Oco Takes on BI; DemandTec’s IPO | AMR Research

Oco Takes on BI; DemandTec’s IPO | AMR Research

While we often get complaints that we “only write about Oracle or SAP,” a review of our content shows a different story. And to help further spread the coverage, this week, I met with several small software companies eager to become the next supernova. Over the next few weeks and months, you will learn their stories. Here’s the first.

Oco, Inc. aims to accelerate BI evolution

I last wrote about Oco nearly a year ago—“Oco Out to Map the Business Genome.” Oco founder George O’Conor had developed a clever scheme for mapping and extracting all of the critical data in an enterprise regardless of which system it had resided in. Unlike traditional business intelligence (BI) systems, he promised to provide the business genome mapping in six weeks or less at a fraction of the cost of traditional offerings. He was so sure of his company’s abilities that he promised a money back guarantee.

It sounded too good to be true so we interviewed three of Oco’s largest and most prominent customers, the past few months. (Note: In exchange for their frank views, we agreed to not use their company names.)

Too good to be true? Talk to the customers

The first customer interviewed brought Oco in for reporting, to overcome the deficiencies of a legacy package. It started as a management reporting tool, but is now viewed as providing “360-degree visibility” across the organization. Since the first project, Oco has been involved in three follow on engagements, including one for the customer’s client. That client had a two month window in which it had to have Oco’s software installed and operating—Oco did it in four weeks.

The customer is using Oco as part of its new information architecture. Oco helps manage budgeting, planning, and forecasting for the multichannel operations for a diverse set of brands. To date, the customer said that Oco provided a “4:1 improvement on total cost of ownership.” The initial project required Oco to be on site one day a week for six weeks. This has been reduced to a four-week process for the follow on projects.

The second customer is in the apparel retail business. Our contact had been working with Oco since 2003. At the time, the company was in the process of replacing the Ecometry platform which he described as providing “poor reporting and complex ad hoc reporting.” While beginning to look at alternatives like Business Objects and Cognos, the customer met Mr. O’Conor who said, “Give me your data.” Within six weeks, Oco had given the customer the reports needed and had also, as the customer explained, “extended the life of our dysfunctional platform.”

Today, whenever the company has a data management project, the motto is “That’s a job for George.” Yet, at the same time, the customer said that “we are always looking for alternatives. Can we do better? The answer now is ‘no.’”

The third customer is in the quick serve restaurant business. It discovered Oco when finishing its first governance processes. At the time, the company was using Microsoft Access and Excel to manage this. One part of the business was implementing Oracle ERP. This customer’s division was expected to trail the parent company’s ERP schedule by 12-to-18 months. The lack of governance and systems led to complaints about lost data, lost leads (buyers inquiring about franchise opportunities), and frustration over data collection.

Our contact told us that he had once spent a day with the franchising manager and was appalled at the person’s lack of tools. He began to assemble a list of requirements for improving that position: software with a fast implementation, more intuitive user interface, and available on demand software rather than on premise. Fortunately for Oco, his Oco contact previously had been his Oracle sales rep. The project was completed in five weeks. One of the new abilities allows franchisees to see how well they are doing selling the company’s new products relative to their peers. The Oco software also allows franchisees to track their own key performance indicators.

Ironically, the only common complaint the three customers had was Oco’s fixation on six-week implementations. They viewed that as more of an Oco marketing message than a necessity; they can’t move as fast as the small software vendor. When we asked Oco executives about that, they said the primary reason for the six-week plan was to prevent scope creep—the bane of every software project.

Two of the three customers mentioned that they would continue to look at the offerings of other vendors, be it ERP or BI. At the same time, though, they have expanded use of the Oco system by adding seats, applications, and reports. One also added another business division to it.

Changes after Bill Copacino named president and CEO

Oco has made three major improvements so far this year. The first was the hiring of Bill Copacino as president and CEO in January. We first met Mr. Copacino in 2000 or 2001 when he was running Accenture’s supply chain practice. He later became group chief executive for global business consulting with practices spanning financial performance management, business intelligence, CRM, supply chain, human capital development, and business strategy. After Accenture, he joined C&S Wholesale Grocery, a $20B food distribution company.

The second was the infusion of capital. Shortly after Mr. Copacino joined, the company raised $10M in funding from Highfields Capital Management as part of its $14.5M Series C round. The money is being invested in four areas: product development (increased focus on usability, integration with Cognos 8, and the automation of some of the data extraction/data management processes); sales and marketing; additional headcount, especially in development and delivery; and the build out of an alliances program. As you might imagine, Mr. Copacino understands the value of relationships with the consulting firms and integrators. So far, Oco has been working with several firms including IBM Global Services, Tatum, and Lenser.

The company has also been contacting the private equity firms swarming around retail buyouts. This could be a major growth area for Oco. Fast implementations plus a wide range of reports are natural complements to the investors’ plans.

The third boost has been around the messaging. When we met with Mr. O’Conor last summer, the messaging was around “On-Demand Data Integration” and “On-Demand Analytics.” This time it’s more industry specific. Since most of its 13 subscription customers are retailers, the company now offers the Oco Retail Intelligence Solution. This is aimed at different roles/groups inside an enterprise, including the executive team, merchandise and inventory management, direct marketing, store operations, and operations (such as track and analyze performance in the warehouse and call centers).

The new messaging is working. The company has recently begun pilots with two well-known New England firms in retail and consumer goods, respectively.

Buy Google AdWords or new name?

If I could offer one bit of unsolicited advice to the Oco executive team, it would be to do something about the name. Google “Oco Software” and the first mention is “OCO Software, a division of OCO Consulting, specializes in the design and development of software for investment promotion and trade development.” Wrong company!

If you type in “Oco,” you’ll find the right company right after the Occupational Outlook Handbook and just in front of the Orbiting Carbon Observatory. You have to know to go to www.oco-inc.com. The need for a hyphen is not intuitive.

The solution is to buy up the Google AdWords for Oco, Oco software, Oco BI, Oco Retail, etc., or change the company name. It’s probably cheaper to buy the AdWords.

DemandTec goes public

Over the last month or so, I’ve written about the IPO plans of NetSuite and SuccessFactors, and specifically cited the rapid growth rates of the two software-as-a-service (SaaS) providers in the “Clear the Track, Tech is Back” piece. When Deltek filed in May, I also wrote about that, too. So, it was understandable when one of our researchers got an angry e-mail from DemandTec asking why they weren’t included in my coverage or analysis.

On Friday April 20, I had lunch with Dan Fishback, DemandTec’s president and CEO. While we spent most of the time talking about the SaaS offerings his company has built for its 105 consumer goods customers and 29 retail anchor tenants, he also told me about his intention to go public this year.

On May 24, DemandTec announced it had filed to go public. Shares of “DMAN” began trading August 9. The stock opened at $10.05 and closed at $9.34. The timing was somewhat unfortunate given that the Dow dropped more than 387 points that day spooking a lot of global exchanges. As The Wall Street Journal noted (August 10), this was “the second-heaviest one-day plunge since 2003.”