Inside B2B IT: Shadow AI, Cross-Functional eCommerce, and Winning Internal Adoption

Dungeon Crawler Carl by Matt Dinniman — The LitRPG book series Jacobi recommends at the end of the episode.

Full Transcript

Aaron Sheehan: Welcome back to the B2B Commerce UnCut podcast, sponsored by OroCommerce. I remain your faithful host, Aaron Sheehan, and I'm joined today by a, I might say, luminary of the B2B eCommerce space. And that's a little bit of an inside joke, maybe. Jacobi Zakrzewski.

Jacobi Zakrzewski: Nailed it.

Aaron Sheehan: Perfect, amazing. His name will be spelled out in the show notes, and maybe we'll put some phonetic helpers in there as well.

Jacobi has been in the B2B space probably, it sounds like, since birth.

Jacobi Zakrzewski: Hold on.

Aaron Sheehan: Yeah, your entire life, really. And I think, Jacobi, the question I always ask people when they are a guest on the podcast is: Who are you, and why should our audience care what you have to say?

And since you've been in the space since birth, I think that's the answer. Why don't you explain a little bit of what that means?

Jacobi Zakrzewski: Sure. So thanks, Aaron. Glad to be here. Again, Jacobi Zakrzewski. I'm the Director of IT at A.Y. McDonald Mfg. Co., which is A.Y. McDonald and a family of other manufacturing companies.

So, I've been in B2B since birth, you know, and in various forms of IT. And I would say my old man, his name's Joe, he's been—

Great name, normal name compared to Jacobi, I would say. Thanks, Mom, Dad.

But, you know, he's been in manufacturing his whole life. The Zakrzewski side of the family's been in manufacturing their whole lives. And, you know, I have plenty—like a traditional Midwestern Polish family—a lot of aunts and uncles going on.

And so one of my uncles went into logistics, one into HR, my dad into accounting to start. So all parts of manufacturing, essentially. And the only one that wasn't covered was IT.

And so, over the course of my childhood, you know, playing cards, going hunting, golfing, doing Midwest-y things like playing euchre, you learn a little bit as a kid about manufacturing and processes and challenges and opportunities inside conversations.

You know, it's not like you're reading a book. You just overhear things. And those of us who have kids and are dads, kids are absorbent, okay? And learn a lot.

And that was my childhood. And certainly it wasn't all about business. We had our fun, for sure. But I learned a lot about manufacturing growing up, and it interests me a lot because of the complexity.

And we hear about complexity all the time, especially, Aaron, on the digital side, and that's been a norm for me growing up.

And so I've been in this, what I'll call, awkward space of being a product of the internet. You know, I'm in my upper 30s at this point, but the golden age of the internet, and growing up on IRC chats, and I was a competitive gamer for a long time back in Counter-Strike, etc.

It's caught between two worlds. One is very modern technology moving very fast. You know, servers, virtualization, this whole internet thing came about. But on the other side of the yin-yang was old, traditional manufacturing distribution part of my family, right?

And so there are these two worlds, and I feel like I've been caught between those two worlds in a space where it continues to mature.

So it's sort of a generational thing in a lot of ways, and I constantly have to think about what it looks like moving forward from an innovation standpoint, but at the same time, respecting the heritage of all those other things that have been in place for, in our company's case, over 170 years.

So, yeah, it's a bit of a timestamp, if you will, for me. But glad to be here and, you know, fit in that middle area, I would say, of speaking both languages, east and west.

Aaron Sheehan: Totally, totally. And we met when you were VP of Strategy at Luminos Labs, hence the luminary joke at the beginning of the show here, which was—or is—a digital services agency. How would you describe Luminos Labs before you went to A.Y. McDonald?

Jacobi Zakrzewski: Yeah, great question. So, you know, I was one of the leadership team members at Luminos Labs, who is an esteemed SI, as I'll call it, in the engineering space of digital. So, highly integrated digital commerce environments between search, eCommerce, PIM, CMS, etc.

So, highly engineered focus, very, very smart people over there with Radu and team, and worked on a lot of great projects. And I joined the organization, number one, because I, in my prior life before Luminos Labs, was the IT executive at a large distributor.

So at this point, I've been on the distribution space, and now in the manufacturing space, but between that time was an IT leadership sabbatical of about four and a half years.

And I was able to speak to leaders like myself at this point and talk about my journey through digital and eCommerce and a prior life at a distributor, but also learn a lot about engineering practices and development practices and system development life cycles that I didn't really have exposure to as a traditional IT person in infrastructure, cybersecurity, operations, etc.

So, I was able to provide a lot of, I guess, wisdom and knowledge, maybe, to clients, but at the same time, absorb a lot from our team in learning about best practices about engineering and what it means to have a highly integrated platform within your space. Loved learning it, loved learning it.

Aaron Sheehan: So you've been at an interesting intersection between IT and business, it sounds like, for your entire life. You'd mentioned, you know, IT was the one sort of domain that your family hadn't populated, I guess, in the manufacturing space.

How do you think about translating between IT and business in manufacturing? I've found over my career that it's rare to find people who can easily move back and forth between the jargon of business, the jargon of IT, and also understanding the incentives of both.

What's been your experience with that? Because you've been sitting in this middle space, it sounds like, for quite a long time.

Jacobi Zakrzewski: Yeah, I think it's incredibly important for, whether you're in, you know, quote-unquote, digital or IT—it's a two-way street, these relationships. And I think you can desire to have the business come to you to want to learn about how IT works, but that's a tough battle. It's just not happening day to day.

You know, my CEO, Rob McDonald, who's a fantastic guy, doesn't necessarily come to me and say, “Hey, teach me about DNS.” Okay, that's just not happening. It'd be an interesting day, though.

But what that means is folks like myself have to go out and learn about the business. Hey, tell me a little bit about what is our value proposition as a company? When we, you know, we have these little widgets here we make, right? These little valves, you know, things like that. What does this do?

