Logging On

As customers adopt new technology that puts the internet at their fingertips all day, every day, they become comfortable doing business online and it becomes harder to turn their attention away from digital content. A number of control states have realized this, and have implemented or are implementing new processes and communications strategies as a result.

These five (Iowa, Maine, Michigan, Mississippi, and Oregon) are ahead of the curve in at least one area of digital technology. They’re finding new, more relevant, and more efficient ways to interact with their stakeholders. Many have learned from the private sector’s understanding that adopting new technology reduces cost, increases productivity, and raises an organization’s profile with consumers. All have agreed to share their best practices so that the industry can see what’s working and learn from their experiences.

Modernizing the Warehouse

Many of the Iowa Alcoholic Beverages Division’s functions can be accessed online. Its licensing application has been accessible on its website for more than five years, virtual training for tobacco retailers moved online more recently, and tax forms for beer and wine are readily available. Yet the division’s warehouse, which distributes more than 16 million bottles of spirits to the state’s 700 liquor stores every year, uses an inventory management system from the early 1980’s.

“Our old system had an outdated programming language, it was a mainframe application, and it’s very difficult to maintain,” says Bruce Ireland, IT Manager for the ABD. “The new system is server-based, has current programming, and will allow us to better track inventory, extend opportunities to customers for order fulfillment, strengthen security with built-in record retention, and give us a better grasp on tracking labor movement.”

If that sounds like a lot of benefit from one upgrade, it is. To ensure they were implementing the right technology for the next 30 years, Ireland and Chief Deputy Administrator Rick Swizdor underwent a multi-year search for the correct vendor after receiving funding approval in 2008. Even in an uncertain economic climate, the funding was considered essential.

“The justification is the return on investment,” Ireland says. “We view a higher degree of inventory accuracy, better tracking, the opportunity to refine processes, and a reduction in staff as necessary to become more efficient.”

The new system will be live this summer and retailers who have heard the news are excited, even if not everyone will use the online ordering capabilities.

“Customers will be able to enter their orders more effectively online, track when they’ve shipped, and view their buying history,” Swizdor says. “It’ll be good for customers, but we won’t require online ordering because it’s not feasible for some of our rural customers who don’t have internet access.”

For customers who continue to call, fax, or email their orders to the division, order fulfillment staff will manually input the orders into the new system. Even so, the increase in efficiency and reduction in expenditures is well worth the investment.

“At the end of the day it’s a cost-saving opportunity to streamline our capabilities with the rest of our functionality online,” Ireland says, “and offer new and better ways to enhance our customer service.”

Socializing with Customers

Everyone at the Oregon Liquor Control Commission has a series of icons below their email signature. Some are widely recognizable as the logos of Facebook and Twitter, but the commission also emphasizes its work on other social media sites like YouTube, Flickr, and Blogger. Any information the commission releases is posted to its website and often reiterated across its social media presence instantly to reach as wide an audience as possible.

The most effective tool for releasing news, changes to the law, or new rules for stakeholders is an email service called gov.delivery. The LCC offers the service through its website. Consumers and retailers can sign up for automatic updates whenever something new is posted about any of 57 different topics they subscribe to. They receive that information automatically to their email address or cellphone. For the communications team at the LCC, sending information digitally is more efficient and effective than using traditional media.

“There’s no cost for using social media sites, and while we pay for the email subscription service, the cost is minimal compared to the printing cost of mailing new rules out to everyone,” says Joy Evensen, the commission’s Public Information Specialist. “It’s quick and easy to send messages to our entire audience.”

Evensen also receives reports that show her how many updates were sent out and how many were opened, allowing her to judge the effectiveness of their messaging campaigns and utilize different channels if necessary.

“We try to use all these different forms of communication so they support the same message,” says Christie Scott, Public Affairs Specialist at the LCC. “It might be the same information, but we write differently for each site and each audience.”

Originally, they saw the benefits that private businesses and nonprofits were seeing from using social media and decided that the trend fit with their state government’s push to be more transparent. They also saw the opportunity to bypass the print media and bring the LCC’s message directly to consumers.

“Traditional media don’t pick up the kinds of stories that are important to our stakeholders,” Scott says. “They target a wide audience, whereas we have a specific target that we want to get information to.”

Sites like Twitter and Facebook also offer the added benefit of real-time conversation. Consumers can ask questions and receive answers in real time, offering a level of personalized service that doesn’t require additional staffing or resources.

“We’re already crafting these messages, so why not streamline everything and put it on Twitter or blog about it?” Evensen asks. “We’re able to clear up a lot of myths about control states like how we function and what our role is. There’s a lot of misinformation out there and this lets us tackle it in a different way.”

