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Summer 2008
Fusing fulfilment with IT
 Two businesses, one in multi-channel fulfilment, one in web development, have been brought together in a bold move to create a new kind of supplier. Peter Rowlands talks to the two men who aim to make the concept work 'We don't want to be regarded as just a safe pair of hands for fulfilment requirements – we aim to offer much more than that.' This is how Andy Reedman, UK chairman of docdata, sums up his company's aspirations as it prepares for expansion beyond its logistics roots. The kind of thing he's thinking about is mainly information. 'We can offer clients all sorts of tools to understand better how their online business is performing. We can analyse the behaviour of people visiting their web sites, and show them which product variations are selling fastest.' 
They could get some of this information elsewhere, he admits, 'but we can bring it all together meaningfully against the background of what's actually happening on the ground.' If this doesn't sound like the approach of a classic third-party fulfilment company, that's probably because it's not. Docdata is undergoing a profound transformation, even as it continues to exploit established skills honed over its 14-year life in the UK. Until this spring the UK business was known as Braywood, although it was actually acquired by Dutch-based docdata more than a year ago. During that year or so an identity and a policy for the UK operation have been ironed out, and now there's a real buzz about the company. Docdata nv, the parent group, is a major force in multi-channel fulfilment in the Netherlands, where it operates two major automated multi-client distribution facilities. Joining a much larger group gave the UK company new access to investment funds from the group, and this resource has already been put to good use. In particular, docdata has acquired an established e-commerce web site specialist, Hitura, which has some high-profile customers such as Anya Hindmarch (luxury handbags) and Barcode Warehouse (auto-identification systems for logistics). Now the UK group can offer clients a complete package, which can include everything from web site development to physical fulfilment – all fully integrated together. Reedman feels this combination of physical capability and systems expertise is rare. 'Plenty of other fulfilment companies will offer to do web development, but generally they tend to use out-of-the-box solutions. At docdata we can now offer complete bespoke systems in-house.' He adds: 'Elsewhere, you often find that the two sides to e-commerce tend to operate separately from each other. In the old days, the attitude to fulfilment from the IT people was often something like *Here's an ASCII text file of customer orders – just sort something out with that'. That's how far integration extended. Now we simply don't have those conversations any more.' Reedman says the objective should be to integrate the order-taking and fulfilment activities into a continuous two-way process, providing visibility and key performance measures throughout. Fortunately, both Braywood and Hitura were Microsoft systems users, and they say it has been a relatively smooth step to integrate using Microsoft-centric web services architecture. Having all parts of the fulfilment process in-house has encouraged docdata to help customers develop effective, functional web sites. UK docdatacommerce director Ryan Kliszat, who joined the group from Hitura, explains: 'We look hard at the logic of the sites we build, and try to reduce the number of steps between product selection and purchase. We run exercises such as analysing the information that shoppers look for and can't find.' Scope for personalising Andy Reedman feels one of the problems with e-commerce web sites is that there's no standard set of steps for shoppers to go through. 'Every retailer thinks it knows the best way to do the job, so customers are constantly having to learn new sets of procedures.' 'Consumers tend to stick with what they know,' says Kliszat, 'so the retailers who get this right can position themselves strongly for future business.' He adds: 'When we think we've got the basics right, we adopt the same broad approach for each new customer, but we maintain scope for personalising the site as well.' Historically, the Hitura business tended to focus on upmarket clients turning over between about £1 million and £20 million. On the fulfilment side, the company is perhaps more flexible in terms of taking on new start-up clients operating on a more modest basis. 'The minimum business volume for a new client would probably be around fifty orders a day,' Reedman says. However, the two men are happy that there's no mismatch here. Docdata's fulfilment division has taken a decision to focus on smaller products – items that can be handled by a standard carrier – and also leans towards higher-value products, though this is by no means a pre-requisite. 