What value does this provide our customers? How does it help waterworks, natural gas, plumbing in our world?

And these little things that I'm holding up, they're under the ground in all of our homes. You don't know, but they're essentially in your everyday lives.

And so I think it's incredibly important for the IT individual to embed themselves in the business about what makes you specialize in an organization, what is your value proposition, why do customers buy from you? Why do they?

And then you take all that information and then have to apply: how can we, as IT individuals, help enable that, grow that, secure that, maintain that? Okay? And so that helps build the trust simply by understanding.

So, I'm, you know, I call myself an introvert, Aaron. I know it doesn't seem like it, but maybe I'm an ambivert. But I spend a significant amount of time asking questions and listening, especially—I've been here at A.Y. McDonald for roughly eight months now, seven, eight months.

And I've spent more time asking questions and listening ad nauseam at this point, just to understand what we do, how we do it, why we do it, what makes us special. That then builds a really solid trust and a potential two-way dialogue to move forward.

So, I think it's important of, you know, how do we make money, and how do we spend money? You just gotta understand that. You gotta understand the balance sheet of how the economics work in your business.

Aaron Sheehan: No, 100%. Really, what you're describing is, I think, the key trait when I'm, you know, talking to people who have that translator role, and where it's not just translating, but also adding value, then, in each sort of interaction.

It's curiosity. I think that's the word you're really—

Jacobi Zakrzewski: Yeah, yeah.

Aaron Sheehan: —a curious person. And I found that the people who thrive in this role are curious people, because you want to learn how each interesting domain does their business.

I know a lot of people listen to this, so they're not seeing the video, so they didn't see what you were holding up, necessarily, but A.Y. McDonald is making, you know, metal objects, often.

Jacobi Zakrzewski: Brass.

Aaron Sheehan: It's very cool, yeah.

Jacobi Zakrzewski: Yeah, we're in the brass world. Fittings, valves within waterworks, natural gas, etc. So, pretty much a lot of the things you would see between the curb of your home, apartment, whatever you have, to your actual residence under the ground, a lot of that stuff going on. Okay? Yeah. Unsexy. Unsexy.

Aaron Sheehan: It's something that, when you started at A.Y. McDonald, you were not an expert in brass or waterworks.

Jacobi Zakrzewski: Absolutely not. I—no, I came from the distribution side, so it's more about how many do we need to have in stock, is it available, is pricing, you know, yada yada.

But I did not understand how a foundry worked when I joined. I now understand a lot about foundries. You know, melting very hot things and making them essentially lava and molding them into castings, and then we make finished goods.

So I learned a lot about foundry stuff. I knew a lot about the factory side.

But it's interesting because curiosity—I'm a systems thinker. I think about end-to-end and systems thinking, meaning not just technical, but, you know, the output of something is an input of another process, and then kind of working through that supply chain of, how do we get from these copper pucks to that finished good? It doesn't just black magic happen.

Aaron Sheehan: Right.

Jacobi Zakrzewski: And so there's an extreme amount of interest of how we go from step one to two to three, and then certainly I apply the technology overlay of how can we make sure we're doing that safely, securely, of good quality that our customers expect, etc.

So, you kind of have to embrace a little bit of our motto of “customer the boss.” We say that a lot here. And put yourself in the customer's shoes in everything we do day to day.

But yeah, curiosity is a fantastic word for it.

Aaron Sheehan: I think so. And so you’d mentioned you were in the distribution space as well. Talk a little bit about that, because you’ve done IT leadership in distribution, so you’ve really had the full—you talked about the supply chain and all the value that gets added at each stage of the supply chain.

You’ve had a unique, sort of, first-party role, a good seat, a front-row seat to all portions of this. What were you doing in distribution?

Jacobi Zakrzewski: Yeah, so for about seven years, I was the VP of IT for Crescent Electric Supply Company, which is a very large distributor and family of companies in the U.S. on electrical distribution.

So, you know, working with manufacturers like Schneider Electric, Eaton, Lucian, etc., and essentially doing the distribution side, and also quite a bit of value-added services, I would say, as well.

So, learned a lot about what efficient supply chain should look like, and what it means to be a good distributor when it comes to getting the right product at the right time, at the right price, no surprises, right?

That is the name of the game in distribution, especially during what I’ll call the COVID era. Boy, as long as you had it, you’re good to go, you know?

And yeah, I learned a lot about inventory management and warehouse management. Slotting is something I learned a ton about in warehouses. And again, complex. It’s fascinating, though. Complex.

Aaron Sheehan: You said fascinating, and it’s fascinating to you because you’re a curious person, which is, again, sort of the value.

It’s funny, because you’d mentioned being an introvert, and I’ve met you at trade shows. In fact, all of our in-person interactions, I think, have been at trade shows or industry events, so that’s somewhat amusing to think about.

But how then do you see the role of IT in the supply chain more broadly?

And one of the reasons I ask that is, I’ve been in this space a long time as well, and there’s always a tension, I think, observable tension in a lot of organizations between, let’s say, IT and business. And I’m using business as a proxy for a lot of other parts of the business, depending on how you sell and what the inputs and outputs are.

In some organizations, when it comes to, let’s say, the operations of anything that plugs into a wall, IT is the unquestioned domain leader and stakeholder, and the business takes whatever IT gives them in terms of systems and permissions and how procurement works and things like that.

And in other businesses, IT is downstream, and the business makes the decision, and IT figures out how to execute on it.

Oftentimes, you can ask this question in an organization and you’ll get different answers about the role of IT within the business.

What is your take? Do you have a take on what the proper role of IT is inside of a manufacturer, inside of a distributor, anybody that’s operating in this supply chain? How do you see yourself fitting and relating to the rest of the business?

Jacobi Zakrzewski: Yeah, it’s a good question. And it depends on every business, and it’s a bit of a maturity model.

