MAJOR OVERHAUL
As a result, PC Connection last year decided to embark on a thorough overhaul of its fulfillment system. IT staffers looked at numerous off-the-shelf E-commerce packages, but all were found lacking. Instead, the company launched a labor-intensive campaign to internally develop new front-end modules for the existing JD Edwards system. These modules were built using both Web services and traditional EDI to deal with the company's growing web of fulfillment partners.

"We needed a holistic approach," says Susan Fazelpoor, PC Connection's VP of program operations.

Ferguson estimates that the company has invested at least two worker years in the project to date, drawing on expertise from across PC Connection's internal development staff of more than 70 programmers. The effort was overseen by a newly created project management office and implemented by a core team that ranged over time from three to seven IT staffers, depending on the project's stage. All the work was completed in-house.

Throughout development, business leaders from key departments such as product management provided input on requirements, including process changes, workflow redesign, and user interface modifications.

The first set of enhancements to the JD Edwards system went online earlier this year, and Fazelpoor says they're already paying off in terms of time and cost savings. "In the past, much of what our buyers did was very manual and time consuming, with lots of order entry across multiple systems," she says. "This takes 90% of the manual part out of their day."

Among other things, there are now modules that can automatically determine the quickest, most economical way to fulfill an order, whether directly from one of the company's warehouses or through a partner in a particular geographic location. Additionally, the ERP platform, hosted on an IBM AS/400 server running IBM WebSphere middleware, now uses Web services protocols to connect with some trading partners in order to perform real-time inventory checks during the sales allocation process.

The system also links directly with PC Connection's full-service distribution, custom configuration, and repair center in Wilmington, Ohio, as well as other company-operated facilities in Connecticut, Maryland, Massachusetts, and Texas.

Those efficiencies are key for a company that operates in an industry with historically slim profits and that is currently facing a slowdown in demand as the overall economy lags. For the second quarter, PC Connection reported an operating margin of 1.9%, while net sales increased by just 2% to $449.4 million. Net income declined 12% to 5.1 million. PC Connection's stock price tumbled 24% on July 29 after the company warned investors about its results.

Still, Ferguson says PC Connection is investing for future growth, and adds that the new system means customer orders will continue to be filled with greater speed and accuracy, even as business picks up.

"It's a customer satisfaction issue," he says. "To stay in the game you have to upgrade your system to handle increased requests."