The Goldilocks economy–not too hot, not too cold–is a memory.
The stock market is jumpy from accounting scandals.
The Internet no longer is a flashy new toy that makes 20-somethings rich while keeping seasoned execs awake at night.
But the notion that Internet technology can make people more efficient is alive and well.
And that, in turn, can make the economy hum again.
This optimism is at the heart of Microsoft’s launch of its new Web-based software.
Visual Studio .NET makes it easier for computers using different programming languages to talk to one another, opening the door wider for automating such mundane tasks as ordering supplies.
Similar optimism is fueling hundreds of thousands of tiny companies like Servicys, a start-up based in suburban Bannockburn that operates in a decidedly less glamorous industry.
Servicys is an online distributor for a $20 billion industry known as “jansan”–short for janitorial and cleaning supplies–everything from mops and buckets to toilet paper and disinfectants.
Founded and bankrolled by consulting firm Bain & Co. with a handful of big companies, Servicys has 13 employees and gross sales of about $25 million.
While Microsoft was pulling out all the stops to promote its software at Navy Pier on Wednesday, Servicys Chief Executive Ken Creasman was in Michigan, pitching a prospective customer on how Servicys can cut cleaning supply costs by more than 10 percent.
Fourteen months ago, Creasman was setting up camp with nothing but a desk and a telephone in a corner of Bain’s office in the Sears Tower.
“My overhead is my shadow,” the 49-year-old vet of ServiceMaster and S.C. Johnson & Son said at the time.
About the same time, the nation’s 7,000-odd jansan distributors, mainly family businesses, were worrying about the flashy new dot-com exchanges that wanted to take away their customers.
Some distributors started their own Web sites.
Others looked to software companies to provide private networks to connect them with their customers.
Bain’s strategists took a different tack.
Rather than adding technology to an inefficient process, they set out to cut costs from every link of the supply chain.
First they inked a deal with UPS eLogistics for warehousing and packing.
Then they lined up big suppliers like 3M, Georgia-Pacific and Rubbermaid.
Finally, they hired a firm to build an online ordering platform.
Creasman signed the company’s first big customer in June: a five-year, $95 million contract with Ascension Health, a large Catholic hospital chain based in St. Louis.
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He came calling at the right time. The non-profit chain was looking to chop an estimated $64 million annually from the $1 billion it spends on supplies of all types. Servicys plugged into this larger initiative.
Technology is the least of the effort, which so far is making good on its promise to cut cleaning supply costs by 10 percent.
“Employees naturally are skeptical,” says John Doyle, president of Ascension Health Ventures, which decided to invest in Servicys. “They worry, `Will this take my job away?'”
Creasman’s no techie, but he’s an expert when it comes to where bits and bytes intersect with people’s lives.
He turned skeptics around “180 degrees,” Doyle says. “He understands this is a people business. He tells us stories using [employees’] first names, spouses and children’s names.”
Competing distributors, meanwhile, no longer are losing sleep about the dot-com exchanges, which are disappearing faster than Kleenex during flu season.
“I don’t think anybody fears the Internet anymore,” says Timmy King, tech officer for Pro-Link, a Massachusetts-based distributors’ consortium.
Still, some of his members are being prodded from a new direction.
“They come to me and say, `We have to get a Web site because some customer will only buy'” online.
And so the process goes, a seesaw of hope and fear, an incremental march led by giants such as Microsoft and upstarts such as Servicys.
“We’re still in the early stages,” Creasman says, “but it’s working.”
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