ResoDirect keeps busy staying ahead of the curve

Reso irect which handles the video duplicating, on-line and on-screen hopping, shipping and accounting for major media players like NBC, CBS, the BBC, The Corporation for Public Broadcasting, WGBH, WNET, A&E, the History Channel, The New York Times, HGTV, Golf Channel, Kiplinger, the Zagat Survey

ResoDirect was founded as Resolution in 1982 by four principals who sought to merge and integrate two successful companies into one. Earth Audio, a recording studio owned by Mike Couture and Bill Schubart, and Blue Jay Films, a film production company owned by Jim Taylor and Brian Doubleday (later bought out at his request), were merged.

A limited private offering produced about $120,000 from 20 or so minority shareholders and a capital lease of another $250,000. This created enough asset purchase and operating capital to acquire television production equipment and a year's cash flow to achieve and sustain profitability.

Resolution opened its doors in the fall of 1982 with five employees engaged in field TV production, a recording studio and primitive audiocassette duplication capabilities.

Within the first year a modest, but lucrative, television series production contract was landed and Resolution began a successful career producing 26 episodes of The Joy of Gardening, still airing in syndication 15 years later. This gave the fledgling company a sustaining revenue stream from which to develop.

Currently, the South Burlington company employs 265 people fulltime, another 85 people part-time, and had sales of $27.6 last year. One part of the company, the television production company, which makes programs for clients like the Discovery Channel and Public

Broadcasting, spun off in July into an independent company called Resolution Productions, Inc.

"We are unique," said Schubart, now CEO and chairman of ResoDirect. "We are the leading, if not the only, such integrated outsource for broadcasters, cable programmers and midsize media publishers in the country today."

The company changed its name to ResoDirect last summer. "We wanted a Web site that really reflected what we do, and Resolution was not available," Schubart said, "So we chose ResoDirect, and that is the brand for our services. Our legal name is still Resolution."

WHAT IT DOES

ResoDirect is a complex company that provides complex services to its customers, Schubart said.

"I can describe it this way," Schubart said. "First, say you're watching the History Channel or CBS. They come on and say, 'Would you like to buy the full video set of Horatio Hornblower'? You then either call the History Channel, call up their website or look in their catalog and order the videos. From that point on, you're working with ResoDirect. We a swer the phone, take the order, and take the credit card number. The order comes into our system. We pull the videos from the inventory, pack them, ship them to you, and report to the company about the transaction. That's how the general public would know about us."

The company performs four functions.

"The first is order management," Schubart said. "It means we're handling orders from consumers, but also from

retail stores. So we may get 6,000 or 7,000 orders a day from individuals, and 200 to 400 orders from Amazon.com, Wal-Mart, Costco, and mom-and-pop stores. We're handling all of those orders. The consumer orders come in through 800-numbers, the Internet, mail and fax. The wholesale orders from stores may come in through fax, mail, phone, or electronic data interchange (EDI), like Wal-Mart's computers talking to our computers."

The next function is manufacturing and inventory management.

"We're a video cassette duplication service," Schubart said. "We have the technology to copy 10 million video cassettes a year. Our clients have books, music, teaching guides, school course curriculum, clothes - virtually anything they handle, we take care of. If you go through our Vermont warehouse, you will see all kinds of media, and any products related to that media that client might sell. For example, a health publisher might also sell a whole bunch of products, and we would handle those as well."

The third function is called "fulfillment and distribution."

"Fulfillment is picking, packing and shipping for individuals, and distribution is doing it for stores," Schubart said.

The company's fourth function, in many ways its most sophisticated and complicated, is managing its clients business information and money.

"If Amazon.com places a huge order, to the BBC, we're picking, packing, shipping, billing and receiving all the money," Schubart said. "in other words, we're handling the entire wholesale transaction, accounting for it all, and providing all that information. fully reconciled, to the client."

