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Managing New Technology

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Very few people go into the publishing business because of their love for high-speed technological change. And yet here we are in a field that has been a leader in using new computer applications for several decades, and that is now experiencing a rate of change that is dizzying.

I have devoted much of my time over the last two years at Independent Publishers Group to implementing–some IPG employees would say inflicting–technological innovation. I have no credentials as an information-technology expert (like many of you, I was an English major), but I think I have learned some valuable lessons about the special problems attendant on managing this sort of change; and I am even willing to hazard some guesses about what might be in store for us, judging from recent developments, in the near future.

The technological initiatives we chose and implemented were a much more computerized picking-and-packing system for the warehouse, and a very large title-management database. And the hard part, it turned out, was not dreaming up or locating the right software and hardware, although this takes time and care. The hard part was getting people to use the new stuff the way it is supposed to be used. A recent news story noted that an FBI computer system that cost $10 billion to develop has been rejected as useless. This, I am told, is the fate of somewhere between one-third and one-half of the new systems companies have tried to implement.

For Better Picking and Packing

Twenty-four-hour turnaround of orders is now obligatory in the book business. In a world where most stores stock only one copy of a title, your book, once that one copy sells, will be unavailable at that store for all the days it takes to get another copy on the shelf. Slower turns mean lower sales.

Our old picking-and-packing system was not up to today’s demands, and we had tweaked it as far as we could. To create a new system, we had to examine first principles, such as: What other products are enough like books to provide useful models? Where and how should an invoice be created? What is the most efficient way to get the right books and the right invoice into the right carton?

Once we had a new system cooked up in the abstract, we worked with Wayne Olson, the founder and programming genius at Cat’s Pajamas (we use their basic publishing package), to write the code, and we chose a materials-handling company to recommend and install the proper equipment.

Taming Title Information

The need for a title-management database arose over a long period and required a different sort of solution. We started with the realization that four or five people in our office were creating and maintaining spreadsheets with the same title information on them. Or almost the same information, since discrepancies inevitably creep in, which, in itself, is a very big problem in the information age. Why not have just one place for title information–which becomes, by definition, the authoritative information–and eliminate all that duplication of effort?

With a home-grown Access database, our catalog became just a report with tags that drive page layout software. And a complicated Web site was another sort of report, easily updated. And the title cards, spreadsheets, and the like required by the chains were just reports from the database too.

But then our customers began to want complete information about all our titles (cover images, book specifications, prices, catalog copy, reviews–for backlist as well as frontlist), and they wanted it exactly the way they wanted it, so it could slide smoothly into their particular information systems. (When your major customers are bigger than you are, they make the rules and you do the heavy lifting.) At that point we had to abandon Access and go to a turnkey system, in our case QSolutions.

With the help of this vendor, IPG now sends 1,700 gigabytes of title information twice a month to 50 different customers, which means that the titles we handle are easy to find and to search, and that the information about them is accurate.

Handling the Hard Part

The simple truth is that any complicated new system will be more trouble than it is worth–for months. It will be one step forward and two back. Your employees have probably already been through this process of technological change several times, and they didn’t like it. It is not that they are lazy or stupid (I have yet to meet anyone in the book business who is either), or even technologically averse; it is that you have already given them too much to do, and this latest miracle timesaving innovation threatens to bury them.

And yet you have no choice in this matter. If you are not willing to take a day to save a week of work, a week to save a month, etc., you will soon be unable to compete.

Judging from my experience, it pays to keep several facts in mind as you attempt to manage new technology.

Technological change has to come from the top.

This is so, first, because the adoption of a new tech tool is more a high-level business decision than a judgment about the utility of the tool. There are thousands of “solutions” out there that could benefit your business. You have to decide which you really need and what costs in time and money are acceptable. The person who handles your IT problems has an essential role to play in helping you implement a new system, and perhaps in helping you choose the best one, but that person is no more qualified to tell you what to implement than your dentist is.

Secondly, change must come from the top, because it simply will not happen unless the person pushing it has a lot of clout in the organization. Otherwise, for the human reasons cited above, your staff will sandbag the innovation until it dies a lingering death. The most highly qualified, highly placed IT professional probably won’t have sufficient clout to get the job done.

Important technological innovations will create new power centers in your company.

