Know Thyself

Reality-check time: Before you make a large investment in the next big thing, make sure it’s true to who the business is, who its customers are, and the corporate vision for the future.

The fact is that not every business needs to be up to its neck in the latest and greatest technology to successfully serve its customers and support its goals. True business-technology alignment lies in knowing where the application of technology will make a competitive difference in your company, and being prepared to meet those needs — not in driving forward progressive initiatives simply to keep up with the latest trends.

ACR Group Inc., one of the nation’s largest distributors of heating, air conditioning and refrigeration equipment, parts, and supplies, hasn’t seen any downside from subscribing to that philosophy. The publicly traded company in a consolidating industry, which is serviced in large part by mom-and-pop shops, generated more than $200 million in sales in fiscal 2006.

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And it did so on the strength of a business model that gives autonomy rather than complex tools to the individuals who run its 54 branch locations (which directly service contractors and are operated as separate profit centers); and empowers sales people to make decisions without requiring a big honking CRM system and its associated overhead. It also works with its customers the way they want to, and most of them would rather pick up the phone than view inventory over the web or place orders online.

Seeking Simplicity

The company has grown rapidly, both organically and through acquisitions, and especially throughout the Sunbelt. IT centralization and system scalability is critical for growth in its very decentralized business. It relies on that old stalwart, an IBM AS/400, running Infor’s ERP software for distributors to provide a single, centralized platform that offers everything ACR says it needs.

The software enables executives to have a real-time view and analysis of sales, invoices, and gross margins from every one of its selling locations. Branch offices connect to the system via a frame relay network, while mobile sales staff have wireless access to information on the AS/400.

CFO Tony Maresca is the first to acknowledge that ACR’s set-up isn’t leading-edge in its industry, when compared to some of the other big players. The company, which spends less than 1% of its revenues on IT, admittedly tries to be prudent in its expenditures.

“There are people who unquestionably have more capability than we have,” he says. But some of them also have more complexity that poses additional burdens around IT management, which has to service multiple platforms, while ratcheting up demands on the end user. ACR’s software choice was driven by the platform’s relative simplicity.

“We don’t need college-trained people to get business data for the people running our branch operations - they can do it themselves,” Maresca says. “Our mission is to provide the tools they need to take care of their customers and manage their assets — they don’t want any more than they have to have.”