The Friday Interview: Noel Shannon, ProStrategy

16 Apr 2004

The launch next week of Microsoft CRM in Ireland and the prospect of the software giant muscling into yet another market segment will cause a certain amount of apprehension within the IT community. But the event will make Noel Shannon (pictured) a very happy man.

Shannon’s company, ProStrategy, has been appointed as one of just five Microsoft Business Solutions partners in Ireland, which means it can sell CRM to the thousands of businesses which Microsoft is hoping will flock to the product. This relationship also covers the mid-range enterprise resource planning (ERP) product, Microsoft Navision, which is going to be Microsoft’s other main enterprise software focus over the coming years.

The road to becoming a Microsoft partner was a convoluted one for Shannon. He began his career with Burroughs and subsequently became marketing manager for Wang Ireland in the 1980s. In 1989, he founded EPS Software and over the next 12 years grew this to be a successful services organisation specialising in Cognos (an important partner still) and Lotus Notes implementations.

At the turn of the millennium, when the application service provider (ASP) business model was quickly gaining currency, Shannon decided to get in on the act. He spent a lot of time putting together an ASP offering where he would host business intelligence software over the web in partnership with IBM and Microsoft.

It seemed like a good plan but something was not right. “The ASP model didn’t work,” he says simply. “I think we were too early or else we weren’t big enough. Maybe the companies we talked to were worried about outsourcing. We were getting a lot of interest – every company thought the concept of a monthly payment for a managed service was great – but we didn’t get the customers.”

Having failed with his ASP venture, Shannon did what any good business manager would do: he sat down and did a nuts-and-bolts assessment of his business. When he did, he realised that the real market growth was actually happening in the SME market, not in the enterprise market where EPS was most active. “We think business intelligence market is a solid market and will grow at a reasonable rate but we think there’s going to be significantly greater growth in the SME sector in Ireland over the next five years,” he comments.

The solution, he felt, was to find a complementary business that could give it access to the SME market. He identified such a company in KSM, an IT services firm that was a reseller of the popular mid-market accounting software, Sybiz. In 2001, Shannon sold the Lotus Notes division of EPS to System Dynamics and a year later, in June 2002, merged EPS with KSM to form ProStrategy.

It was a turning point for the company. Suddenly it was in a position to focus on growth markets, such as ERP for medium sized businesses. Shannon quickly identified a fast-growing US software firm, Navision, as a potential partner in the area.

When he entered discussions with it, Shannon was completely oblivious to Microsoft’s intention to buy the company. He recalls: “During the early discussions with them they said ‘By the way we’re being bought by Microsoft’ and we thought: ‘This is fantastic news’ because of the spend we knew Microsoft would put into it.”

Having become a Navision partner and undergone the necessary training and certification, ProStrategy did its first implementation a year later, with Transland, a freight distribution company. This sector has turned out to be a rich source of business, since a further five distribution customers have followed in Transland’s wake. The most recent win, PalletXpress, a Mullingar-based freight consolidation company, represents a sale of around €200,000.

Shannon firmly believes that, for the first time, ERP is finally affordable to mid-size companies. These systems start at about €30-50k and go up to about €300k. “In the past they wouldn’t get the systems for that type of money and the implementation costs would be way higher,” he says.

At a time when the Irish Software Association is describing the sales function as a key weakness of the industry, Shannon believes in tried and trusted principles such as proper lead identification. The origin of the watershed Transland win was an intensive telesales operation which reduced a list of 5,000 distribution firms in Leinster with 50 to 250 employees to 15 firm leads.

“I’ve been in the industry a long time and the most successful way of making a sale is actually meeting a person face to face. But lead generation is essential. Unless you’re putting leads in at the top you’re not going to get sales out the bottom. You have to have a process to generate leads and that means phoning up people,” Shannon remarks.

On the back of the growth of its Navision business, ProStrategy is setting up a Belfast sales office which will take its total headcount from 12 to 15 employees.

With the might of Microsoft behind it, moreover, the product proposition can only improve, Shannon believes. “Each new version of Navision will have more look and feel of the Microsoft desktop. It’s what everybody wants – integration with the normal working environment which for most companies is Outlook, Excel, Word and so on.”

He is also impressed, if slightly awed, by Microsoft’s long-term plans for the system. “Microsoft has a 12-year roadmap for Navision…12 years! I don’t have a 12-year roadmap for myself!”

By Brian Skelly

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