Forging
the Next Dot-Com Generation
by Melissa
Wells
Jagged Peak is using new Internet technology to solve old
business problems.
IN THE
COURSE OF PROVIDING INTERNET technology to B2B clients,
Paul Demirdjian, chief executive officer at Clearwater-based
Jagged Peak Inc., has witnessed the demise of many of his
peers in the dot-com industry.
 |
| Paul
Demirdjian, chief executive at Jagged Peak Inc. in Clearwater,
has created software that simplifies the complex process
of enterprise commerce management. |
"I
saw good companies with great technology go under, especially
in the Tampa Bay area," Demirdjian says. "It has
been a horror story from a technology perspective."
Fortunately
for Demirdjian, his is a happier story. His firm, Jagged
Peak, is a relative newcomer, having been founded in August
2000. "Jagged Peak is not a pure dot-com," says
Demirdjian. "We're using Internet technology to solve
old business problems. We've had a conservative business
approach following the traditional business model."
Although
Jagged Peak is a new company, Demirdjian had been developing
the firm's enterprise transaction management software for
years prior to that as owner and chief executive officer
of IBIS Solutions in Tampa.
Demirdjian
and Vince Fabrizzi, owner of the Compass Group, a marketing
firm based in Clearwater, had occasion to discuss their
business philosophies. "We talked about our vision
and saw that we were coming from different aspects of the
same business," says Demirdjian. "We recognized
that by combining our forces we would create a far stronger
synergy."
When
the firms merged two years ago, Fabrizzi became chief sales
and marketing officer at Jagged Peak and his partner, Dan
Furlong, became the new entity's chief operating officer,
positions they hold at this time.
The
services Compass brought to the merger include e-marketing,
distribution and a database management infrastructure. "It
made sense to combine our technology," says Demirdjian.
"My company went from a software firm to a business
process-driven company."
The
process Demirdjian's technology now drives can be described
most simply as providing real-time information on orders,
distributions, logistics and inventory across the enterprise
via the Internet to companies with global operations. The
EDGE system, the trade name for Jagged Peak software, tracks
the status of an individual order anywhere in the transaction
chain from order origination to fulfillment as well as providing
cumulative totals for all transactions within a company.
Essentially, the system shows the right hand what the left
hand is doing.
"A
client can have 40 warehouses," Demirdjian explains,
"and this system gives managers visibility on a global
basis. They can see in each warehouse, for instance, the
quantity of product that is available and where orders are
originating. This system helps them monitor pricing and
manage the logistics of product delivery from multiple locations."
But
Demirdjian says that this is much more than an inventory
management system. "Our client is connecting with a
new frontier of supply chain management systems, warehouse
management systems and customer relations management systems
all combined," he says. "And we provide visibility
so that no matter where you are in the chain everyone can
see the same picture. By connecting the different links,
anyone in the system has real-time information rather than
a fragmented, linear view from one department to the next."
Orlando-based
Marlin Group uses the Jagged Peak system to drive the processes
of its subsidiaries that provide a range of services to
support businesses that are selling products and services
on-line. "We had chosen another system but decided
that it was too much of an investment from a personnel and
software cost perspective," says Paul Mazzapica, senior
vice president of Marlin Logistics and ContactNet LLC.
Deciding
to investigate other technology in the marketplace, Mazzapica
had been familiar with Demirdjian's software while under
the IBIS moniker and was good friends with Vince Fabrizzi.
"Vince and I coached our sons' hockey team for several
years," Mazzapica says. "We won a state championship
together."
In November
Jagged Peak made a presentation to Marlin executives. "We
decided it could be the heart of our integrated solution,"
says Mazzapica. "We have integrated our accounting
and financial systems, warehouse and inventory management
systems and our customer relations systems using EDGE as
the central repository and traffic cop for our click-to-ship
business model."
From
its $30-million facility in Orlando, Mazzapica says his
firm uses the Jagged Peak system for "retailers outsourcing
their e-commerce to Marlin," Mazzapica says. "We
have a 60-person call center, that is soon to expand to
200 people, for getting orders and handling the logistics
of getting product out the door.
"The
Jagged Peak people truly understand the e-commerce environment,"
he adds. "The type of product they're providing will
drive the second dot-com generation."
