tightly focused vendor, IRM Corporation (www.irm-net.com),
has fine tuned its products, services, its sales process and even its commercial
terms to match the realities of its sole market food manufacturers who sell
to the foodservice and vending markets.
the article "Boutique
Vendors Bring Big Value" we discussed how focus can create highly specialized
solutions that better serve their niche markets. Our recent meeting with IRM
would be an excellent example. The company has provided the service of data
collection and cleansing for the field merchandising market since its founding
in 1970. In recent years, it has, however, further focused by targeting only
foodservice and vending industries and by adapting to the changes of how the
market has been served by also evolving its product technology.
seasoned management team and a long history of working in and serving these
markets have lead to in-depth knowledge of the target customer's business environment.
That environment includes razor thin margins that have led to these manufacturers
and their distributors taking a conservative approach to management. A target
customer would be a food manufacturer/producer that sells branded products (vs.
private labeled products) to foodservice/vending operators (e.g., restaurants,
schools, entertainment, convenience stores, etc.) via multi-tier national distribution
and by employing a field or broker sales force. These kinds of customers (e.g.,
Sara Lee Corporation, ConAgra Foods, DFG
Foods, etc.) desperately need reliable sales, marketing and margin
data analysis, which is typically not readily available from their back-office
this insight, IRM has tuned its products and services and the commercial relationship
to best serve the analytical and workflow applications needs of the above food
manufacturing companies that must deal with customers (i.e., food service distributors)
that, all alike, work on thin margins and have a conservative style.
Products and Services
that end, IRM offers sales and marketing solutions that include applications
for transactional sales analysis and trade marketing. The applications accept
data from both the customers system and the food distributor's systems. This
data includes sales transactions from both sources and trade marketing information.
With this data, IRM aggregates manufacturer shipments with multiple distributor
shipments by site to drive end-user/operator analysis, category management and
purchase rebates based on actual purchase history.
information is presented to field sales with its flagship Sales Discovery
System, which is business transaction analytical software. This system
eliminates the need for paper-based sales reporting and resides on a portable
field salesperson's notebook computer. The system appears to be easy to use
and highly customized to the specific needs of the field salesperson, with flexible
and dynamic views and filters. Sales, deal, margin, inventory, and other information
are presented across all company, customer and product hierarchies in various
time brackets. An appropriate authorization security system tunes the data available
to the individual. PromoAssist is IRM's web-based solution for managing and
tracking promotional activity within the channel.
expedites the request, submission, approval, confirmation, and payment processes
associated with all promotional activity (e.g., spending analysis, payment history,
multiple promotions' views (i.e., by date, by status, by region, by distributor,
and more), etc.), without the need for any paper forms or documents. It provides
workflow for approvals and analysis of the promotional events, and it also integrates
with other IRM services to combine promotion with Sales Discovery analytics.
IRM products further assist in increasing the effectiveness of the field sales
force. TopSales performs data warehousing, multi-source disparate
data collection & processing (e.g., integrity validation, cleansing, matching/aggregation,
etc.), as well as calculation with analytical reporting and trade payments and
banking functions. Ntelli.Net is a secure web portal for field
sales force's access to the above productivity tools.
Business Model, Terms and Conditions
were very impressed with the way that IRM addressed the reality of the business
environment of its customers. The company has embraced commercial terms and
a sales process that is unique but may serve as a model for the future of technology
in other markets. The conservative food manufacturing businesses are concerned
about cost, time and risk. To address the cost concern, IRM provides a hosted
model on a subscription basis. No set-up fees are involved, which avoids upfront
investment in equipment and software and limits start-up cost to training.
time to implement is extremely interesting and possibly unique. As part of IRM's
sales model, the application is actually installed and proven before a formal
proposal is given and a contract is signed. This means that the time between
contract signing and the application going live is virtually zero. Only user
training remains, and to speed user training and lower cost, web based Webex
training is available.
risk concern is addressed in several ways. First, the risk that the software
will do what is required is addressed by IRM actually installing the application
before the customer makes the decision to commit. This allows the buyer to see
the application, with its almost live data, to fully understand what the application
does, how it looks and how the users will interact with the system. Second the
financial risk is minimized by both the low monthly cost and a contract that
is extendable on a month-to-month basis. Not only is the money at risk reduced,
but also no long-term commitment is required.
IRM's sales process and terms, our observation is that it is lower risk and
lower cost to actually sign up with IRM than to conduct a traditional evaluation.
Further, quick payback and proof concept beforehand have always been door-openers,
even before these days of little room for failed IT investments.
while IRM management projects significant growth and the size of the chosen
market should allow for this growth, several obstacles must be addressed. First,
the company has a very long history of serving this market but a limited experience
within the business software applications technology business or the business
model. This introduces an execution risk and a question relative to its long-term
profitability. Second, growth must be funded. The subscription model provides
predictable revenue but may not provide adequate funding for rapid expansion.
month-to-month contracts put pressure on IRM to continually meet its customers'
expectations. A fall off in service level or a competitor who does a better
job can have immediate impact on IRM's financial position.
a challenge for IRM, this pressure is a plus for its customers, as IRM must
work hard to meet its customers' on-going and changing needs. Although IRM is
focused on a well-defined niche market with specific needs, the company is not
without competition. Other, larger and better-known competitors (i.e., analytics
providers like Cognos and Brio, and a slew
of traditional ERP vendors targeting the food industry like Ross Systems,
SAP, SSA GT and so on) are both in its market
today and more will likely enter it more seriously in the future. While IRM's
focus and business model gives it some advantages (see Fatal
Flaws in ERP Software Create Opportunity for Niche Software in CPG Companies)
, the company must stay aware of these competitors and maintain its current
domain expert advantages. Should it continue to penetrate these vendors' customer
base (it has already done so by garnering 50 high-profile customers, some of
them being mentioned earlier), it is only a matter of time when the likes of
Cognos will produce industry oriented analytic product or when ERP vendors will
address the analytical needs the entire distribution channel.
many smaller vendors, IRM lacks significant marketing ability. Its tightly defined
market makes it easer to reach potential buyers, however, IRM needs to invest
in sales and marketing to better reach this market, outside of a mere 'word
of mouth' approach at this stage.
tightly focused, IRM serves its target market well. Food manufacturers serving
the food service and vending markets are urged to put IRM on their short list.
Further, we suggest that they take a test drive with IRM as a short cut to spending
the time and money associated with evaluating more traditional vendors. IRM's
hosted solution seemingly offers a low-cost, low-risk and fast way to start
analyzing your business outside your factory's four walls. Test the company's
focus to determine if it is germane and if it will yield value to you without
Jakovljevic is a research director with TechnologyEvaluation.com
(TEC), with a focus on the enterprise applications market.
He has over 15 years of manufacturing industry experience, including several
years as a power user of IT/ERP, as well as being a consultant/implementer and
market analyst. He holds a bachelor's degree in mechanical engineering from
the University of Belgrade, Yugoslavia, and he has also been
certified in production and inventory management (CPIM) and in integrated resources
management (CIRM) by APICS.
Thompson, a principal of Process ERP Partners, has
over 25 years experience as an executive in the software industry with the last
17 in process industry related ERP, SCP, and e-business related segments. Olin
has been called "the Father of Process ERP." He is a frequent author and an
award-winning speaker on topics of gaining value from ERP, SCP, e-commerce and
the impact of technology on industry.
can be reached at Olin@ProcessERP.com.