Tag Archives: Federated Systems Group

2001-2006 TSI: Weekly Partners’ Meetings

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Agendas for meetings. Continue reading →

Between January of 2001 and November of 2006 I met pretty often with Denise Bessette (introduced here), who was by then my partner and VP of Application Development. I found a folder of Microsoft Word files for the agendas that I wrote up for these strategy meetings. Starting in 2003 the meetings became more regular. They occurred on many if not most Wednesdays, the day that I was most likely not to be at a client’s.

We generally ate lunch together at an order-at-the-bar restaurant on the west side of the river. It had picnic tables near a small stream. I can’t remember the name of the place. I took a drive in the area that my memory associated with its location, but I could find no trace of it. I suspect that it closed, and the land was bought by a developer who put it to another use, perhaps condominiums.

The following summaries are mostly in chronological order. Almost every AdDept client is mentioned at some point. Separate blog entries with much more details have been posted for each of them. They can easily be found using the 1948 Project’s master index program, which is available here.

Many items on the agendas are repeated on subsequent agendas. A few of them persist over years. These were issues for which we never found solutions. The most obvious examples were the efforts to find additional uses for AxN that would benefit newspapers and/or advertisers.

By 2001 the nature of and name for AxN1 had been decided. Our focus was on how to roll it out to the AdDept clients and what we could do to make it more attractive both to the advertisers and the newspapers. We also discussed potential support issues and how the new model 170 that TSI had recently purchased could handle the load of handling the traffic from AdDept clients and newspapers. Occasionally we talked about personnel and other business-related matters.

By 2002 the business environment for large department stores had changed dramatically. Before listing the agenda for one of the meetings I wrote, “We need to change our attitude 180 degrees. Previously we had excess demand and were struggling to increase our capacity to meet it. Now we have excess capacity, and our customers are frugal.”

I had used Net.Data2 extensively for AxN. At the time it was the only thing available on the AS/400 that could interact with the database. By 2002, however, IBM was telling people not to use it. However, it was several years before IBM provided an equivalent tool. Java3, which I had studied extensively and had concluded was not suitable for what we wanted to do, was IBM’s solution to everything.

I was surprised to read how uncertain we were about the willingness o AdDept clients to use AxN. The meeting in March mentioned the need for a second installation. Before reading this I was pretty sure that Belk4 was the first, but maybe someone else had used it on a limited basis.

In 2003 Denise and talked a lot about what kind of programming was marketable to our clients. We investigated quite a few products that claimed to make it easier to make native AS/400 programs web-based . We also talked about what features could be added to AxN so that it would be more valuable to advertisers or newspapers. Usually one of the last items on the list was whether we should spend time converting our code from BASIC to RPG or something else.

In May Sue and I took our first vacation in Italy. I wrote a journal about that adventure and posted it here.

The meeting of November 5 was the first mention of Bob Wroblewski, who has been introduced here. The next few agendas mostly consisted of the same items.

In January of 2004 Bob and I flew to California to visit Robinsons-May and Gottschalks. Bob then started enrolling Rob-May’s papers. After that the process of getting newspapers to subscribe to AxN snowballed for several years. At about the same time our long courtship of Dick’s Sporting Goods finally paid off with a contract for AdDept. So, in only two years the outlook for TSI had improved greatly.

In February it occurred to me that there might be one dominant software company for the newspaper business. If we could create an interface with their system, it could advance the AxN project tremendously. However, I later discovered that each paper, if it had anything at all, had developed its own software or paid someone to do it. There was no uniformity. Fortunately I discovered that this was a blind alley before I wasted a lot of time, money, and energy on it.

The agenda for the February 18 meeting made it clear that the AxN project was about to take off. Most of the long-time AdDept users had at least been contacted. Stage Stores was enthusiastic, and they had just acquired another chain named Peebles. Finally, Dick’s Sporting Goods had finally signed the contract to purchase AdDept. To deal with the expected increase in use of the Internet by the newly subscribing newspapers Denise was arranging for installation of a T-1 line from AT&T with the Cox Cable connection as backup.

The March 3 agenda closed with a mention of the NAA, which was the abbreviation for the Newspaper Association of America (changed to News/Media Alliance in 2016). I eventually talked with someone at its headquarters, but I foresaw that it would take a lot of time and effort to build a productive relationship with the organization. It might have been a good project for Doug Pease (introduced here) or Jim Lowe (introduced here), but at that point they were in the rear-view mirror. I never thought that this would have been a good fit for Bob. Besides, he was busy talking to newspapers, or at least soon would be.

It took me a few minutes to decode this entry on the entry for March 24: “Robinsons: Lower price for LANG?” LANG was the Los Angeles Newspaper Group,.5 a company that printed and distributed tabloids in Los Angeles and its suburbs. Advertising for all those papers was managed from one central location. TSI agreed to send them one bill. We treated them like one large paper with several editions.

In April we were waiting for Dick’s to begin the solicitation for AxN before we approached Macy’s West and RadioShack. The April 21 entry contained positive news about Filene’s use of AdDept for accounting, including the monthly closing process. The next week Denise and I discussed the proposed trip to talk with Hecht’s main paper, the Washington Post. I ended up visiting them on May 14. It gave me quite a thrill, but I don’t think that they ever agreed to use AxN. Apparently we also considered a press release about being in business for twenty-five years, but I am pretty sure that we never did it.

The agenda for May 26 poses this question about Filene’s: “Have they made a big mess?” Bon Ton agreed to send letters to its newspapers about AxN.

In June we discussed various methods of emailing claims. I don’t recall that we ever took any action on this. There was ominous news from Federated that they put all quotes on hold. The total number of orders in AxN exceeded 100,000. The June 30 agenda announced that Dick’s was moving into its new building over the subsequent weekend.

