Sage CEO Sheds Light On Software Company's Reorg
"I know we're making lots of changes, but I believe they are necessary for our future success," Swenson said, addressing solution providers at Insights, the company's annual channel partner conference, being held this week in Nashville, Tenn. "It's been an interesting year and what I would call a transformational year."
Friday Sage North America said it is combining its Business Management and Industry & Specialized Solutions divisions into a single Business Solutions division. The company named former Microsoft executive Jodi Uecker-Rust, whom Sage hired in February, as president of the division.
That move came two days after U.K.-based parent company Sage Group said revenue for the first half of its fiscal year was $1.11 billion, down 3 percent from the first half of fiscal 2008. Sage North America reported sales for the same period were $450.5 million, a 9 percent decrease.
At the same time, Sage North America said it was cutting its workforce by 500 jobs through layoffs, attrition and eliminating unfilled positions.
In her keynote Swenson said last week's steps were part of a broader effort to operate the company more efficiently, grow sales to the vendor's installed base and bring in new customers. She called the latest moves "getting back to basics," which included better understanding customers and delivering solutions to them.
Swenson said that under the old corporate structure there was too much focus on specific products. With the reorganization there will be more focus on SMB accounting markets rather than individual products such as Peachtree and Sage BusinessWorks Accounting, for example, and more focus on midmarket ERP markets rather than Accpac and Sage MAS 90 as individual products.
"We're combining operations inside the divisions so that we're more focused on customers and markets instead of—and this is a point I'd like to emphasize—instead of only products. I think it's a much more logical approach for working with customers and, quite frankly, I think it's a much more logical process for working with all of you," she said.
Swenson also made it clear Sage is counting on its channel partners to help the company return to growth. "You're really our face to the customer," she said, citing the need to increase sales to existing customers while promising "more rewards for generating business growth." She said the company is also developing a standard reseller-tier model across most of its product lines to make it easier for channel partners to work with the company.
Swenson said the company would continue efforts to expand into high-growth vertical markets such as health-care IT and nonprofits/charitable organizations. Another of Sage's core markets, construction, has been hard hit by the recession, but could be rejuvenated by the $131 billion set aside for construction projects in the federal economic stimulus bill, formally titled the American Recovery and Reinvestment Act.