Technology Newsmaker Q&A: Bryan Murphy

This week, we speak with Bryan Murphy, president and CEO of WHI Solutions. Murphy's company provides a series of on-demand business management software that maximizes distribution efficiency for manufacturers, distributors and their customers. WHI solutions has been ranked one of the 500 fastest growing technology, media, telecommunications and life sciences companies in North America for 2007 by Deloitte & Touche USA LLP.

What's the No. 1 technology setback you encounter in the aftermarket?

Out-of-date, proprietary systems that can't handle the advanced functionality that's available today. A good analogy is when people put sweet rims on a crappy car. You have to upgrade the system.

The best examples of the functionality affected by these out-of-date systems would be e-commerce functionality and next-generation catalog functionality. For example, our next-generation catalog can serve up images, it provides Internet access to find additional information and is presented in a GUI format for ease of use. But if you're on an old green screen that can't utilize that functionality, you're at a competitive disadvantage.

Business intelligence would be a third example. If it's a closed system and you can't communicate with it, you can't generate the type of business intelligence that's required today to run the most efficient operation that you can.

The aftermarket is often accused of underspending on IT. What kind of ramifications will this sort of behavior have?

I think it promotes a "have versus have-not" tiering within the industry, and as a result you'll see accelerating consolidation. A good analogy is racing. You can be the best driver in the world, but you're still going to lose unless you invest in your car. You can't be competitive if you're competing with people who are running their businesses faster, better and cheaper.

I would make the point that there are companies buying out there. I see the larger clients that we deal with spending on technology. I don't think it's universally true that the industry underspends on IT; I think that smaller guys don't make the types of investments that they need to be making.

The argument that many smaller businesses would make, in that case, is that they can't afford it.

That's a great point, but I don't buy it. What we've done, in particular, is design a product portfolio with the small guy in mind. Our products are delivered as a service, so we have very low upfront costs. You pay for the product on a usage basis. You only pay for what you eat, in effect. By and large what we've found is that we've eliminated the hurdle of upfront capital. As a business owner, I understand the problems that a large outlay of capital requires. That's typical of what the software model used to be. With this software-as-a-service model, we've eliminated that hurdle, and frankly we're delivering a savings to users on their existing IT costs. In my mind, the financial burden has been removed. Now the only obstacle is whether or not companies are willing to make that change. Many people are change-averse.

Do you feel that current data and technology standards are appropriate and effective, and what do you think it will take to achieve widespread adherence to these standards?

I think that the standards today are appropriate and effective. The AAIA and other industry leaders have worked hard and done a good job of establishing a set of standards. I think that where we haven't done as good a job is in communicating the [return on investment] story to decision makers at the manufacturing level. I think that needs to be a big emphasis for '08.

Do your customers understand the distinct difference between product attribute data (PIES) and application catalog data (ACES, e-catalogs)? Should there be more focus on product attribute data?

Yes and yes. I think that they do, by and large, understand the difference. The real issue here is that PIES is becoming more and more important because of the explosive growth of e-commerce. You can't expect to reach your potential without having solid PIES data: U.P.C. label, weight, product dimensions, images. If you go to Amazon.com, all of that information is there, and that's what you use to make your selection. If it's not there, it makes it that much more difficult to make a purchasing decision.

Amazon is a good model to look at. Obviously the travel agencies and the real estate industry are all good models to look at. They all have the data that is critical to making that revenue happen. We're definitely behind the curve from that standpoint.

I think manufacturers that are focused on providing PIES data are receiving huge dividends. In effect, they are the first movers on the Web.

Because of a lack of full implementation of product attribute data standards, the aftermarket is not necessarily an appealing market to software providers. Should there be more software providers in the industry, and if so, how does the industry attract this talent?

I don't believe that the lack of product attribute data standards is the reason for fewer IT companies looking to market software in this space. I think it's the perceived lack of IT spending that's the problem. If I'm the CEO of SAP or Oracle, and I'm looking at entering this space, I want to know the potential market for my product. How much are they going to spend on software this year? The answer is: very little. It's not the fact that there's a lack of standards, it's the lack of market opportunity.

It's a chicken-and-egg scenario. You can't blame the constituents of the market for not spending. As an IT company, you need to listen to the customers and build a product that they're willing to buy, and one that will provide value.

Deloitte & Touche just named us as one of the fastest 500 growing technology companies in the country. IT spending is not a problem for us. The trick is listening to the customers and building a product that provides value for them. We'll be up 110  percent this year. For us, that strategy has paid off.