So, Maslow’s hierarchy of needs, you kind of have your equivalent of it in my space. First and foremost, most of you that are listening to this, or if you’re in B2B, your organization probably values things like R&D and innovation, etc.

But what I would say is that your organization definitely values stability amongst all else. And that is assumed, but it is something that is very important in terms of the bottom of the pyramid.

So first and foremost, we have to meet the needs of our business and indirectly our customers with stability and security, okay? We gotta make sure systems are running, that our coworkers are able to do their work as if it’s like water running in their house. They’re flipping their lights on in their house and it just works, right?

The issue that you have with the general population of coworkers is, imagine your kids are in your utility room in your home, and they’re constantly playing and messing with things.

That’s kind of what it’s like to be an IT person, where the business users are constantly messing with these nerd knobs in the ERP, and you’re trying to keep them safe, but also trying to help them do their jobs. But they don’t sometimes know what they’re doing, and the whole “enough to be dangerous” is happening every single day.

And messes are made. Don’t get me wrong, messes are made. And 99.7% of the time, not maliciously. It’s just by accident, and it’s because of the cause and effect of what happened.

So first and foremost, stability and security, right?

And then you kind of move from firefighter mode into what I’ll call the trusted business partner domain, alright? And that is building those relationships, talking with your peer group in finance and HR and procurement and operations, on the production floor in particular for us, and just speaking with them and asking about how we can make their lives easier.

Because if you don’t do that, if you’re not reaching out with that quote-unquote olive branch, rest assured they’re gonna find their own creative ways to help themselves. And as an IT person, that scares the crap out of you, okay?

A little shadow IT starts to happen, and that’s prevalent everywhere.

Aaron Sheehan: I was just about to deploy that phrase, shadow IT.

So what is the state of shadow IT right now? In a world of AI, which is the premise that—the face that launched a thousand ships here, ChatGPT—in the world of AI, what is shadow IT for you right now?

Jacobi Zakrzewski: Yeah, we have—you know, I’m new to the organization—we have a little bit of it going on. Not recklessly, not to the point where it’s imposing on that whole stability and security thing that I mentioned from a pyramid standpoint.

So it’s not to the point where, like, “Oh wow, this is a danger to our organization.” We’re not there. It’s not happening.

And that’s because the predecessor that was here and myself have built good relationships over the course of time and say, “Help me help you,” kind of scenario.

But, you know, in terms of shadow IT and even shadow AI to a degree, we do allow our coworkers to do a little bit of exploration on the farm, if you will, with fences around said farm.

And what I advise our team in IT is that, listen, it’s okay if they go out and try something within a certain realm of responsibility, okay? That’s innovation, that’s trying something new and not being afraid of it, that’s leaning forward.

And if we’re not providing the solution out of the gate, we can’t be too upset, because they’re looking to accomplish the goal or to do their job more effectively.

And so we need to embrace that innovation or their curiosity, and then lean into that and figure out how we can help them in a safe manner, right?

And so we can’t let individuals go off the range, alright? We can’t let that happen. That’s dangerous. There’s monitoring tools, there’s visibility things for that.

But also, when we see that happening, you kind of go, “Hey, Bill, can you talk to me a little bit about what were you trying to accomplish here? Talk me through that.”

Not, “Bill, you’re doing something bad. Stop it. We’re blocking you.” That’s not a great first initial salvo to have.

It’s more understanding, it’s being curious. And that takes time, and it can be exhausting, I get it, but rest assured that taking that time and effort will pay for itself, though.

So it happens everywhere, Aaron. There’s new tools being built every single day. It’s the next best thing every single hour.

But what our organization has quickly realized is—this is what I tell folks—there’s a lot of things that are interesting in AI. There’s not that many things that are useful, okay?

So we’re trying to bridge that gap of what’s interesting to what’s valuable and useful on the other end. And that’s education, that’s awareness.

I myself, and one of the individuals on our learning and development team, her name’s Allison, shout out to her, we’ve been running enablement sessions of just little 45-minute sessions with groups of individuals about what AI is, here’s a few things you can do for it, and just showing examples and giving those breadcrumbs for the folks who maybe aren’t naturally curious and have done so on their own.

They just need that first initial step, and we’re guiding them down a path. I’m not forcing it. There’s no mandates here.

But the naturally curious people and folks who want to work smarter versus harder will embrace it to the point where they’ve bridged that gap between what’s interesting to what’s useful.

We find a lot of useful things at this point.

Aaron Sheehan: That’s really—that’s very interesting. It’s funny, because I was talking a couple of weeks ago—I had a long, late-night parking lot conversation with a friend of mine who’s in a similar role at a metal manufacturer.

And he’s talking about one of the things that he’s seen with AI is that so many people believe that they have found something useful to bring you as the IT leader.

And so, sometimes I have a large dog who will find a possum or something in the yard and bring it inside and leave it on the living room floor, and they’re like, “Look at what I did, you know? I brought you something that I think will be useful to you.”

Also, “I vibe-coded an app,” or, “I’ve created an interactive Figma that I think is actually software,” or, “I’ve got a buddy who’s an expert consultant.”

And it’s not shadow IT in the sense that this isn’t something that’s been brought in and installed on the network and plugged into the wall, where someone’s trying to work around a constraint.

It’s more that the amount of noise that gets brought to you as the, let’s say, tastemaker or gatekeeper of IT within the organization—suddenly there’s a lot more noise injected because the surface area for people who are software developers is suddenly much wider, much larger than it had been previously.

Is that something you also see from your vantage point?

Jacobi Zakrzewski: Oh, absolutely. And, you know, in the IT team, I let them know this is gonna happen. I said, “Here’s what’s gonna happen.”

And so, like many organizations, we have a large amount of what I’ll call prototyping going on amongst our business users, which I enjoy.