'In any case, the skill set is the same, whether you're looking at a luxury brand or an everyday range,' Reedman points out. He says in future there will be areas of differentiation and areas of overlap between the e-commerce and fulfilment operations. In case you should imagine all docdata's energies are going into the IT side, a quick look at its warehouse complex at Witney should change your opinion. Until lately covering 50,000 sq ft, it has just been more than doubled in size to 110,000 sq ft, and an automated handling system is soon to be installed. This will sit conveniently between the established and new areas of the premises, feeding product to packing stations and reducing the amount of manual handling involved. E-fulfilment is a highly seasonal activity, but operations manager Sharon Estall says one of the keys to docdata's success has been to hire staff on short-term contracts rather than relying on temporary workers. 'It's been an extremely successful policy,' she says. 'We've never struggled to find suitable people.' Making integration a reality The company uses its own warehouse management and wireless order-picking software, developed by its four-strong permanent IT team. We wondered if there was continuing logic in maintaining this team in Witney and the separate web development team in London. 'They focus on completely different things,' Reedman points out. 'But now they have the opportunity learn from each other, and make integration a reality.' There is also a modest multi-client call centre at Witney, allowing the company to take on direct consumer contact for customers who require this. Although now ultimately controlled from the Netherlands, docata's UK fulfilment operation still has an air of independence about it. Indeed, having stepped back from his day-to-day involvement in the company recent years, Andy Reedman has been enticed back to resume to a full-time role by the new opportunities beckoning. When he tells you with a mischievous grin that he finds the environment genuinely exciting to work in, you instinctively feel he really means it. 'We have complete independence to do our own thing,' Reedman says. 'The docdata group appreciates that different markets can need different approaches, so here in the UK we're still very much focused on providing solutions that work for our own customers,' he says. As an example, he reports that having considered offering docdata's own payment handling system to UK clients, his team concluded that a UK-centric solution would work better for the time being. 'So we've just agreed with Cybersource to supply this capability for us.' He says continental payment handling, despite variations in national banking procedures, is unified by the use of the euro currency. 'The UK doesn't quite fit in.' As an example of differing practices in other markets, he points out that continental web sites are often geared to handling bank transfers as a payment option. 'Often it's down to deep-rooted cultural variations. 'What docdata has given us that we couldn't have obtained any other way is the resource to expand,' he says. The Hitura acquisition is one example, but there will be others. 'We would definitely be interested in buying another fulfilment company,' he says – mainly to increase business volume, though he agrees that extended geographic spread would also be useful. 'There aren't a lot of companies on the market at the moment,' he says, 'but we're keeping an eye open for suitable opportunities.' The company is also keen to acquire a minority interest in online retail businesses, and has just made its first move by buying into Anything Left-Handed. 'We can take on every aspect of fulfilment for a company,' Reedman says, 'from procurement to web sales to fulfilment to returns handling. They're left to concentrate on what they're good at – marketing and selling.' Something else docdata has brought into the picture is the opportunity to handle cross-border fulfilment. 'We're already talking to some major companies who would be able to use this ability,' Reedman says. While he says he's not aware of any specific plans for further expansion by the parent company, he concludes: 'It wouldn't be surprising if that were on the agenda.' The latest venture from this ever-imaginative group is a growing collection of informative articles – white papers, more or less – that are being made freely available on its web site. They cover various aspects of e-commerce fulfilment, even touching on subjects such as search engine optimisation. 'Our aspiration is to be seen as an enhancer rather than just a provider,' Andy Reedman says. On present evidence, there's every indication that it is already well on the way to achieving that goal. BOX: Docdata here – and there Docdata's UK fulfilment business, formerly known as Braywood, specialises in e-commerce fulfilment and response handling, and also has a division dealing with donation handling for leading charities. It is based just outside the Oxfordshire town of Witney. At the turn of 2006-7 its management agreed to a takeover by Dutch-based docdata nv, and co-founder Andy Reedman became a chairman of the new UK-based subsidiary. The parent company originally specialised in media replication (CDs, DVDs and so on), and is still big in this market. It has several plants on the Continent and one at Telford in Shropshire, and it listed on EuroNext. But it could see that digital media distribution was gradually reducing demand for physical media, so it started to build up a parallel operation in fulfilment. It is now believed to be the fulfilment market leader in its home country, and is keen to expand to other markets. It has already established a base in Germany, and the Braywood acquisition is seen as the lynchpin of its expansion into the UK.
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