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Salesman at heart Featured

6:55am EDT November 22, 2004
Fred Szumlic is focused on sales. Szumlic, the CEO of software solution reseller JAAS Systems, spends a lot of time meeting with staff members and empowering them to handle their own issues.

"This allows me to spend my time growing our global sales force," says Szumlic, who previously served as the company's vice president of marketing, sales and support.

After all, he says, it is that global sales force, made up of the company's network of resellers, that is responsible for JAAS' success. Five years ago, the company partnered with Solomon (which subsequently became part of Microsoft) to offer manufacturing software products through this established network of resellers. Szumlic says as long as the company offers outstanding service, resellers continue to choose JAAS's products.

Over the same five years, Szumlic has helped the company narrow its focus to target middle-market clients in the manufacturing industry, which has dramatically increased the company's revenue.

Szumlic says the company is focused on manufacturers with with sales of $5 million to $200 million, which stems from the employees' expertise in that area. Utilizing JAAS' core competencies continues to pay off, allowing the staff to focus on the specific needs of manufacturers.

"We come up with a way to help them solve their problems," he says.

But Szumlic says JAAS is not without its own set of challenges. Increasing the quality and frequency of updated product releases can be difficult, especially when the company places a premium on doing so.

According to Szumlic, the company can fix software issues more cost-effectively by releasing a new version release than it can by offering "hot fixes" to clients. And it can add functionality when it does so, which adds value to the customer.

Smart Business spoke with Szumlic about the challenges of running a quickly shifting software development firm and the strategies he uses to effectively manage a global staff.

What are the greatest changes in your industry in the past five years, and how have they affected how you manage the company?

The biggest change is that we operate in the mid-market now. (But) the industry is moving away from proprietary software into open architecture.

We have a lot more flexibility to present best-of-breed solutions, so we don't have to be all things to all people now. Instead of trying to handle companies' office and customer service solutions, we can focus on manufacturing. This flexibility allows us to operate in our core competency and not shortchange offices on their needs.

Is that focus what makes JAAS unique?

We've remained true to manufacturing companies that employ our products to address real-world issues. We help them come up with a way to solve their problems.

When we first started the company, we partnered with Solomon Software, which later became a part of Microsoft. That allowed us to spend our time and efforts on our products in our core area of competency -- manufacturing. We have gained acceptance by our network of resellers and their customers. Solomon is used for the financials side, Microsoft for everything else.

What generates the most sales for us, though, is the redistribution of our products through our reseller network. We are able to leverage our existing sales force out there that know the products and territory.

They are responsible for marketing and sales in their areas. Using that reseller channel is the most profitable for us.

What operational challenges does the speed of change in your industry create?

(It makes us) continue to develop innovative solutions. In order to do that, we get input from organizations, developers, support staff and marketers. We ask them, 'What we can do to make our product better?'

We also get global input from our group of resellers and our end users. We want to make sure we understand their needs and are putting them in the proper priority. It can be a challenge to balance the input from the field and the customers' requests in a proper manner -- it's a balancing act.

We start with our local support team first, then the developers. We see if the change is feasible and what the cost would be to develop it. Then we analyze to see if we add the feature (if) it will improve the product's marketability. We don't do anything in a vacuum, and we have a lot of experience in manufacturing.

How do you ensure your clients don't jump ship to a competitor?

Ninety percent of our sales come from our resellers replacing competitors' systems with ours. Because of the new openness in software architecture, we are much more service-oriented. In a major city, there can be eight Microsoft resellers. Customer service becomes that much more important.

We respond quickly -- that is our No. 1 goal. We continue to offer new features that benefit our resellers' customers and end users. Recently, we came up with a product configuration that was rules-based.

It helps our customers to ask the right questions to get the product configured properly so that they don't have orders going to the shop floor that are incorrect. It helps manufacturers reduce inventory and reduces costs. Users can make the system analyze costs and see where their costs are.

Today, manufacturers can't raise their prices but they can find ways to reduce operational costs to become more profitable.

How do you manage a global sales force?

The obvious issues are with languages, time zones and cultures. You have to be the most cognizant of other cultures. The Internet is a saving grace for us. I can respond to a report from Indonesia now (in real time). Time zones are actually in our favor now, in terms of training and demo shows, which we can do without traveling and spending time in a plane.

Our last eight to 10 deals were in Viet Nam and China. We've had great success in the Pacific Rim. We are one of the few Microsoft products (resellers) that are enabled to use the Chinese character set. That feature was developed by a local distributor there.

Another factor is pricing and the exchange rate. You don't own the price, but we make as much margin as possible considering the constant market change. One of the reasons we went with Solomon is its network of resellers (is) already in place; Solomon already had a global presence.

How are you approaching continuous improvement issues within the company?

One of our biggest challenges is to improve the quality and frequency of our software releases and reduce hot fixes. Whenever you add an update to a software product, you find out there's at least one scenario you forgot to test, and it can break the software.

If that happens, you have to send a hot fix to the client, so client A has hot fix A and client B has hot fix B, and you end up maintaining multiple hot fixes. Improving the quality of the testing and doing three or four major releases during the year fixes the problem, and you can add new functions and features as well.

Our April 1 release fixed or enhanced eight or nine issues, and we added five new areas of functionality like engineering phantoms. Instead of running to fix this issue or that, we can improve the overall quality of the product.

Eighty percent of our sales come from the Microsoft Solomon portion. We work with them to know what's coming down the road. And we meet with them face-to-face once a month or once a quarter to find out how their changes will impact what we're doing.

What are your biggest personal challenges in managing JAAS?

Time is my biggest challenge. It takes a lot of time to develop a global reseller channel; a lot of things go into it. When you are making and developing software, decisions have to be made the right way to move everything forward.

I have to balance my time to make sure that everything is moving forward together as a team, with cohesiveness in everything we do. One of our big internal discussions and communications is our weekly staff meetings -- we have departmental meetings weekly; staff meetings are every two weeks.

We discuss issues that have arisen, where we are on our goals and, if we have time, other issues. Once an issue and how to deal with it is established, the staff is empowered to handle it within their departments.

The staff trusts that if I say, 'Do it; go ahead,' that I'm not as worried about the outcome as long as they have put their best feet forward. How to reach: JAAS Systems, (614) 759-4167 or www.jaassystems.com