Success Story: Freshdirect® Protecting a Perishable Business

Success Story: FreshDirect® Protecting a Perishable Business

“If our systems go down To ensure business continuity in the face of disaster, FreshDirect turned ® and we can’t get to this to IntraLinks for secure storage and controlled access to critical information technology documents and procedures. information, our whole

business could be at risk.” FreshDirect is a fast-growing online grocery in the New York tri-state area, whose mission is to revolutionize the way fresh food is sourced, processed and delivered direct to consumers. - Myles Trachtenberg Setting a new standard for fresh food production and distribution by offering unparalleled Chief Technology Officer quality, product customization and value pricing, FreshDirect’s success has earned it high praise. Private Equity Week claimed, “FreshDirect Inc. one day may be the grocery world’s FreshDirect equal of Amazon.com.”

About 99% of FreshDirect’s business is generated via its website, www.freshdirect.com. Serving its growing client base of over 250,000, FreshDirect handles about 4,000 online orders a day, each with an average of 30 items. All told, the company moves about one million items each week in its state-of-the-art Long Island City warehouse, which is the size of five football fields.

IT Keeps FreshDirect Running At the heart of FreshDirect’s operation is the company’s information technology (IT) organization. In addition to keeping the website available non-stop, the IT group manages hundreds of systems and servers, each with different passwords and start-up/shut-down procedures. They keep the ordering, fulfillment, supply, and other systems interconnected so shoppers have up-to-the minute information about availability and pricing for the 8,000 products FreshDirect stocks, and fulfillment knows what shoppers order so that they can pick, pack and deliver according to customer expectations.

Needless to say, FreshDirect’s IT infrastructure is vitally important. In fact, the company could lose up to one million dollars each day that IT is offline. Even worse, frustrated customers might abandon online ordering in favor of walking down to their corner grocery store.

FreshDirect has enjoyed rapid expansion, but this has placed significant strain on critical IT operations and performance. In 2003, the company hired veteran IT expert Myles Trachtenberg as chief technology officer to improve FreshDirect’s IT reliability.

Emergency Planning Trachtenberg immediately recognized vulnerability in FreshDirect’s IT infrastructure. Critical IT information was stored in locked filing cabinets in one location, which unnecessarily put the company at risk. These sensitive documents hold every detail of the company’s complex day-to-day IT operations, including passwords to key systems, equipment diagrams and operational procedures for shutting down and starting up servers and other hardware and software. Trachtenberg wanted a secure place to store these documents in case of an emergency. “If our systems go down and we can’t get to More than 400,000 users trust IntraLinks to The IT staff immediately jumped into action. this information, our whole business could provide web-based document management. From their homes, off-duty system archi- be at risk,” says Trachtenberg. “To ensure Each year, some of the most confidential tects accessed the company’s disaster business continuity, we need this informa- business transactions in the world run preparedness documents stored with Intra- tion accessible from different locations. But through IntraLinks. Every customer ben- Links. Using cell phones, they relayed the these are highly confidential documents, efits from the same built-in security as the passwords and step-by-step procedures for and must be kept under tight security.” world’s largest banks. Unlike cumbersome 60 machines to the plant. Staff had only 30 enterprise content management systems, minutes of back-up power to shut down key Paper documents can be lost, damaged, de- IntraLinks is easy to use and quick to deploy systems properly and in the correct order stroyed, or seen by people who don’t have without large investments in training. to minimize downtime and risk to system proper permissions. Distributing multiple The company’s high-touch customer service components. Without immediate access copies of an organization’s most sensitive helps customers get up and running quickly, to the documents, the effect of the outage documents is inherently insecure. Yet, and provides 24/7 customer support. would have been severe. Once the power having access to critical information during was restored, the off-site staff relayed start- an emergency is vital. That means having “We looked at other vendors, but none up procedures. access to the information from outside the could provide the combination of security, premises and the corporate firewall. accessibility, reliability, and ability to deploy After a gut-wrenching 28 hours, Fresh immediately,” says Trachtenberg. “Why Direct was back online. The outage cost Trachtenberg considered building a redun- invest in a greater level of complexity that the company $1 million, but it could have dant infrastructure, but realized it wouldn’t would bring less of a return?” been far worse. have been as secure as he required, and would have diverted IT resources from For FreshDirect’s IT organization, Trachten- “Without IntraLinks, it would have easily supporting core operations and profitability. berg says, “IntraLinks is our safety net. taken us a week to get our systems running He also contemplated buying enterprise Our IT staff now has peace of mind. Secure, again,” says Trachtenberg. “We would have content management software, but decided reliable access to the most important lost $7 million, plus the cost of spoiled it would have been costly, required too information they need to do their jobs is no food and future revenue from dissatisfied much time to implement and wouldn’t have longer something they worry about.” customers who would have stopped using provided access to the information outside us. Frankly, our business might have been the FreshDirect network. Since then, IntraLinks has helped Fresh on the line.” Direct weather floods, fires, transit strikes

IntraLinks: Secure, Accessible and blackouts – the type of business Future Expansion Document Management disruptions that cripple other organizations. FreshDirect is considering using IntraLinks Instead, Trachtenberg investigated solutions for all of its critical corporate documents. that would not be tied to FreshDirect’s Friday Evening Emergency In particular, the legal and human resources physical infrastructure and would meet his IntraLinks was put to the test following a departments have numerous contracts and strict security and access requirements. total power outage at FreshDirect’s main other sensitive documents that need the When he looked at IntraLinks On-Demand facility. At 5:00 PM on a Friday – just as the same protection IntraLinks has provided the Workspaces™, he knew he had found the company was preparing for the weekend IT department. right solution. rush – a roof top transformer failed and cut all power to the plant immediately. All “I can see IntraLinks becoming Fresh “It’s a virtual filing cabinet available anytime, picking, packing and sorting applications Direct’s corporate document repository,” anywhere with the security of Fort Knox,” went down, as did financial applications. The said Trachtenberg. “It will continue to grow according to Trachtenberg. company couldn’t process existing transac- and become the core way to store critical

tions in the plant. business information.”

About FreshDirect www.intralinks.com Founded in 1999, FreshDirect is one of the nation’s leading online fresh food manufacturing and delivery services. FreshDirect is setting a new standard for fresh food production and distribution by offering 1 866 INTRALINKS unparalleled quality, product customization and value pricing from its state-of-the-art facility in Long Island City. The company is expanding rapidly and currently serves most of Manhattan and locations in Queens, New York 212 543 7700 Brooklyn, the Bronx, as well as New Jersey and Westchester. The company’s vision is to change consumers’ lives by providing the ultimate shopping experience for impossibly fresh food and meal solutions. The London + 44 0 20 7956 2080 company currently has over 250,000 customers and has fulfilled close to 3 million orders since opening for business in September 2002. Additional information can be found at www.freshdirect.com Asia-Pacific + 61 0 7 3890 7551