The first item on the July 21 agenda was “Denise’s three issues”. I wonder what they were. Item #10C talks about a follow-up meeting with the Washington Post that never happened. The next week’s agenda explained that they did not respond to my email. A second e-mail was sent on August 4. On August 25 (my dad’s eightieth birthday) I called the Director of Advertising Services.

Something distressing was evidently going on at Parisian, but I don’t remember what it was. That disclosure was somewhat offset by the following good news: “RadioShack: 34 active; 39 testing; 22 Macy’s West; 15 L&T; 4 Parisian; 56 other.” RadioShack did one of its four geographic divisions at a time. The last two entries brought up new subjects: “How can we make better use of my time and Lucia’s6?” and “5-year plan”.

The August 4 agenda was the first to mention SQL7. I used SQL for all of the AxN programs, but the AdDept programs mostly created temporary indexed output files that were populated by one program and read by another using IBM’s recommended approach, ISAM (Indexed Sequential Access Method).

Marshall Field’s (introduced here), the last big installation of the May Co. version of the AdDept system, was first mentioned in the agenda for September 8. We were very excited about the meeting scheduled for September 16 at Hecht’s advertising department in Arlington VA. By this time the work for the Peebles installation at Stage Stores was operational enough that we were ready to solicit their newspapers for AxN.

I was serious enough about contacting companies that sold software for ad agencies that I spent $35 to buy the booklet from the AAAA. I questioned whether we should write to each of them to propose an interface with their system and AxN. I don’t remember ever doing so.

The agenda for November 1 mentioned that Field’s used an ad agency for both broadcast and newspaper. My recollection was that they started using AxN almost immediately and dropped Haworth, the agency that bought newspaper space. However, later entries seem to contradict this. The same agenda mentions that TSI was carrying $55,000 in questionable receivables in the last month of its fiscal year.

I never had to make an onsite visit to our AxN client in Guam.

The November 10 agenda mentioned that—after months of foot-dragging—Federated Systems Group was finally going to “cut over” to their new AS/400 system. During this period we were worried about providing support for AxN for Macy’s West’s newspapers in Hawaii and Guam. This was needless. The papers subscribed for years without any problems. This was also the last agenda that included a mention of a press release about TSI’s twenty-fifth anniversary.

A major issue early in the year was how to handle the process for installing changes that Dick’s had forced upon us. There were other issues, too. The first agenda of the year ends with the question: “How can we get this installation on the right track?”

Two minor enhancements to AxN for the advertisers had been completed: custom emails and downloading of email addresses. However, I had apparently given up on the possibility of interfacing with computer systems used by the newspapers. There was also a process for reconciling the orders on AxN with the schedule on AdDept.

By March 10 we had a big programming backlog because of the large number of difficult jobs for Marshall Field’s. Denise controlled this process. I simply asked, “How can I help?” In the same meeting we discussed for the first time what, if any thing, we should do to forestall Macy’s from replacing AdDept with the system known then known as FedAd that had been developed by Burdines. Our contact at Macy’s West stated that “it did not exist”.

At the March 25 meeting we talked about Macy’s East for the first time in many months. For the April 28 and May 4 meetings there is separate agenda for AxN. For some reason I seemed worried about using it at Foley’s and Stage Stores.

The first item on the regular May 4 agenda was one word: “Lucia”. Lucia was able to handle much more challenging projects than our other administrative employees. The problem was trying to come up with things for her to do. Another issue on the same agenda posed some interesting questions:

We never mastered the trick of Cloud Computing.
  1. How could we set ourselves up to manage systems for our small clients? Bon Ton, Gottschalks, Neiman Marcus
    1. IBM (like Federated)?
    2. TSI
      1. Dedicated high-speed line for each user?
      2. On the net?
        1. Telnet? How would they print? Pdf?
        2. VPN: AS/400 to AS/400?
        3. VPN: PC to AS/400?
      3. High availability?
      4. Disaster recovery?
    3. A third party?

We did not spend a great deal of effort on trying to provide “cloud” computing for our customers. It would have involved a great deal of expense and risk. Just seeing that term “disaster recovery?” item gives me the chills.

Later in May Sue and I took our second Italian vacation with our friends Tom and Patti Corcoran. I wrote a journal again, but this time I had a camera. The results are posted here.

The agenda for June 2 began with the surprising news that Chuck Hansen at Marshall Field’s had asked me to back off on AxN. It also mentioned the agenda for a meeting with Macy’s Marketing on 5/17. It probably intended to say “6/17”. The next agenda, dated July 8, only stated, “Follow up with …” I must have forgotten the name (Robin Creen) of the lady with whom I met at Macy’s Corporate Marketing. There is also a reference to Bloomingdale’s. I suspect that this was in response to information from Tom Caputo, who worked with AdDept at both Lord & Taylor and Saks Fifth Avenue, that Bloomies had never taken the FedAd software out of the box.

The July 11 agenda has some detailed information about a proposed newsletter publicizing how AdDept handled inserts. Some of these enhancements were done for Dick’s.

The August 26 agenda has a new and somewhat mysterious major topic called “AdDept ideas”. The two subtopics are “SpooliT8 ($9K) or other Excel” and “Service Bureau”. I think that SpooliT made .csv files out of spooled output files. It may have had a few other features.

Throughout this period there were references to The Oregonian, the major paper in the Portland area that stopped paying invoices for AxN without canceling and never responded to attempts to find out why.

The agenda for September 14 mentions the long letter that I sent to Robin Creen. Its contents are posted here.

