Proof Point - Imperial Sugar
Jan/Feb 2003 by liz tanner
Using Novell exteNd, Imperial Sugar creates a web services-based extranet that turns customer service into a competitive advantage.
Imperial Sugar Company is one of the largest sugar refiners and processors in the United States with 2002 sales of $1.29 billion and approximately 10,000 customers worldwide. With two cane sugar refineries, two beet sugar factories and two packaging facilities – as well as other warehouse, distribution and terminal facilities – Imperial Sugar's ability to reliably supply customers is unmatched in the industry.
Imperial Sugar has faced formidable challenges as the economics of the sugar business have changed, with profit margins between refined and raw sugar growing razor thin. Facing fierce competition and shrinking margins, Imperial Sugar sought market differentiation through its known strength–customer service. Imperial Sugar believed that using technology to enhance customer relationships would achieve key business goals:
- Enhance competitive differentiation by improving service levels
- Reduce order processing costs with automated self-service via the Web
- Increase revenue opportunities by better understanding customer needs
To achieve these goals, Imperial Sugar embarked on an aggressive effort to implement the Imperial extranet, an advanced Web services-based portal that allows many of its 10,000 customers to place orders electronically and view a real-time picture of their relationship with Imperial Sugar.
"Focusing on our customers is a strategic priority," says Warren Hunt, director of Strategic Planning at Imperial Sugar. "We're creating value for them by making it easier to conduct business and collaborate with Imperial Sugar."
Imperial Sugar's traditional business model is supported by a sophisticated mainframe-based order management system called SalesTrak, a COBOL/CICS/VSAM application developed and maintained by Imperial Sugar's IT staff. The application processes 12,000 orders per month entered via EDI transactions, or manually entered by Imperial Sugar's customer service representatives.
The first Imperial extranet accessed local relational data copied from SalesTrak on an hourly basis. This approach posed two thorny problems. First, it was not responsive enough to satisfy customer needs for up-to-the-minute information access. Second, the extranet had no practical way of handling orders because users did not have real-time access to SalesTrak's order management transactions.
Because the extranet could not process orders electronically, customer service representatives spent most of their time each month processing orders from approximately 2,000 customers over the phone, manually entering the data into SalesTrak. This call volume made it difficult for them to support a broad range of other inquiries and requests.
Imperial Sugar's Web Services Vision
Imperial Sugar recognized the need for a Web services strategy as part of its IT plans. The company believed that with the proper technologies and vendor, it could implement a suite of Web services that would support its near-term extranet objectives, as well as position it strategically for the future.
To achieve its Web services vision, however, Imperial Sugar needed to XML-enable SalesTrak without disrupting its current operations. In addition, Imperial Sugar required a robust deployment platform to support the scalability and reliability needs of its Web services architecture.
"We needed to align our IT strategy with every facet of the business," said George Muller, CIO of Imperial Sugar. "Our key challenge has been to deliver new customer-focused systems, in ‘Web time' without disrupting our current business."
- Enhance competitive differentiation through customer service
- Reduce order processing costs
- Increase revenue opportunities solution
- Novell exteNd to create Imperial extranet benefits
- Increased competitive advantage with 24x7 customer access to extranet
- Significantly reduced order processing costs with self-service via the Web
- Improved overall customer service–while cutting service costs in half
- Increased revenue opportunities by better understanding customer needs
After inviting several leading vendors to participate in a oneweek pilot program, Imperial Sugar selected Novell exteNd as the foundation for its Web services strategy. With the superior ease of use and rapid implementation capabilities of Novell exteNd, Novell was able to quickly develop a real-time Web interface to Imperial Sugar's legacy systems–results that the other vendors could not match.
"Novell showed us that its technology was ready for prime time," said Muller. "It was remarkable to us that they were able to build a prototype of exactly what we were looking for within a week."
Imperial Sugar used Novell exteNd Composer to XMLenable SalesTrak's key CICS transactions, assemble them into appropriate business process flows, and expose them as Web services interfaces to the extranet. The intuitive visual design environment of Novell exteNd Composer requires very little training to create services from mainframe applications. "We have a relatively small staff, so a short learning curve was critical," said Muller.
Imperial Sugar uses the Novell exteNd Application Server to manage all of the runtime execution for both its Web services components and the new Imperial extranet portal application. The load balancing features of the exteNd Application Server deliver the scalability and performance necessary for Imperial Sugar's phased rollout of the extranet, and its fault tolerance assures high availability to its customers (See Figure 1).
Imperial Sugar completed the design and implementation of its Web services architecture in six weeks, and after two months of testing began the rollout to its 10,000 customers.
Imperial Sugar worked with Novell Consulting during all phases of the extranet project. "Novell has proven to be much more than a technology vendor," said Mark Clemmons, Imperial Sugar's Web and database manager. "They have provided the level of business partnership required to achieve our goals on a very aggressive schedule."
Competitive advantage through superior customer service
Imperial Sugar now offers unprecedented customer service that differentiates the company from its competitors and is a key selling point to attract new business. Imperial Sugar's customers have 24-hour access to the extranet from any Web browser to place orders and check the status of shipments, which helps them better plan their production. This real-time, Web-services model allows for a truly collaborative business relationship with customers, enabling Imperial Sugar to maintain appropriate supplies and more accurately forecast demand (See Figure 2).
"In a commodity business like ours, you have to add value to differentiate yourself," said Muller. "So far, we have processed more than 2,300 orders totaling $30 million worth of business on the extranet. Customers are truly doing self-service in a realtime environment."
Working with Novell, Imperial Sugar executed its Web services strategy within its aggressive schedule and budgetary requirements, and is now ahead of its competitors in providing real-time customer interaction and self-service. Company executives are actively marketing its new extranet as a competitive advantage to both new and existing customers.
Like most enterprises, Imperial Sugar keeps a sharp eye on the bottom line. "We had to complete this project within a tight time window, and the numbers all had to work," said Muller.
Giving customers a direct connection to its sales systems has significantly reduced Imperial Sugar's order processing costs, and contributed to a 50% reduction of its value-added network (VAN) costs.
More than 500 customers, including many of the company's largest accounts, are actively using the extranet, which has significantly reduced call volumes as well as the amount of time customer service representatives spend taking orders. One large customer used to spend 4 to 5 hours on the phone every day with a customer service representative, but can now efficiently service its account on the Web. Representatives and customers can also view information simultaneously on the extranet, which improves responsiveness and speeds problem resolution.
Customer service representatives are now more productive and can provide better service as their roles have evolved from order takers to customer analysts. With the extranet, Imperial Sugar has dramatically improved its level of customer service, while decreasing its service costs.
"We value Novell as a true partner, not just a vendor," said Muller. "In just a few months, we built a solid Web services foundation, tied our Extranet to our operational systems and positioned Imperial Sugar for future opportunities. The time-tomarket profile of Novell exteNd is simply outstanding."