Syspro Plans: Cut and Grow

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Joey Benadretti says he cut the fat out of Syspro's channel program last year and is aggressively recruiting roughly two dozen replacement resellers for 2007. "We've always been VAR-oriented," says Benadretti, president of Syspro USA, noting that channel sales typically account for 85 to 90 percent of annual sales revenue.

But management has changed its philosophy over the past six months in "what we want, what our channel is able to produce, and what we can do to enhance it," he continues.

Last year, Syspro dropped 30 resellers, reducing the number from 120 to 90. It's not that the company is trying to shrink the channel, because it hopes to replace them with 30 to 40 new ones. It wants more active VARs.

Partner Insights

"As Syspro has grown in terms of technology, some VARs got left behind," Benadretti explains. "Most got a couple of customers and started to feel very good about themselves. When we started to get on .Net technology, we saw more cracks in channel partners, particularly the smaller ones and the older ones. We offered training and we found some couldn't learn the new stuff and some didn't want to learn."

Long known for its manufacturing software, Syspro, whose parent is headquartered in South Africa, has expanded its offerings, introducing out software that addresses other major aspects of running an organization, including accounting and distribution.

It has also plunged into the market for customer relationship management software, rolling out Syspro CRM 5.0 in the summer. In that product it added an Executive View, for analysis, a trend it also followed with the introduction of Syspro Reporting Services with Syspro 6.0 Issue 010. In the latter offering, it also expanded its inventory management capabilities to support the lean manufacturing model.

Now, the company is looking in the United States as well as Mexico, the Caribbean and Central and South America to find resellers who are able to learn the product line.

Syspro wants dealers who are committed to its line and who are willing to dedicate resources to the products.

"We're in some sense a boutique. We don't want 5,000 resellers," says Benadretti. "We want resellers with expertise in manufacturing, and if they don't have it, we'll teach them."

Ideal candidates are 10- to 30-person companies that will train five or six people to work with a dedicated business development manager provided by Syspro.

Sales training, marketing assistance, a Customer Service Concierge, and the online Syspro Learning Channel and Support Zone provide resellers with the information necessary to stay on top of product functionality. The company also provides them with strategies on how to effectively demonstrate those features to prospects.

BACK TO THE BASICS

Demonstration skills are particularly appreciated by Jim Holifield and Tom White, principals at S2 Solutions of Burlingame, Calif.

Their company had performed consulting work for accounting software resellers since 1990, but was forced to learn selling skills when end-users started taking the service work in house. Because consulting work came from referrals and the organization's culture was services-driven, not sales driven, the learning curve was challenging.

"A lot of people in the Syspro world are very competent product experts, very good implementers, and very proficient in a field, which doesn't make them the best demo people in the world," Holifield says. "It's difficult to turn them into a sales (person) when you're competing against someone like Microsoft, who's all about marketing and sales."

Syspro's methodology, which Holifield calls "Demo to Win," teaches resellers to focus on a few points that are relevant to prospects, rather than showing all the bells and whistles.

Consistency is key during the implementation phrase as well, notes Benadretti, which is why Syspro developed the Structured Technique to Achieve a Rapid Solution, a methodology that helps maximize operational efficiency. Stars offers templates for inventory and warehouse management, as well as processes related to planning, purchasing, manufacturing, sales, and distribution.

"Many businesses simply fail to examine their existing business processes at the time new software is being implemented," Benadretti says. "They attempt to lay the new software on top of existing procedures and, therefore, expectations may not be fully realized."

This focus on overall business management is winning sales for some VARs.

"It allows us to change our story from software vendors to business consultants," says John Edgar, president of Lonehill Systems of Orlando, Fla., which serves 160 Syspro customers in the states and 300 worldwide and claims to have sold the largest single-site system-400 users-in 2006.

PRODUCT STRENGTH

Edgar likes the open architecture, Web-based technology, and end-user focus of Syspro 6.0, Issue 010.

In particular, he appreciates the fact that system modifications now carry forward to new versions of the ERP product, instead of forcing customers to redo the programming each time they upgrade. This also means he can now offer a 100 percent fit across various verticals.

Holifield also is impressed with the enhancements in the new version.

"The user interface is extremely configurable. That allows us to present a solution to a prospect that's both easy to use and easy to understand, as well as addressing their requirements," he says.

The fact that customers can choose which modules are most appropriate for them pleases Michael D. Tashman, president of Houston-based CSI technologies, a Syspro reseller since 2003.

"Some software you pay per user and get everything, Syspro is cafeteria-style," Tashman says. "Some people will tell you [Syspro's] trying to nickel and dime you. I say you don't have to buy what you don't need."

Module pricing is based on the number of users, with the lowest for things like General Ledger at about $1,500 for four users or $12,600 for 216 users.

BUILDING RELATIONSHIPS

Tashman also values the relationship with Syspro executives and managers.

"I talk to my business development manager daily," Tashman says. "I like that kind of relationship. They just don't call you for sales forecasts." He has also seen an increase in the effort to nurture the channel. Benadretti says that ongoing communication is one of Syspro's differentiators, including direct access to senior executives, and he recently began a newsletter, "Working Together," as part of the effort.

One major complaint expressed by resellers was the company's decision to cut their percentage of annual what Syspro terms "license fees," which covers maintenance and upgrades. The reseller's cut dropped from 30 percent of fees to 15 percent.

The move made Edgar, who formerly ran a dedicated Syspro shop, bring SAP on board at the end of 2005. Although Lonehill Systems sits at the top-tier level, earning roughly $500 million in annual sales, Edgar cautions against undermining the channel.

"Fifteen percent was a mistake because people survive on that. I now have multiple products thanks to them. It's not a good idea for VARs to spread their wings," Edgar says.

Benadretti defends his decision, noting that if VARs perform well, they are rewarded with 2.5 to 5 percent better margins, additional marketing coop assistance, and more on-site visits from Syspro executives, allowing those resellers to influence Syspro strategy and future planning.

"The cost of development is more expensive today than it has ever been. We felt investing heavily in R&D was the best decision for us and our channel partners. It was one of the hardest decisions I've made, but it was the right decision," Benadretti says.

Alexandra DeFelice is Associate Editor of Accounting Technology and can be reached at alexandra.defelice@sourcemedia.com.

Syspro Snapshot

U.S. HQ: Costa Mesa, Calif.

Founded: 1978

Revenue: $63.6 million (projected 2006)

Employees: 370 worldwide, 80 U.S.

Resellers: 90

Offices: 5

Products: Syspro ERP, CRM, Planning & Scheduling, Analytics

Web site: www.syspro.com

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