Lynn Berman, founder of SWK in Livingston, N.J., is insistent upon the point: “In today’s Information Technology solutions market, it’s a necessity to have a focus, to be the best at one or two things.” So with business plan in hand, she has carved out sizable niches for her company in Electronic Data Interchange and Warehouse Management.
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Before founding SWK in 1989, Berman was the CFO of a $45 million distribution company, where she became familiar with the intricacies of EDI. She valued its benefits in dramatically slashing data-entry cycle time while accelerating the pace at which orders are placed and filled.
Unfortunately, for most of SWK’s small and medium-sized manufacturing and distribution customers, available EDI systems were “very cumbersome to implement, they were expensive, and the end user couldn’t really manage it by themselves,” recalls Berman. “If they needed to add a trading partner, they had to go back to programming to get it done.”
She continues, “It wasn’t until solutions like MAS 90/200 started featuring Windows-based tool sets that EDI became viable in the mid-range.” In 1998, SWK developed it’s own front-end mapping utility, dubbed Mapadoc, which tightly integrates with MAS 90/200. The firm is currently at work on a MAS 500 (Enterprise Suite) integration as well.
For small companies with fewer than twenty EDI users, “we offer ourselves as their IT person,” notes Berman. “It becomes very cost-effective” versus hiring an IT staffer at $50,000 a year or more. For customers farther up-market, “in the 20-to-25-user category, an IT person starts becoming a necessity,” says Berman.
SWK (www.swkinc.com) relies on the Best channel to foster Mapadoc sales. It pays a referral fee to those Best VARs that don’t want to get directly involved in EDI. But there are currently thirty resellers trained and authorized for Mapadoc sales. “They understand they have an EDI market and they want to pursue it,” comments Berman.
SWK provides a new Mapadoc VAR with on-site assistance for the first install because “at the end of the day, it’s our name out there,” says Berman. An average sale ranges from $25,000 to $30,000, for both Mapadoc software and services.
She estimates that as much as 70 percent of new MAS 90/200 and now MAS 500 sales are cinched because of the availability of EDI integration. “It’s no longer just a nice-to-have; it’s a requirement.”
Mapadoc has played an integral role in SWK’s evolving into a ten-employee, $2.3 million technology consulting firm. The company is authorized to sell MAS 90/200, MAS 500, SalesLogix, and the Radio Beacon Warehouse Management System in the tri-state New Jersey, New York, and Connecticut area. Mapadoc sales occur nationwide. An “average” systems implementation involves 25 to 30 users.
A Complementary Niche
Drawing on her distribution background, and in search of a “perfect complement” to the company’s EDI thrust, Berman not only took on Radio Beacon WMS a couple years ago, she also oversaw development of a software link to MAS 90/200.
Automated warehouse management clearly has high-growth potential, according to Berman, with less than 5 percent penetration in the middle market, as opposed to a 90-plus percent rate for accounting software. Most people are outsourcing their warehouse management, she notes, because of the expertise required in materials handling, warehouse layout, efficiencies analysis, and more.
Already, SWK is getting referrals from other Best resellers whose customers need EDI integration with their existing MAS 90/200 systems. SWK itself recently completed the first phase of a MAS 200 install at a client site for $77,000—pretty much evenly split between software and services. The second phase will encompass Radio Beacon WMS and “a fair amount of custom programming.” According to Berman, WMS software pricing ranges from $15,000 up to $75,000, with approximately an equal amount earmarked for services.
“We put client satisfaction before everything else,” remarks Berman. “We’re not selling technology just for the sake of selling technology; we’re selling complete solutions.”
Richard McCausland is Senior Editor for Accounting Technology and can be reached at email@example.com.