And it’s prototyping within the approved tool list, is what I will call it, and we’ve given enough range there to be creative.

And I feel, you know, for the marketing team and digital teams, now you have the armchair design experts every single day happening, right? And then you got armchair IT people, etc.

There’s a fundamental difference, though, of what is a prototype. And I think vibe coding and other tools have done a fantastic job about creating great prototypes very quickly. I do it myself.

Our team’s amazed. You know, like, “Well, you recreated our MES application, the front end, mind you, in like two hours?”

Yeah, I did. But that’s table stakes. That’s commodity stuff now. I’m not super interested in that. I’m just showing a functional example of what we could do versus a non-interactable UX wireframe.

I think the challenge that organizations face is understanding—and I think we’ve done a good job at this—what it takes to go from a prototype to production.

Non-IT folks don’t quite understand what it means to have security, role-based permissions. Non-functional requirements are very important when you’re going from that prototype to production.

So the way I see the transcendence of our organization is, one of our users in engineering, his name’s Nate. Nate’s very smart. He’s created dozens and dozens of little applications and things like this.

He’s done it for his own individual needs, though, right? So we have a lot of individual things happening, which is great.

But then you start to grow into functional area things where, oh, now it’s Nate plus five other people are using this.

Okay, is that group becoming dependent on this and critical to their process? Okay, what happens if it breaks? What happens, you know?

And all those things that come with building things also comes with maintaining things, okay?

And the maintenance side, and operations, and support, and troubleshooting, and understanding when things break and how to fix Humpty Dumpty is something non-IT people aren’t quite used to.

And so I personally feel that allowing organizations to step in it a little bit, going from that prototype to production, is very important as a learning lesson.

And stepping in meaning it’s not putting your organization at risk, but it’s getting your coworkers, your peer groups outside of IT to realize maybe this isn’t the easy button.

You know, maybe parts of this are easy, but parts of this are incredibly difficult, and we need to put some more thought into this.

So definitely see it happening in our organization. I see it happening in other organizations. But I think just talking about and educating the collective selves on what it means to productionize an application or a software is incredibly important.

Aaron Sheehan: I mean, I completely agree. This is a topic that is near and dear.

People who are listening to this know OroCommerce is a—at least I hope they know OroCommerce is a B2B eCommerce platform.

And obviously, this as a category of software—and you’re very familiar with this because this is the stuff that you sold and delivered at Luminos Labs—

Jacobi Zakrzewski: Yeah.

Aaron Sheehan: As a category of software, B2B eCommerce software is not immune from the larger, “Hey, AI is going to replace all the software in the world,” kind of discourse that’s going on.

And what we see is exactly what you described, which is that gap between, “I can see a sort of working prototype on my screen,” and therefore, dot dot dot dot, “I have working enterprise software with role-based access and SOC 2 security.”

And observability, and all kinds of other important things built in.

Jacobi Zakrzewski: Resiliency, backups, yeah, all the—

Aaron Sheehan: Failovers, yeah, all of those things.

As you mentioned, I think rightly, when I asked you earlier about the role of IT, it’s about stability. And stability is a non-functional requirement in a lot of respects, or is supported by the non-functional requirements in a lot of respects.

Jacobi Zakrzewski: I’ll tell you a story. Let me tell you a story about it.

Aaron Sheehan: I love a good story, Jacobi.

Jacobi Zakrzewski: Yeah. So during one of my former times as a leader, I was in board meetings and stuff all the time.

And I remember one of my first updates I ever gave. And mind you, I’m in my late 20s at this point of a billion-dollar-plus company, certainly what I’ll call the youngest person in the room at—

Aaron Sheehan: I just want to state, again, for people who are listening and not watching, as far as I can tell, Jacobi is still in his late 20s, so this doesn’t seem like this happened that long ago.

Jacobi Zakrzewski: You aren’t helping in that regard. I feel like I’m aging very quickly with my kids.

I don’t wake up hearing creaks and feeling sore every day, so that’s good, but I know that—you’ll get there. You’ll get there, sonny.

But, you know, I was sitting in a boardroom, and I was giving updates about infrastructure stability, uptime of our core business systems, our security score was fantastic, no breaches.

You know, by all metrics and KPIs from the stability standpoint, dark green checkboxes, baby. You know, feeling good.

And I’ll never forget, a board member—you know, I’m proud, right? I’m confident, but not arrogant, kind of thing going on, talking about this, touting the team about all the cool things we’re doing—and the board member goes, “So what?”

And I’ll never forget those two words.

Meaning, she said, “So what?” As if, okay, those are—we expected that. But so what after that? What are you doing to help go beyond the stability and keeping and maintaining and keeping the lights on?

And I’ll never forget that moment.

And that was the trigger that got me—and I don’t know why I didn’t always think about this before—but that was a catalyst moment in my mind of going, we have to be more than just keeping the lights on.

That’s expected. Just like you turn your lights on in your home or you turn your faucet on, the water comes out.

But what value are you providing the business beyond that?

And that’s what gets you beyond the firefighter mode to trusted business partner to being an innovative partner with the business.

So, as much as I loved working in the business, it was incredibly important—I use the word incredible a lot—but it’s incredibly important to work on the business, not just in the business.

And that was a moment in my mind I’ll never forget, of she goes, “So what?”

Wow, I thought I did a great job.

You know, but more is expected. More should be expected.

And that required a different level of effort and attention, right? And so, “So what?” Question mark.

Aaron Sheehan: That’s great. Well, so let’s talk about eCommerce then, because I think that is a place where, for IT anyway, that “so what” often ends up becoming manifest, because it is a part of the IT stack that is revenue-producing, right?

It’s—you can look, when you’re going to that board meeting and you’re saying, “What are we responsible for?” Although IT may not be, sort of, formally managing necessarily IT operations on a day-to-day basis, the systems that were decided, and the way the integrations work, and sometimes the existence of a channel is actually pretty led by IT in a lot of respects.