The agenda for October 12 had several tantalizing references. It began by stating that IBM’s VPN9 product, which TSI used for communicating through the Internet, with clients’ AS/400s would be activated on the following Saturday. It also reported that a newsletter had been sent out.

Robin Creen topped the October 24 agenda, but there were no details. The second item referred to renewal of iSeries News, a magazine.that catered to the AS/400 community. It had undergone many name changes, and the content had also evolved. We kept all of the back copies in the shelves that in 2023 are in my office. When we closed down the company (details here), I threw all of them away.

The third item was “SBC Contract”. I don’t remember SBC, but I suspect that it was an IBM Business Partner that had sold more systems than we had or had somehow managed to deal directly with IBM. During this period TSI was not allowed to quote or sell any IBM products. We had to go through a Super-VAR.

The fourth item was “Lucia” with no details. The fifth was “AT&T Global: do we need it?”. I am pretty sure that this product allowed me to get my email when I was on the road. In the days before Wi-Fi I had an AT&T product installed on my laptop that allowed me to use a phone line in my hotel room to sign on to AT&T and look at my email.

We must have received an inquiry from Sport Chalet10 a chain of stores in California that was similar to Dick’s. Until I saw this entry again I had completely forgotten about them. Evidently I wrote them a letter and sent them a newsletter, but nothing came of it.

The last agenda for 2005 was dated December 6. The #1 item was the blitz to get an AdDept system for Macy’s South up and running in time for the season that started at the beginning of February. The second item was an inquiry from Circuit City11. This was another dead end.

The “My disk recovery” entry brought back some really bad memories. I think that I recovered everything on my computer’s hard drive, but it was costly and painful. The best part was that I got an external hard drive12 that made it very easy to back everything up.

There are no entries for 2006 until June. I remember being under extreme pressure to bring the two huge AdDept installations at Macy’s South and Marshal Field’s up to speed. Meanwhile we received the crushing news that Macy’s and the May Co. had merged, and Macy’s would be the dominant player.

The agenda for June 13 began with the word Corum. I am pretty sure that it referred to broadcast buying software. Based on the date it was probably associated with Macy’s South.

That agenda also contained a major item that simply stated “Modernizing and marketing AdDept”. We never did find a feasible way to transform the AdDept screens into something that looked modern. We made more marketing attempts after this, but they did not amount to much. This was the peak period for AxN. More than four hundred papers had subscribed. TSI’s administrative person spent a good deal of time printing and mailing invoices and depositing checks from newspapers.

The agenda for October 11 was startlingly different. It mentioned two AS/400 models, a 170 and a 270. My recollection is that we did development and ran the business on the 170, and the 270 was devoted to AxN. It also mentions recruitment. I am not sure whether that referred to the administrative position or programming. The agendas have gotten shorter and shorter.

This agenda also mentioned the C compiler for the 270. Denise was upset at me for even investigating the possibility of converting TSI’s code to C, which was widely used in the Unix world.

In the agenda for October 18 the scary term “Macy’s North” appeared several times. It referred to the company that was formerly called Marshall Field’s. Evidently the marketing (never called “advertising”) department there had never bought into using AxN for insertion orders. They may have still been using Haworth.

“Maintenance” was often mentioned in the agenda for November 1. We probably never charged as much as we could have for the kind of service that we provided our clients. I was evidently still spending quite a bit of time at Belk.

I was surprised to see Circuit City mentioned again on the agenda for November 8. We must have received another phone call. The term “Foley’s project” also appeared. I am pretty sure that that was the code name for the long and frustrating effort that Denise and I undertook to sell the company.

The last agenda that I have was dated July 10, 2007. It contained only four items:

  1. Trip to Macy’s West
  2. 515
  3. Dick’s quotes
  4. Foley’s
Never even a nibble.

Denise and I continued to meet, but not on a formal basis. By then I had almost given up on selling more AdDept systems. There had been so much consolidation in retail that the number of good prospects for the system had shrunk to almost nothing. Nordstrom and Dillard’s would have looked nice on our client list, but it was hard to think of anyone else that was worth pursuing.

We still did quite a bit of custom programming during the next five or six years, but managing the list of open jobs did not require the juggling act that had characterized the previous decade.

The AxN business decreased for a few reasons. The big stores no longer trusted newspaper ads to bring in customers as they once did. Newspaper readership was way down. Some of the AdDept clients outsourced their buying to agencies or media services. That always meant a drop in the number of papers.

I enjoyed those meetings immensely, and I miss them.

1. The history of the development of AxN is posted here. The system design is outlined here. The description of the process by which it was brought to market begins here.

2. Net.Data was a scripting language written by IBM for the AS/400. It was quite popular, but IBM for some reason decided to drop it in favor of the open source scripting language php, which required implementation of the Zend php engine.

3. Java is an object-oriented language that was developed by people at Sun Microsystems. The company released an open-source version. Java was almost the only thing that IBM talked about at the PartnerWorld convention that Denise and I attended in 2000. It is described here. On the AS/400 applications written in Java required a lot more resources than programs written in the native languages. If run on the same box the Java programs were slower, a lot slower.

4. The history of the AdDept installation at Belk is posted here.

5. In 2016 LANG merged with the Orange County Register and a few other papers. The new organization was called the Southern California Newspaper Group. The third item under the Federated topic was “AxN letter to four divisions”. Since “Bloomingdale’s” was the second item it mus refer to Macy’s East, West, South, and Florida (Burdines).

6. Lucia Hagan was TSI’s administrative person during this period. She was introduced here.

7. SQL stands for Structured Query Language. It was invented by IBM, but the company did not endorse its use on the AS/400 until 2004.

