Epicor Software: Accelerating Growth

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By  Carly Lombardo

Epicor Software is actively trying to grow its dealer channel again, following two years in which the ERP vendor’s financial fortunes have improved. The vendor is recruiting both on its manufacturing side and its back-office side, and tailoring programs to the two groups.

“We currently have 153 partners in North America and want another 50 partners within the next year. We’re looking for people who have domain knowledge and partners who can expand our geographic coverage,” says Mike Wingrove, Epicor’s director of channel sales. The increasing channel mirrors the company’s overall improvement in revenue, with channel revenue up by 23 percent over the last year.

Partner Insights

Epicor created two divisions for partners: the Manufacturing Solutions Group, and the Enterprise Solution Group and developing a common platform for the two groups. Although Epicor’s program includes both consultants and development partners, the majority are value-added resellers. The Enterprise Solution Group has 109 partners, and the Manufacturing Solutions Group has 44 partners.

Wingrove took on the task of creating a manufacturing channel in January 2003.

 “We aligned the margins with the Enterprise margins, so there has been no change there. Being consolidated, we have the economies of scale to provide resources such as marketing programs, the partner secured site and partner portal, training programs, and partner specific sessions at our sales meetings,” says Brenda Nobleza, channel development manager.

Epicor’s main product line has moved through a series of name changes from Platinum SQL to e by Epicor, with the “e” being dropped in the last two years as the product became Epicor Enterprise. The company has also used acquisition to add a variety of products, including customer relationship management, manufacturing, supply chain management, professional services automation, and collaborative commerce to its product line.

Along the way, it alternatively emphasized, then de-emphasized channel sales in favor of direct sales. Many former VARs left its program after Epicor told them in 2000 that they couldn’t carry competing products, a policy that was soon revoked, but which left the company with a smaller channel.

Since then, Epicor has been rebuilding its product line and its finances. It has used acquisition to build its product line beyond the back office.

Among acquired products is Vantage, suited for small, medium, and large manufacturers that operate within a mixed-mode environment. Vantage products feature embedded CRM, advanced planning and scheduling, business intelligence and a suite of collaborative eBusiness solutions. The Vista integrated shop management system is designed for small make-to-order job shops that want to track and resolve problems before they affect the shop floor.

The Enterprise Solutions Group focuses on the mid-market. The group’s suite includes Epicor CRM, Back Office, Epicor for Service Enterprises, Warehouse Data Collection suite, Warehouse Management and Fulfillment suite, and Supplier Relationship Management. Epicor Enterprise pricing starts at $25,000 for a five-user financial and accounting solution. It also has Clientele, a CRM package with help-desk functions.

Recently, it expanded internationally with the acquisition of Amsterdam-based Scala Business Solutions, which markets ERP, CRM, and SCM applications through its Web based iScala platform. The purchase also boosts Epicor to about $250 million in annual revenue.

Accelerating Growth
Both divisions offer three different partner classifications: reseller, authorized consultants, and referral partners.

Performance levels for partners are awarded by annual sales performance. Premier Gold partners must meet a minimum requirement of $250,000 in annual net license revenue Gold partners must have $100,000 in annual net license revenue, and authorized partners must complete certification requirements.

VAR margins are based on a rolling 12-month period of actual sales, and all new VARs start at the 30 percent margin level. Marketing development funds are three percent of sales, and the maximum amount that can be accrued is $7,500.

The schedule for margins is as follows:

  • 30 percent for purchases of $99,000 or less.
  • 35 percent for purchases of $100,000 to $199,999.
  • 40 percent for purchases of $200,000 to $499,999.
  • 45 percent for purchases of $500,000 to $749,999.
  • 50 percent for purchases of $750,000 and up.
VARs and Authorized Consultants may become Referral Partners for those products they are not authorized to resell. If the referral/lead closes within six months, they receive 10 percent of Epicor’s Net License Revenue.

Attleboro, Mass.-based Emerald Consulting, a Gold partner, has been an Epicor house since 1997, when it became a certified Solution Provider with its development of an AR ChargeBacks add-on to manage unauthorized deductions.

“The channel conflict is managed well. When we have a multiple office deal, we engage partners in the particular geographic region to assist us. The worldwide channel helps us gain businesses and keep the customer happy,” says Armand Brunelle, president. Emerald is also considered a Vertical Market Specialist for both the not-for-profit and professional services sectors.

Implementation Assistance
In general, ESG partners must have experience in selling ERP and CRM applications. They must also be Microsoft Certified partners, provide dedicated sales and consulting resources, and must complete the certification process within six months of signing up.

VARs must attend a two-day Sales Boot Camp designed to tutor them in product functions, marketing, and sales methodology and demonstration skills.

The company will also provide consultants to assist during a reseller’s first two implementations. There are separate certifications for Epicor Warehouse, Supplier Relationship Management, and Epicor for Service Enterprises.

The Implementation Certification Program has two components: product education and the guided implementation assistance.

Product Education is available through Epicor’s eLearning Program. Courses walk partners through implementation, maintaining the systems, and advanced application customization. VARs must attend a four-day Knowledge Camp Product Training Workshop which is a hands-on session focused on how to effectively set up and configure the application. After the camp, a Pre-Consulting Workshop is required. During the four days partners will be applying common manufacturing scenarios.

Marketing Services
Epicor also offers a variety of marketing programs and tools to assist resellers in gaining clients.

“Generating end-user leads is key to our VARs growing their businesses, and we want to be sure our partners have all the tools they need,” says Wingrove.

These tools include Cyber seminars and secured partner sites.

In fact, Epicor has recently revamped the partner section of its Web site to include information on product marketing, channel marketing programs, partner education, worldwide support, VAR order forms, and implementation guidebooks.

David Warford, president of Xltec, an accounting software reseller for 15 years, says, “VARs are the key to customers liking a product or not.” Warford, whose Alpharetta, Ga.-based firm sells hardware and software systems to accounting and manufacturing firms, feels Epicor has made the right channel decisions. “Epicor has made a corporate decision not to make the channel a profit center. I don’t have to pay a fee to join the program, and all I have to do is log on to the partner site and set up Web training for my staff. I can monitor their progress or sit in on the classes with them,” says Warford.

“The partner Web site has a lot more resources to get partners up quickly and growing. The e-learning is great, and the Webinars allow me to take part at my leisure,” adds Brunelle.

Epicor Snapshot
HQ: Irvine, Calif.
Phone: (800) 290-1592
Web: www.epicor.com
Founded: 1984
Employees: 1,500
Annual Revenue: $250 million
Product Suites: Epicor Manufacturing, Epicor Enterprise, and Epicor Clientele

Carly Lombardo is Associate Editor of Accounting Technology and can be reached at carly.bohach@thomsonmedia.com.

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