted with the introduction of Microsoft's Active Server Pages. The good news: ASP would greatly simplify the serving of dynamic content. The bad news: The team would have to backtrack to incorporate ASP tools in their applications. "Things like that were pretty painful," says Barnes.
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