Interview with Chris Scherpenseel- CEO FRx Software
18th July 2005 Chris Scherpenseel, CEO of FRx Software, has been at the sharp end of accounting in a number of companies and industry sectors. His experience as a finance professional gained over 20 years has given him first hand exposure to the frustrations and demands facing operational management trying to steer a business to better performance. Now, as CEO of FRx Software, a business owned by Microsoft, and part of the Microsoft Business Solutions family, Scherpenseel is putting his experience to work as he strives to deliver better performance management solutions to the mid-market. He explains to our Managing Editor, Gary Simon, how he intends to make FRx a major brand in Europe .
FRx is probably best known in the UK and Europe as a reporting tool accompanying mid-market ERP systems including those offered by Microsoft Business Solutions, such as Microsoft Axapta and Microsoft Greatplains. In fact FRx partners around 30 different ERP solutions. However, the FRx business is branching out beyond its historic borders and beginning to play a more significant role in the business performance management space.
"The BPM market has evolved over the last five years and has added products beyond financial reporting and consolidation. We definitely see ourselves as a part of the BPM space and have added budgeting, planning and forecasting software as well as new functionality around XBRL," says Scherpenseel. "We are a bit of a niche player at the moment but we are broadening our suite of applications," he added.
Whilst most BPM vendors are focussed on the enterprise BPM market selling to large corporates, so FRx is almost unique in declaring its primary interest in mid-market companies. In addition, as a Microsoft company, it enjoys the advantage of a strong brand that is generally very well regarded in the SME sector. Scherpenseel is taking full advantage of the Microsoft brand but stresses that being a part of Microsoft does not automatically confer all of the advantages that people imagine. "We've re-named our products Microsoft Frx and Microsoft Forecaster and are working with the Microsoft SQL and Microsoft Office teams to fully take advantage of their resources and expertise to improve the products. We are also working with the other MBS businesses such as Microsoft Axapta to make sure that our products are integrated completely with their mid-market ERP products. But it does not happen automatically. We have to network with other Microsoft teams just as anybody else would have to."
Nevertheless, Scherpenseel recognises the particular importance of the Microsoft capability in the mid market. "BPM tools in the mid-market have to be easy to use. Mid- market companies with 100 to 500 employees do not have the financial and IT resources to throw at performance management. The products have to be easy to implement and intuitive to use. So we have concentrated on giving the products a Microsoft Office look and feel so that the user experience is similar to all of the other Microsoft products. We also wanted to get away from the complexity of reporting offered by the vendors targeting the larger corporates. Some of them use six or seven different reporting tools and methods."
Scherpenseel recognises that other BPM vendors make a virtue of their Microsoft credentials which may mean that FRx is competing with loyal Microsoft suppliers in the same space. "It's what we call co-opetition, a mix of co-operation and competition. Most companies acknowledge that sometimes you are in competition with them and on other occasions you are collaborating. It may become more of an issue as more BPM vendors push downstream to mid-market companies."
According to Scherpenseel, there is considerable demand in the mid-market space for better performance management software. "Most companies need better insight into their performance but the majority are still using spreadsheets to deliver their management information. Spreadsheets are good to a point but it's difficult to deliver the analysis and roll-ups of divisions and segments using a spreadsheet. Secondly, compliance and corporate governance are driving the demand for better tools so that management can forecast performance with more confidence," he says.
Scherpenseel sees more competition and consolidation amongst BPM vendors. "Those software vendors targeting larger enterprises have to provide a broad suite of applications and many will buy companies rather than build applications so that they can accelerate their time to market. So I see a heightened level of acquisitions," he says.
As Sherpenseel embarks on expansion in Europe it is the prospect of improving the capability of mid-market companies that gives him a buzz. "Having been an accountant and CFO, business performance management is a part of my heritage and I have good domain knowledge and understanding. I remember it was a real challenge to provide business insights because so much of my time was spent collecting and manipulating data. Businesses need to spend less time preparing the budget and more time understanding the results," he says.
"The other challenge is that historically information is presented as grids, or columns and rows of numbers. This may come naturally to accountants but many people in business are not numbers people. We have to find better ways of presenting data and alerting people to take action on the information being provided in dashboards, graphs and charts."
Scherpenseel is a man with a mission. He has a good understanding of what drives the mid-market and the tools it needs. As part of the Microsoft family, Frx software has a formidable array of capability at its disposal. The mid-market might be an unfashionable segment of the marketplace with some BPM vendors but FRx could prove it is a profitable and rewarding place to be.
FRx is probably best known in the UK and Europe as a reporting tool accompanying mid-market ERP systems including those offered by Microsoft Business Solutions, such as Microsoft Axapta and Microsoft Greatplains. In fact FRx partners around 30 different ERP solutions. However, the FRx business is branching out beyond its historic borders and beginning to play a more significant role in the business performance management space.