Market Shift

On the strength of its scanning tool, Intellagent is making the move from service provider to product vendor.

For a guy who never really intended to get into the customer relationship management (CRM) business, Kurt Reiter is certainly making it pay.

When Reiter founded Intellagent Solutions in October 2003 with his partner, Alex Gorlatov, the idea was to provide business process management (BPM) solutions for midsize companies -- those with roughly 200 to 1,000 employees. Reiter, who is president of Intellagent, notes that he and Gorlatov, now the company's vice president of solution development, each had years of experience implementing BPM solutions in both commercial and government markets.

"We were strictly a service provider and reseller of BPM products," Reiter says. But in working with an early customer, Platform Learning Inc., the Intellagent team realized its client needed not only BPM, but a CRM solution as well. Reiter and his team researched the CRM market and decided that Microsoft CRM v1.2 would fit the bill.

As it turned out, many other Intellagent clients were in the same boat. And they shared another problem: lots of paper.

Intellagent developed software that made it easy for clients to scan in documents and associate them with customer records in the CRM system. "So you not only had access to data related to customers and prospects, but also any paper documents that went along with it," Reiter says.

As the business grew from about $800,000 in revenue the first year to $1.2 million in 2005, Reiter saw even greater potential in the scanning solution, called IntellaScan. To capitalize on that potential, Reiter decided to get out of the service-provider business and into the product business. The software was officially launched in January 2006 and the company essentially made its public debut in late March at the Microsoft Convergence conference in Dallas. One of Intellagent's new partners at the show predicted that the company will sell 500 copies of IntellaScan this year. That would make revenue growth "somewhat exponential," Reiter says. "My dad used to call that a high-class problem."

Intellagent Solutions

Headquarters: Sterling, Va.

Info: www.intellagentsolutions.com

President: Kurt Reiter

Founded: 2003

Line of Business: Microsoft Dynamics CRM and Bluespring BPM Suite

Microsoft Partner Program Level: Certified

Microsoft Competencies: Microsoft Business Solutions, with Microsoft Dynamics CRM specialty; Business Process and Integration

Annual Revenue: $1.2 million in 2005

Growth Rate: 50 percent, 2004 to 2005

Employees: 10

Customer Base: Midsize businesses, including educational organizations and government agencies (notably, the U.S. Department of Defense)

Clients: U.S. Army Central Clearance Facility; Platform Learning Inc.

Lessons Learned
From his years of experience as a service provider, Reiter has learned some valuable lessons.

First is the importance of customer satisfaction, which, in his view, extends to building a system the way the customer wants it even if you don't think it's quite the best technical approach. "Sometimes you have to roll with it to make sure they're happy and getting the system they want," he says.

Another critical element: establishing and maintaining good personal relationships with customers at every level. "Doing BPM solutions, it's easy to get sucked into just seeing the C-level vision for how they want the system to work," Reiter says. "But if you don't take into account the people who will actually use the system and really understand their needs and relate the system to them, it's not going to be a success."

Birth of a Product
Reiter and his team did just that for Platform Learning, a New York City-based company that provides tutoring services to grade-school students, says Eric Burke, who was vice president of technology at Platform Learning when it hired Intellagent in 2004. Platform Learning targets students in schools deemed as needing improvement under the federal No Child Left Behind (NCLB) Act. Many of those students are eligible for stated-funded tutoring services under NCLB. To get paid, however, Platform Learning must adhere to strict requirements, including having students sign an attendance sheet for each tutoring session they attend.

The registration process is likewise paper-intensive, Burke says. The company regularly holds recruiting events at schools that are eligible for NCLB funds; its representatives may sign up 3,000 students or more in two or three days -- all using paper forms.

In its first iteration of a BPM solution, Platform Learning executives decided to make field personnel responsible for ensuring that all those forms were complete and accurate. In practice, however, with so many students signing up in such a short time, that system just didn't work. "We had tens of thousands of [entries in the system] with nothing more than a first name and a last name," he recalls, noting the company grew from servicing 3,000 students to about 70,000 in just over two years.

