When Matt Hickman bought a water systems equipment retailer in 2004, he was walking in cold. Kean’s Pump Shop, based in St. John’s, Nfld., was using Simply Accounting, but it was very much a paper and pen business. In fact, many of its sales quotes were verbal agreements.
“We had no detailed record keeping, no marketing data,” said Hickman, the company’s owner and president. What the company had was 20-plus years in the business and an experienced management team. “These guys could gut out their decisions,” he said of his 15 staff members. “I didn’t have that as a new owner.”
Lacking the ability to sniff out opportunities, he started looking for a system to capture data and make it more usable. When looking at alternatives, he realized there were a number of products on the market that offered more than just an inventory solution. “People have retirement plans and I wanted to capture as much of their insight and knowledge of the market before they moved on and build that into our database,” he said.
Without an IT department of its own, Kean’s worked with local integrator zedIT Solutions Inc. in May 2005 to roll out SAP Business One, an enterprise resource management system that integrates customer relationship management with financial and logistics modules for small and mid-sized enterprises. Kean’s also had to upgrade its hardware, since it only had a basic network in place.
The company is now able to more efficiently track its warehouse stock, as well as its costs, so it has better data to compete for government tenders. “It’s completely changed our sales process to the point where if the power goes out we have a really hard time,” said Hickman. “It’s almost automated certain processes for us – it does a lot of the grunt-work thinking for us.”
For example, Kean’s was buying 400 SKUs from one supplier, and was able to do an item-by-item analysis and compare it with a proposal from another supplier. “It took us about 15 minutes to do it and another hour to make our decision,” he said. “It reduced the cost of those items by about 40 per cent – previously we had no way of doing that.”
Kean’s also has a growth plan in place. “As a new owner I came here with some pretty broad long-range plans,” said Hickman. “The last thing I was going to do was plunk down some money and have to redo it again in five years.”
These long-range plans include acquisitions, which required scalable technology. “That was a big seller for me because if the company grew 10-fold, I wouldn’t have to worry about starting over.”
Other plans include expanding the business. Eight months ago, Kean’s added a division to the company that deals with geo-thermal heating; in January, it will add another division to handle industrial process equipment. “These types of opportunities are different from our usual sort of business in that they have very long lead times, they’re very relationship based,” said Hickman. The company wouldn’t have been able to roll out these new divisions so quickly, he added, if it didn’t have the technology in place.
Kean’s is an example of what’s happening in the small and medium enterprise space across the country, said Conrad Mandala, vice-president of SMEs with SAP Canada. “I travel from coast to coast and hear the same message from almost everybody,” he said. SMEs want a single version of the truth and they want integration.
In an Ipsos Reid survey commissioned by SAP Canada, eight out of 10 SMEs said they felt operational efficiencies (79 per cent) and business productivity (76 per cent) were areas where IT could boost their business.
SAP’s smaller customers want to make their operations more productive and require help with their growth plans, said Mandala. “There’s hundreds of companies that want to be the next RIM,” he said.