8. SpooliT is still on the market in 2023! Its website is here.

9. VPN stands for Virtual Private Network. The Wikipedia entry is here.

10. Sport Chalet was sold to Vestis Retail Group in 2014 and was liquidated in 2016.

11. The sad story of Circuit City ended with its liquidation in 2009.

12. I still have that hard drive in 2023. However, I recently discovered that I no longer can find the cable that was used to attach it to a computer, and the company that made it was no longer in business.

1993-1996 TSI: AdDept-Burdines Interface

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The proverbial brass ring? Continue reading →

Even before I became a professional software developer, my friends and acquaintances often approached me with their ideas for computer programs. It started in the Army with Doc Malloy’s idea for a tennis game, continued through graduate school, and was nearly ever-present in my business life. It seemed peculiar to me that so many people seemed to imagine that I had a skill that they lacked but no idea how best to employ it.

I have a great idea for a software project!

In point of fact, the limiting factor in software development was almost always money. A new software system required a substantial investment to cover development and testing costs, as well as marketing expenses. Very seldom did the people who propose these project give any thought to helping to finance them. At least they never volunteered information about having a secret source of funds. They evidently thought that they should share in the imaginary profits because they provided the original idea. I sometimes told them, “ideas are a dime a dozen. Implementation is everything, and marketing brings it home.”

I had plenty of ideas of my own. A few of them, such as the idea of running several simultaneous “threads” for the cost accounting programs generated a bit of revenue for TSI. One of my ideas, the use of a butterfly-shaped website for insertion orders and emails for notifications, resulted in a very profitable product for TSI, AxN. The genesis of its design and the marketing concept that turned it into a financial winner is described here.

TSI’s clients also had a large number of ideas for programming, but they seldom expected us to work pro bono. I spent many hours researching and writing quotes for changes to our systems requested by our clients. I doubt that a month went by in which I failed to produce produce ten or twenty of them. I considered my most important responsibility at TSI to be providing a clear description of each requested project and assigning an appropriate cost figure.

Gilbert’s LinkedIn Photo.

Very seldom did someone approach me with a project that included funding. I can think of three times in forty years. Only one of these concerned software that we had already designed and coded. The person making the proposal was Gilbert Lorenzo1, who was one of the top bosses in the advertising department at Burdines, the Florida division of Federated Department Stores.

Gilbert telephoned TSI’s office in the early nineties. He had received one of our first mailings about AdDept, our administrative system for large retail advertising departments. He said that he would be in New England to meet with some people at Camex2, the company based in Boston that marketed a system for digitally producing page layouts for newspapers and large advertisers. He requested us to show him a demonstration of the AdDept system.

Most of this huge structure served IBM’s business partners.

We reserved some time in a demonstration room at the elegant IBM office in Waltham, MA. We had a relationship with this office, but we had never done an AdDept demo there before. I arrived there as early as I could to get the system set up for my presentation. It was a very nice facility that always impressed potential clients.

The AdDept system in those days was fundamentally sound, but many “bells and whistles” were added on in the subsequent decade. In almost every case they were suggested by and paid for by one AdDept client or another.

The most impressive thing about the demos in the early years was the speed with which the programs moved from one screen to the next. Once the tables were set up, a user could define all aspects of a new ad to run in dozens of papers in just a minute or so. This always generated the biggest “Wow!”

In our discussion after the meeting Gilbert said that he liked what he saw. He might have even said that he wanted to buy the system. However, I did not hear from him again for several years. This was consistent with what always seemed to happen with Federated’s divisions, a phenomenon that is explored in more detail here.

Meanwhile Burdines was—unbeknownst to me—experiencing explosive growth. In 1991 alone the number of stores increased from twenty-seven to fifty-eight through the assimilation of two Federated divisions— the Maas Brothers and Jordan Marsh stores in Florida. More stores were added throughout the rest of the nineties. By the end of the decade Burdines dominated the department store market throughout the entire state.

The purpose of Gilbert’s second contact with TSI was to invite me to Huntsville, AL, the home of a software company with which he was working at the time. I don’t remember the name of the company. I do recall that two of the team assigned to this project formerly worked as software developers at Camex before DuPont purchased the company and changed its focus. One of them was Mike Rafferty3, whom I had met at Camex’s headquarters when our common customers had requested that an interface should be constructed between the two systems, a project that was described here.

The software company in Huntsville had a very impressive headquarters. As I understood it, the company’s primary customers were NASA and companies that worked with NASA. That was de rigueur in Huntsville.

Gilbert explained that he was working with Mike and the others to develop a comprehensive software system for the advertising department at Burdines, and he hoped and expected that the other Federated divisions would also use it. He wanted TSI (or at least me) to participate in the project, and he insisted that he had the funding for it.

Mike described their approach to the project. They intended to use a home-grown database that resided on a server, but most of the programs would reside on the individual “clients”—PC’s or Macs. When I told him that TSI’s programs were written in BASIC, he suggested that we consider converting them to use Microsoft’s Visual Basic.

Most of the discussion concerned the scope of the project. They were interested in integrating something like AdDept into the unitary structure that they envisioned. No one addressed how TSI would be integrated into the development process. Maybe they expected me to fill in some of the details or to volunteer to research how difficult it would be. Maybe they knew that we seldom backed down from a project just because it was difficult.

The atmosphere was cordial and positive. I remember that we all went out to lunch together, and I ordered a Monte Cristo sandwich. Nevertheless, this meeting made me very uncomfortable. On the one hand, the prospect of installing a version of the AdDept system into all the remaining Federated divisions was way beyond tantalizing. It would be a dream come true. What they suggested would undoubtedly a big job, but TSI had a talented group of programmers who were quite familiar with both the subject matter, and the way that I liked to approach big challenges.