Burke, now president of Information Architects, a service provider in Lake Hopatcong, N.J., says Intellagent helped implement a more workable solution. Reiter and his team conducted numerous requirements sessions involving everyone from company executives to the actual tutors.

"They literally drew a map of how the process actually functioned and the expectations at each step," Burke says. Intellagent also developed the scanning solution that would become IntellaScan. "A lot of what is now in IntellaScan was born out of this project," he says.

With the system Intellagent built, Platform Learning can now scan in a document and the system will run a number of algorithms to determine whether it represents a new child or refers to one already in the system, associate the forms with the appropriate record and point out where information is missing.

Burke was impressed enough with Intellagent that he hired the company to implement Microsoft CRM, BPM and IntellaScan for his own company, which focuses on disaster recovery and high-availability solutions for small and midsize businesses.

By diving deep and talking to all project stakeholders, you go beyond simply doing a good job for your customers, Reiter says. Instead, you essentially become a subject-matter expert in your client's business: "That makes you an extremely valuable resource to them on an ongoing basis, as their business grows," he says.

Another case in point is the U.S. Army, for which Intellagent implemented an early version of IntellaScan along with a BPM solution based on Bluespring software. Since then, the Army has brought Intellagent back for two more projects. "They feel we know as much or more about what they do than any one person in their organization," Reiter says.

Service Provider bit
It's no accident that, in addition to partnering with Microsoft for CRM, Intellagent is also a member of Bluespring's partner program. Like Microsoft Dynamics CRM, the Bluespring BPM product is easy to customize because of its .NET architecture, Reiter says. That capability is important because customers almost always want a custom user interface on their BPM solutions.

At one time providing that customer interface required doing significant custom development, but now Intellagent simply builds on top of Microsoft Dynamics CRM 3.0. "CRM is a great application platform, even if you don't use any of the CRM functionality," Reiter says. "You can build all kinds of custom entities within the CRM product and it can be literally embedded and operated directly within Outlook. So the software that everyone lives in every day can be the same place where your business applications reside as well."

Reiter also likes the way Microsoft and Bluespring treat their respective partners and considers them both models to emulate. Neither sells directly to customers, instead working to bring that business to their partners. "I can't name the number of experiences where, after I brought a vendor a bunch of business, it took the customer direct," he says. "In each case, it was the end of the relationship."

With that in mind, Intellagent will get out of the CRM implementation business, he says: "We don't want to repeat what we consider to be the sins of other product vendors that ended up competing with their partners."

Beating the Odds

A graduate of George Mason University, Kurt Reiter was somewhat torn as his company was hawking its wares at the recent Microsoft Convergence conference in Dallas. On Sunday, the show expo was starting at just about the same time Reiter's GMU Patriots were tipping off against the University of Connecticut, continuing their improbable march through the NCAA Men's Basketball Tournament.

In the company's booth in the exhibit hall, "we had a little window on one of the machines that we kept popping into to see what the score was," Reiter says. The Patriots earned a trip to the Final Four by defeating UConn 86-84 in overtime.

"At the same time, [his alma mater's Patriots] were beating the odds and really getting a national spotlight, and we felt like we were doing the same thing there at Convergence." -- P.D.

Reiter is also now learning the strategies associated with being a product vendor. As a services company, developers and project managers were the mainstay. Now, the emphasis is on customer support, including technical support, along with sales and marketing.

"The No. 1 hurdle for us going forward is awareness," Reiter says. Convergence was the company's first real marketing push, and Reiter couldn't be happier with the result. The company conducted about 120 product demos in three days, with people often waiting in line to see one. Now Intellagent has to continue learning how to find leads and effectively market to them. That means learning the ins and outs of tools like e-mail marketing and advertising, as well as revamping the Web site to reflect the product focus.

And the product requirements are already coming in, with a number of requests for a version of IntellaScan that works with Dynamics GP, the ERP product formerly known as Microsoft Great Plains (for more about Dynamics and the impact the new products will have on partners, read "Getting Serious About ERP"). That version is now on tap, and Reiter hopes to have it done in time for the next big Microsoft event: the Worldwide Partner Conference in July.