Out in a cornfield, roughly 50 miles from Pennsylvania’s Lehigh Valley, is a company you just may want to keep your eye on.TIW Technology, or Technology for the Industrial Workplace, is aptly named for its roots in manufacturing, and the story of how it forayed into the accounting software space and created Alere Business Applications reflects the company’s mission to create products in response to customer needs.
The company began in 1983 by providing consulting and programming for refineries and power generation plants. It acquired, and was one of the original dealers of, AutoCad, a software application for two- and three-dimensional design and drafting.
During that time, it also became a reseller for SBT, a company that was offering modifiable accounting products. SBT needed a partner to develop a manufacturing package to integrate with its accounting line, so TIW introduced its Workshop product as a third-party offering.
“We actually came into this industry through the back door, being a reseller and a consultant and then developing a third-party package for SBT, which during the 1990s just grew enormously,” explained TIW president Rod Hatcher. “As SBT became larger and larger, we grew right with them with our manufacturing offering.”
In 1999, the marketplace began to change. SBT was acquired by Accpac, which was later bought by Sage Software.
“You could see that there was a consolidation in the market,” Hatcher recalled. “That led us to a position where our installed base of manufacturing users was getting pretty nervous about their main vendor being acquired. We got more and more requests that we add an accounting package to our manufacturing package, which is what we did.”
As a result of those customer requests, Alere Accounting was introduced in 2001. This gave its manufacturing customers a couple of different options. They could remain on their same accounting application and just use TIW’s manufacturing software, or they could switch over to Alere Accounting.
“We want to honor our relationships with the other companies,” Hatcher said. “But what we do is provide a bit of incentive from a purchase standpoint to move to our package and we provide a conversion program. They have a nice clean path, that they can actually pick a time and convert directly into our accounting package and not lose any of their data.”
TIW has worked to grow its accounting product line over the past seven years, leading the company to integrate the manufacturing Workshop package into the Alere Business Applications portfolio, which includes the accounting line. The entire portfolio is server-based, and software as a service or online applications aren’t in the near future for the company, according to Hatcher.
“In our little corner of the market, we have seen no requirement at all for that,” he said. “The companies we serve really don’t wish to let that information go outside of their company and we’re very sensitive to listening to that. Part of that stems from the fact that our product is modifiable, so quite often our customers are taking our product and modifying it to some degree to suit their particular business, and that is almost not supported at all under an SaaS model.”
Alere Accounting is broken down into three offerings with five modules: Alere CS, which is client/server scalable for $3,995 a module; a local area network system called Alere LAN for $1,995 a module; and Alere SB for the two-user small company, priced at $995 a module.
The five modules are the Manager and the Sales modules, which include the accounts receivable functions; the Purchases module, which includes the accounts payable functions; and a General Ledger module and an Inventory module. Alere
Accounting also offers a sixth module, the Sales Order Configuration, which offers kitting and a rules-based configuration function. Users can choose to purchase modules individually.
“We’ll handle anything from a company that wants to graduate from QuickBooks, to a several-hundred-million-dollar organization,” Hatcher said, adding that his software’s sweet spot tends to be companies with revenue in the $20-to-$60-million range. About half of the company’s revenue is derived from optional software maintenance agreements, which are approximately 25 percent of the application’s license price.
It makes sense that, since TIW started by serving the manufacturing market, most of its customers would be in that area. That, however, is shifting. “Probably about three fourths of our installed base is in manufacturing,” Hatcher said. “But our sales are about 50 percent to companies that are manufacturers and 50 percent are other [types of] companies. So the mix is changing as our accounting program gets a larger and larger installed base.”
A DIFFERENT TAKE
“Something very interesting is that it’s one of the few accounting products that’s real-time, so it’s not batch,” explained Mike Lettini, president of Lettini & Associates, one of Alere’s top dealers based in Santa Paula, Calif., who switched over to the product in 2001. “Plus, the fact there’s no month-end closing required, it’s a major time-saver for accounting departments. I’m an accountant by profession. I spent 25 years as controller and director of operations. I know what it takes to manage an accounting system.”
Lettini, who started his consulting company in 1986, had until 2001 offered the Sage Pro Series accounting application.
“I was disappointed in the direction the product was taking and the lack of development in utilizing current programming techniques,” Lettini said of his experience with Pro Series, adding that he was one of the first to offer Alere, and now provides educational seminars to end users and his client base. “Many students attend these seminars because they’re looking for an up-to-date system which is easier to operate and maintain, as well as providing a platform for customization using less cumbersome programming techniques. We have found that, in addition to the Alere Accounting products being superior in many features, it provides a foundation for the client to build all their business systems around.”
Hatcher describes the system as “transaction-based,” which means when a user gets to the end of a company-defined financial period, all there is left to do is print the report.
“It’s kind of funny,” Hatcher said. “One of our most common tech support calls is a new user who is coming to the end of their first period and they’re calling to say, ‘Okay, I’m totally confused, what do I have to do to close the period?’ We usually say, ‘Do you like to golf? Go golf. There’s nothing for you to do.’ It’s a different approach.”
Also different is a road map list of changes within the software’s versions that is available on the company’s Web site, at www.tiwcorp.com. Users can see characteristics and updates of each version of the software dating back to 2002. The idea behind this feature is to show value to those customers who purchase the software maintenance agreements.
“The question that comes up is, how do you maintain a large number of clients that will willingly pay for a software maintenance contract each year if you don’t have a way of showing them a lot of value?” Hatcher asked. “So what our SMA contract does, it not only includes technical support, but it includes the release of all new versions and a bunch of other things.”
TIW also provides a downloadable white paper on the key features and benefits of its application, as well as an initiative targeting CPAs to partner with their system. “What we have been doing is attending a great deal of the CPA-based local trade shows and we offer accountants an agreement that if they would like to partner with our package, we will provide that package to them, provide training to them, in return for them recommending clients to us,” Hatcher said of the year-old program. “It’s nothing new or novel.” In the summer, the company plans to offer currency conversion, a new function that will complete what it considers the product’s major feature sets.
Next up for the company is getting the word out in the marketplace about its offerings.
“As I look down the road, we’re kind of club-footed,” Hatcher said. “We have a gigantic left foot we call technical and we have a tiny right foot we call marketing and it makes it tough for us to walk, so the challenge for us is to become proficient at the marketing side. We’re never going to become the size of Microsoft or Sage, but we can become a pretty good-sized company.”
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