On the other hand, from my perspective the way that this project was described was adorned with “red flags”.

  • I had already researched the possibility of using Visual Basic. It might have been possible to convert some of the programs, but there were no tools designed to help. It would certainly have taken TSI several years to produce a workable system. We would be discarding all of the tools that we used in favor or ones that we had never used and, to my knowledge, had never been used by anyone in a data-intensive situation. TSI’s programmers would certainly need a lot of training. We would probably need to hire skilled employees or at least consultants to achieve any degree of efficiency.
  • Their whole architecture was different from what we used. In the AdDept system the data and all the programs resided on the AS/400 server. The “client-server” approach that they proposed located the data on a server, but the program were all distributed to the PC and Mac clients. To me this sounded like an administrative nightmare. All changes—including emergency fixes—must be installed on all of the clients.
  • I considered the AS/400 integral to AdDept’s success, and so did our customers. The operating system code was built on the database rather than the other way around. That meant that the system itself could never be used for programs with the the huge requirements for memory, disk, and processing speed that design and creation of advertising layouts required. The AS/400 was definitely not designed for that. However, it was ideal for administrative systems like AdDept. It competently handled so many problems with which all-purpose operating systems constantly struggled.
  • I trusted IBM and the AS/400’s database. I knew how to get the latter to function efficiently, and IBM’s support was unmatched in the industry. The idea of converting to a home-grown database seemed just preposterous.
  • By the time of the meeting in Huntsville TSI had finally turned the corner. The AdDept product had a solid client base and a good number of prospects outside of Federated. How could we continue to pursue AdDept development for those companies—which was relatively certain to generate revenue and good will—while devoting a great deal of time and attention to the massive Federated project? It did not seem possible to me.
  • Gilbert had said that he had funding, but he never provided any details about who, how, or how much.

Something about the project sounded fishy to me. They were interested in my participation, but they never specified how. Did they want to buy TSI? No one mentioned anything like that. Did they want to hire some or all of us? Did they just want me to consult with them as to the system design? Or was there something else?

At the end of the meeting, Mike asked me what format TSI preferred for exchange of information. Both of the programmers were very surprised when I told them that our offices were connected to all of the clients’ AS/400s via phone lines. We used the AS/400’s built-in messaging and word processing. No one had ever asked us to communicate outside of that.4 I told them that TSI’s employees had PC’s, and the company had a few modems, but we mostly used the PC’s as terminals to the AS/400.

The group did not come to any agreement about how the project was to proceed. I had an impression that they thought that I (who was well into my fifth decade on the planet) was a fossil. I, on the other hand, thought that they, who had dealt almost exclusively with production of ads for newspapers, dramatically underestimated the difficulty of designing a single multi-user database that was capable of handling all aspects of scheduling and managing the financial aspects of all media. The planning and cost accounting modules were even more challenging.

After the meeting I had a little bit of private time with one of the principals of the software company. He asked me what I thought about the project. I told him that it was interesting, but I did not see the ROI (return on investment) for combining the two systems. I remember his exact words. “ROI. Oh, yeah, where’s the ROI?”

I did not hear from any of them again, and I did not press for inclusion in their project. In all honesty I had too many other things demanding my attention. After a year or two I sometimes wondered whether Gilbert had abandoned the project or had gone ahead with it. The answer, it turned out, was somewhere in between. I spent no time searching for information about the project, but little hints turned up occasionally.

Our liaison at Lord & Taylor, Tom Caputo, described to me his experience interviewing for a job in the advertising department at Bloomingdale’s, a Federated division in New York City. He asked the people there about their computer system. They showed him boxes that contained the software for the FedAd system, which Federated had sent them and told them to use. The people at Bloomies had never unsealed the boxes.

When I installed the AdDept system at Macy’s South5 in December of 2005, TSI’s liaison there was Amy Diehl. Her official title was “FedAd Coordinator.” By then I knew that FedAd was the culmination of the project begun by Gilbert Lorenzo more than a decade earlier.

I soon learned that the advertising department at Macy’s South was not actually using the FedAd system at all because the programmers had admitted that it could not handle the department’s planning process. Instead they had been using parts of a previous version called Assets for a few tasks. I was astounded to learn that the Assets system used a Microsoft Access database. They had sent a boy to do a man’s job! Federated Systems Group no longer supported it.

Later we heard that Macy’s East was using the FedAd system, which by then had been given a different name. At the time its advertising department was still using the Loan Room system that TSI had written and implemented for them in the early nineties. That meant that for years the details of every ad were being entered into at least two separate systems.

I even quoted a bizarre request from Macy’s systems people to write an interface between their system and AxN. I provided them with a quote, but nothing came of it.

In all of that time—more than two decades—I never heard anyone say anything good about FedAd. As far as I know it generated a great deal of expense and not a penny of revenue for the company. I only knew of one department that used it. TSI, in contrast, sold and installed thirty-five AdDept systems, each of which was customized to the needs of the individual departments.

On the other hand, I might have been able to carve out a career as the guru for Macy’s concerning administrative software for advertising. That would have certainly been something to crow about. After all, when the game was finally ended, Macy’s had all the marbles.

I doubt that they would have let me—and whatever portion of TSI was involved—participate from Enfield or East Windsor, and I doubt that they would have let us continue to perform or oversee work for their competitors. They might have allowed me to program for the AS/400—I saw several of them at the FSG data center in the Atlanta area. However, it was more likely the Gilbert would have required everyone in the process to use the same database. He seemed to be calling all the shots.

So, I probably would have had to sell my soul to Macy’s. I might have made a lot of money, but I think that I would have been miserable. Almost everyone in my acquaintance who had worked for one of our clients and then worked for Macy’s or a Federated division quit in the first few years and was openly bitter about the experience.

