ProfitCenter Gives Hosted CRM a Different Spin

ProfitCenter Software (PCS), a subsidiary of Systemax, formally launched its Profitability Software Suite of hosted CRM products last week, making it the latest entrant into the increasingly competitive on-demand CRM space.

Despite the recent “official” launch, PCS CEO Matthew Ehrlich told CRM Buyer that the suite has been available to the public for about six months and that PCS already has nearly 1,200 seats. “We are growing at about a 100 percent rate,” he said.

PCS is charging US$125 per user per month and offers contracts that run for between one and five years. In addition, the company, not a third party, implements the hosted service for a predetermined fixed rate, regardless of complications that may develop during deployment.

Pieces of Profitability

Five components make up the Profitability Software Suite: ProfitCenter Sales, a sales force automation offering; ProfitCenter Orders, an order-processing solution; ProfitCenter Products, a product lifecycle management and marketing tool; ProfitCenter ERP, a tool to integrate PCS’ CRM applications with its SCM (supply chain management) and ERP financial offerings, and ProfitCenter Business Intelligence, which offers executives a macro view of their overall business in real-time.

“We wanted to combine aspects of CRM, order processing and ERP in one suite. We’re trying to focus on integrating these various functionalities that directly affect a company’s profitability,” Ehrlich said. “We are taking a broader focus that focuses on the whole journey of the transaction.”

Like other hosted offerings, the Profitability Software Suite system is accessible via Web browser. It uses Oracle as its database, BEA WebLogic as its application server and Linux as its platform.

Ehrlich said PCS chose technology from the leaders in various spaces so that its software would operate efficiently and effectively. He also said the company chose Linux and Java because it did not want to be tied to a .NET strategy, in which integration could have been more limited for potential customers.

Reason for Being

Systemax started its PCS division because it could not find an existing CRM vendor that could integrate its own online and offline businesses. Systemax sells PC hardware and related peripherals via e-commerce sites, direct mail catalogs and resellers.

“PCS is another application company focused on the needs of an underserved vertical industry segment,” Forrester Research vice president Erin Kinikin told CRM Buyer. “While most companies have customers and sell products, not everyone can fit their processes into the same tool.”

According to Kinikin, PCS seems to be focusing on brand-oriented online retailers that sell many products to many customers. “Unlike lower-volume B2B, these companies require strong integrated order management and configuration and strong product catalog functionality — facilities not available or well integrated in many CRM systems,” she said.

Primary Targets

“Focusing on profitability is not unique to PCs, but focusing on efficiently taking and fulfilling orders for online retailers of configured products could be a differentiated niche market,” Kinikin added. “It’s not the profitability that’s unique, but how the profitability is delivered [to fit] the needs of specific vertical industry segments.”

For his part, CEO Ehrlich said PCS initially is targeting direct-mail businesses that, like Systemax, use catalogs and Web sites to sell their products and services. These types of companies typically have complicated product requirements that necessitate configuration.

“You want to be able to manage all of this — the catalogs, the Web sites, the bricks-and-mortar stores — using just one database that points to all of the presentation layers,” he said. “And you want to maintain this database within the system so that [the business processes] can be performed in a real-time Internet way.”

Part of New Trend

CRM industry analyst Denis Pombriant told CRM Buyer that vendors SAP and NetSuite (and, to a lesser extent, SFDC) have initiated a trend to integrate more data from ERP and SCM applications into CRM applications to provide a 360-degree customer view.

“That is a valid and valuable thing to do,” Pombriant said.

For her part, Kinikin said PCS’ hosted approach and integrated front- and back-office functionality put it head-to-head with NetSuite, though she noted that PCS has a long way to go to match NetSuite’s claim of 8,000 customers.

At the same time, underserved markets that are waiting for CRM and other applications to adapt to the way they do business could be well served by the latest PCS offering, Kinikin said.