So, what is eCommerce then at A.Y. McDonald, or in B2B more broadly? Is that part of the “so what” answer?

Jacobi Zakrzewski: Yeah, I definitely think it is, and especially because we’re so set on the customer. And everyone says they’re customer-focused, but I will tell you, plastered in all of our facilities is the phrase, “Customer’s the boss.” And I’m gonna tell you, sometimes it’s almost to a fault, you know?

But ultimately, why digital and eCommerce is important to us is because it’s directly associated to the customer, okay? That is a direct line, and that’s what helps you work on the business versus in the business.

So, you know, I don’t know that we’ve formally defined eCommerce. And you ask yourself, “What is customer experience? What is eCommerce?” You’re gonna get a different answer everywhere. And you’ve done plenty of discussions with companies—you get a different answer.

And we’re traditional in the fact that we have a website that has transactional eCommerce capabilities: a login, see your own pricing, see inventory, see order history, lead times, etc. Very important. I know it sounds like table stakes, but just doing that alone gets you really far.

So we have the eCommerce transactional side with our distribution partners, as well as some direct customers.

We have EDI, a lot of EDI in the manufacturing space to distributor. You see it less so distributor to contractor, but definitely a lot of just recurring things in EDI from manufacturer to distributor. It works.

If it works, don’t change it, kind of a thing. And many of our large distribution companies are great partners in EDI with us today. So we have that channel going on within the digital space.

And then we have your traditional, like, emailing POs, sales order automation in that kind of sense, too. So we’ve built some automation technology-wise from an order entry standpoint doing that, too.

So those are all things. But also, I’m really proud of the team here at A.Y. McDonald Industries. If you go to aymcdonald.com, you’re gonna find a tab there for catalog, and we have an extremely detailed product catalog with product data.

And I’m so happy, coming from the PIM world, doing implementations, that we are quite robust in terms of our product data and specifications, etc., to help our distribution partners, you know, sell the sizzle, if you will.

And so we consider that part of eCommerce and digital, too, is just our digital catalog and different ways our distribution partners can consume that.

And, you know, EDI represents a large revenue. Customers would buy from us EDI or not, I think, but EDI helps us from just one of those stability, recurring, don’t-have-to-think-about-it-it-works standpoints.

And so roughly, I will call, 29%-ish of our revenue goes through some semblance of a digital platform, and that includes emailing POs, etc. So, quite a high percentage.

Aaron Sheehan: I love that you include emailing POs as digital, because that is a—for a lot of folks, I’ve found that doesn’t—email is almost so banal as a channel, it is almost seen as living outside of digital, and therefore outside of process, almost, in a lot of respects.

And so I think that’s changing now with the option of more, sort of, AI automation tools.

But yeah. So who owns, then, eCommerce? Does IT own it? Does sales own it? Does marketing own it? Who owns it, and who should own it? Double question.

Jacobi Zakrzewski: Yeah, so A.Y. McDonald is over 170 years old as a company, okay? So that being said, just because we’ve been around a long time doesn’t mean we’re this $5 billion enterprise, okay? It’s been slow, steady growth, very stable, you know, doing well.

And we’re in this—it sounds demeaning—but we’re what I’ll call in this awkward adolescent phase as an organization, where I’ll consider us a very high upper-mid-market organization that has your typical small, lean, but mighty teams.

You know, we have about 30 people in IT, for example, and about 1,800 total coworkers within our industries kind of platform.

But we’re in this awkward adolescent phase of upper-mid-market, but also desiring enterprise capabilities at the same time, right? And so you got maybe a small but mighty team that operationalizes the day-to-day, yet you’re reaching for the stars, and then there’s a gap, okay?

And I say that because some of the growth models, we don’t have a dedicated role to digital eCommerce. Like, we don’t have the version of what you might see of VP of eCommerce. We don’t have that, okay?

So it’s a shared responsibility, and it works, okay? It’s a Cerberus. It’s a three-headed animal here.

IT is a major part of it from an enablement standpoint and getting all the bits and bytes to get where they need to be, from an integration standpoint, for sure. I bring a little bit of different flavor, given my background, of lots of new ideas and things like that that may not have been in place before.

So that’s, you know, number one is IT. Number two, marketing.

Marketing represents the second part of what I’ll call digital and eCommerce, especially our digital catalog, product data, imagery, tone, brand, etc. Lots of that.

And then third is not sales. Third is customer service.

So Erin Round is her name. Shout out to her. She’s been here maybe longer than I’ve been alive at this point, and she is so customer-focused, deals directly with our customers, embodies the customer experience and what the feel is working with A.Y. McDonald every single day.

And so between myself, her, and our Director of Marketing, Justin, represents kind of the committee, if you will, of digital and eCommerce in a lot of ways. And it works well, and we’re continuing to mature.

But Aaron, I think it’s unfair sometimes. Let’s pretend we had one person that was responsible. Let’s pretend we had a Director of eCommerce, a VP of eCommerce.

Aaron Sheehan: Let’s play pretend, yes.

Jacobi Zakrzewski: Yeah, let’s pretend we did. Who would be best at it?

And a bit of a hot take here, not one that I’m gonna have a list of responsibilities on a résumé or job description. I’m simply gonna say, in B2B, whoever has the best business relationships amongst your functional groups in your company is probably the best fit sometimes in eCommerce, right?

eCommerce and digital in B2B should be one of the most cross-functional areas of the organization, if done correctly.

I think isolating it is a huge mistake. Treating it as the stepchild of the organization is a huge mistake.

And why is because everything you do in eCommerce, if you have a highly integrated experience, touches every other part of your company. Every other part of your company.

Aaron Sheehan: That’s a great answer. That’s a really, really good answer. And I say that because it’s often one that I give. I don’t use those exact words, but because it is so cross-functional, it is high visibility and it’s high trust.

