Pascal Houillon wasted little time putting his stamp on Irvine-based Sage Software Inc., the North American headquarters of Britain’s Sage Group PLC.
The past four months have seen the Frenchman reshape Sage’s executive team and lay out a strategy to boost the company’s brand in hopes of getting back to growth.
“We are at the beginning of a new environment at Sage,” said Houillon, a 22-year company veteran who most recently ran Sage’s Southern Europe division. “The biggest challenge is to realign the mindset of people.”
Sage’s software streamlines accounting, purchasing, payroll processing and other day-to-day business tasks.
Most of its software is sold through a network of resellers that install the software and provide service to businesses.
Houillon is in charge of the biggest piece of Sage as chief executive of the North American division. It has nearly $1 billion in annual sales, about 40% of its parent’s total.
About 3.2 million businesses use Sage products. The company gets about 70% of revenue from subscriptions for software to manage payroll, track expenses and other administrative work, according to Houillon.
The company was hit hard during the downturn as many small-business customers opted to hold off on purchases. Sales largely have been flat for the past few years.
Irvine’s Blizzard Entertainment Inc. (see story, page 7)—the top maker of online video games—surpassed Sage as Orange County’s biggest software company by sales a few years ago.
Houillon said he aims to break the slump.
Earlier this month, he added executives to oversee four key areas: small-business accounting; mid-markets; specialty divisions; and North American strategy.
The moves are intended to improve customer service, improve relations with resellers and suppliers and streamline decision-making.
“I changed it because most of the people in the executive team were more back-office people,” he said. “I wanted to have more business leaders. It’s important to have a voice of the customer around the table of the executive team.”
Rivals include Intuit Inc. and big players such as Microsoft Corp., Oracle Corp. and SAP AG, which go after large and small businesses.
Sage is trying to deliver more products online and market newer services with growth potential, such as payment management and marketing software.
Those segments currently bring in about $100 million in yearly sales, according to Houillon.
Houillon has spent most of his time in new role learning the North American market and meeting with customers, partners and resellers.
He’s already zeroed in on a key challenge.
“(Customers) don’t know the Sage brand and they don’t know what the Sage brand stands for,” Houillon said.
The company began rebranding its products a few years ago, making the Sage name more prominent on products, packaging and collateral material.
Campaign
Houillon plans to continue the emphasis with an aggressive branding campaign in the next three to six months.
He expects it will take several years to build the sort of awareness he’d like to see in the marketplace.
The company plans to advertise through various media and lean heavily on its resellers to tout the message.
“It’s the main way for us to really increase Sage awareness,” he said.
Houillon was little known at the North American headquarters when he took the top job in March. He recently provided a glimpse into his management style as he talked about his vision for the company.
“I’m much better at leading people than managing people,” said Houillon who traded a home in downtown Paris for an ocean view home in Laguna Niguel. “I don’t want to micromanage.”
Career
Houillon began his career as a systems analyst for French insurer Union des Assurances De Paris, now part of AXA.
He cofounded and ran a software company targeting small and midsize businesses before joining Sage as a salesman in 1989.
Houillon’s held a number of management positions, rising to chief executive of Sage France in 1997. He went on to add oversight of Southern Europe as well as operations in Belgium, Brazil, Switzerland and Morocco.
He arrived in Irvine as part of the North American division’s third management shift in as many years.
He follows Sue Swenson, who took the top job here in 2008. She replaced Ron Verni, who led the North American division from Atlanta and was ousted by Sage’s British board. The board dismissed chief financial officer Jim Eckstaedt at the same time.
Swenson is an industry veteran and was one of the highest ranking females in the county’s technology sector as head of Sage.
The company recruited her to rework its sprawling operations in the U.S., which includes several large operating units all over the country.
Swenson tapped a number of new executives and created spots for a technology chief, a finance chief and a vice president to oversee resellers.
Her handoff to Houillon marks a significant shift for Sage.
“It’s probably the first time we have had a really thoughtful transition plan,” Swenson told the Business Journal in an earlier interview. “That means we are growing up.”
Houillon’s hire is a clear signal that Sage plans to promote from its own ranks.
“Sage is really committed to developing its global talent,” Swenson said. “We hadn’t done much of that previously.”
Swenson cleared the decks for Houillon by guiding a consolidation of some 20 acquisitions Sage had made during the past decade. Hundreds of jobs were cut, and the company relocated its local operations to a smaller space within the Irvine Spectrum.
“I don’t plan to do any downsizing now,” Houillon said. “Our problem today is to get the right people to get the company to grow again.”
That means new hires.
The company has about 200 open positions in North America, where it employs more than 3,500. It has 369 OC employees.
Buying other companies will come later.
“Acquisitions are part of the Sage business model,” Houillon said. “It’s the way we developed our business. Our last buy was in 2006 but it’s on my agenda.”