Even highly successful implementations of technology will peter out if not carefully tended. The care and feeding of any important system has to become an explicit part of someone’s job description, an essential component of how that person’s performance is evaluated. Put someone in charge; but be careful whom you choose, because such positions become power centers.

Our new picking-and-packing system created a job at the warehouse for which we do not yet even have a title. The person who holds this job coordinates a large flow of information back and forth between the warehouse and the office and keeps the system running smoothly. If you need to have certain things done at IPG, you have to talk to him.

Likewise, our new title database brought into being a database manager. The amount of information she controls is growing exponentially and is used in every aspect of the company. Information is power, and she now has a lot of both.

The unintended consequences of technological change will be more important than the intended ones.

You bring in new technology to solve particular, known problems. But once you have brought it in, and if it works, you find yourself standing in a new place from which you can see the necessary next steps more clearly.

This was the story of IPG’s run-up to a full-blown title-management database; one thing logically led to another. Likewise, having installed a sophisticated pick-and-pack system, we soon found ourselves solving problems we had not even known we had: we saw ways to anticipate heavy returns, to bring up backstock just as it was needed, to position fast-moving titles properly, and so on. We had wanted the new system to speed up the shipping process. We discovered that it allowed us to greatly increase overall efficiency as well.

You will be managing technological change for the rest of your career in publishing.

Things are not going to settle back down. In just a few decades Wal-Mart grew from a single discount store to the biggest employer of human beings on the planet, mainly by implementing computerized methods of supply-chain management. The power of this technology has not escaped the notice of our big book customers, and they are insisting that we adopt it.

So far, only the back end of the Wal-Mart approach is being applied in the book business, and only the larger trading partners are applying it. Using EDI (Electronic Data Interchange), they transmit purchase orders that allow vendors to produce invoices almost instantaneously. POA (Purchase Order Acknowledgement) tells the customer that the PO has been received and which parts of the order can be filled, which not. ASN (Advance Shipping Notice) tells the customer when the books in question actually shipped and what title or titles, and how many copies, are in every carton. When publishers’ and distributors’ warehouses are responsive enough, this process turns orders around in 24 hours and provides important information to the customer as the process unfolds. (For information on EDI transactions and warehousing best practices, visit www.bisg.org.)

The front end of supply-chain management–at the interface with the end user–is nowhere near as far along as the back end, and change here will be much more difficult to implement. At the larger stores, when a book is scanned at the cash-wrap, the fact of that sale is immediately captured by a computer (this is how BookScan gets its information) and becomes available at the bookseller’s central office.

In a fully evolved supply-chain system, this little piece of sales data initiates a complex but almost instantaneous conversation in the tiny mind of a huge computer carefully programmed to examine a wealth of information.

First, should the title be restocked? How long did this book sit on the shelf before it was sold? How has the title sold at other stores? Are its sales on the upswing or the downswing overall? Are comparable titles selling better? How will time of year affect the title? What new titles are in the pipeline that will require shelf space? Is this an A store or a B store for the title’s subject matter? And no doubt much else. The big booksellers are mining years of past sales data to discover the best possible decision tree for these decisions.

If the choice is to restock, they will consult many databases to find out whether there is a new edition of this title or a new price, where the title can best be sourced and on what terms, whether it’s in stock, and, if not, when it will it be. The information must be current and accurate or the whole system blows up.

Once the computer has resolved these issues–there is nowhere near enough time in this process for a telephone call, fax, email, or any other sort of human or quasi—human interaction–an electronic purchase order is sent on its way, and a replacement copy is on the shelf in a day or two.

How will new titles be ordered initially in this new robotic world? I think there will still be room for human beings in the title-acquisition process. But there surely will be few orders, from the largest customers at least, for the books of publishers who cannot perform the steps in this complicated new dance.

The publishing business is at bottom about books, not technology.

The gains in efficiency achievable through electronic supply-chain management are stunning, and they must be realized if books, in the not-so-very-long run, are going to have a chance of competing successfully against other forms of entertainment and enlightenment. We are all technologists now. Soon everyone is going to know the price and availability of everything.

What about the value of anything?

Let’s keep hiring English majors.

Curt Matthews is CEO of Independent Publishers Group and of Chicago Review Press. Visit www.ipgbook.com to learn more.

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