Building a 21st Century Platform: Q&A With Consona CEO Jeff Tognoni
May 18, 2009 4:00 AM PT
Consona offers a line of enterprise resource management and customer relationship management software that is made up of parts that are more recognizable than the whole.
Remember Onyx? It belongs to Consona. Same with Knova and, more recently, SupportSoft.
Over the last few years, Consona has been steadily acquiring companies -- 13 or so -- building out a very respectable portfolio of products.
It's about to take the next logical step: In a matter of months, Consona will be launching an integrated suite of services and support products built on .Net, knitting together the functionality gained through these acquisitions.
"We have been working towards our idea of what a 21st century platform for service and support should be," CEO Jeff Tognoni told CRM Buyer.
CRM Buyer: How is Consona weathering the economic downturn?
Jeff Tognoni: We have done quite well. Last quarter, our profit grew organically. So we are handling it quite well. From a top line perspective, all of us in enterprise software have been getting hit as the economy shrinks IT budgets, so we have had challenges on the top line as much as anybody -- but the difference for us is, we have been able to get ahead with costs.
CRM Buyer: What are some of the cost-cutting measures you've taken?
Tognoni: A lot of it is just across-the-board cuts, looking for waste, etc. We look for [places to cut] everywhere, in other words. We are very good at getting the most productivity out of almost every process that you can find at a software company, including sales, support and accounting.
CRM Buyer: How can your products help your customers' bottom lines in the near term?
Tognoni: Well, we sell both ERP and CRM applications. Our ERP segment is primarily aimed at manufacturing companies, so our application drives cost efficiencies across the entire manufacturing process. On the CRM side, we are focused on service and support. Here too, we drive down costs for customers in these areas.
CRM Buyer: What are some of the bright spots for your company right now?
Tognoni: We are doing a couple of interesting things right now: We have been moving to a .Net-based architecture over the last couple of years, and that is nearing completion. We have several releases related to that coming out. We are also coming out with a new CRM product -- a knowledge-driven support product.
One of the reasons we bought Knova Software and Onyx was to merge them into a service management support product that does both case and knowledge management service. It takes a while to make that high level of integration happen, but we are on track. We recently bought a company called "SupportSoft," which will also add to our CRM line, but that acquisition hasn't closed yet. That should happen in a month, and it will be one more piece of our full service and support product suite.
CRM Buyer: How will your company look a year from now?
Tognoni: We will be bigger from an organic growth perspective as well as an M&A perspective. We will continue to seek outside growth via acquisition, staying close to our ERP and CRM perspectives.
CRM Buyer: What is the dollar figure of the acquisitions you've made over the last few years? And, why acquisitions, in the first place? There is a case to be made for building your own functionality.
Tognoni: Well, I would have to say we have spent well over (US)$150 million acquiring several different companies. We've done about 13 acquisitions in the last four years, so we have been pretty aggressive -- but with a steady pace to it. As for why acquisitions instead of building in-house, that is the best way to grow in this kind of environment. If you want fast growth, it has to be by acquisition.
CRM Buyer: Are you planning any more for this year?
Tognoni: It's hard to plan for these things, because you never know how a deal will shake out -- but yes, I think we will have more.
CRM Buyer: What sort of functionality might you be acquiring next?
Tognoni: Within our CRM line --which focuses on service and support, as I said -- we would like for more functionality to fill out our suite. I don't want to say more than that. In ERP, we would stay close to our manufacturing focus. Within those two areas, you find there are quite a few companies out there that are available to acquire, and we are usually one of the first ones at the table.
CRM Buyer: Are you finding companies are discounted now because of the recession?
Tognoni: The market for public companies, which actually has come back a little recently, is certainly significantly less than two years ago. We stopped buying a couple years ago when prices got too high. We figured they would correct down, and now they have, so we are more actively looking at things.
CRM Buyer: So you are actively looking?
Tognoni: We are back actively looking for deals -- we are not looking for the cheapest deal, but for one that fits our strategy.