Jacobi Zakrzewski: Yep.

Aaron Sheehan: And it’s funny how many B2B companies don’t do this. It is an isolated junior role.

And I’d be curious in your perspective, but I think some of that stems from a perception that eCommerce is fundamentally a cannibalistic channel. That is, I would have gotten this order. They would have emailed me, they would have called me, they would have faxed me, I would have gotten—I would have sent it to them via EDI, or I would have punched out, like, whatever it is.

But that eCommerce is just another order capture means, and therefore the customers are the customers independent of how they interact with us. In other words, the channel has no bearing on their customer satisfaction, their order volume, their retention to us at all.

They’re doing business with the business, and that’s totally almost irrelevant, how they’re interacting with us. Therefore, eCommerce is just somebody who’s delivering basic stability in a channel so often.

Jacobi Zakrzewski: Yeah. There’s two ways to approach, I think, if you’re looking at eCommerce and getting started, or looking to go eCommerce 2.0 in your business. There’s two ways to approach it. It’s outside-in or inside-out.

Outside-in meaning customer first. You’re fully forgetting anything inside your business. You’ll figure out, you know, the messiness inside your castle after the fact. You’re gonna lean directly into what the customer wants, and you’re gonna say, “Hey, too bad, so sad, Bill,” in whatever department. “This is what we have to do because the customer said so.”

And it’s gonna cause a ruckus, and you’ll get through it eventually. That’s kind of an outside-in strategy.

Inside-out is getting a lot of the buy-in amongst your team first, and having the eCommerce, what I’ll call platform—let’s use Oro in this example—of enabling your teams to use the platform first so then they can talk about it with their customers.

So one of my goals back in my prior life was to build an eCommerce and digital platform so the sales team in particular would never have to log into the ERP ever again.

Aaron Sheehan: Saving those seat licenses. I love it.

Jacobi Zakrzewski: That helped, Aaron, don’t get me wrong.

But what it did was, if the salesperson can log in from their phone, from whatever device, without getting on the VPN and launching this archaic application that has 50 tabs, and they don’t know how to use, and they’re frustrated, and they’re creating products every single day and duplicating them—I have scars, okay?

They’re able to just log into this website and look at customer order history, look at order progress, look at inventory counts, make a quote for somebody. And by the way, it happens to be the same place customers can use.

It’s an application. It’s a front end to your ERP and business systems, okay?

Aaron Sheehan: Oh man, you’re doing our—this is, I mean, this is—you’re quoting our marketing here, Jacobi. This is amazing.

I’m not even paying you for it. This is fantastic.

Jacobi Zakrzewski: Because if you have—let’s pretend, you know, salespeople do this all the time. They’re rolling into a customer, right? Pull up in the parking lot.

Boy, you’d like to be informed about the recent orders, any RMAs, any returns. Maybe they’re getting quotes for things. Boy, you’d like to be informed before you walk into that building, right?

And so, just doing a quick check, look to see things. You’re talking about so that nothing’s a surprise. You say, “Hey, I saw you place an order last night. Fantastic. You know, we’ll make sure that gets to you in time,” etc.

That is very intelligent, very smart. Looks like you know what you got going on inside your four walls and castle.

And, you know, you show a little flash on your phone, like, “Yeah, I see it on our website here. You know, I’m using it too. Did you know you can register for an account and log in and look at this stuff too?”

Treat eCommerce as the product of your products.

Obviously, we make these little valves and widgets, things like that, but if you can have the digital application, whether it’s PunchOut, your transactional eCommerce site, EDI—if you treat those as products of your product, things will go pretty well.

And in order to do that, you gotta do some internal sales, okay? Whoever’s leading, or the group leading eCommerce, you gotta have your one-pager of, “Hey, this is a service, a value-added service we offer.”

To the salesperson, this is how it helps you. They’re still gonna get the commission, they’re still gonna get their orders from the customer, you know, those types of things.

So yeah, I definitely have taken what I like to have as an inside-out strategy about getting the buy-in in the groups, kind of engagement first, because they’re the force multipliers.

They’re the ones that are going to be evangelists for these things because it helps them, and by and large, it can help their customers.

But it takes time. It’s not a quick, easy thing. It’s a cultural thing.

Aaron Sheehan: Yeah, I do a lot of workshops on adoption, workshops to B2B audiences on the topic of adoption, and it’s interesting.

Customer adoption, or buyer adoption of eCommerce, is where a lot of people sort of start. How do I get my customers to register for a password? How do I get my customers to check their order status?

And then as the sort of, like, you know, the peak of the relationship, how do I get them to actually order, you know, and then reorder? Oh my God, it’s the meme of the head-exploding guy.

But really, when we start doing the workshops, invariably the topic that generates the most—I don’t say controversy—the most heat and light is the internal adoption of, like, how do I get my salespeople and my CSMs and my leaders, my sales leaders and my field salespeople, and my branch managers, how do I get them bought into eCommerce?

How do I not make it seem like it’s threatening their jobs? How do I make it seem like a product of products? Which is what you said. That’s really good. This is very good stuff.

Jacobi Zakrzewski: I have another short story here.

Aaron Sheehan: God, we love a short story. Please.

Jacobi Zakrzewski: So in my prior life, Luminos Labs worked with a company who manufactured and also distributed actuated valves of various types, okay?

They have a new website now. It looks really great. But one of the key features and functionality of that website was a CPQ, okay? It was a product configurator externally exposed to the world.

Okay, which sounds, “Oh my gosh, you’re gonna allow people to, like, configure a product publicly and, like, show this?”

Yes. Why? Because the sales team took away the internal CPQ, in a lot of ways, right? And made it—they had to go to the website to do the CPQ, right?

So what we found with the sales team was, and it was really good because it was a modern experience, it was easy to use, it wasn’t on this, like, fat client-server application.

