High Tech: Spending To Save

Last fall Tropian spent $200,000 on Oracle financial and purchasing software. Purchase orders are now handled over the Internet, eliminating rubber soles from the process and slashing the processing cost from $176 per purchase order to $87. Tropian says the investment has already saved it $530,000--and that number is growing daily. "For a start-up company," says director of materials and logistics Cindy Pence, "that's big bucks."

TaylorMade-Adidas Golf, a leading golf-equipment company based in Carlsbad, Calif., found that when its traveling sales reps showed up at local pro shops, they spent an inordinate amount of time on their visit just checking on inventory and handling paperwork. The main reason TaylorMade wanted them in the field, though, was to talk to the pros and sell new merchandise.

That's why TaylorMade has signed on with i2 and developed a 10-stage e-business plan that will be phased in over the next few years. For a company with worldwide sales of just $500 million a year, the $10 million investment is sizable. But TaylorMade is convinced that it will pay for itself by wringing new efficiencies out of every part of the company. The sales reps will be able to use a Palm handheld device with an attached scanner to assess the inventory quickly and then use the i2 database to place and track orders.

A new website will help TaylorMade better serve its large Asian market. Vendors will be able to operate online without being hampered by time-zone differences. There will be no faxes waiting to be read, e-mails waiting to be opened or phone calls waiting to be returned. TaylorMade expects that the software will allow a product to move from factory to market in 18 months or less, instead of two years. That's important in a business in which market share is closely tied to a company's ability to be first to market with hot new products.

Hiram Walker, the Canadian distiller of Canadian Club and other liquors, just bought Manhattan Associates' new warehouse-management system. The company is convinced that the new system, which will cost about $650,000 over six months, will quickly pay for itself by improving the speed and accuracy with which orders move from the production line to shipping. Vice president for operations Dan DeMarco says, "You can't stop investing every time the economy looks like it's going to take a little downturn."

For technology companies, the giddy build-it-and-they-will-come days may be over. But even amid today's economic slump, smart managers know that it can be just as much of a mistake to spend too little as too much.

--Reported by William Dowell/New York, Hilary Hylton/Austin, Linda Kim and Daniel Terdiman/San Francisco and Collette McKenna Parker/Atlanta

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