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12/6/2004
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Amex Software Helps Handbag Maker Simplify Business Processes

American Express applications offer vertical-industry functionality to small and midsize businesses.

New York-based handbag and backpack manufacturer Yak Pak has overcome some of the IT challenges facing small and midsize businesses with the help of American Express Tax and Business Services Inc.'s wholesale distribution software. The Amex applications enabled the company to replace its legacy system and upgrade its business-management software to include new factory-planning, control, purchasing, sales, customer service, warehousing, and distribution capabilities.

Yak Pak, which distributes its products to large and small retailers and sells products online at www.yakpak.com, faced several problems with its old FoxPro-based system. Because FoxPro isn't a transactional database, Yak Pak's IT system faced reliability issues, says Richard Haugen, Yak Pak's chief operating officer. It was also difficult to use--it could take up to an hour for Yak Pak's sales representatives to enter orders into the system--and the aging system no longer worked well with other software, Haugen says.

Additionally, Yak Pak had seven servers handling core business processes, including E-commerce, EDI, shipping, and accounting. The company's IT staff spent 60% of its time maintaining the system and making sure servers could talk to each other, Haugen says.

The manufacturer reached a point where its legacy system no longer supported the company's growth. In January, the company implemented SAP Business One--The American Express Edition for Wholesale Distribution application, because it contains the key functionalities needed to manage a wholesale business, Haugen says.

"It has absolutely transformed every major business process in our company," he says. "Now our sales reps are so much more efficient than before. For example, they don't run reports anymore; they have reports scheduled and delivered to them automatically. We also have fewer people in accounting now than we did at the beginning of the year, and yet we are able to provide a higher level of customer service to our customers."

The American Express Edition software, created by American Express Co. subsidiary American Express Tax and Business Services, is built on top of SAP's Business One business and operational management software. It's designed for small and midsize businesses, as well as divisions and subsidiaries of large organizations, says Charles Riess, managing director at American Express TBS. The software has built-in tools to simplify managerial processes, a wireless warehouse-management system with "pick, pack, and ship" functionality, and document-management and EDI capabilities.

American Express TBS disclosed Monday the completion of the first year of its American Express Alliance Program, an initiative with SAP America and IBM to provide small and midsize businesses with industry-specific business-management technology. In the first year of the program, more than 50 customers deployed business-management software and more than 20 business partners joined the program to sell, implement, and support customers.

Since implementing the American Express Edition in January, Yak Pak has realized productivity improvements in a number of areas. For example, the company has seen a reduction in EDI and shipping chargebacks, a 10% decrease in mispacked shipments, and a 60% decrease in customer-service costs. On-time shipments have increased from 95% to 98%, Haugen says.

Yak Pak has reduced the number of servers handling its core processes from seven to two and has been able to relocate its warehouse from Brooklyn, N.Y. to less-expensive Houston. "We always stuck to a geographical location, but with this new system our business is no longer dependent on where the computer is," Haugen says.

"The American Express Edition gives us visibility into our supply chain," Haugen says, and it provides "the order process and the accounting process that the bigger companies have and most smaller companies cannot afford. And it also gives us the integrated solution, so we don't have standalone systems anymore, and it reduces our maintenance costs."

What differentiates the American Express Edition from similar offerings on the market is its vertical industry-specific functionality and full support for midsize businesses, Riess says. The applications combine functionality that companies must often buy from multiple vendors, he says. "We've also provided a single point of contact for the sale and implementation, as well as toll-free support for the total solution including the hardware, the software, and the services.

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