Costa Mesa-based Syspro Impact Software Inc., a privately held maker of business software, is watching its back.
The company, which develops software that helps track business data, lives in a world of bigger competitors and regular takeover offers.
“We are a small industry,” said Joey Benadretti, Syspro’s president and joint managing director. “And some of our competitors are really rugged types that like to dirty the wings.”
Two of the company’s biggest competitors—Sage Software Inc. and Epicor Software Corp.—are neighbors. They’re based a few miles away in Irvine.
Syspro also competes with a few biggies, including Redwood City’s Oracle Corp., Germany’s SAP AG and Georgia’s Infor Global Solutions Inc. as they eye smaller customers.
The tough territory has made Syspro a scrappy, fierce defender of its culture and way of doing business.
The company, which is part of South Africa’s Syspro Pty Ltd., is big on keeping things simple. It offers a streamlined product line that can be added to and built out with additional upgrades.
“We are a much more straightforward organization,” Benadretti said. “What you see is what you get. In many ways we are a boutique.”
Syspro makes what’s called enterprise resource planning software—a catch-all for a variety of programs that track data and provide a real-time window onto a company’s operations.
Functions
The software tracks purchase orders, inventory, accounting, supply chain and customer relationships, among many other bits of data about a business. It also integrates with software from Microsoft Corp. and others.
“The most important problem it solves is to give management the ability to make better decisions,” Benadretti said. “We give a real-time view to what is happening in the business. Efficiency is really what it is about today.”
Syspro targets small and midsize businesses. Some of its biggest customers are manufacturers.
They fall into a variety of markets, including industrial and commercial equipment, autos and parts, packaged goods, drugs, medical devices, food and beverage, defense and aerospace, among others.
The software is priced based on a company’s number of users, with an annual maintenance fee that covers the cost of upgrades.
Unlike rivals, Syspro doesn’t seek out new offerings via acquisitions or look to gain market share by gobbling up smaller rivals.
“Our mandate is to focus on our customers and focus on what we do best,” Benadretti said. “What we do best is provide one offering.”
Estimated $65M
Syspro is a small player in the business software world. The Business Journal estimates the company has roughly $65 million in annual revenue.
Sage Software, the North America unit of Britain’s Sage Group PLC, saw about $430 million in sales for the six months through March, the most recent data available.
Epicor, which is publicly traded, is expected to see about $430 million in 2010 sales and had a recent market value of $450 million.
Syspro clings tightly to its independence.
“We are not under the same pressures as some of these companies here that are public,” Benadretti said. “They massacre to get the numbers in at the end of the quarter.”
Despite fielding buyout offers and nudges toward a public offering, Syspro has opted to hold its own.
“I don’t think we have ever considered selling,” Benadretti said. “I get contacted multiple times a week about going public. But everyone who is public is ether crying or lying.”
The company prides itself on its family-like culture and brags about never having had to cut jobs, according to Benadretti.
It’s a bit of a jab at Epicor and Sage, which have each seen hundreds of jobs cut and executive overhauls in the past two years.
“Good companies hold on to their people,” Benadretti said.
Syspro’s big selling point is that it has a small, stable staff that provides personalized service.
The company “has still got the mindset of being personal,” Benadretti said. “We are very much purists.”
Customer Retention
Once Syspro nabs a customer, they tend to stick around, according to Benadretti.
“Our retention levels are among the highest in the industry at about 98%,” he said. “That’s what holds us together as a company.”
Two brothers, Chris and Phil Duff, started Syspro in a South African garage in 1978.
In the mid-1980s, Syspro became one of the first companies to layer features that tracked processes for manufacturers on top of accounting software.
Phil Duff runs Syspro as its top executive at its global headquarters in a suburb of Johannesburg. Chris Duff left the business some years back.
Syspro’s U.S. headquarters is run by Brian Stein, chief executive and joint managing director, along with Benadretti.
The company has some 100 workers here and does sales, marketing and customer support from its OC office. Most of its sales are via resellers.
It also does product development for U.S.-specific software, such as programs that help manufacturers sell to big retailers.
The local operation keeps close ties with South Africa. Benadretti was born in Zimbabwe and went to school in South Africa. Stein and half a dozen other workers and managers also are South Africa natives.
