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Institutional Knowledge

Inside the minds of Hawaii’s most successful companies

(page 2 of 4)


Technology

Clark Morgan, CEO, Alakai Mechanical

“I don’t think we do any hand drafting anymore, it’s all on the computer.”

Clark Morgan
CEO, Alakai Mechanical, on leveraging technlogy

Several themes emerged again and again in conversations with 25-year Top 250 veterans. The first is leveraging new technology. Don Horner puts the change in perspective, “You have to remember, 25 years ago there was no word processing, no personal computers; there was obviously no email, no cell phones or any of those kinds of devices.” These new ways of exchanging and managing information have touched all businesses.

First Hawaiian was quick to embrace the new technology. “We were the first bank to have ATMs; now we’re working on the technology to accept Chinese debit cards — and the Chinese aren’t even here yet,” Horner says.

Horner clearly has a personal affinity for the tech side of business. He points out, “I was the first guy in the bank to have an IBM PC. I was the first to have a Blackberry. I’ve never seen a process I didn’t want to tinker with.” Horner adds that banking remains a relationship business. Nevertheless, technology has had a major role in a stunning increase in productivity at the bank. “I went back and read the 1983 annual report,” he says, “and it really helped me reflect on the times. Back then, we had just over 2,100 employees; today, we have just over 2,200. Yet, the size of the company is five times what it was then. So, we’ve gone from $2.6 billion in assets to $12.8 billion with just a modest increase in staffing. More important, our earnings are up 10 times. In that year, we made $21 million; this past year, in 2007, we made approximately $207 million.” First Hawaiian parent, BancWest Corp., is No. 1 on this year’s Top 250 list, extending a reign that began in 2003.

Probably all of the Top 250 companies have had to embrace technology — though each perhaps in its own way. For some companies, high-tech means hardware. Clark Morgan, CEO of Alaka‘i Mechanical, wanted to show us his plasma-cutting table, his spiral machine and what he calls the “pièce de la résistance,” an enormous Rube Goldberg machine that converts giant spools of galvanized sheet metal into finished ductwork. “It would probably take 50 times longer to manufacture the same product by hand,” Morgan says of the $800,000 machine. And yet, despite the efficiency of this machinery, it has been the company’s investments in information technology that have really driven growth. Sophisticated software called Building Information Modeling (BIM) now coordinates projects from start to finish. “I don’t think we do any hand drafting anymore,” Morgan says. “It’s all on the computer.” BIM allows an estimator to quickly create an invoice for a project, or an engineer to automatically send a list of parts to the plasma cutter down on the work floor. Not bad for an old-fashioned HVAC contractor.

Other unlikely industries have benefited from the advance of technology. John Schapperle, the CEO of Island Insurance, says, “The ‘Information Age’ has really impacted us — especially in the last 10 years.” Over the years, the programs and systems needed to process claims and assess risk have become increasingly complex and sophisticated. “Now, we’re a very high-tech industry,” Schapperle points out. “We’ve got the best equipment and personnel we can buy.” Eventually, the IT division found that its expertise in numbers crunching and managing data was also in demand beyond the halls of Island Insurance and it began to contract its services out to other companies. In 2002, Island Insurance spun the division off as Hoike, a separate business under the parent company, Island Holdings.

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