Customer Winner: Donaldson Company Inc.

Companies Mentioned
Posted on Jun 09, 2006

All kinds of equipment use air filters -- everything from jet engines all the way down to disk drives. No matter the type of product, when that filter is dirty or worn out, the customer has only one priority: get a replacement as fast as possible. And because today's supply chains are much leaner than before, most companies don't hold much inventory. So, when a company needs a replacement filter, it needs information ("Which filter works with my equipment?") along with the filter itself -- pronto. The Internet is a natural delivery mechanism for both the information and the ordering function, eliminating the lag time and money involved in printing and sending product literature through the mail. Donaldson Company Inc. (Minneapolis), a $1.6 billion maker of filtration systems, has 14 business units serving customers of all sizes in a wide range of industries and sells tens of thousands of products. Back in 2001, the company faced the fact that it needed to upgrade its aging, static Web infrastructure. Customers demanded better functionality, and the old system was rapidly becoming unsupportable. So, Donaldson sketched out a worldwide Web architecture to better serve customers in the multiple countries where it operated (now numbering 32). Leveraging a modest investment, the company invigorated its Web presence through a Web content management system (CMS), offering functionality that would become indispensable to customers, putting Donaldson in a better competitive position. The payoff is a streamlined platform for delivery of rich product information, empowering content owners by giving them the ability to publish their own updates to the Web and establishing a more consistent Web presence for the company across its divisions and geographic locations. Donaldson has also used it CMS to improve myriad internal and external processes, making the company ever more responsive to customers' changing needs. Web-olution Donaldson served its customers quite ably long before the dawn of the Internet. Since its founding in 1915, Donaldson has accumulated customers in the industrial and engine markets, including dust collection, power generation, specialty filtration, compressed air purification, off-road equipment, industrial compressors, heavy trucks, and light vehicles. Donaldson's 50,000-plus customers range from giant companies such as Caterpillar, which accounts for about 10% of its sales, to proverbial mom-and-pop shops. The company's 11,000 employees are located in 32 countries, and international sales are becoming an increasingly large part of its business. Like so many first-generation Web sites, Donaldson's Web presence in 2001 was spotty, static, and sparse. Only a few business units put their product information online; others were left out entirely. Information about major divisions and geographic locations was absent, which was problematic for the then-billion-dollar global company. "It was basically an investor relations Web site. There wasn't a lot of useful information," says Tim Grafe, global director of the Industrial Filtration Solutions group for Donaldson. Also, the groups that did maintain information on the Web had to rely on IT personnel to make changes for them, resulting in unacceptable delays. "There was always a big bottleneck between the business user wanting to make a change and getting it published to the Web," says Chris Valle, e-commerce IT manager. "We needed to empower the business users to make their own updates." The most important thing Donaldson could do for its customers on the Web was also the simplest: Make every unit's product catalog available on the Web site, along with the ability to buy products. As with razors, the filters business is all about replacement parts. "Customers need information [such as] 'What's the replacement filter that goes with my equipment?'" Grafe says. But with tens of thousands of products and their accompanying photos, getting that information out to the Web quickly was no small undertaking. The Web development team knew it would need a content management system (CMS). Near the end of 2001, the team elected to purchase the Enterprise Content Management platform from Stellent Inc. (Eden Prairie, MN). For a relatively modest outlay of $150,000 (including software licenses, hardware, and implementation), Donaldson obtained a powerful CMS that could be used to manage both content for the public Internet and the private extranets it planned to create to serve specific customer groups. "With Stellent, the same content management system and database will house all the content on the extranets and public Web sites. That was a big attraction for us," says Dan Wick, senior Web developer. The investment was hardly a burden for the company, which reached $1.1 billion in revenues in 2001. Though the filtration industry was experiencing some declines like virtually every industry at the time, Donaldson had been profitable every year since 1989, and 2001 was no exception. (In fact, in 2005 the company capped off an impressive 16 consecutive years of record earnings growth.) Deployed in March 2002, the Stellent CMS enabled immediate cost savings by eliminating the production and mailing of hundreds of thousands of Donaldson's color brochures. "We pushed a lot of that cost out to the customers. They print out just what they need and they print it in black and white," much more quickly and economically than the old way, Grafe says. Donaldson added a Spanish-language option to its North American Web site to give its customers more options. It also has specific sites for the Europe, Middle East, and Africa region and four micro-sites under the heading of Asia-Pacific. The Web team and business users felt it was important to have regional sites in order to reflect the different products that are more important in one area than another, as well as cultural differences. For example, Donaldson makes filters used in disk drives. As disk drives are no longer made outside Asia, only that regional site needs to feature information on those filters. "We have to maintain a localized presence," Valle says. Treat Them Right Fundamental to Donaldson's Web strategy even in 2001 was to tailor Web content for different groups. The Web team envisioned the major business units creating extranets for their customers, reflecting each division's autonomous nature. The first extranet appeared in 2004; there are now four up and running, with two more expected by the end of the year. "Each extranet site is for a specific business unit," Valle says. "A lot of the use is for internal people. Or, they can invite business partners and customers to participate, give them access to a certain sub-set of documents. The business unit can use the Web to interact with customers however it wishes." Donaldson leverages Stellent's Web content management technology to automatically publish portions of the same document to multiple locations throughout and the company's extranets; only the applicable information within the document appears in the appropriate sections of the Web site. Not surprisingly, the extranets have provided an excellent means of deepening key customer relationships. For example, one customer leveraged the Donaldson extranet during the construction of power plants in Asia that house hundreds of filtration cartridges. To complete these projects, the company used local suppliers. Instead of printing and shipping drafting sheets and assembly specifications from the United States via mail to these Asia-based suppliers (at considerable cost and time to Donaldson and thus the customer), Donaldson made these large files available via the extranet, saving considerable money and time for the customer. Not only was the delivery of this content fast, Donaldson also was able to record when it was downloaded, ensuring that everyone was working off of the same plan and allowing the job to be completed much sooner, and at a higher quality level for its customer, than similar projects in the past. ERP-WEb Link The Stellent CMS has also enhanced the functionality of Donaldson's Oracle ERP system and online product purchasing features. For example, one of the most heavily used sections of the company's Web site is the product e-catalog. The Stellent system extracts product information from Oracle, links it up with an image it stores in its own repository, and automatically publishes the specifications to, where the product can be purchased online. One of the most satisfying aspects of the CMS project is that both the technology and CMS architecture are still humming along, five years on. "Our core CMS investment is still bringing dividends. We have not changed much. Our vendor is advancing and evolving the product. But the model that we developed five years ago still works," Valle says. With Donaldson's myriad array of competitors, it is hard if not impossible to make the assertion that it is further along on the Web than anyone else. But clearly, Donaldson has invested in its Web site in order to become indispensable to its customers. "We're in a competitive business. Our competitors can copy our products without investing in R&D themselves. To keep moving ahead, we have to have high customer satisfaction. It's a matter of survival," Grafe says. "Years ago, our customers would have carried filters in stock. They didn't need to have the information and replacement filters so quickly. But the supply chain is much leaner than it used to be. Our customers rely on us to find out if the filter is available and have it tomorrow."

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