Finally, I must add that I suspect that there was a good possibility that the invitation to Huntsville was just a ruse to get me to expose the totality of the AdDept system to people who might be able to replicate it.

Epilogue: While researching the blog entry for TSI’s relationship with Federated Department Stores (posted here), I discovered that Val Walser’s LinkedIn page prominently features how she “directed development of a sophisticated, integrated software product” in the division run from Seattle. It must be referring to the system that Gilbert and Mike envisioned so many years earlier. I never heard anyone mention any other such system.

1. For some reason Gilbert Lorenzo has two LinkedIn pages. They are available here and here.

2. The Camex system was used by both of the first two AdDept users, Macy’s East, and the P.A. Bergner Co.

3. Mike Rafferty’s LinkedIn page is here. It did not provide much information about him when I discovered it in 2022.

4. Keep in mind that the Internet was in its infancy. At that time Microsoft had not yet completed its domination of the word processing and spreadsheet markets. Technical people used “message boards”, not email, for communication. AOL did not hit the web until 1997.

5. The installation at Macy’s South is described in detail here.

1991-2007 TSI: AdDept: Federated Department Stores/Macy’s Inc.

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TSI’s dealings with Federated and Macy’s Inc. Continue reading →

Let’s buy Macy’s!

For more than a decade after TSI began marketing AdDept, its software system for retail advertisers, the chain of department stores now known as Macy’s Inc. was called Federated Department Stores (FDS). The company was acquired in the eighties by Robert Campeau, a Canadian real estate magnate. For a short time it was merged with Campeau’s other stores and called Federated and Allied Department Stores. In 1992 the company emerged from bankruptcy as FDS, the same year that Macy’s filed for Chapter 11 protection. In 1994 FDS found enough cash in the cushions of the sofas in the furniture departments of its stores to purchase Macy’s shortly after Santa’s favorite retailer emerged from its own bankruptcy. Details of the takeover can be read here.

In the early nineties I was just beginning to learn about retail in America. It shocked me that a bankrupt company could stiff all of its vendors and then have the wherewithal to buy another company of about the same size. A lot of craziness like this happened in the nineties. I never did figure it all out, and the two companies involved in this transaction were a thorn in the side of TSI for the rest of its existence.

I don’t know why Val used a photo that cut off her chin.

In 1992 FDS had eight regional divisions. Each division produced and placed its own advertising from the divisional headquarters. The first FDS division that contacted TSI about purchasing the AdDept system was the Bon Marché, which was based in Seattle. I was called by Val Walser1, the Director of the Advertising Business Office there. She had received one of TSI’s mailings in late 1989 or early 1990, and she thought that the system might be what they needed. I talked with her in person twice, once at the Retail Advertising Convention in Chicago and once in Seattle. I gave Val a private demonstration in Chicago, and I showed the system to the rest of the team in Seattle. Those encounters have been described in some detail here.

No mention of Federated.

I don’t think that I knew at the time that the Bon Marché was part of FDS. Even if I did, I don’t think that I realized then that the parent company was about to declare bankruptcy. I was inexperienced; I probably made some errors in judgment. Perhaps I made a mistake by proposing a system that would only be minimally sufficient for their existing operation. Maybe we did not follow up often enough or in the best way.

Although Val informed us that she had requested funding for the system, it was never approved, and after a while we did not hear any more from her. We continued to send materials to her periodically. Until I began the research for this entry I was unaware that she had any involvement in deploying a system that was initiated by the FDS division most distant from Washington, Burdines in Florida. Val apparently oversaw the development of the administrative part of the FedAd (or whatever it was called at that time) system. By then her division was known as Macy’s Northwest, which was folded into Macy’s West, a long-time AdDept user, in 2008.

TSI’s fruitless contacts with Burdines have been documented here.

From the beginning I thought that Jordan Marsh, the Boston-based department-store chain, would be a valuable customer for TSI. Like the Bon Marché, Jordan Marsh was actually part of the Allied group before Campeau acquired Federated and merged all the stores into one gigantic chain. At one time there were also Jordan Marsh stores in Florida and San Diego, but by 1991 all of those stores had closed or were no longer controlled from Boston.

Kate Behart, whose career at TSI is described here, arranged for me to do a demo for people from Jordan Marsh’s advertising department at an IBM office. I don’t remember any of the names of employees at Jordan Marsh. In fact, the only things that I remember about our meeting with them were that Kate was very upset that I had used the word “gals” at one point and that they informed us that they wanted our system.

I am sure that Kate must have followed up on the presentation. She was very conscientious. However, nothing came of it.

Bloomingdale’s, the high-end department store with headquarters in New York City, contacted TSI several times. The last of these exchanges of telephone calls was handled by Doug Pease, whose successful marketing career at TSI is detailed here. We certainly sent them detailed materials about AdDept and the AS/400. I might have done a demo for them at the IBM office. I clearly recall that we went to their headquarters in Manhattan and gathered specs about their needs. I can still picture the Manager of the Business Office, who wore a three-piece suit and had a long pony tail. Guys with pony tails were not unusual in the creative and production areas of advertising departments, but he was the only one that I ever saw in the financial area.

Doug followed up on our visit with several telephone calls. At one point he became certain that Bloomies would buy the AdDept system. Nevertheless, not long after he had voiced his certainty, he got the telephone call that dashed his hopes. He never told me the details, but he was visibly upset about it.

