A corporate Intranet is quickly becoming as necessary as an Internet presence. Always quick to take advantage of opportunities for administrative and cost savings, corporate executives have been quick to see the value of Intranet communication. Corporate communications, training, HR functions can be done more efficiently, more accessibly, faster and for less money on a 'Net. It's an executive's dream come true.  

Besides communications and HR functions 'Net technology can benefit the business of doing business as well. Sales can place orders remotely, track them and quickly coordinate with Customer Service. Accountants and managers can check the day-to-day performance of far flung employees, stores or franchisees. As the technology has proliferated, uses for it expanded exponentially. As use expanded integration began, PCs began talking to mainframes.  

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By integrating information from legacy systems into 'Net technology an entire enterprise can become more visible, more accountable. And by doing so make it increasingly difficult to see the business segments as discrete elements. Specialized people (sales, HR, MIS et al) and dedicated computer systems and applications are still necessary. But what used to be stand alone systems are now talking to each other. For most companies the individual trees are becoming a single forest.  

Champion Auto Stores has enthusiastically embraced the idea of integration. Jim Lundberg, Marketing and Communication Director is the leader of the project. What they have done is a great example of 'Net application. It was done the way it should be, with benefits for the company and the end user in mind.  
 
iBiz: When did you begin your Internet project? 

Lundburg: We first began at using the Internet as our Intranet, or Wide Area Network, with our stores. . . we began investigating it about this time two years ago.  

iBiz: Did you develop this Intranet in house? 

Lundberg: That's correct.  

iBiz: So how many people do you have working on the project? 

Lundberg: Well, to start with myself and a number of computer consultants, the people at Bitstream Underground and a couple other consulting companies helped us get pointed in the right direction. Design of the site was probably the most extensive portion. It took us six to eight months to actually design the site. Then it's taken the last sixteen to eighteen months to put it all together.  

A lot of the programming was done by consultants. They then coordinated their efforts with our Information Services department in order to access the specific information that we needed. Most of the graphical information and most of the on site information we update at the stores was all created by our production group or our IS team. 

We also developed a consumer site. We haven't put a lot of time and or effort into our consumer site yet. Our main concern is in getting the business site up and operational. We are at that point currently so now our next major concern is getting the units out and into all the stores. 

iBiz: How many stores do you have? 

Lundberg: Champion auto stores currently has over 160 stores in eleven different states in the Upper Midwest. We currently have about two dozen stores on-line and are rolling this out to the rest of our stores by February 16th. 

iBiz: Tell me about the system. 

Lundberg: We have developed a client server relationship with our stores by setting up PCs with Internet accounts in our stores. Setting up a proprietary web server and firewall that allows stores to come in and access specific information. Our Apache web server is state of the art and we're very happy with that. We call the system "Express Net" by the way. The PCs are set up with Castanet Marimba as our push technology device. This allows us to update our client sites on a weekly basis.  

We send the stores all the memos we would send them, monthly sales information. It also allows us, to maintain for them, current information to help them operate their business, whether it's product information, technical information, sale information, training information. All of this stuff we maintain at the client site for them so they don't have to worry about upgrading this information.  

iBiz: Did you have to deal with legacy systems for your database information. 

Lundberg: That's right we are accessing flat file information and displaying it in the form of active server pages. 

iBiz: Did you find the conversion from paper to virtual documents difficult? 

Lundberg: No not really. You should know we do all of our HTML documents with Pagemill. Also the majority of information we send to and maintain at our stores is in the PDF format. We do this for ease of transfer and ease of storage. They also come up on the screen very crisp and clean. We can zoom into certain areas such as a vendor catalogue to view text or imagery. Our stores have Epson color, ink jet printers they can easily print out very clear pictures from PDF files. They can send these off with consumers to help them make the correct purchasing decision. 

iBiz: You have a private client/server relationship but your information is traveling over public lines. What kind of security do you have? 

Lundberg: We have basically three levels of security to our server. First of all they have an ISP account so they need to dial in and authenticate with that. We've set up their drives for automatic authentication with their ISP. Then when they get on-line with our site and the want to place orders, or check stock or do any number of inventory control functions they then once again need to re-authenticate themselves with us using a user ID and Password. Finally, we've stored on the client site, as well as on our sever, a digital certificate. Half of it is on the client side and the matching half is on the server side of the firewall. 

iBiz: Are you using a tunneling protocol? 

