A Vertical Strategy Pays Off
Streamline Systems finds success with its exclusive focus on Axapta ERP for industrial manufacturers.
- By Alison Diana
- September 01, 2005
Streamline Systems LLC has a one-track mind. The Denver-based consulting firm specializes exclusively in delivering Microsoft's Axapta ERP solutions to industrial equipment manufacturers around the country, says Senior Partner Larry Cohn, who co-founded Streamline Systems in 1994 with Senior Partner Al Galinot.
"Our goal is to be the very best in one thing and to do it better than anybody else. I think that's what makes us different," says Cohn. "[Customers] do not want to buy from a generalist; they want to buy from a company that knows their business and can provide significant business improvements."
Since its inception, Streamline Systems has been focused on its customers' success, says Cohn. The company's goal is to help customers use the software tools to improve their business operations, he adds. "We measure our success based upon the success of our clients. If our customers have not improved productivity and lowered their costs as well as increased their sales due to reducing their product lead time and improving their customer service, then we have not done our job well," Cohn says.
"To help our customers achieve business success, we need expert consultants who have experienced the challenges facing our customers and have utilized Microsoft information technology to solve these challenges," he adds. "Our people are what differentiate Streamline Systems. They are experts in industrial equipment, having an average of almost 20 years of experience in the industry." Cohn also seeks to foster teamwork among his 20 consultants. "We've never measured a consultant on utilization: We want our consultants to share their expertise," he says.
Basing consultants' bonuses and promotions on utilization promotes internal competition and encourages individuals to hoard knowledge, says Cohn. "The only bonus plans we have are team bonuses based on the profitability of the company."
The consultant's role is solely to focus on customer success, says Cohn. "My job is to make our consultants happy. If they are happy, then our clients will be successful."
Streamline Systems expects to add about 10 more consultants in the next year, but does not want to grow dramatically, given its personal focus on both clients and employees. "Are we going to grow? Absolutely. The challenge is managing the growth to maintain the culture of the company," Cohn says.
Streamline Systems' Larry Cohn requires all his consultants to be experts in industrial equipment.
A Winding Road
Begun as a four-person outfit selling System Software Associates' Business Process Control Systems ERP to manufacturers, Streamline Systems had great success in its first two years, Cohn recalls.
That led to a joint venture with Jan Baan of Baan Software called Baan Business Systems USA, a privately owned Baan ERP reseller. But the solution provider, which quickly grew to about 40 consultants, didn't fare well against its much larger competitors.
"We were doing horribly," says Cohn. "We were competing against JD Edwards and Oracle every day. Our win ratios were 15 to 20 percent. We were coming in second too many times.
"We went to Europe because Jan's companies were doing so well there," he adds. "We learned the value of selling vertical solutions. Their win ratios were high, their sales campaigns were short and they didn't have to discount the software. It was a no-brainer for us to change."
The partners' prior experiences in manufacturing, coupled with the company's resolve to specialize in only one vertical, began to pay off. Within two years, the company was reselling $15 million worth of Baan software with revenue of more than $25 million, making it the top Baan reseller in the United States.
Streamline's reputation for customer service, technical astuteness and market know-how also grew. The company relied almost exclusively on customer references to promote its offerings.
In 1999, the consulting firm severed its relationship with Baan, selling that portion of the business back to Jan Baan. Last year, Streamline Systems—which had signed a three-year non-compete agreement with Baan—began offering Microsoft's Axapta-based ERP solution to its clients.
|Streamline Systems LLC
Web Site: www.streamlinesys.com
Top Executives: Larry Cohn, senior partner; Al Galinot, senior partner
Microsoft Competencies: Axapta
Annual Revenue: $4 million
Number of Consultants: 20
Vertical: Industrial equipment manufacturers
Achievements: Microsoft Gold Certified Partner; member of Microsoft's Business Intelligence Advisory Council
Clients Include: Telsmith, Morgan Construction, Nortke, Baxa Corp., Spectra Logic Corp.,
The Microsoft Move
Industry consolidation—PeopleSoft's acquisition of JD Edwards and Oracle's purchase of PeopleSoft—limited the selection of software partners. Microsoft's channel-friendly strategy, its technological leadership and the support it offers partners played a crucial role in determining Streamline Systems' future direction, says Cohn.
The relationship already has resulted in contracts around the country, as well as some international opportunities, he says. By the end of June, Streamline Systems already had closed three large Axapta contracts this year—worth a total of $2.5 million in consulting fees and $1.5 million in software, he says.
When Telsmith Inc., a subsidiary of Astec Industries, needed to replace its existing ERP system, the company investigated many programs, says Steve Miscikowski, chief financial officer at the Mequon, Wis.-based company. Telsmith is a manufacturer of processing equipment for industries such as crushed stone, sand and gravel production.
"We looked at a lot of different packages. Management wanted us to go with Baan, because Baan was installed at three of our other companies," he says. "We felt that Axapta had a lot more flexibility, a lot more options. Price-wise, they're about the same, but we looked at all the additional things we're getting for our money. Axapta is a totally integrated package. There are no add-on modules from other companies, which we thought would make it easier to gather and relay information."
About 40 percent of Telsmith is using Axapta today, and the manufacturer expects the software to be installed throughout the company by Oct. 3, says Miscikowski.
"Streamline has gone out of its way to make sure the right functional people are here when we need them," he says, noting that Streamline Systems' consultants have been available after-hours and on weekends.
The fact that Streamline Systems focuses only on industrial equipment manufacturers helped Miscikowski and his team win over top management. Microsoft and Streamline Systems also put together a presentation at Microsoft's Technology Center in Chicago to help woo Telsmith executives, says Miscikowski.
"It definitely gives a certain comfort level," Miscikowski says. "They know what they're talking about, they know what our problems are. We are convinced that we will see significant business improvements when we are finished, especially a significant reduction in product lead time. Rather than telling customers it will take three to four months for a product, we are going to be able to tell them it will take three to four weeks."
Playing for Keeps
Indeed, Streamline Systems goes out of its way to ensure all clients receive service that goes above and beyond the expected, both to continue its growth and prevent competitors from chipping away at its market.
"If we take great care of our clients, they'll take great care of us. A prospect is going to take much more notice of a client than [one of our] pre-sales guys," he says. "You have to do the right thing for your clients. Any time you run through an implementation, you're going to have issues and problems. Manufacturers should ask, 'How is your partner going to react?'"
Given Streamline Systems' single-minded approach to its industrial manufacturing vertical, the solution provider hopes its clients will continue to expect—and receive—the quality of service on which it has built its company and reputation.