By Susan A. McLaughlin of Presstek An important element of our course of action in change management has been an extremely high level of communication with the employee base. June 27, 2005 -- In our last Presstek Perspective, we shared with you some of the activities that have been going on at ABDick following its acquisition by Presstek. I framed that discussion around what I felt were the few critical factors that are major contributors to the success of these types of complex initiatives involving significant organizational change, and shared my thoughts on each: Assembling the Team Assessing the Infrastructure Speed and Decisiveness This month, I would like to share with you some of the specific things we have accomplished as we continue with the reshaping of our company to meet the demands of the twenty-first century. What has been most exciting for me has been the response of the ABDick team to these last several months. There is no question that it has been a difficult experience for many. As a 120+ year old company, ABDick has a lot of history and a very high proportion of highly tenured staff. As you would expect in a situation like this, we were not able to retain everyone as we began to assess the infrastructure and make the necessary changes to return to profitability. This has, without question, been the most challenging part of the process. An important element of our course of action in change management has been an extremely high level of communication with the employee base. This is absolutely critical to ensure success. A key part of that is the eight employee round tables, each consisting of 12 employees, that we have conducted over the last several weeks. We use the forums not only to communicate our thoughts and plans about the future of the organization, but even more importantly, we listen to--and take action on--the opinions and suggestions of our loyal, dedicated team. Additionally, I have been using broadcast voice mails and e-mails every couple of weeks to keep the information flowing. This level of engagement provides critical organizational insight and ensures employees that they are an important part of the process. That being said, we have undertaken four major initiatives: Another important part of our service transformation is the investments we are making in technology infrastructure Service Transformation . As we make the migration to more digital content in our portfolio of products and services, ensuring that our service force has the appropriate skill level to support those digital products and services is absolutely vital. We began the process in February, and have already trained more than 150 service professionals, mostly on new digital products. But another important part of our service transformation is the investments we are making in technology infrastructure, including their ability to close service calls via the Web, and analyzing and evaluating service management systems that will help us in profitability, quality and customer satisfaction with service. Our service team members are quite pleased about the opportunity to learn about new products and new technologies. They are thrilled that the company is investing in them personally, helping them to refresh their skills. We see this reflected in the feedback from our customers, who we have been surveying relative to their service experiences. They tell us that they see great value in the marriage of Presstek and ABDick, great value in the products that are now available, and as a consequence, they are seeing a reenergized service team, as reflected in their demeanor, as they begin to see clearer path to success for themselves and for the company. Our average customer satisfaction results have been 4.6 on a scale of 1 to 5, and the entire team is very proud of that achievement. Presstek Integration . In March, we tackled the organizational integration between Presstek and ABDick, having completed our infrastructure assessment. Although this has required some difficult decisions, we are now operating in a more pure mode, with ABDick acting as the customer-facing, distribution part of the organization, and Presstek responsible for just about everything else. Sales Training. In April, we conducted sales training at Presstek Headquarters in Hudson NH. This was in the form of a product launch that introduced our sales force to the new products available as a result of integrating Presstek digital technology into the ABDick portfolio. Like our service team, our sales team was completely reenergized as they learned about these products, including new KPG branded DI presses, the certified pre-owned DI press program, and the Dimension Excel Series of CTP systems. They recognized the pent-up need for these products in their customer base. While I thought it would take at least 90 days for the team to build up a pipeline for these products, I am happy to say we started taking orders the following week! Improving Profitability. Finally, we are turning our attention to the elements of our business that were contributing to our inability to be profitable. In essence, ABDick was a $100+ million business that was not making money, as evidenced by the unfortunate need to go through the bankruptcy process. As we completed our infrastructure assessment, we found that we had too many individual transactions, resulting in a clogged system that simply couldn't handle them all. We also reviewed our revenue by customer and found the 80/20 rule applied, and that a significant number of our customers represented less than 5 percent of our annual revenue. Additionally, we had a huge number of repair parts and SKUs that we continued to order and keep in inventory, even though we might only get one order for many of these parts and products each year. As a result, we are working hard to migrate our smaller customers to our more affordable--yet highly productive--Web interface, and we are beginning to put in place end-of-life strategies to reduce the overall number of SKUs as well as a process for obsoleting spare parts. There is no question that we still have a lot of work to do, but I am very happy with the progress we have made and with the energy and enthusiasm displayed by our team. Looking back on these last few months, it is really quite amazing that we have been able to move as fast as we have, and we could never have done it without the support and cooperation of our employees, customers and partners, and our parent company Presstek. I owe them all a debt of gratitude!