Lundberg: No, the digital certificate applies once they pass the firewall. It is a secure site. There are hackers out there who will get to you if they decide they want to. Our main concern is that we put up enough deterrents to satisfy our own sense of well being. We're confident we not going to have those types of problems. 

iBiz: Did you look at truly private solutions like dedicated lines and Frame Relay. 

Lundberg: We looked at the difference in cost between using frame relay. There was no question, for a company such as ours to be able to use a device that can communicate over long distances, it was just not financially feasible for us to use Frame Relay. Our pockets are not that big. We're an automotive company not a huge computer or information company. We have determined using the Internet as our Wide Area Network is efficient as well as in an expense range we can afford. 

iBiz: What's the benefit to Champion Auto? 

Lundberg: There's a number of advantages for us. By having all the information they have on site as well as being able to access our warehouse stocking information and some other inventory control tools we can provide current and specific information to our stores quickly and easily. We can communicate much more efficiently. Our memos and other mailings that used to go out to their stores with their weekly shipment are now done on line. As with most retail establishments, big piles of papers tend to build up quickly in the corners of the managers office. Whether or not they are read is always a question. By having it at their fingertips, A: We are assured they have current information; B: If they need to find something, they know where to look for it and they can find it quickly. All that regards the on drive information. 

In regards to what we can store on line, they can quickly check stock on product, place an order for it and make a number of different choices about delivery. They can set up customer pick-ups at our distribution centers. They can set up will call for additional product. It can be UPS'd, next day, second day, etc. It can be flagged to ship with an upcoming order. Any of these choices can be made remotely. 

The advantage to them is when they have a customer in front of them. Having to pick up the phone, call somebody long distance and then sit on hold while someone else checks the stock is a great loss of time. Instead they can go on line, check the stock very quickly and know they are getting timely, accurate information. Some of the other inventory control tools we're providing them include such things as Inventory Control Maintenance. We automatically generate orders for replenishment of stock for our stores. The orders are based on what they sell through their cash registers, the keyed in SKU numbers. The on-line system allows them to tap into their inventory control files and determine how many of these items should I have in my store right now. What are the recommended inventory levels? What is the minimum recommended inventory level? Do I have an order generated for this particular product already. 

We can also provide them with access to neighboring stores' inventory information. Instead of picking up the phone, calling a neighboring store and taking two employees out of the loop when they could be helping customers, stocking the shelves or doing a better job of helping Champion Auto Stores. Now, they can go on the Internet and quickly check for stock without having to take a second person out of the customer service loop. Our stores are on-line from 7:00 AM to 9:00 PM, all of the hours the store is open for business. 

iBiz: How has it been selling this to the rest of the people at corporate? Did you have a battle getting this done. 

Lundberg: When I first raised my hand and asked my corporate officers, "Couldn't we do some neat things with this new Internet?" There was a lot of pooh-poohing going on. Our Information Services department was still working in a mainframe environment. The direction I was given was to go check this thing out and make some recommendations. Over a period of approximately four to six months I was able to identify solutions to a many concerns our corporate officers had. Especially in regard to security, a major concern was how do we keep people from hacking into our system and getting into our mainframe systems? 

That was solved through the use of the three different layers of authentication I mentioned earlier. Consequently we put in place our client/server digital certificate and an Eagle Raptor firewall. One of the other questions or concerns that we had was how can we prevent our client people from getting to areas we deemed in appropriate. This is a proprietary system and we are only allowing our stores access to information that pertains to Champion Auto Stores. For that reason, we reviewed a number of different filter programs, Net Nanny, Surf Watch and Cyber Patrol and Cyber Snoop. We wanted to use a white list rather than a black filter. Rather than filtering out inappropriate sites we wanted to direct them to only specific sites. Cyber Snoop has performed as a white list filter exactly as we wanted it to . One of the main hurdles we had was we decided it would be beneficial to us to use NT boxes in our stores. To find an NT version of a white list filter was very difficult. We finally decided on Cyber Snoop and that has worked very well for us. 

iBiz: Do you think this is going to be more cost efficient? 

Lundberg: Certainly. Not only more cost efficient, it will encourage our stores to order more product from us. We have a little over fifty corporately held stores, the balance of the stores are dealership agreements, not franchise stores. That's a big, thick, tall stack of papers whereas dealership agreements are smaller stacks of paper. These store owners do not have to buy any of the products that we offer from Champion Auto Stores. By making it just that much easier to access information and place orders we're confident we are making it much more appealing to purchase product from us rather than some of the other warehouse distributors out there. 

iBiz: How do the store owners using the system feel so far? 