The information ResoDirect provides to its clients breaks down into five parts: sales and accounting; marketing efficiency, or how well the client's catalog or media campaign is doing; inventory how much they have and how much it is worth; logistics - what is going on in their business, how many people are ordering on the Web, on the phone, using AMEX or Visa, how many people are making contact but not placing an order; and customer data base management.

"We have 70 clients who have 5 million customers," Schubart said. "And that's changing all the time. Most of our clients are with us for the long haul, and we are a complete outsource. They view us as managing their non-core business. CBS is a broadcaster, not a media publisher. We manage that part of their business. We give them an 800-number and an address in Vermont, and from us they get money and accounting. We're really se ing accountability, integration and a single-point service."

GROWTH STRATEGIES

In terms of business strategy, "I can't say there's an magnificent vision behind the company," Schubart said. "We've been very adept in listening to our clients, finding out what they need, and then developing it. Unlike other companies, who are looking to forever expand their market share, we have focused on expanding our relationships with our quality clients. So if we started off 12 years ago doing something small for CBS, rather than race around and get everyone else in sight, we focused on what else we can do for CBS."

ResoDirect does not build Web sites for its clients, but it manages its client's Web shopping services.

"As soon as you order something on CBS.com you switch to our Website," Schubart said. "We do that for about 45 of our clients. Most of these people have been with us for up to 8 to 10 years."

At times, there is a lot of excitement in this business, Schubart said.

"We have been told that we will be handling both the Super Bowl and the new version of Survivor - on the same day in January," he said. "It's always fun here when there's some huge success and we are running around the clock, processing orders."

UPGRADE

The company's specific, focused strategy for continued growth is expansion and major systems upgrading, Schubart said.

"We've expanded the distribution center to 160,000-square-feet, and added adjunct distribution facilities that we don't own but have access to," he said. "We've increased our manufacturing capacity."

More importantly, five months ago the company began the $4 million implementation of an end-to-end information technology change using Oracle.

"It offers the first fully integrated, Web-based suite of applications available anywhere," Schubart said. "When it is fully implemented, in about a year, it will put ResoDirect ahead of everything else in the marketplace."

The company has just completed Phase One of the upgrade, involving all the applications intrinsic to the running of the business.

"Every single thing that Resolution does or touches is now integrated into about 38 modules," Schubart said. "Phase Two will be all the applications that are extrinsic, or specifically tied to how we run our clients' businesses, like electronic commerce and distribution, operations. It's our final and largest investment in history, and it's preparing us to be a Web-based e-commerce fulfillment company. That means that our clients can log on anywhere in the world and manage their business. They can access exactly what's going on, their sales, their accounting, wherever they are, at any time of day."

Once the Oracle system is in place, "it will vastly open the universe of clients we can handle," Schubart said. "It will enable us to process electronic commerce anywhere in the world. Oracle does automatic currency conversions. It has all of the business best practices designed into the software. General Motors runs on Oracle."

KEY TO SUCCESS

The key to the company's success is its investment in its people, its culture, and its infrastructure, Schubart said.

"We're very proud of our people," he said. "We're not interested in making any changes in our management team or submanagement team. I would advise any company to focus very strongly on its people. Anybody can buy anything, but in the end, it's the people who work for you who really deliver the value. We're also very pleased with our second enterprise: intelligence - which are the software, hardware and networks. That's what this whole Oracle conversion is about. And we're pleased with our plant and technology, our real estate, our machinery, our buildings. We're fresh off making investments in all three of these asset categories. We feel we're right there. We're ready for the next growth stage."

Another part of the company's success comes from being involved in the political life of the state and the community.

"People should remember that their business exists in a community, and they need to be involved - in policy, government, schools, health care, local issues," Schubart said. "It doesn't matter what you do, but to imagine your business as an island unto itself is a big mistake. The decisions made in the Legislature, on the local school boards and in the hospital, have a tremendous impact, and you need to be a part of that dialogue."