Last month I (Rich) attended Epicor Software Corp.’s Insights user conference as Epicor’s guest at the Mandalay Bay Convention Center in Las Vegas. Epicor delivers business software solutions for the manufacturing, distribution, retail and services industries. Epicor is one of the major software companies serving our industry through their distribution software offerings: Prophet 21, Eclipse, and Epicor ERP.
Insights is Epicor’s annual user conference that provides more than 500 sessions, including a Q&A with Condoleezza Rice; product announcements and product road maps; education/training sessions on how to use existing/new features in Epicor’s packages; and, just for fun, a concert by the musical group Train.
The meeting also includes a massive solutions pavilion where the Epicor team and Epicor partners gave attendees a hands-on introduction to products.
As a reminder, Epicor has approximately 3,800 employees, 20,000 customers in 150-plus countries and sales of around $900 million. The company has development groups located in every major operating region including the Americas (United States, Mexico), Europe, Russia,Asia (India, China), and Australia.
Among the Epicor employees in attendance were President and CEO Joe Cowan and the entire senior management team. As a result, attendees had many opportunities to ask questions and, most importantly, provide feedback to all levels of the Epicor organization.
One highlight for me was the keynote by Rice. Unlike some dry keynotes that one encounters at conferences, Cowan conducted an on-stage interview/conversation with Rice that was quite interesting. It allowed Cowan to delve into topics that were certainly on my mind relating to growing up in Birmingham, Alabama, and her work as national security advisor and then as secretary of state during one of the most difficult foreign policy periods in our country’s history. Kudos to Cowan for the home run.
Epicor provided me the opportunity to spend some one-on-one interview time with key members of the senior management team; so I attempted to ask about issues that readers had raised as I prepared for the conference. The readers had varying ways of asking, but there were several common threads:
“Epicor was purchased by Apax Partners, a private equity firm headquartered in London, United Kingdom in 2011. What does the acquisition mean to me as a prospective Epicor customer or current Epicor customer?”
“I have an old ERP, why should I replace it and why should I select one of Epicor’s ERPs over the others? Also, which Epicor ERP should I select?”
“I am a current user of Epicor products; where are your priorities for the package I am using?”
I had the opportunity to poise these and other questions to the following key Epicor employees:
Schmitt: Can you talk about how the Apax Partners ownership of Epicor rolls down to the prospective or current distributor customer?
McCollum: I think it is ultimately good for our customers. Equity owners want to understand the value proposition that the company delivers to customers and how compelling that value proposition is. If it’s a value proposition that delivers growth and an improved bottom line every year, there is very little risk that the company will be disrupted materially. A new owner typically increases the investment as they work to build the value of the acquired company, which is what has happened at Epicor.
I believe and I think the numbers speak for themselves; we deliver value, we continue to grow and we continue to grow the bottom line so we remain attractive to a private equity firm and also are positioned for continued investment by the private equity firm.
Fleischaker: Joe Cowan’s emphasis on what we say and what we do, building out our products to meet the needs of the distributors, whether it is e-commerce, mobility, analytics, there is a lot happening.
We are focused on what makes the customer happy. Our belief is, if we make the customer successful, if we support them well, provide the right products and push forward from the technology and innovation standpoint, we will achieve success.
Schmitt: I know you are privately held and so you release less data than a publicly held company. But most customers and prospects do not take time to dig into your numbers. What can you say?
Fleischaker: I would love for customers and prospects to see our numbers. We’re diversified, financially solid and growing.
Schmitt: What do you say to the wholesaler who asks, “You have several ERPs, which one should I consider?”
McCollum: We have implemented significant organizational changes in order to better align ourselves with customers.
In the past we had separate business units. There was little motivation to pass opportunities to other business units, even when the other unit was better aligned to serve that wholesaler.
Now I have responsibility for the Americas, and we perform an alignment assessment of all opportunities early in the selling process. This helps us understand if we’re offering wrong products or just cannot succeed with this prospect. Then the territory manager and business development team ask a bunch of questions that leads us down one path or another.
Mostly we focus on asking what problems the customer is trying to solve. Then we perform another, deeper version of the assessment prior to demonstrating the product that we think best serves the customer. This is all aimed at aligning the prospect with the right product.
Schmitt: As wholesalers focus on their core business of selling toilets, pipe, air conditioners, etc., where do you see the biggest risk of their getting blindsided?
Fox: They need to understand that e-commerce has changed. For a long time, it was good enough if you had a Web storefront.
It’s no longer good enough. It has to respond to the way that people want to interact with it. It needs to be accessible on multiple devices. It has to be easy and convenient.
Distributors looking to differentiate themselves need to provide a good storefront, then surround it with their traditional values of service and relationship and their understanding of the specific needs of their sector.
Fleischaker: The steps or roles in product distribution are changing. There is a blurring of the roles of the manufacturer, the wholesaler and the retailer.
McCollum: There are a couple. First, wholesalers assuming that a new system will work like an old system. We try to work with wholesalers to make sure their processes are aligned with what the software can do from a best practices perspective, and that they are willing to change business processes.
Schmitt: The other?
McCollum: Assuming that millennials moving into the industry will operate the way previous generations have worked. They are very interested in working smarter not harder and a lot of that involves their use of technology in new and different ways.
A couple of interesting statistics for you: Currently, 60 percent of millennials feel they are not appreciated by the baby boomers they work with and 64 percent of boomers feel they are not appreciated by the millennials they work with. This is a huge disconnect especially when you couple it with the forecast that by 2025, 75 percent of the workforce will be millennials.
Schmitt: What is Epicor doing with regard to millennials?
McCollum: I did a whole session on the topic, but one example would be how we are working on improving the way we onboard millennials. We want to get them adding value quickly.
We find that when they aren’t able to add value quickly or when they are not acknowledged, you can have dissatisfaction and turnover.
You also have to understand that many of the old processes will not fly with millennials and so we are also rethinking many of our processes.
Fox: We’re finding that millennials, as well as the current team, want to leverage their existing data using business intelligence tools. So we are focusing getting data from our ERPs into a data warehouse environment that supports BI visualization and discovery tools.
Schmitt: In several sessions, there was significant emphasis on “time to value.” What exactly does that involve?
McCollum: We are working on our installation processes to break them into phases. We work with a customer to understand their specific problems and then focus on solving one problem at a time so when the phase is completed, the customer is immediately seeing the benefit or value of the solution and not having to wait until the entire project is completed.
As I close the column and try to summarize what I saw and heard over the four days, it is difficult to properly evaluate and report on all the initiatives. As an outsider, it appears that Cowan now seems to have the team on board, a strategy in place and a course charted for keeping Epicor positioned as one of the top software providers serving our industry.
Thanks to everyone at Epicor for your hospitality!