CASE STUDY

Industry: Retail/Distribution

Customer Since: September 1997

BMC West Corporation is a leading regional retailer of building materials. In addition to providing construction products from manufacturers, BMC West conducts value-added conversion activities which include fabricating pre-hung doors, millwork, roof trusses, pre-assembled windows and pre-cutting lumber to meet customer specifications. BMC West operates 56 building materials centers located in California, Colorado, Idaho, Montana, Nevada, Oregon, Texas, Utah, Washington, and Wyoming. In addition, BMC West owns a 49% equity interest in Knipp Brothers Industries, LLC, a leading framing contractor in Arizona and Nevada.

Building Materials Holding Corporation (BMHC: Nasdaq) is a holding company engaged, through its wholly owned subsidiary, BMC West Corporation ("BMC West") in the distribution of building materials, selling primarily to professional contractors and builders as well as to project-oriented consumers (including professional repair and remodel contractors hired by them). BMHC was formed to centralize, at the holding company, responsibilities for acquisitions, financial and administrative functions - including strategic, financial and capital planning, corporate governance, and investor relations activities. In addition, the holding company structure is intended to focus operational management of the day-to-day activities. As part of this restructuring, the operating units of BMC West have been divided into three major operating divisions. This restructuring is intended to give local management more focused responsibility, and enhances the opportunity to recommend the introduction of new products or services appropriate for a given market.

Business Challenge:
BMC West Corporation had a highly paper-intensive Accounts Payable process, with limited office space and more than 25 file cabinets full of transaction documents such as purchase orders, invoices, contracts, and buying agreements. Employees were sitting at credenzas, on windowsills, and sharing desks with two or more people. BMC needed an information technology solution that could free up valuable office space, reduce physical storage needs, and enhance overall efficiency in the A/P department. BMC received approximately 10 large containers of mail each Monday, and 5-6 containers every Friday. When invoices were received by mail, each was copied, for mailing and filing. Check runs were done twice - once for the check and one for a copy to be attached with the paid invoice. The manual process of copying and filing increased BMC's risk of losing invoices and checks, causing less accuracy in their accounts payable process. Since BMC's A/P department paid invoices without first matching purchase orders, loss of invoices or check copies would potentially impact receipt or verification.

Due to the massive amounts of paper documentation arriving daily, BMC required a solution that would decrease physical storage space and accurately store invoices in an efficient and organized way, while allowing quick user access.

Why Acorde?
Acorde is the first web-based product that handles both existing paper-based and e-business transactions within a single solution. BMC West Corporation upgraded to Acorde to automate its Accounts Payable processes. By scanning and storing all invoices, users throughout BMC, including remote locations, now have easy and immediate access to all relevant information. Acorde has dramatically improved BMC's customer service, and images are easy to access, view and fax when needed. BMC no longer needs to play phone tag with vendors to track invoices -- employees have real-time access to invoices and vendor information.

With more than 74,000 active vendors in BMC's system, Acorde handles an increasingly high volume of invoices and related documentation. In 1999 alone, over 502,219 invoices were keyed into the system by only 13 employees - an average of 38,632 invoices per person! Acorde has significantly improved user productivity throughout BMC, as well as reduced operating costs and enhanced customer satisfaction. BMC West implemented Acorde Process with their Oracle Financials application so that data entry occurs only once for both systems. EDI data from Sterling Commerce is also integrated into Acorde to automatically verify the accuracy of stored information, prior to filing the data into Oracle Financials and the EDI documents into Acorde. These enhancements will allow BMC to further realize a return on their investment, including time and cost benefits, since self-service is now available for vendors and stores.

BMC's future plans include allowing vendors to access and view invoices in real-time over the Acorde web client. BMC also plans on automating its check request process and expense reporting system. Expanding to all locations and automating processes enterprise-wide, over the web, will also be key components of the future Acorde system at BMC. Integra Information Technologies, an authorized Optika Advantage Partner, implemented the Acorde solution at BMC West Corporation.

Solution Highlights:

• Decreased required physical storage space from 28 full file cabinets to 3

• Increased staff retention and motivation

• Improved efficiency of front-office and back-end of operations

• Improved customer service and satisfaction