By Doug Chandler, Executive Editor, Electrical Wholesaling
For many years, under the name CCI/Triad, they were best known to the electrical industry as the company handling the technology behind the Industry Data Exchange Association (IDEA), Arlington, Va. They built and continue to maintain and develop the Industry Data Warehouse (IDW) and the Industry Data Exchange (IDX) network over which IDEA’s members do business.
In 2005, having changed its name to Activant Solutions Inc., the Livermore, Calif.-based company began to expand its position in enterprise resource planning (ERP) systems for wholesale distribution, and along the way picked up the systems running many electrical distributors’ operations. The acquisition of Speedware in January of that year brought ownership of Prelude Systems, among other brands. Activant followed that move with a larger one in August when it bought Prophet 21, Yardley, Pa., which had been on an acquisition quest of its own for several years and brought the installed base of Array users from Trade Service Systems and Prism from Systems Design, as well as users of Prophet 21’s own Acclaim system.
It was with the acquisition last year of Eclipse from Intuit, Inc., that people sat up and took notice. Suddenly a host of familiar brand names were gathered under the Activant banner: Acclaim, Array, Eclipse, Prelude and Prism.
Electrical Wholesaling sat down with Steve Bieszczat, Activant’s senior vice president of marketing, to find out about the company’s growing presence in the electrical distribution channel’s information technology space, and how the distribution software market may change under its influence.
One thing that becomes immediately apparent is that Activant plays in a much larger space than just electrical distribution. The company, founded in 1972, and with 2007 sales of $450 million, does “integrated business management systems and services.” Half its sales come from the wholesale market and half from the retail market.
One of its most impressive projects has been to build a suite of systems throughout the automotive aftermarket that takes data synchronization far beyond what the electrical industry has done thus far with IDEA and its IDW and IDX. It started in 1984, when they took all the automotive aftermarket catalogs and keyed them into a database. The modern version of that database integrates the entire supply chain, to the point that when a mechanic at your local shop looks up a water pump and orders it, every node back to the manufacturing plant is reduced by one water pump and a replenishment order is activated.
“The reason we got the business (to build the IDW for IDEA) was because we showed them all the stuff we’d done in automotive and they said, ‘Oh, I guess they can do this,’” Bieszczat says. “We beat out some much larger companies, such as IBM, to get that business.”
Now, Activant is one of two major players in electrical distributor ERP systems, the other being Infor Global Solutions, Alpharetta, Ga., which is big in manufacturing, but also owns the former NxTrend and related brands.
With such a mix of different legacy ERP systems under Activant’s umbrella, existing users might be concerned about how much support they would continue to receive. Activant won’t be abandoning anyone, but it also won’t be continuing development on all those systems.
Future development will focus on Prophet 21 and Eclipse. Prelude Systems’ Plano, Texas, offices will also continue to play a key role as Activant’s custom shop for development of one-off systems and special applications. Activant’s wholesale business is based at Prophet 21’s headquarters in Yardley, Pa.
“We’re going to continue to run several products, because we want to make sure that when we put our gear in it doesn’t turn the company upside-down,” Bieszczat says.
Activant has personal experience with what can happen with a forced change-over. “We had a COO and CFO who said, ‘We know you have all these systems running Activant that are working really well and doing what you want, but they’re not industry-standard, so we’re going to take all that out and put in Oracle.‘ We’ve never recovered from that. We still fight it to this day. So we learned ourselves the pain of sticking in a system that didn’t work.
“When we put in a system, we’re not going to go in there and turn your business upside down and make you change your business practices and how you interact with your customers. We’re just going to try to facilitate that.”
The logic behind Activant’s acquisitions in the distribution ERP market comes clear when you look at what each of the systems is designed to do.
“We cover a range from cookie-cutter to complex, in terms of the IT footprint and how much you need to know to keep the thing running” Bieszczat says. “Our Eagle customers (retail shops) need it to pop out of a box running. Prophet 21 is closer to pop-out-of-a-box than Eclipse, but pop-out-of-a-box becomes a burden in a larger organization because they want more horsepower, more bells and whistles, more flexibility.”
On the distribution side of Activant’s business, Eclipse systems are developed for large electrical and plumbing distributors, and Prophet 21 is primarily for mid-size and smaller companies, though it is scalable upward. It also is a Microsoft-based system, which gives users the comfort level that comes with a familar interface and functionality.
For the legacy systems in its portfolio, Activant will continue to provide support and do incremental upgrades to existing functionality, but for development of new features and functions, all the energy will be focused on Eclipse and Prophet 21.
Much of the R&D is being concentrated on remote and wireless technologies and business intelligence.
The “imbedded business intelligence gymnastics tools,” as Bieszczat calls them, are among the more interesting ideas Activant is working with. They use a widget-like interface that’s linked into the business’ database to create user-customized tracking tools.
Using a simple, intuitive, drag-and-drop format, users can create a live report that’s either constantly updated or triggered by an event, and imbed it in whatever application they work in most of the day.
As for other technologies under development, “anything wireless, anything mobile, anything GPS-ish is a sure-fire seller,” Bieszczat says. They’re also seeing a lot of demand for document imaging software that can capture signatures or scan documents into a database for paperless storage.
New warehouse management modules are also seeing a lot of growth among distributors. They employ wireless functionality and other new features, but Bieszczat believes the growth is mostly coming from distributors who haven’t had them before and are ready for an upgrade.
“I think it’s just a maturation of people’s acceptance of technology,” he says. “They buy an ERP system and that’s enough for awhile, then a few years later they’re ready for another dose so they buy a warehouse management system.”
Customer relationship management (CRM) functions are also catching on in more distribution companies. CRM systems got some bad press a few years ago for being hard to implement or pointlessly complicated, but newer systems tend to be simpler, concentrating on shared contact management, event planning and event recording functions and tickler or reminder files. Activant is developing a new one for its retail platforms, and hopes to roll it out through all its marketplaces in the near future.
Activant also recently rolled out a new service, Vista Information Services, that leverages Activant’s installed base of distributor ERP systems to create aggregated sales and market share reports. It wants to sell this data to manufacturers, and to develop a report for distributors as well. The distributor version gives them a “fair share” analysis, comparing the distributor’s sales to industry averages, generating missing-item reports and so forth to give them better information for making decisions.
This kind of report is common in many other industries, especially consumer packaged goods, mass merchandising and electronics, Bieszczat says.
One approach Activant uses to separate itself from the crowd is a commitment to hands-on service. The company doesn’t use value-added resellers (VARs) or contract support firms for any part of the process, a practice more common among the large software vendors such as SAP, Oracle and Microsoft. Activant has field engineers all across the country who put in the hardware, the software, configure the network, set up the printers, provide training and so forth, and provide support for the whole package.
Activant’s involvement in the electrical industry on so many levels represents a wholistic approach to building business for the future.
“We’re going to try to provide responsible leadership in the industry,” Bieszczat says. “We want to lead with core ERP technology, we want to lead with information services products and industry involvement in the IDW and IDX, and we want to lead with wireless and business intelligence and such so that we’re the company of choice for all the right reasons.
“The business benefit of that is obvious. It reduces your cost of business, your cost of selling. Responsible leadership in the industry is the goal that takes us to our financial goals.”