Along
with making it possible for businesses to sell their products
on line, Marlin also has developed an e-retail Web site,
www.marlinhealth.com, which sells nutritional supplements
and fitness products. "We used this technology to come
to the market with our own e-commerce storefront to prove
the system does work," says Mazzapica. "This has
allowed us to capture several large companies that do everything
from office accessories to consolidating debt."
An advantage
with the Jagged Peak system, cites Mazzapica, is conversion
onto the system. "The start-up costs are low and the
time frame is shortened," he says. "It's a success-based
model in that the more transactions you do, the more you
pay. This allows you to grow as you can and the fixed costs
are minimal."
Typical
deployment time is 60 to 90 days compared to the 12 to 18
months that is the standard with Jagged Peak competitors.
And the EDGE software connects the systems already in place
within the company. "We don't throw out systems in
various departments but extract information needed by all
the other departments," says Demirdjian.
Another
contrast to the competition is system requirements. A Jagged
Peak client does not need to make significant capital investments
in new hardware and software. "The only investment
a company needs to make is a connection to the Internet
with a browser," Demirdjian says. "The flexibility
of our platform allows us to customize the system to each
customer. Our system replaces the need for order entry call
centers, buying space on a server farm, software licenses
and training personnel on the system. We support and augment
a company's IT department, we don't replace it."
From
its 80,000-square-foot headquarters in Clearwater, Jagged
Peak handles order fulfillment for many of its clients.
At the time of the merger the firm had 35 employees and
has grown to 49. "We added 10 engineers," says
Demirdjian. "We're not adding much staff. That's the
beauty of this technology."
Revenues
for Jagged Peak began at $3.2 million in 2000, grew by another
million last year and are projected to reach $10 million
this year.
Those
revenue increases have landed the firm on this year's Deloitte
and Touche Technology Fast 500 list at no. 164 and no. three
on the Florida High Tech Corridor Fast 50 technology list.
"This recognition is a validation of our efforts and
belief in the technology and evolution of e-business,"
Demirdjian says.
While
Demirdjian's chief goal at this time is broadening awareness
of the firm's technology, he does see trends on the horizon
for e-business.
"No
one had connected all the steps in the order fulfillment
process," he says. "Once that integration takes
hold, then the next step is measurements and from there
predictions. In five to 10 years a CEO will set goals at
the beginning of the month and the system will monitor how
the company is attaining them in real time. That way the
CEO can respond to market needs as they're happening and
not wait until the end of the month."
To develop
the measuring and predictive software Demirdjian plans on
aligning with other technology firms. "We'll evolve
with the market," he says. "We're seeing clients
demanding measurements and requesting velocity reports.
There's already good measurement technology in the market.
We're working on alliances with those firms in the form
of a strategic partnership."
One
such partnership already in place is a most important link
in the order fulfillment chain: UPS. "We have a strategic
alliance in place with them to provide tracking of orders
shipped," says Demirdjian.
Another
form of alliance forced on the company came as a result
of the events of Sept. 11. Some of Jagged Peak's clients
had to file for bankruptcy protection. "Several of
our multinational clients were impacted, especially in the
travel industry," Demirdjian says. "They had a
considerable drop in their activities with us. We worked
closely with our clients and became partners to work through
this with them. Now they're coming out of their problems
and we're even stronger in our relations."
Clients
using the Jagged Peak system are spread over the world:
North America, Europe, Africa and Asia. "Our system
can handle any language that the Internet supports,"
Demirdjian says.
Always
a significant challenge to a technology company is staying
abreast with new technology. "Our average year is 55
days," says Demirdjian. "Response time for keeping
up to date with the evolution of technology is very short.
We have to be ready to respond to the market by being nimble
and quick. We can't make mistakes."
Although
the dot-com industry has taken a hit, Demirdjian does see
a demand for services returning. "We were impacted
but have been able to manage through the process,"
he says. "I do see a momentum of growth in B2B. There's
as much corporate investment in B2B as there was in the
1998 to 2000 time frame. It had diminished but it's not
gone."
And
Demirdjian believes the best is yet to come. "There's
no industry we have captured or saturated," he says.
"We've just started. Our organization is client-centric.
All of our business processes are geared to supporting our
customers. We have a tight control on delivering the best
solution with optimal cost while maintaining profitability.
We're continuously adapting to the market."
And
more than likely Demirdjian is using the EDGE system to
do that, just like his clients.
