Case Study Epilogue VLM

This Epilogue was written in October, 2003, after a telephone interview with Gerry Malone, Director, VLM . It's purpose is to review progress since the original Case Study, which was produced in the first quarter of 2002.

The introduction of an eBusiness strategy has effectively changed VLMs business model. The company operated in the traditional print sector until 1999 when VLM undertook an eBusiness development. VLM introduced an online print portal for customers. The portal allows customers to build their print documents online and automatically submit them to VLM for printing - with the minimum of human interaction.

General Update on situation since implementation
The company now has five fulltime people working in the area of IT. It has rolled out its online print portal to a number of customers, particularly its increasing estate agent base in the UK. The software tool set which VLM developed as part of its eBusiness strategy remains at the core of each new technology development undertaken by the company. When dealing with larger customers in the UK, VLM have found that they have had to develop additional tools to integrate with the customers business processes. These tools allow for additional functionality or provide integration with customers systems. Once developed VLM make these additional tools available to other customers, thereby increasing the number and functionality of software tools available on the portal.

The company recognised shortly after its original eBusiness development that a more robust database platform would have best suited their needs. The company is now in the process of re-engineering their database to facilitate growth in functionality and increasing customer usage.

During the eBusiness development VLM had targeted the financial sector as an area of potential growth for the company. The system developed by VLM was ideal to the volume of print produced by the financial sector. With some additions to its eBusiness system VLM has already targeted and moved into this sector, having established a plant in London to service it.

VLM's original eBusiness development took place18 months ago. The company had envisioned that customer training would be one element of the eBusiness strategy it would have to implement with customers. The company has found that what was perceived as a major training issue hasn't materialised. There has been a significant shift in the acceptance of eBusiness and now the combination of more IT capable users and an intuitive system has eliminated the need for online training. The company currently supports users of the system with online help files and a very much reduced help desk.

Available Measures of Success e.g. cost reduction, improved efficiencies.

VLM have been able to measure the success of its eBusiness strategy by the success of its Birmingham plant and the addition of a new plant in London. The company believes that VLM has proven through the use of its Internet model that it can sell volume print very effectively and get the gross margins it set out to achieve. With 10% of the UK estate agents market VLM have provided agents with an effective quality alternative to in-house printing by using Internet technology.

Since the implementation of the eBusiness system VLM has seen very good savings in direct labour costs, particularly when compared against costs in the traditional print sector. VLM has also found that its direct sales costs as a percentage of sales are comparative to the norm within industry. The company believes that this will reduce even further when the company's current growth phase levels off.

Whilst the company has encountered longer than expected sales cycles, overall sales costs are reducing. Once a customer has adopted VLM as its digital print provider, there is a high degree of lock in and in a number of cases customers have requested VLM to manage all of their print requirements.

Changes in views/perception/understanding of business and issues
The biggest single change in its understanding of business since the eBusiness implementation has been the change within the company's sales cycle. VLM is now spending longer in its initial sales contact and presentation of its eBusiness solution to clients than it did when it operated in the traditional print sector. However the time spent by VLMs sales staff in follow-up sales with customers has reduced, and has allowed the sales staff more time to focus on additional product offerings rather than servicing existing contracts.

Changes in work practices/business model
VLM has made a significant change in its business model. In 1999 it opted to develop an eBusiness model, the development and implementation of its online print portal provided the foundation for the change in VLMs business practice. The company has moved away from its original trade in the traditional print sector, forgoing sales in this area, and is now focusing exclusively on its eBusiness trade. The success of its plant in Birmingham and the launch of its new plant in London have reinforced the company's adoption of its eBusiness model.

Any future planned developments.
VLM is committed to continual and long-term investment in technology. The company has developed additional software tools, which will be rolled out for use by the financial sector.

The use of the company's portal by customers in the UK has resulted in increased volumes of print processing in its Birmingham plant. The capacity of the company's online software and backend process has attracted attention from companies from around the world. Approaches have been made to the company for the licensing of its software. VLM is currently considering the implications of licensing its eBusiness system but it is an area the company is likely to develop in the near future.

Written by Claire Cunningham, Aura Internet Services