Virtual Certification and Training

Training is an important component of any control state operation, but poses logistical and budgetary challenges. Centralized classroom training not only takes servers and retail workers away from the floor, it causes scheduling nightmares and uses resources that could increase the budget and manpower for compliance.

In Maine, the Bureau of Alcoholic Beverages and the state Department of Public Safety are implementing an online certified seller/server training program for the state’s 40,000 alcohol servers (on- and off-premise). The DPS is charged with licensing, compliance, and reviewing and approving all alcohol education courses. Until recently, the only approved training was traditional classroom programs. Business owners across the state asked for a more accessible training option and the Bureau of Alcoholic Beverages agreed, citing both the high demand and the possibility of increased compliance.

“If training is more readily available we expect more people will be trained, so access is a huge driver,” says Johnnie Meehl, Manager of Liquor Operations at the Bureau. “We’re expecting reductions in over-serving and serving or selling to minors. Sellers and servers who know and understand the law are more likely to follow it.”

Recent legislative changes have also led to the increased demand. Maine’s legislature recently passed a law allowing the DPS to consider seller and server training as a condition of licensure, and a large municipality now requires training be completed within 90 days of employment for alcohol servers. Adding an online option won’t replace the current system, but it will give business owners much-needed flexibility.

“We expect the online training course to contain the same material covered in the classroom,” says Meehl. “The current training program, which is all inclusive to on- and off-premise, will be available through the Department of Public Safety and the private training companies that currently offer the courses.”

The goal of any training program in Maine continues to be ensuring that all sellers and servers have the information they need to reduce irresponsible sale or use of alcohol. The online course will ensure that the training happens sooner after a new employee is hired, reducing the change that employees are working before they have the education necessary to work in the industry.

The new training course is scheduled to go live in April, and could lead to other Bureau operations going digital, Meehl says. “Utilizing technology, streamlining processes and broadening availability of information and resources is always our goal.”

One Stop for License Needs

One challenge for organizations that create an online initiative is integration with future updates. The Michigan Liquor Control Commission has offered online product registration for spirits since 2002, and over the past decade the commission has expanded its online presence to include online license renewal for retailers, wholesalers and suppliers, and product registration for beer and wine. Other state agencies followed a similar strategy, tackling one initiative at a time. The result was inefficient for the state and the businesses using the systems.

The solution to that problem is called Michigan Business One Stop, a project that represents Michigan’s commitment to making it easier to do business in the state. The Liquor Control Commission is working within the scope of that project to create a single place to submit liquor license applications online, complete with all the required documents and payments.

The upgrade involves enhancing the state’s online product registration system and online application system. Phase one of the registration system project lets suppliers assign wholesalers to specific products within a territory and lets wholesalers define their territory. Phase two lets wholesalers identify the retailers that purchase products within their territory. Ultimately, the goal is to allow consumers to find a retailer that carries a product they want to purchase after searching for it on the MLCC web site.

The application system upgrade allows customers to check the status of their liquor license applications online at any time. It will also show them the name and cell phone number of the enforcement investigator assigned to their application to increase communication between the commission and its customers.

Digital Administrative Efficiencies

“Just like everyone else, we’ve had to look at ways to cut costs,” says Patsy Holeman, Director of the Mississippi Department of Revenue, which oversees beverage alcohol control in the state. “We’re constantly examining processes to find efficiencies whenever we can.”

Last year, as a result of examining the department’s efficiency, Mississippi moved many of its administrative functions online. Whenever possible, the department no longer sends hard copies of purchase orders, bailment invoices and purchase invoices. Holeman says the time before customer receive purchase orders has dropped significantly, bailment invoices now only go out twice a month, and more than 80 percent of retail customers order items and access their daily invoices online.

“Our postage costs and person-hours spent printing, copying, sorting, and preparing paper records has drastically decreased,” Holeman says. “More importantly, we’ve significantly reduced the time it takes for customers to receive special orders, which makes retail permittees, customers, brokers and suppliers happy.”

Posting any sensitive information online always creates security concerns, so the department created a special password-protected section on its website for internet customers and issued each one a user ID and password. Since only permittees can see the information on those pages, they contain everything from price books to supplemental pricing to individual account information. Permittees can order and view invoices in real time, and the system is set up to automatically draft their bank accounts for payment.

Now that the retail customers are online, the department is working with its two shipping companies to send documents electronically so trucks can leave the warehouse and be on the road more quickly. It’s also working to increase registration on the website.

“We continue to see growth, and the goal is 100 percent participation,” Holeman says. “We believe that will happen as permittees handle more and more types of business transactions electronically.”


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