They were able to go to the website, log in on behalf of the customer if they’d like, configure a product, and kind of do it in front of the customer real time on the website, and basically act as a CPQ platform, but it happened to be on the eCommerce website. Same place, right?

And so, if you can expose some of those functions or jobs to do closer to the web experience, the more likely you are, you know, to have good adoption.

And it wasn’t forced. It was definitely like, “Hey, if we redid this application, you know, what would you like to see?” And lots of business requirements, a lot of feedback sessions.

But we built it, and it worked really well. And there’s no internal CPQ. You know, it’s all on the web platform.

And that was one of those internal buy-in things happening. And again, it happened to be the same place, same tool customers use directly with their own two hands, you know?

Aaron Sheehan: Yep. Yep, exactly.

It makes total sense. If you’ve got to fix the data and fix the access, you might as well expose it to as many people as you can. And the more people who are using it and looking at it, the more adoption improves, and it becomes a sort of virtuous cycle inside the business.

And it helps prevent the kind of fragmentation of tech debt that you often see in a lot of B2Bs, where there’s, like, this very strong separation between back of house and front of house in terms of how IT is sort of conceived of, and yet a lot of times they’re doing the same jobs. The back-of-house system is doing the same, just for a different audience, with a different experience.

We’re closing in on time here. I want to talk a little bit about something you and I had discussed, I’ll say, in the green room ahead of the actual recording that we’re doing here, which was the distinction you were making between knowledge work and labor work.

You were sort of opining a little bit about productivity, measuring productivity, and kind of the difference between knowledge work and labor work. And I think, you know, as you’ve said, where you are, you have a lot of foundries. You make a lot of—you get things very, very hot and melt them and make them into very, very important pieces—

Jacobi Zakrzewski: Yeah, sorry.

Aaron Sheehan: —hardware. There’s a lot of labor work that clearly happens around you. So walk the audience here, walk the listeners through a little bit about your theory or your framework for productivity and how that fits in between the difference between labor and knowledge, because I found it very interesting.

Jacobi Zakrzewski: Yeah, I think, you know, one of the things that we were doing in IT—by the way, I spent about seven years in public accounting as a consultant and filling out my timesheet, which was 10 minutes at a time, or six minutes at a time at .1 increments, right? And so, when you gotta fill out timesheets, you know, billable, yada yada.

And I’ll never do that again, you know, kind of a thing.

Aaron Sheehan: I’m never interacting with OpenAir again!

Jacobi Zakrzewski: Yeah, yeah. But I say that because one of the big things in manufacturing, and even distribution, is human productivity.

And so, you weigh your warehouse off of productivity, of making sure people don’t have to walk from point A to point B, and you’re not crossing people on aisles. There’s some safety things. You’re trying to reduce the amount of wear and tear on people, but at the same time making your operation really efficient, as if it’s a well-oiled machine.

Happens a lot in distribution. And if you haven’t been in a distribution center before, definitely go to one and just watch, right? Watch. There’s a purpose behind all of it, okay?

Manufacturing, very similar thing. Human productivity, OEE, which is generally on operational efficiency, making sure systems are available, machines are working. People are at their, you know, cells or in their workstations, and they’re pushing through productivity. They’re making these widgets and, you know, taking them off of their line and putting it on the next line, and on and on it goes.

And we do a really good job measuring productivity out on the production floor because it’s all based upon the backlog and capacity, and essentially making sure product can get out the door on time.

And obviously, ideally, making margin on it, like many businesses, in a lot of ways. And so we do a really good job from an accounting and productivity standpoint on the production side of the house, is what I’ll call it, right?

But we’re starting to have a loose equivalent of that on the non-production side of the house, especially with the bringing on of AI.

So again, what’s interesting versus what’s useful.

We’ll never get to the point of doing what I’ll call time studies on the office side and making people measure their time and clocking in and out of, you know, certain things. It just gets too difficult because, contextually, you’re going from this thing to this thing and this thing to this thing on the office space. It’s very different on the production side, where you may have a singular job or you may have multiple jobs to do as a single person, but it’s within a scope.

Very, very defined scope of you’re getting input from something else and giving output for something else to take over, right? So, easier to measure productivity that way.

On the office side, quote-unquote, it’s more difficult because you’re continually context-switching of, “Oh, you know, there’s this broken service. Oh, but I gotta work on this project,” and very scatterbrain stuff going on.

So it’s kind of hard to tell, “I’m gonna hit a stopwatch and work on this one thing for 25 minutes, and then stop that one thing after 25 minutes.” You’re always in this abstract layer.

But I will say, with the bringing on of productivity tools and automation and AI, you start to question a little bit about how much time can you save with some of these tools.

And so, over the last six months, I’ve been running a little bit of what I’ll call an AI cohort amongst curious individuals. It started with 30 people, is now up to 85, and it’s fantastic, with very good sustained adoption of using AI tools to do their job individually.

Alright, whatever it is. Finance, accounting, procurement, production planning and scheduling, all these things that center around production and help it out.

And I can tell you, there’s about, on average—this is self-assessed amongst our individuals—at least four and a half hours saved per week of just general doing things faster.

And it doesn’t take a lot, actually. Whether it’s summarizing specifications of a product, looking at safety things, the typical email summarization, finding information, because we’ve done a good job connecting a lot of our AI tools to our data warehouse in Microsoft Fabric, which is really important to do as a next step beyond traditional office productivity things.

Four and a half hours per person per week starts to add up, okay? What are those four and a half hours being used for otherwise? Don’t know. And I’m not gonna—

Aaron Sheehan: You’re not their manager. You’re just the sort of facilitator of the cohort study, yeah.

Jacobi Zakrzewski: That’s right. And so it’s fascinating, to your original point and question, is I think we have a loose equivalent, I would say, of productivity on the non-production side. It’s just more abstract, and you’re context-switching all the time, but there’s a loose equivalent.

