Hard Choices

By David F. Carr  |  Posted 2003-01-17 Email Print this article Print

If it's possible for an office chair to create buzz, Herman Miller's Aeron did. But it's still counting on 3-D technology to juice sales.

Hard Choices

Z-Axis also could prove to be one of the most problematic technologies for Herman Miller to continue to support. To solidify a proprietary advantage, Herman Miller purchased exclusive rights to the software. But that means Herman Miller also bears 100% of the cost of maintaining and improving z-Axis—tens of millions of dollars, and counting.

Conversely, the virtue of z-Axis is specifically that it exists to sell Herman Miller products, and only Herman Miller products. Rather than trying to create broad-based tools for many customers, Computer Human Interaction is currently seeking similarly exclusive relationships with customers in other industries who want to offer their salespeople something unique.

For Herman Miller, there is a hazard: Competitors may learn to deliver similar capabilities to their dealers, and for less money.

"When it first came out, clearly it was something that wasn't available elsewhere," says Malcolm Fields, CIO at hon, the rival office furniture-maker. But manufacturers can work with independent software vendors of specification tools such as 20-20 Technologies of Montreal, Canada, and those products keep getting better, Fields says.

Steelcase, which has developed a z-Axis clone called Vspec, acknowledges it is reconsidering development and support for that tool. Ken Tamelin, director of e-tools at Steelcase, says Vspec is not a major focus of his compared with providing better Web-based tools for dealers and customers. Steelcase continually evaluates whether it can replace proprietary technologies with off-the-shelf solutions, he says.

Dennis J. Insogna, vice president and general manager of BKM Total Office, a Steelcase dealer based in Connecticut, says he believes the decision has already been made to ditch Vspec in favor of a system based on 20-20's Giza. Giza can be used to do the same sort of job as Vspec or z-Axis, but Insogna likes the idea that it supports the catalogs of multiple manufacturers.

"Vspec is more of a parochial solution," Insogna says. "I want to offer my customer choices. If I don't offer choice, I have a losing proposition."

Herman Miller dealers tend to express a higher degree of loyalty to z-Axis, which they say is easier to use and does a better job of enforcing rules about how different pieces of furniture should be purchased together, than Giza or similar tools. But the balance of power may be shifting.

In June, furniture manufacturer Kimball International previewed its implementation of a new 20-20 product—20-20 Office Design—at the NeoCon furniture industry trade show, and captured a "Best of Show" award.

Kimball, of Jasper, Ind., plans to use the software exactly the way Herman Miller has traditionally employed z-Axis, says Kevin Bidner, 20-20's vice president of commercial sales for North America. Kimball's implementation, dubbed eMagine, will allow salespeople for the Kimball Office and National brands to make more dramatic presentations and close sales faster, he says. By investing development time in building in the configuration rules for its products, Kimball has the opportunity to match the advantages that have long been claimed for z-Axis, Bidner says.

Even with a specific implementation like Kimball's, the underlying technology retains the ability to support product catalogs from multiple manufacturers, giving dealers more flexibility, Bidner says. In addition to product catalogs created specifically for the new product, 20-20 Office Design will also import Giza files.

Further, 20-20 Office Design also claims some functional advantages, including the ability to dress up 3-D representations of a design with textures and colors that match the walls and carpet of the real space, along with an "auto-decorate" feature that throws in potted plants and people for a more lived-in look.

For z-Axis to keep pace with these developments would presumably require millions of dollars of future investment by Herman Miller, which has been trying to cut back on its technology diet. Z-Axis has already cost tens of millions of dollars, and fiscal 2002 operating costs reflected $15.6 million in accelerated depreciation related to retiring the "classic" version of z-Axis and replacing it with z-Axis: The Next Generation, the version now in dealer's hands.

A weak economy may not seem the perfect time to invest for competitive advantage. Companies that have invested in building a technological lead may even feel entitled to cut back, says Bill Rosser, a Gartner Group vice president and research director.

But that may be exactly the time to invest in unique technology. Rosser says it often makes sense to maintain an area of strength, rather than sit back. "If you have an edge in some software or configuration tool that makes you different or better, then try to maintain that edge," he says.

At the same time, Herman Miller must decide whether using proprietary technology like z-Axis is essential long-term, Rosser says. "There comes a point where the value you get from being ahead is comparatively small,"he adds.

Right now, though, competitors will not find it so easy to leapfrog Herman Miller, says Mercer Management's Bovet. "The brilliance of Herman Miller was how they put the whole thing together," he says. In other words, just because a competitor fields software that may have a feature or two z-Axis lacks, it doesn't mean they've replicated the whole "value net." In Miller's case, the laptop software doesn't just print out an order. It ties the sales right into manufacturing and supply-chain processes, Bovet says.

David F. Carr David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.

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