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MEMBER SPOTLIGHT: INTERVIEW WITH 2004 CEO OF THE YEAR, GEORGE KLAUS
Interview by Jennifer Beever
For 20 years,
Epicor has been a provider of integrated enterprise software to
midmarket companies around the world. With over 15,000 customers,
Epicor delivers integrated software solutions for Customer Relationship
Management, Financials, Manufacturing, Supply Chain Management,
and Services Execution and Control that enable companies to improve
business operations and build competitive advantage. In February
of 2004, the Software Council of Southern California named Epicor’s
CEO, George Klaus, as CEO of the Year. We managed to catch George
Klaus for an interview just as Epicor announced its first quarter
revenues for 2004 were up 26% over last year.
The Software Council CEO of the Year award is presented to the CEO
of a software company headquartered in Southern California that
has been in operation at least four years, and receives the highest
aggregate ratings in sales growth, job growth in Southern California,
profitability, product innovation, and community and industry involvement.
JB: What do you see as the critical business issues in your industry
today?
GK: Over the past 12 months, the software industry continues
to see considerable consolidation, which means the business landscape
is almost constantly changing for software providers and their customers.
Epicor has always exclusively served the midmarket: companies with
annual revenues between $100 and $500 million. The midmarket remains
an under penetrated market, and we have become leaders in that space
by providing the same functionality needed by the Fortune 500 on
more cost effective technology platforms and implementation.
JB: What’s been Epicor’s greatest success?
GK: We’ve been a technology innovator, starting with
the first client-server products in the early nineties, and most
recently the first Web services-based CRM (Customer Relationship
Management) and ESA (Enterprise Services Automation) solutions.
JB: What do you see as Epicor’s greatest challenge in
the past? How did you overcome it?
GK: We face the same challenges our customers do – a
competitive market, a shifting economy and the changing demands
of customers. I have always held the belief that our first priority
is to serve our customers, then our employees and, finally, the
shareholders. This philosophy has enabled Epicor to maintain customer
loyalty and remain competitive through changing economic climates
and market conditions.
JB: Do you believe acquisition is essential to Epicor’s growth
and success?
GK: Acquisitions are just one way to grow a company. We focus
on organic growth, which is what ultimately drives our ability to
fund further acquisitions. For Epicor, acquisitions are an effective
means of enhancing our technology offerings and growing our position
in the industry.
JB: How have you managed recent acquisitions?
GK: In 2003, Epicor completed successful acquisitions of
CompuNet Solutions, TDC Solutions and ROI Systems. Acquisition of
each of these companies was initiated because of their natural technology
and business synergies with Epicor. With the acquisition of Scala
Business Solutions, which is scheduled to close in Q2 2004, Epicor
is poised to become the largest independent midmarket provider of
collaborative ERP, CRM and SCM applications based on Microsoft’s
.NET platform and Web services, serving the midmarket.
JB: Do you see competition increasing as other ERP software
vendors like SAP try to serve the middle market?
GK: The midmarket has been widely acknowledged as underserved,
which has prompted tier one competitors like SAP to attempt to claim
their piece of it. What isn’t clear is whether these larger
providers understand that the midmarket typically has limited technology
budgets and IT staff. Epicor provides the same functionality as
the SAP’s of the world, and, like SAP, we do it through a direct
distribution channel so that our customers deal directly with the
software publisher. However, because of the technology we use, (i.e.
Microsoft), we deliver this functionality to the mid-market at a
total cost of ownership that mid-market companies can afford. Therefore,
I don’t believe tier-one vendors like SAP will ever be able
to compete effectively in our space.
JB: How did you come to Epicor; what is your background?
GK: I joined Epicor in February 1996 as president and CEO
and then later that year, took on the role of chairman of the board.
Prior to joining Epicor, I held positions at Frame Technology, Cadence
Design Systems/VALID and Hughes LAN Systems. I also remain involved
with the local software community and serve on the board of directors
for FileNet Corporation and the University California, Irvine -
Information & Computer Science CEO Advisory Board.
JB: What do you see as a personal success in your years as
CEO of Epicor?
GK: I have seen tremendous change during my tenure at Epicor,
in both the industry and the company. One achievement that stands
out to me is the strength of the relationships Epicor has built
with its customers over the years. For 20 years, we have focused
on customer satisfaction and have continued to receive positive
feedback from our customers on Epicor’s products, services
and people.
JB: What would you like to tell other Software Council CEOs?
GK: Always focus on your customers. At Epicor, we are placing
a special emphasis on customer support and service at this time
because I believe that this will become an important differentiator
in our mid-market environment. Customers are going to measure vendors
not only from their technology and feature function capability but
how well they service them - mid-market customers are becoming more
sophisticated and want the same support that tier-one customers
get. I would also advise them to always manage their business with
their number one priority being to keep an eye on their cash, which
I believe is more important than watching the P&L.
JB: What do you see as Epicor’s greatest challenge for the
future?
GK: We are taking an aggressive approach to expanding our
global presence, and with the acquisition of Scala, Epicor will
further increase its ability to serve the global mid-market. Our
greatest challenge with the acquisition of Scala is becoming a truly
global company and managing the global landscape. Additionally,
we aim to continue building on our momentum as a leading-provider
of ERP solutions for the mid-market by working with key technology
partners like Microsoft to develop and deliver solutions that leverage
leading-edge technologies such as Web services.
Epicor's worldwide headquarters is located in Irvine, California
with offices and affiliates around the world. For more information,
email info@epicor.com or call
949-585-4000.
Interviewer and Software Council member Jennifer Beever spent 14
years in the ERP software industry prior to founding her marketing
consulting firm, New Incite, in 1997. Jennifer helps companies create
and implement systematic, planned marketing strategies. Contact
Jennifer at 818-347-4248 or jenb@newincite.com.
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