Lundberg: Anybody who's been exposed to the system finds it extremely helpful and very beneficial. In the automotive industry the cost of operating an auto parts store has gone up dramatically. In the 1970' store inventory averages were between $25 and $55,000. With the increased number of vehicles on the road, the different body styles and the parts proliferation. That means no longer does this one starter for a bi-zillion different vehicles, it's only going to fit one particular vehicle for this one particular year. Now our stores inventory needs have risen to from $100,000 to a quarter of a million dollars in inventory that needs to be on the shelf at any given time. With that in mind, our store owner's pockets are not that deep, they, for the most part, have finite financial resources. By providing this kind of a tool for them they can streamline their inventory and make better use of the dollars they have available for product in their store. 

iBiz: What other kinds of information is available to them? 

Lundberg: The operational manuals are all available to them via the system. It's right in the store, right on their system so they don't have to worry whether the manual they have on the shelf is current. A new area we are in the process of developing right now, deals with our requisition. That is a listing of the 50,000 plus different items that we carry, the different part numbers that we carry. We have no devised a means of accessing and displaying this information over the Internet as well. We're tying an electric catalogue concept to it. Right now we have found how to display imagery and marketing statements regarding each of these items. They can pull up information that says, OK now this is your product specific information. If they select to see more information on that we can provide them with image of the product as well. The customer can then review the information with them at the store and make a more educated purchase decision. 

iBiz: Have you encountered any resistance from the store owners? 

Lundberg: You have to keep in mind that most of our store owners are auto parts people. I started in this company as an auto parts person, I had taken some typing classes in high school and college. Unless you had a degree in it or were in the Math Club you didn't get to mess with computers. Our store owners have a very similar mindset. If it's not mechanical they don't understand it. Now that's not true for all of them, it's am attitude. So there's been a little resistance. But by using the browser technology and the point and click aspects of the Internet we've been able to knock down these barriers for the majority of store owners.  

We're also finding because the average age of our store owners is between eighteen and twenty-two we're bringing in a whole new generation of computer literate employees. They're helping our store owners adjust to this new technology.  

iBiz: That's kind of bottom up training. 

Lundberg: Unfortunately our society has predicated that at this point. All the kids these days grew up with computers in the classroom. It wasn't that way for me. Now with the user friendliness of the PC and the added user friendliness of the Internet using browser technology and the point and click aspects of it, we're finally getting to a point where our store owners ate saying, "Yeah I think I can do that."  

iBiz: How much of your training is being delivered over the system. 

Lundberg: All of our training information we have in an eleven level, thirty-one videotape and workbook training program called Fast Track Learning. What we are able to do is maintain all of the workbooks and the paper work necessary for store personnel to complete their training in the store. This way they don't have to order workbooks from our warehouse. They simply print them off. If we have an update or add a new workbook it can be pushed out to them seamlessly. They don't even know we've done the update until they receive the tape and we notify them of the workbook on their computer. 

iBiz: Do you have any plans for customer to interact with the systems. 

Lundberg: Right now this device has a certain amount of that appeal for customers but it is our goal in the future to develop a similar, PC based consumer kiosk. Right now in our stores we have laser disk players that allow customers to choose and view more than 125 different maintenance procedures. This helps give them added confidence in completing the repairs at hand. We envision replacing those units with a PC based unit hooked to a DVD jukebox kind of player. It will again allow customers to review information on how to conduct repairs. 

We also have over 60 Tech-Tip handouts in our stores currently that we can also make available. We already have them in our stores as HTML documents and we post one of them to our consumer site every month for reference as well. We would envision all this type of technical information as well as video clips and instructions to be available on the consumer kiosk. 

We also plan on taking that digital requisition we are working on and once we have added all of our product imagery and marketing statements to the database of specific product information we then can duplicate it on our consumer site. We will then add a shopping cart to it and allow customers use that to review and make some of their purchasing decisions. I envision this kiosk to have a keyboard as well as a thermal screen capability very similar to the "Create A Card" facilities you see around town. 

iBiz: That's pretty ambitious planning. 

