by Seth Fineberg
Costa Mesa, Calif. - Unless you are involved with accounting for the manufacturing or distribution sector, the name Syspro probably doesn’t ring a bell.
This is not to say that this 25-year-old South African software developer with offices around the world doesn’t go head to head with the likes of Best Software or Microsoft Business Solutions. Brand identity has not been Syspro’s strongest suit, but the company aims to change that.
Syspro is looking to put its convoluted, albeit successful, history aside and focus on further establishing its brand and doing what it has always done: managing its worldwide channel and further developing its products.
Executives in the company’s United States’ headquarters in Costa Mesa, Calif., believe that they have an edge.
“We’ve been here longer than most of the competition, we are self-funded, and we have never lost anyone in our reseller channel. How many companies today can say that?” said Joey Benadretti, vice president of Syspro USA. “A lot of companies, in their desire to meet shareholder or management expectations, are constrained and end up using third-party products. That’s never been an issue for us.”
Syspro’s products were not always recognized by their current moniker. In 2002, Syspro decided to optimize brand awareness and increase market penetration by re-branding its primary product, Impact Encore, under the unified Syspro name.
Syspro’s product roots go back to a multi-user financial and distribution management system originally developed by Dallas-based software vendor Intermark for Singer Business Machines, according to Syspro’s Web site. When U.K.-based International Computer Ltd. purchased Singer, it began marketing the software as “STARS,” running on its proprietary hardware.
ICL commissioned Syspro, then a South African software maker without a brand-name product, to convert STARS to the Unix platform. Subsequently, Syspro bought the rights to STARS, combined the software with distribution and manufacturing software it had been developing, and Impact was born.
Benadretti and Syspro USA president Brian Stein realize that competition, as well as the economy, have changed drastically in a short time. But they say that this hasn’t necessarily hurt the company.
“With the way things are now, we are finding ourselves up against companies like SAP and others of that nature because they are struggling to find business,” Stein said. “We also have a very mature product that is tightly integrated, and we don’t have to worry about issues like our competitors are having of late.”
In the U.S., where the company has been since 1987, Syspro claims that its main competitors include Microsoft’s Great Plains, Best’s MAS 500, “a variety of products” from Epicor Software and, to a lesser degree, Exact North America (also known as Macola).
In Syspro’s home base of South Africa, its main competitor is Softline, which, at press time, was the subject of a takeover bid by Best Software’s parent, Sage Group plc.
Syspro’s revenue dropped to just under $44.6 million in 2002 from a high of $52 million in 2000. But even during the worst of times, the company has never had to lay anyone off.
Another differentiating factor is that Syspro primarily has only one core product with over 40 modules. All of these are available for specific business needs, including enterprise resource planning, customer relationship management, electronic commerce, advanced planning and scheduling, and warehouse management.
Syspro 6.0, its primary ERP product, remains the dominant product line. Its CRM, APS and relatively new e-commerce product, Syspro e.net solutions, also receive “a fair amount of interest,” according to national sales manager Scott McMaster.
The company has also had a long-running practice of investing heavily in product development. The results have been mixed in that, while the company may have exceptional products, they have remained out of the limelight compared to its competitors’.
“Some companies throw a lot of money at marketing, whereas we have quietly plodded forward, putting most of our money into our technology,” said McMaster. “On the one hand we are conservative, we don’t spend money on some wild thought or application, but we do put a lot into our products and that has paid off for us.”
Things are changing for Syspro, however, as it plans to focus more of its time on marketing and getting in front of accountants and CPAs at the firm and corporate level.
Although the company did not reveal a specific strategy, it has been making an effort to get out to trade shows and into the press.
Stein, for one, had a noteworthy appearance on a panel of nearly a dozen middle-market accounting product executives at the recent American Institute of CPAs Tech Conference.
The company is also touting its many achievements and awards, including recent acknowledgements from Start Magazine - which targets manufacturing executives - ISource Magazine, and K2 Enterprises.
But achievements and public appearances alone are not the key to the company’s future. Syspro also relies heavily on its channel, which is over 400 strong - with half in the U.S.
Products are 100 percent sold through its resellers, which the company admits are a special breed. Unlike many of its competitors, Syspro claims that it is not as focused on channel size as it is on specific attributes.
“Look at the average VAR being asked to carry all of these products. It’s hard to learn a line and can result in a lot of dabblers which, when you have over 5,000 partners dealing with product, you can’t have a comprehensive strategy,” McMaster said. “We are very focused on what we do and so are our partners. We concentrate on core areas of business, which allows us to attract better business partners.”
McMaster admits that, while his channel may not be “the cream of the crop,” they are loyal, and he stressed, once again, that no one in their channel has ever left. He declined to discuss specific margins or incentives except to say that they are competitive.
He claims that Syspro takes a “hands-on approach” to its channel and has programs such as the Syspro Learning Channel - a Web-based training program built around assisting resellers “to make the leap from liking the product and taking it on to becoming profitable with it.”
Twice a week, resellers can access live “Webinars” or download archived classes to gain better understanding of implementation and sales.
Heide Wilson, president of Sunnyvale, Calif.-based reseller Operations Resource Group, is pleased with Syspro’s selectivity with the channel and feels that it speaks to her firm’s expertise, as well as the product’s sophistication.
“We tend to under-appreciate the fact that they have one product that can fluctuate for a lot of things,” Wilson said. “My biggest concern originally was that they didn’t do a good job marketing.”
She said that she discovered them while attending a trade show, adding that Syspro’s profile has been “picking up” since then. “They’ve always had great software, but now I think they are better at letting people know,” she said.
Northbrook, Ill.-based reseller Business Technology Partners has carried Syspro products for over eight years, and they are now the company’s best seller. The company also sells Microsoft’s CRM, Solomon and Small Business Manager products, along with Best’s Abra payroll program.
But principal Todd Perlman noted that Syspro lacks market awareness.
“People in the know and those who have experience with ERP and accounting software usually go with it, but when it gets down to an accountant recommendation, that’s where we run into the wall,” he said. “They [Syspro] always put money into development, which is great, but not so much into marketing. But if you ask our consultants they are glad they spend it where they do.”
Perlman also noted 100 percent client retention with Syspro, whereas he often receives calls to replace other accounting systems after only a few years.
Syspro’s future, in part, depends on their awareness level, but Stein and his colleagues believe that they are improving on that front and only feel threatened by the potential aggressiveness of other companies. In the company’s biggest outreach to accountants, Stein was among several software company executives in a panel discussion at the American Institute CPAs’ technology confab this year.
Future strategies for the company include a major addition to its product line. This month Syspro will launch a new application for the consumer packaged goods sector, targeted specifically to retail chains. Details about the product were limited at press time, but Syspro is betting that this will be huge for the company.
“We are going to make this a choice vertical, targeting distributors and manufacturers to a degree,” Stein said. “There’s a huge hole in distribution systems, and we plan to capitalize on this.”
Stein also expects platforms like Microsoft’s .Net and wireless will offer major opportunities for the company in the coming years.
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