Dave Muma faced a problem familiar to many small business owners: How could he keep the company, a family-owned insurance firm, profitable in an era of increasing competition? Dave, whose father, Jack co-founded the Royal Oak, Mich.-based Hudson & Muma over 40 years ago, decided the solution was specialization.
The company, which sells coverage for events like weddings and bar mitzvahs, moved into providing an umbrella for film productions. They started with the local Detroit industrial movie scene, but eventually landed actor/director Jeff Daniels' upcoming Escanaba in da Moonlight, -- "kind of like Fargo set in the woods," says Muma.
Servicing such niches as weddings and film productions raised a technical barrier, however, that Muma had to surmount as company chief information officer. Many of these specialty products, such as film insurance, sell best to a national audience. The Web seemed the best way to reach beyond Detroit -- especially if he could integrate his site with the rest of his office systems.
Muma incorporated the Web into his business in order to reach new customers and better serve existing ones. He is a rarity, however. Ray Boggs, vice president of IDC, is currently working on a survey that indicates only 1.9 percent of small businesses have integrated their Web sites to their back end. That percentage should almost double to 3.2 percent over the next 12 months, but it would remain a very small number of all small businesses. The rate drops even lower for companies with fewer than 50 employees, Boggs says.
But a Web site is only as powerful as the business working behind it. To get the most from a Web site, it needs to work in synch with the back end and not as a separate entity.
What It Takes
Hudson & Muma had been run for years on an IBM RS/6000 server that used a custom insurance application on the AIX variant of Unix. Somehow, data coming from the Web would have to work with that existing application. To further complicate matters, while all the existing customer data was stored on the Unix system, the program wasn't flexible enough to handle new prospects. It was a classic legacy-system conundrum.
"We had a choice to dump the whole thing and purchase a whole new insurance automation application from one of four or five vendors in that industry," says Muma, "or we could leap ahead of everybody and come up with something even better."
Naturally, he went for something better. Muma came up with a solution that would integrate the back end insurance application with the Web site, save him the chore of doing a complete technology overhaul, and give him a flexible way to address the different needs of both current customers and prospects. Rather than trashing the existing system, he chose to split the chores that needed to get done and handle each in a different manner.
He began by separating the prospects from the existing customers. Part of the Web site (www.insure-all.com) that's used to collect data from prospective customers is hosted at the firm's ISP. When someone inquires about wedding or bar mitzvah insurance at the site, the information is written to a file on the ISP's Web server. One of the NT machines at Hudson & Muma automatically retrieves a copy of the file daily via FTP and adds it to their new Microsoft SQL Server database.
Once in the SQL Server database, Hudson & Muma agents can easily access the data within standard Microsoft desktop applications. They can, for example, grab the e-mail address and send follow-up messages to the prospect with additional information.
One of Muma's staff developed a data import engine using Microsoft Visual Basic Professional 6.0, a standard programming tool. The engine automatically moves the information to the old RS/6000 Unix database when the prospect becomes a customer. "The Unix database is a lot faster," says Muma, explaining why he didn't move everything over to the SQL Server. "It just really cooks."
Another part of the Web site that is used to communicate with existing customers was hosted in-house. This portion of the Web site gives existing customers a chance to review their policy expiration dates and other information. To accomplish this Muma had to set up the RS/6000 to automatically generate a daily report of updates that are sent to the SQL Server and then posted to the Web site.
Hudson & Muma was able to accomplish the entire integration by simply adding on to the technology they already had, but they may have had an advantage. "[Integrating a back end to the Web] might be less difficult for a service business because they don't have the inventory aspects," says IDC's Boggs. "It becomes a pure billing opportunity. Muma can get away with this once daily posting of data because he's not running a business that sells a physical product."
The skepticism of most small companies is understandable, according to Boggs. When he puts himself into their shoes, he looks at it this way: "In my head it makes sense," Boggs says. "Web orders flow into my regular receivables and processes. In my heart, I'm thinking 'Oh, man. That's going to take a lot of work. You're revealing me to be the flawed manager that I've long suspected I was but dared not confront fully.'"
Muma may be uncommon but only because he was willing to question his own assumptions, about cost and complexity. Now when he meets fellow small business owners at local events, he tries to persuade them that they, too, can integrate the Web into their businesses.
"I end up having to get them over their misconceptions that it can't be done without thousands of dollars and 50 to 60 programmers," says Muma, who only has a tech staff of two working under him. "Some of these possibilities are really quite simple. It's not all just smoke and mirrors."
Muma believes that the company will convert to Microsoft products at some point, but he views his decision to split existing customers and prospects and to find a technology solution for each as crucial. Setting up the prospect data on the SQL Server has gotten him halfway home.
FrontRange Solutions (formerly GoldMine Software)