Lundberg: Certainly, but it necessary to bring us into the new millennium and beyond. It's necessary to take care of our customers and our stores. 

iBiz: Does each store buy their own system? 

Lundberg: No this is a lease program. We lease them to our stores on a monthly basis. There is a lease fee plus their Internet Service provision costs. 

iBiz: Do you select the local ISPs? 

Lundberg: What we have done is look at a number of ISPs. We will allow our stores to choose their own but if they would like us to handle the billing for them, etc. Then we have a couple of them we recommend. We don not want our stores using systems like America Online or Prodigy. That's based on past performance issues. I discussed the issue with most of the major players and currently IBM is the provider we recommend as our Internet Service Provider of choice. But again, we give our stores the option of choosing their own if they like. We do reserve the right to approve their choice however. 

iBiz: Is ISP performance an issue? 

Lundberg: I worked with a local ISP where, for an additional fee, we were able to get unlimited access with no time outs between 7:00 AM and 9:00 PM, for a set cost. That means our stores can come in the morning, sign onto the Internet, stay on 'til closing. Be able to quickly and easily access the information they need and get out when they need to. We also use the same phone lines at night to poll our stores for a different system. 

iBiz: What system is that? 

Lundberg: The cash register system. It actually creates the automatic order. It's important that the store signs off at night. That is not done via the Internet. We call in and poll them. 

iBiz: Why not? 

Lundberg: Because we are still in the process of proving the Internet can support mission critical information. Until we have been able to do that for a prolonged period of time we have decided to continue dial in and poll these stores for information we what we would consider to be mission critical. That process has been in place for more than a decade. 

iBiz: Does that information then feedback to the stores? 

Lundberg: Yes. The next day stores can see whether or not orders have been generated, is a particular order on order, what are my current on-hands. All that information is available and based on end-of-day the prior day's business. 

iBiz: It's amazing ain't it? 

Lundberg: Boy I'll tell ya. Thing's have really changed in the two years I've been lookin' at this stuff. 

iBiz: What's on the immediate horizon? Now is yesterday tomorrow. 

Lundberg: They're saying the average lifetime of software these days is a maximum of eighteen months. We're definitely seeing that to be the case. We're having a tough time keeping up with the technology right now. With the added speed capabilities U S West is going to be offering here in April, we're pretty excited about what we can begin to do. 

iBiz: Does it ever become to be if it works don't fix it? 

Lundberg: Definitely so. That is going to be the case with our system for probably the next decade or so. We have spent a lot of time and effort is the design phase so we are pleased with what we are capable of doing. We don't plan on changing it drastically in the near future. 

iBiz: How are you going to roll this out? 

Lundberg: We have a marketing conference this weekend. Anybody who is interested in starting on this program can start their lease immediately. They will be on line this Monday, February 16.  

Our goal is to have this into all of our stores by the end of this year. Those that do not sign up immediately will be required to have the system in their stores sometime in the near future. It's part of the marketing agreement we have with the stores. 

One of the things we're using that's uniques to our system is we're using drawer drives. Drawers are about the size of a car radio. It locks into the front of your CPU. With the turn of a key you can remove oyur drawer drive, which is your hard drive. This allows us to maintain these systems quickly and easily. If someone is experiencing a problem out in the field it's a plug and play situation. You can UPS them a new drive and a key and they can be up and running in twenty-four hours. We have designed this system to be a no brainer. It;s designed to be extremely user friendly and something auto parts people can do. You no longer have to be a rocket scientist. 

iBiz: Have you changed anything because of input from the field. 

Lundberg: Of course, we set these first store up as Beta sights because we expected we knew we were going to b running into some problems. Not only did they help us identify some of the problems with order creation and tracking orders through the system, they also helped identify security problems. Some of our computer literate youth were able to defeat some of our early versions of white list filters. By doing so they have helped us accomplish our goals. 

iBiz: Do you have feedback mechanisms in place outside the system? 

Lundberg: A member of our help desk is charged with calling our stores once a week and reviewing any problems they might be having, providing suggestions, helping them troubleshoot. He is also in charge of shipping and receiving the drawer drives. We definitely have to take pro-active stance when it come to development and maintenance of the site. 

iBiz: Nothing encourages resistance more than things that don't work. 

Lundberg: Exactly. You bet! The easier we can make this system work the faster our people adapt to it. Anyone who has spent any time on the system at all, has decided this is a great tool for doing a better job of servicing our customers.  

iBiz