Case Study: Coping with Success

From time to time you hear of a corporation you think you know nothing about until you realize you know it quite well. It is a somewhat tired joke to call The Hillman Group a nuts and bolts kind of business, but anyone who owns a house can thank this company for helping to hold it together. Hillman Group is an undisputed king of retail hardware, the company that sells a bulk of the nuts, bolts and other fasteners you buy at Home Depot, Lowe's, Sears, Ace and every other chain you've heard of right down to mom-and-pop hardware stores. It makes the keys and cutting machines that get you into your house and the "For Sale" sign you leave it with. It's likely that the nametag around your dog or cat's neck is a Hillman product.

Hillman is one of those American success stories, started with an Ohio couple's $2,000 franchise bet in 1964. A much larger private business was handed down to the founders' sons, who went on to acquire acquired Sharon Bolt and Screw and the Cole, Curtis and Axxess key-making companies. Current CEO Mick Hillman sold the company to raise capital but remained to run it, and with another sale and more acquisitions, Hillman Group today is an AMEX listed $395 million corporation of 1,800 employees that has grown revenues every year since founding. Hillman's model today is built on close relationships with more than 25,000 customers serviced by a sales and service force of more than 600.

If success was overwhelming at times, the reality was that Hillman had become a large company with a small company mindset, lacking formalized processes, documentation and clearly defined paths of communication. With growth and acquisition came the usual complement of IT infrastructure and systems needed to close the books and keep the business running. CEO Hillman reset the stakes, and two and a half years ago hired CIO Jim Honerkamp to lead the technology interface with the business, and backed him with the clout to ensure that a new approach would prevail.

"I was hired because the business was outpacing the technology portfolio, the applications, the infrastructure and the IT skills, and putting the business at risk," says Honerkamp. "We recognized that we had not spent enough on IT in recent years and needed to reinvent IT with a vision and a plan to turn IT into a strategic partner with the business."

Reporting Gains Momentum

As the business had grown complex, customers were demanding more automation and accuracy. Three separate transactional systems were supporting the business along product lines: there was J.D. Edwards World, for the letters, numbers, signs and engraving, a homegrown proprietary application for the fastener business and a third application for growing Canada and Mexico operations. There was no way to provide consolidated reporting. "Our executives were trying to piecemeal information together to make business decisions on spreadsheets," Honerkamp says. Finance had a definition of revenue, but so did sales and marketing, making a true corporate revenue report impossible. So, the first business application project addressed revenue, which was delivered with great effort after a common definition eventually came about through sit down meetings with multiple group representatives. The process revealed the fact that a major ERP implementation was needed to truly correct inherent deficiencies in infrastructure, and Hillman is in now into phase two of a four-phase ERP overhaul. But circumstances also dictated that the company was not in a position to wait for the project's completion to address some nagging issues. "We had to get some basic blocking and tackling done," says Honerkamp. "We decided that the best strategy was to find a tool we could layer on top of these disparate back-end systems that could drill down and produce consolidated reporting. I really felt the need to demonstrate some value add in a relatively short period of time."

After the usual due diligence and a search for a tool that could provide some consolidated reporting without heavy lifting on the back end, Hillman settled on Information Builders and its WebFOCUS enterprise tool. The first consolidated report offered a snapshot of daily revenue by product line and channel with a variety of drilldown capabilities. To spread the value, the reporting was offered via a Web-based corporate portal. If Honerkamp found the reporting tool to be the killer application he was looking for, he tends to address the portal and business intelligence in the same breath.

CEO Mick Hillman led the adoption charge, which spread by necessity to other executives facing areas of distribution, materials, operations, marketing, sales and the CFO's office. Each key stakeholder was addressed in turn with applications that now amount to more than 75 highly parameterized BI services. "Our CEO's participation is everything to our project," Honerkamp says. "The first thing he does when he arrives at 6:30 a.m. is to get on the portal and start looking at reports. He picks up the phone and starts calling my peers, the SVP of operations or the VP of distribution or the CFO and starts asking questions based on what he's seeing. Just by doing that he quickly forced everybody who reports to him to make us all more effective, a real trickle down thing."