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Letter from the Editor By Jerry Griffin Making the Numbers Work "Informing and Empowering Your Workforce" An idea whose time has come By Gavin Freytag Getting the Money "Managing Your Loan Officer" Advice from a successful lender By Richard Eckels E-Commerce: The Revolution "Changing Business Models in Mid-Stream" An issue you will face By Eric Anderson Exit Strategy "Finding the Best Buyer for Your Company" Leaving successfully By Bob Shortle Reflections "Are You Ready" Are you ready? By Jerry Griffin	E-commerce: The Revolution Despite having been involved in the on-line business since 1984, I am still astounded by the magnitude of the Internet revolution. Now we are beginning to see long-established companies—like ACE Software— that can deliver their entire service on-line. Revenues increase, costs drop, and every one benefits. — Jerry Griffin Changing Business Models in Mid-Stream By Eric Anderson Executive Summary: ACE Software used to compete primarily in a regional marketplace for school administrative software. Geographical location was important. Now, through the Internet, the boundaries are dissolving. Although the Company will continue to be able to provide services at the customer’s site, those that make the transition to the hosting model will find that their fixed costs will fall dramatically. For ACE, the benefits are access to a much larger market and an increase in staff productivity. Mike Uhrin understands first-hand how the Internet is changing everyone's business. His company—ACE Software, Inc.—has long been a leading regional provider of management software for school districts in the Midwest. Now, ACE is moving quickly to become a national powerhouse. Its route is the Internet, and its goal is totally to change the way school districts use software to manage their operations. Mike Uhrin (pronounced UK-ran) founded the Grove City-based firm 22 years ago to develop school-management applications. Historically, it was a niche market filled with strong regional competitors. "Our business model was well understood," Uhrin explained. "Every sale hinged on whether we could handle state-mandated reporting, and whether we were close enough to provide a comfortable level of support. Proximity meant a great deal in closing a sale," Uhrin said. Reaching The National Market With A New Business Model But because ACE has been a leader in developing Internet-connectivity for its products, it is now regularly reaching the national market. The Internet dissolves geographic boundaries, opening a much larger market to companies like ACE—a classic example of "leveling the playing field." The firm's new student management system (called ADM-2000) allows districts to manage administration via the Internet. With ADM-2000, a teacher or principal can log into the school's database from any Internet connection. Users can input grades and attendance from home, from different classrooms, or from remote locations. However, here's where it gets radical: ACE will host a school's entire database on ACE‘s own servers. "Schools should be in the education business," Uhrin said. With Internet connectivity, schools eliminate the headaches of managing a server—the high-end hardware, in-house technical staff, wiring, computer downtime and all the rest. With the Internet, the server can be in the next room, the next city, the next state or wherever. For small to mid-size school districts, there are considerable advantages to the hosting plan. The district not only saves the hardware cost, but also eliminates the staff time involved in maintaining the server and the headache of finding qualified server administrators. For various reasons, many districts will continue to favor the school-based server model, which the company plans to continue. At the same time, ACE sees great potential for attracting new customers with its hosting plan. Internal Advantages To The Change Not surprisingly, ACE is also moving many of its own internal functions to the Internet. Among the first to move are the internal company calendar and the entire help desk function. Customers will be able to request and schedule additional training, look up answers to their questions, pose questions, order custom programming and check on the status of those requests, all on-line. "Taking these functions to the Internet has already allowed us to better manage our business. We eliminate internal paperwork, reduce errors and manage more efficiently. The goal is to sell more higher margin services by making it easier for customers while reducing overhead by allowing us to better manage the process," Uhrin said. The company's focus is now managing growth without adding to expenses. "The most expensive aspect of the software business is personnel costs," Uhrin said. " The new Internet-based software will help us realize a 25 percent efficiency gain for our support staff and a 15 percent gain in our programming department. These tools will let us support a number of new customers without increasing staffing levels." "An e-commerce approach gives us an advantage over our competitors," Uhrin said. "It makes it easier for customers to interact with us. It lets us manage better. Ultimately, it will reduce expenses while generating more revenue. That's what successful businesses are all about." Many companies in Central Ohio are just beginning to use the Internet to enhance their sales and marketing efforts—on-line catalogs being a prime example. Others, like ACE Software, are finding that every aspect of their business is being revolutionized. Where are you on this curve? — Jerry Griffin
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