One of the biggest disappointments in my career was not being able to land Liberty House, the department store in Hawaii and the Pacific, as a client. When Doug, Sue, and I flew out to Honolulu in December of 1995 to meet with Karen Anderson (detailed here), Liberty House was an independent chain of stores that included both department stores and much smaller stores in locations convenient to tourists. Those stores specialized in “resort ware”.

Macy’s on Union Square in SF.

Our presentation went very well. Karen told Doug in a subsequent conversation that she had requested funding for AdDept, but there was a freeze on capital purchases. The freeze persisted until the company entered bankruptcy in 1998 and closed most of the resort stores. When it emerged from bankruptcy it was gobbled up by FDS. At that point the remaining stores were relabeled as Macy’s, and administrative functions were transferred to Macy’s West in San Francisco, one of TSI’s clients.

So, this was as close as we came to a victory in our dealings with FDS/Macy’s Inc.. Many of the newspapers that had been used by Liberty House still subscribed to AxN in 2014.

AS/400s at FSG. I thought that I had a photo of Len, but I cannot find it.

At some point the AS/400 systems used by the three Macy’s divisions that used AdDept—Macy’s East, Macy’s South, and Macy’s West—were moved to the headquarters of Federated Systems Group (FSG) in Alpharetta, GA, a suburb of Atlanta. I flew down there to consult with Len Miller2, who was in charge of all of the FSG’s AS/400s. I don’t remember exactly what the agenda for this meeting was, but I remember that Len said that long-range plan of FDS was to replace the AS/400 systems with home-grown software running on other platforms. However, he assured me that at that point—soon after the merger with the May Company—it was a very low priority. They would still be using the AS/400s for several years.

My other vivid memory of that day was when we passed a room that contained perhaps twenty desks. At each desk sat someone working on a computer. All of the people were IBM employees who were consultants for Federated.

Len’s predictions both turned out to be true. All of the divisions except Bloomingdale’s were eventually folded into one gigantic Macy’s run from the Herald Square Building in Manhattan. The plan was apparently to use the system built for Burdines and the Seattle division, but it did not have all of the features that the people in New York needed. For several years they maintained AdDept in order to run the Loan Room (merchandise loaned to photo studio for shoots) module that TSI wrote for Macy’s East in the early nineties.

In May or June of 2005 I received a telephone call from Robin Creen3, whose title was Senior Vice-president of Macy’s Corporate Marketing. She wanted me to come to New York to discuss the AdDept and AxN systems. I made an appointment and took Amtrak to Penn Station. Robin instructed me to use the executive elevator at one of the 34th St. entrances rather than the employee’s entrance that I had always used on the other side of the building.

Robin’s office was not in the advertising department. It was on executive row. I don’t remember too much of the meeting, and I cannot locate my notes. I recall that I only got to meet with her once or maybe twice, and I never heard from her or about her again.

I did, however find a copy of a letter that I sent to her on October 7, 2005. Here is the text:

At our last meeting you told me that it was still too early to talk about the future of the existing May Company divisions. Since there have now been several definitive press releases about the makeup of the new Macy’s after the merger, I assume that those restrictions no longer apply.

Needless to say we are concerned about what effect the realignment will have on TSI. We have spent the last 17 years developing AdDept, the software product which has become the standard of the industry for administration of retail advertising departments. The May Company was our largest client.

We know that Federated Department Stores has been working with its Florida division for the last decade or so on a system which overlaps considerably with ours. I am sure that the company has by this time invested a considerable amount of time, money, and manpower in it. It may surprise you to know that I was supposed to be an integral part of the original plan. I met with Mike Rafferty and Gilbert Lorenzo in Huntsville, Alabama, back in the mid-nineties. Their plan at that time was to use AdDept for the accounting functions.

They wanted us to convert our system to run on a PC network using a home-grown relational data base and Microsoft Visual BASIC on each client. To me this seemed like a huge step backwards for us. Their approach would definitely have improved the appearance of AdDept’s front end and provided an integration with the production area, but no one could explain to me how we could possibly support such a system in many locations. The principal problem was that with their proposed architecture someone—presumably TSI—would be required to support both server software and client software. We have never had to support clients—the individual desktop PC’s and Macs. At the time networks were unreliable, Windows was not a mature product, and the Internet was in its infancy. TSI was already supporting a half dozen or more companies, including the two Macy’s divisions, which at the time were not affiliated with Federated. I honestly think that had we participated in the project at the level that they expected, TSI would not have survived as a company. Gilbert and Mike must not have liked my attitude, because we never heard from them again.

Since that time, as I wrote you earlier, most of the rest of the department stores in the country—as well as several other large retailers like Dick’s Sporting Goods—have successfully implemented AdDept in their sales promotion departments. They were able to get affordable systems tailored to their requirements. AdDept is not a sexy system, but it gets the job done.

No one in the entire country—no one—has the experience that TSI has garnered over the last 17 years in understanding the intricacies of administration of advertising systems. We are offering that experience to Macy’s Marketing. Four of the seven newly aligned Macy’s divisions—East, West, Midwest, and whatever the Marshall Field’s division is called—are long-time AdDept users. Lord & Taylor also uses AdDept. Moreover, a large number of May Company employees have considerable experience using AdDept in many different areas. If I were in your shoes, I would consider this as a valuable asset.

TSI has a very strong relationship with its users—both at the corporate and division level. If you talk with the people at the May Company, I am sure that they will verify that we have always done what they asked, that we do an excellent job of supporting our product, and that we give them a lot of bang for the buck.

There is one big additional factor. We are not on their payroll. When they wanted to spend money to make the system do new things, they used us. When they were tightening their belts, they did not have to worry about paying the salaries of programmers, system architects, data base administrators, etc.

