What It Means to Be A One-Stop Shop

Hartford Computer Group, Inc. (Hoffman Estates, IL) is not a POS (point of sale) VAR, even though the company recently sold 1,500 Epson receipt printers to a major national retailer. And although Hartford sold and installed 160 SATO bar code printers to a retail paper company, that doesn't make it an AIDC (automatic identification and data collection) VAR. "We are primarily an IT services and hardware reseller," explains Suzanne Mersch, senior VP of sales and marketing at Hartford. "We sell a full spectrum of mid-range and low-end IT products and peripherals such as desktop computers, laptops, and servers."

Actually, how Hartford is defined probably depends on which division of this $350 million company a customer deals with. The Hartford Distribution division acts as a VAR, Hartford Technology Services as an integrator, Enable Systems as a software developer, and Surplus Village is the company's IT remarketer division. These divisions often work together on projects, thereby providing customers with a full range of IT infrastructure products and services. Obviously, having the capability to offer this broad range of services is a strong selling point. Yet, Hartford knows it takes more than just a one-stop shop concept to entice customers. That's why the company offers time- and cost-saving services such as a national repair network, an e-procurement Web site, and a Web site for refurbished equipment.

Provide A Single Point Of Contact For Repair And Service
When you talk about value-added services, hardware repair usually is listed as one of the most lucrative. Hartford offers two service plan options. First, the depot repair service includes a hot-swap component. In this scenario, Hartford swaps a working piece of hardware (e.g. bar code scanner) for a broken one within 24 hours. Once the broken hardware is received at Hartford's repair depot, the item is fixed and stored in the customer's inventory, if needed for a future swap. Hartford maintains a separate inventory of items for each customer with a depot contract. By keeping track of historical failure and breakage rates on products, they know how much inventory will be needed to accommodate clients' hot-swap requirements. "The depot contract works well for customers who don't have the expertise to repair products such as AIDC hardware, which can normally be shipped overnight," Mersch explains.

Hartford's newest enhanced service offering is its national repair network. By partnering with a national service integrator, Hartford now provides on-site service to customers throughout the United States. However, since Hartford conducts all the service coordination and dispatching, the customer never realizes more than one company is involved in the service call.

According to Mersch, one of the biggest advantages a Hartford service plan offers a client is that all the repair and service is provided by one source. By paying a flat fee per month (based on the amount and types of products covered), Hartford customers don't have to bother dealing with multiple manufacturers for repair or service. "Our service business is absolutely growing because customers want this single point of contact," Mersch comments.

Why E-Procurement And Not E-Commerce?
Service isn't the only part of Hartford's business that offers the value associated with the single point of contact concept. For example, through its Enable Systems solution, Hartford offers customers one online source for purchasing from some of the nation's largest IT manufacturers and distributors. This Internet portal allows clients to search and compare (e.g. high price/low price, feature/function) 500,000 SKUs (stock keeping units) representing more than 2,100 manufacturers. In fact, for POS and AIDC products, companies like ScanSource (Greenville, SC) and HHP (Skaneateles Falls, NY) download their entire catalogs to the private IT Marketplace. Customers that commit to Hartford for all their IT business may choose to pay a monthly subscription fee which earns them the right to buy products at Hartford's costs. Customers not paying this fee are offered products at minimum levels of markup. "We didn't want a consumer Web site where anyone could go and check prices," Mersch explains. "In other words, this is a B2B e-procurement site rather than an e-commerce site."

Once a customer places an order on the Enable Systems site, the order information is immediately sent to the vendor and Hartford's billing system. This process eliminates a lot of the paperwork and time associated with a normal transaction. Research firm Killen and Associates estimates e-procurement solutions save a minimum of 5% of a company's operating resource costs. In the average Global 2000 company, this level of savings results in a 28% gain in profits. Furthermore, research firm Gartner estimates B2B revenue worldwide to reach $7.29 trillion by 2004.

The site's customer-specific nature is really how Hartford clients can save time with the purchasing process. For example, if a customer has an agreement with a vendor for specific pricing, then only those approved prices will appear to the user. "Most companies that are buying IT products have a specific approval process," Mersch says. "We can customize this site per their particular approval process and limit access to only those employees approved for purchasing. Furthermore, we save them time by giving them the capability to view past orders, track current orders, and create customized reports [e.g. view spending trends/patterns]. We have hundreds of customers signed up for this tool."

Buy It Back, Refurbish It, Resell It
Hartford has been involved with the leasing of equipment since the company opened in 1978. As products came back after a lease ended, Hartford refurbished and resold them. The same is true today for many of the company's IT and AIDC products. "Given the significant number of companies downsizing or going out of business, the IT industry is flooded with nearly new [and sometimes completely new] equipment that is no longer being used or needed," Mersch states. "Thus, a very viable industry for the secondary remarketing of this equipment has been created." Via the Surplus Village Web site, Hartford provides full-service end-of-life options for clients' equipment. These options may include remarketing (e.g. cash back to the original owner), redeployment across the customer's organization, sale for parts, donations, or EPA (Environmental Protection Agency)-certified disposal.

For this site, Hartford also buys various types of products (e.g. everything from UNIX servers to consumer products such as digital cameras and DVD players) that were returned to national retail electronic stores. While some of this equipment was returned because of a flaw or problem, much of it is still new. After Hartford technicians refurbish and test this equipment, it is listed on the Surplus Village Web site, which is a traditional e-commerce site. Approximately 30% of the company's total sales revenue is attributable to Surplus Village.

Hartford will probably never be mistaken for just an AIDC or POS VAR, and that's fine with Mersch. After all, by following its current path of focusing on diversification and profitable value-added services, Hartford is racking up positive sales growth numbers each year.