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Business Observer Friday, Nov. 19, 2010 10 years ago

Living on the EDGE

Jagged Peak, an e-commerce company that helps manufacturers fill direct orders, continues to rely on its unique software product to drive growth for years to come.
by: Carl Cronan Editor/Tampa Bay

Eliminating the middleman is what Jagged Peak Inc. is all about. The Tampa-based company works with manufacturers to help them sell products directly to customers, without any worries of running out of stock the way retailers sometimes do.

From its headquarters at the Bayport Plaza office building on Rocky Point, Jagged Peak provides supply chain order management, fulfillment logistics and e-commerce software to clients around the world. Over the last decade, the company has improved its flagship web-based software application EDGE (E-Business Dynamic Global Engine) that allows companies to control and coordinate orders.

Now in its sixth version, EDGE is being utilized by a growing roster of consumer product makers, including well-known brands such as Zippo lighters, Nestle foods, Tag Heuer watches, fashion designer Louis Vuitton and the tourism board of Switzerland.

Paul Demirdjian, chairman and CEO of Jagged Peak, says his company is one of only a few that can legitimately provide its clients with a truly integrated, web-to-ship e-commerce order fulfillment solution. Yet it understood that fulfilling orders from a single centralized location would not provide the ability to fully optimize clients' supply chain, no matter how hard it negotiated with carriers.

To improve order delivery and enhance the experience of end customers without incurring extra transportation costs, Jagged Peak partnered with independent fulfillment service providers. These “affiliate” facilities receive and manage orders through the EDGE application platform and all facilities operate on a standardized schedule.

“Our clients' orders are processed the same day and receive the same level of service regardless of the distribution point,” Demirdjian says. The company's current North American network is comprised of 10 distribution centers that can provide next-day order delivery to more than 90% of U.S. households using standard ground delivery service, he says.

Web, warehousing combined

Jagged Peak's 100,000-square-foot fulfillment center is located in a free enterprise zone adjacent to Tropicana Field in St. Petersburg.

Although the company's history reaches back to the late 1990s, its current form started in 2005 when the web-based entity merged with a stalwart warehousing and fulfillment company. Each had ingredients no one had attempted to combine before for the purpose of providing companies with click-to-ship order capabilities.

In addition to Demirdjian, other top executives include Daniel Furlong, senior vice president and chief operations officer; Andrew Norstrund, chief financial officer; and Vincent Fabrizzi, chief sales and marketing officer.

Customer service is a major component of what Jagged Peak does for its clients and, in turn, what they provide to their buyers. The company provides e-commerce and supply chain services and software to businesses.

“Our clients have the option and flexibility to engage us to provide a specific service or software solution, or can utilize us to provide a fully integrated, packaged outsourced solution,” Demirdjian says. Those solutions are built based on each client's specific needs, he says.

Tag Heuer was able to put Jagged Peak's EDGE software to work toward increasing productivity while reducing costs. The Swiss watchmaker's freight costs were getting out of control because it had to ship materials overnight to fill daily requests, says Matthew Space, Tag Heuer marketing manager.

“We've reduced our freight costs by 40%, just by curtailing overnight charges,” Space says. He adds that the software also reduced administrative time by 90%.

New service offerings

Jagged Peak, which expanded into Canada last year through a network of independent warehouses, extended its service offerings this year to include priority customer care, active website monitoring, reports and analytics, and electronic consulting, services and marketing.

“There's no room for complacency in the technology industry. It's innovate or die,” Demirdjian says. He points out that e-commerce companies must operate on a 43-day cycle because of the extremely rapid pace of change.

“The Internet is a medium that is in a perpetual state of change,” he adds. “What worked yesterday doesn't work today.”

With more than 100 local employees, the company maintains a low debt-to-equity ratio and reinvests profits from revenue, which grew from $600,000 six years ago to more than $20 million over the past year.

Jagged Peak aims to maintain its momentum by spinning off its e-commerce and supply chain services segment under the name AcroBoo Inc. The spinoff will allow each of the companies to adapt strategies and objectives to their respective markets, as well as prioritize resources.

According to a Securities and Exchange Commission filing, Jagged Peak's board of directors decided Oct. 13 to give its stockholders one AcroBoo share for every 10 shares of Jagged Peak. The existing over-the-counter issue closed Nov. 12 at 7 cents a share, ranging between 5 and 25 cents over the last 52 weeks.

More growth may be on the horizon for Jagged Peak. Forrester Research estimates online sales will grow to $335 billion by 2012. “This is not a mature market,” Demirdjian told the Gulf Coast Business Review in a Jan. 28 article. “We see the momentum, and it is here to stay.”

In accepting Excellence in Service honors from the Tampa Bay Technology Forum during its Industry Achievement Awards Gala on Nov. 12, Demirdjian mentioned that Jagged Peak is also here to stay in the Tampa market, which has a burgeoning e-commerce base.

“Being an IT company, we were told many times to move out of Tampa,” he said. “Here's to Tampa!”

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