So far in our discussions TSI has done most of the talking. What we would really like now is to learn what you and the other people in Federated’s management need to get out of the system. A goal-oriented approach works best for us. We have moved mountains for other clients, and we would definitely appreciate the opportunity to tell you how we would attack your biggest problems. We have never shrunk from such a challenge in the past. Our track record in this regard is essentially flawless. If someone will tell us what they need, we will provide it.

Do you think that we could schedule a face-to-face meeting with you and whoever else is involved in this project about this challenge? We have always been straight-shooters, and we would be eager to listen to whatever you have to say.

My last two encounters with Macy’s were both about insertion orders for newspaper advertising. TSI had developed and successfully marketed an Internet-based system for insertion orders to newspapers. Macy’s West, Macy’s South, and most of the May Company divisions that FDS acquired in the merger used it, and they all loved it. We called it AxN, which was pronounced “A cross N”.

I knew that, compared to our other AdDept clients, Macy’s East used a small fraction of the programs that comprised AdDept. Still, they were entering the ads, and, therefore, they were a good candidate to use AxN. I wrote to the Media Director, whom I had never met, and requested a meeting about AxN. He seemed very interested. We scheduled a meeting, I made a dozen or so copies of our sales materials for AxN, I packed them in my briefcase, and I boarded the 6:30 train again. I was alone because TSI had no marketing/sales person at the time.

The meeting was not what I expected. It was conducted by a man named Roman from the IT area, not the advertising department. My presentation was very well received. Roman said that it was very impressive.

He pressed me on whether TSI planned to provide a way to send the layouts for ads over the Internet. This surprised me. I thought that this was a problem that had been addressed years earlier. The market leader was the Associated Press’s AdSend service, but I also knew of several competitors. I said that TSI had no plans to enter that market. I explained that we had neither the infrastructure nor the expertise necessary to compete in that arena. Besides, none of our clients had asked for it, and they were not shy about requesting our services.

He said that we should consider it. Macy’s was looking for someone who could enable them to use the Internet for both insertion orders and the delivery of ads, “because, you know, one-stop shopping is better.”

What should I have said?

I had three hours on the train to mull this over. I had made a mistake by letting this remark go unchallenged. It seemed like such a silly thing to say. I thought that they would want expertise and experience, not fewer phone numbers.

If one-stop shopping really was the objective, then I had no chance of ever persuading them to use AxN. Therefore, nothing could be lost by asking for proof of any real value associated with having one vendor doing both tasks. I knew very well that the people who placed orders for newspaper ads were completely separate from the employees who created the actual layouts and sent them to the papers. This was true at Macy’s in New York and at every other large retailer that I had met with.

We never heard from them after that.

I learned later that Macy’s East’s advertising department had never used AdDept for insertion orders, even though they could have easily faxed the orders from the AS/400. Instead, each coordinator had developed ways to communicate with the reps at the paper. It sounded chaotic.

My last frustrating encounter with FDS (by then known as Macy’s Inc.) occurred in, I think, 2007. This one revolved around Dave Ostendorf, whom I had known quite well when he had been the liaison between TSI and the advertising department at Famous Barr, the May Company division based in St. Louis. Much more about my relationship with Dave and the installation at Famous Barr is posted here.

This is the only picture I could find of Dave Ostendorf. He is on the far left side of the table in the white shirt.

Dave called me about the use of AxN. He said that the people for whom he worked in Macy’s Corporate Advertising department asked him to find out how much we would charge for an interface between AxN and the system that had been developed internally. Dave was a very straight arrow. I trusted him (unlike everyone else mentioned in this entry) implicitly.

Of course, I asked for more details, but Dave would not provide them. He was rather sheepish about this. He advised me just to write up a proposal in our usual format with as many disclaimers as I wanted to include. He also specifically warned me not to low-ball it. So, I wrote up a quote for $20,000 that may have set a world’s record for use of phrases like “assuming that”.

A short time after I talked with him Dave resigned his job at Macy’s and moved back to his home town of Indianapolis. Needless to say, no one ever called about the quote. I have always suspected that it had been used as a justification for further investment in the corporate system.

So, my interactions with FDS and its successor Macy’s Inc. were completely fruitless. If FDS/Macy’s Inc. was the Brass Ring of our field of software, it was in sight quite a few times, but we were never able to snatch it.

My only real regret is that I do not completely understand why we continually failed. Our success with every other department store chain was close to universal, and the employees in the advertising departments at FDS and Macy’s divisions seemed enthusiastic about what TSI had to offer. However, in these situations we were up against an amorphous alternative, the system developed for Burdines and the Bon Marché, about which I knew very little.

One thing that struck me when rereading the letter that I had written to Robin Creen. I seemed to be asking for an opportunity to see the alternative. As a debater and a debate coach I was much better on the negative. I seemed to feel confident that if they just told me what they were using or planning to use, I could demonstrate what was wrong with it. Even if our software was lacking in some areas, I felt confident that we knew how to change AdDept to make it better.

Fortunately TSI found plenty of work outside of FDS/Macy’s up until the time that Denise and I were ready to dispose of the business. If some of these opportunities had gone the other way, it seems likely that we would have missed out on some of our other achievements.

1. Val Walser worked int the advertising department in Seattle until Macy’s brought all of her division’s administrative functions to San Francisco in 2008. Her LinkedIn page, which is here, says that she “directed development of a sophisticated, integrated software product, which was Macy’s premier marketing/advertising system managing all departmental functions.” I presume that this refers to the system once known as FedAd that was begun by Burdines.

2. Len Miller apparently still works for Macy’s in 2022. His LinkedIn page is here.

3. Robin Creen left Macy’s in 2008. Her LinkedIn page is here.

4. Dave Ostendorf’s LinkedIn page is here.