Why? Because I can watch these copper pucks we have in our warehouse that we take and we melt, and we do the things you talked about, and we go through the finished goods and deburr it, finish it up, and have all the quality checks.

That’s a physical supply chain happening inside of our facility. You can watch it happen. It’s amazing.

On the opposite side of the physical side is an information supply chain happening. So, we get a purchase order from a customer. There’s a loose equivalent of our version of a foundry and a factory happening, of taking that purchase order and transforming it, and molding it, getting it into our system, and having an information supply chain happening, right?

And so, when we’re doing process mapping or looking at things, oftentimes we think on the physical side first, but you can make an equivalent of the information supply chain in your business, right?

We tend to do that a lot, about how a piece of data goes from point A to point B and who’s the owner of it, all those types of things.

But I enjoy that. But by no means are we gonna get to the point—I think it’s a culturally difficult thing—to say, “Hey, I want you to track exactly how many minutes you spend on this task per day.”

People will do it, begrudgingly. But you gotta question the purpose for it, that kind of thing. You can’t get to the level like we’re doing at a widget level, maybe on the production side.

Aaron Sheehan: Interesting. You know, that’s really interesting. And I think there’s all kinds of follow-up questions I would love to ask about your study. It’s like one of those old motion control, like, you know, time management, industrial efficiency studies things.

And I wonder—I guess I would sort of end my thoughts by saying—I wonder if AI is making that possible, or it’s simply making it attractive. Because in theory, what you just described has been done and could be done.

Measuring people’s knowledge work, I guess, and their productivity is something that, you know, plenty of consultants charge a lot of money to go do that.

But what AI, I think, has done is it has democratized time savings and efficiencies and unlocked people’s individual enthusiasm for saving time with a new tool, because the new tool is so accessible to them and so unlocking of productivity that they want to—the willingness and the adoption is what’s changed, I think.

Jacobi Zakrzewski: Yeah. Somebody’s—

Aaron Sheehan: Somebody’s not standing over me, watching me in Excel with a timer, you know, like how long it takes me to sort of go run end-of-month reconciliation.

I know we are almost at time. I always end these, Jacobi, with lighter questions. And I think we’ll have to have you back, for sure, to maybe follow up on some of these.

But first off, we’re both Midwesterners.

Jacobi Zakrzewski: Yeah.

Aaron Sheehan: Freddy’s or Culver’s?

Jacobi Zakrzewski: Dude, that’s a rhetorical answer. Culver’s.

Aaron Sheehan: I think I would agree. I would agree. Freddy’s people, don’t at me in the mentions.

Here’s one that most people listening aren’t gonna get. Kum & Go or Maverik?

Jacobi Zakrzewski: Oh, boy.

Most difficult question I’m gonna get today.

Kum & Go.

Aaron Sheehan: Exactly. That’s the correct answer, by the way, Jacobi. That is absolutely the correct answer.

For those who don’t know, Kum & Go is a sort of beloved Iowa-based convenience store chain.

Jacobi Zakrzewski: Although—

Aaron Sheehan: Meeting store chain.

Jacobi Zakrzewski: You go north, stay in Iowa. I’m a big fan of Casey’s pizza, okay?

Aaron Sheehan: Casey’s breakfast pizza? Yes.

Yes, I like a good Casey’s breakfast pizza as well. But the point of the question was, did you like the old branding and leadership, or do you like the new brand? Because Maverik basically acquired Kum & Go and rebranded it.

It’s much less interesting, and I would say the pizza quality has gone down as well. Although, obviously, Casey’s is its own thing.

This is becoming so niche, I love it. This is like a little, like, two-state—our audience in two states is going to have opinions about this end of the topic.

Last question that I ask all guests. Jacobi, what is one piece of media that you’ve consumed in the last several months that you would recommend to other people?

That can be a book, it can be a Netflix series, or a movie, a TV show, a magazine, a podcast, anything you can think of that you have enjoyed that you just want to share with our audience.

Jacobi Zakrzewski: Oh, boy. This is gonna bring a little bit of the nerd out in me, okay?

Over the last six months, let’s say this calendar year, I’ve taken up reading books, okay? This is something I just have never done in my whole life.

Aaron Sheehan: I hear that.

Jacobi Zakrzewski: Yeah, yeah. This whole reading thing, oh my gosh.

I have taken up—and again, this is my nerd coming out, I’m willing to admit this—I’ve been reading the Dungeon Crawler Carl book series. It’s a LitRPG, and I love it, and it’s a great escape.

I read every night before bed, and I enjoy it, man. It’s good stuff.

Aaron Sheehan: You are probably the eighth person in my fr—so I’m as nerdy as you are, and you are the eighth person in my friend group to sort of recommend this.

So I feel like now I need to go do that. So maybe we’ll put a link in the show notes to—do you have an affiliate code that people should use? Code Jacobi for 10% off the books, or what?

Jacobi Zakrzewski: No, I don’t. I don’t.

But, you know, this is something where I find myself getting bored of books very quickly, and that is a book series that’s interested me. And that genre in general, I think, is interesting to me.

It’s fun, okay? It’s fun. It’s fun.

Aaron Sheehan: It’s fun. It’s what you need after a hard day of measuring people’s productivity with AI, is you need to escape.

Jacobi Zakrzewski: I’m tired of melting copper, and I want to read about, you know, these cats with sewer powers and these, you know, crawling dungeons, baby.

Aaron Sheehan: Exactly, exactly. I’m exhausted and sweaty from melting tokens into requests all day long, which is what you do in the AI foundries.

Jacobi, thank you so much for coming on. I’ve been wanting to have you on this podcast for a couple of years now. I’m glad we were finally able to make it happen.

We’ll definitely want to have you back, and I’m sure we will meet at another trade show, introverts though we both are.

Jacobi Zakrzewski: There we go, baby. Thanks for having me.