One on One: Fred Szumlic, Salesman at heart

Fred Szumlic is focused on sales. Szumlic, CEO of software solution reseller JAAS Systems, spends a lot of time empowering staff members to handle their own issues. "This allows me to spend my time growing our global sales force," says Szumlic, who previously was vice president of marketing, sales

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 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' products.

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

"That has taken our sales from $5 million to $200 million in the last five years," he says.

Szumlic says the decision to focus on manufacturing stems from the employees' expertise in that area. Utilizing JAAS' core competencies pays off, allowing the staff to focus on the specific needs of manufacturers.

But JAAS is not without its challenges. Increasing the quality and frequency of updated product releases can be difficult, especially when JAAS places a premium on doing so. The company can fix software issues more cost-effectively by releasing a new version than it can by offering "hot fixes." And it can add functionality when it does so, adding value for the customer.

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

Q: 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.

Q: 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 started, 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 is the redistribution of our products through our reseller network. We are able to leverage our existing sales force that knows the products and territory. Using that reseller channel is the most profitable for us.

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

(It makes us) continue to develop innovative solutions. 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 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.

We start with our local support team, 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.

Q: 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.

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 tight 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.

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

Q: How do you manage a global sales force?

The obvious issues are with languages, time zones and cultures. The Internet is a saving grace for us. Time zones are actually in our favor now, in terms of training and demo shows, which we can do without traveling. Our last, eight to 10 deals were in Vietnam and China. We. are. one of the few Microsoft products (resellers) that are enabled to use the Chinese character set.

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.

Q: 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, 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. Eighty percent of our sales come from the Microsoft Solomon portion. We meet with them faceto-face to find out how their changes will impact what we're doing.

Q: 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. 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 everything is moving forward together as a team, with cohesiveness in everything we do. ... The staff trusts that if I say, 'Do it; go ahead,' that I'm not as worried about the outcome as long as they put their best feet forward.