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Herman Miller


Even companies that are in financial distress need to keep pushing their e-business initiatives--albeit at a slower pace. That's the approach being taken by Herman Miller Inc. (MLHR). The office-furniture maker rode the economic boom with everyone from dot-com upstarts to General Motors Corp. (GM) snapping up its black Aeron chairs and trendy modular desks and cubicles. When the economy dove, so did Miller. In its fiscal first quarter ended Sept. 1, the company's sales fell by 25%, to $410 million, and it lost $2.9 million, down from a profit of $32.5 million a year earlier.

As Miller managers looked to cut costs, one obvious target was the company's tech budget. While Miller was an e-business pioneer as the first office furniture manufacturer to sell its products online, it could no longer afford tech spending of $100 million a year. The company is planning to slash tech outlays by 25% in fiscal 2002. Miller is slowing the pace of its biggest Web project, a multiyear effort to build a corporate portal. This project would give employees, suppliers, and customers a view deep inside the company's operations. While Miller expects to reap financial rewards from the portal, it won't deliver results quickly. "We can't afford to be as aggressive as we were before," laments Gary W. VanSpronsen, Miller's chief information officer.

Even so, the company hasn't pulled the plug. Miller has continued with a more modest initiative, called Kiosk, that helps its 400 dealers follow the progress of their orders with just a few mouse clicks on the Web. Before Kiosk was rolled out this summer, dealers could submit orders electronically, but they needed to call the company to change an order or check on its status. For Miller, the $1 million project was attractive because it was affordable and could be finished quickly. Although the company can't yet point to exact cost savings, VanSpronsen says usage of the system has grown fivefold since June, indicating that dealers find Kiosk helpful in serving their customers. "If you have to pick one thing, you go with what can make a practical difference in your business today," VanSpronsen says.

He hasn't given up on his dream, though. As soon as the economy turns around, the portal will be back on track. By David Rocks in New York


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