» Early History, the Origins of Beck Consulting
A Conversation with Allen and Mary Beck
Early History, the Origins of Beck Consulting
Let’s start at the beginning. Before we get to Beck Consulting, everyone wants to hear the romantic love story of you two.
Mary Beck: How it started was, I met Allen interviewing for Price Waterhouse. He was working as a manager in the consulting practice in the Fresno office and I had gone to Fresno State. I went to junior college first in Visalia, where I was born, and then took a break from school because my major was Microbiology with a Chemistry minor and I decided that unless I got like a doctorate’s degree or something, I would not do things like research. I was just going to work in hospitals drawing blood. That didn’t interest me, but I didn’t know what I wanted to do. I just decided to take a break from school and got a job working at JC Penney. I wound up being a manager with them and it was one day working with the internal auditors that I thought, “Well this audit thing sounds kind of interesting.” I decided that I’d look into that further and that getting a degree in accounting would maybe be my ticket. Because I just wanted something I could get a bachelor’s degree in and then go get work. I did not want to have to go through law school and all that. So, I went back; I decided the closest place to go was Fresno State. I went there, then wound up getting my degree, but before I graduated I decided to start interviewing. Because I was not 22, some of the people that I talked to in the profession said, “Well, you know you are probably not going to get hired by” what was then the one of the Big 8 firms. “You’re probably going to wind up at a regional or a local.” That was fine, but when the ones from the Big 8 came for on-campus interviews, I thought “Well I need practice, why not just go ahead and do it?” I went ahead and interviewed at Price Waterhouse at the on-campus interview, with the partner-in-charge of the office. That went well and he invited me to what was basically an all-day interview in the office. I thought it would just be good practice but I didn’t think I’d wind up getting a job there because of my age. I know, being old at 29! Allen was the last person I interviewed with for the day. He was on the consulting side, and it was funny because I wasn’t trying to get into consulting at that point. I really wanted to either be in tax or audit.
Allen Beck: The drill was always new candidates talk with every manager, audit, tax, and consulting, so that the candidate got a better idea of what all the disciplines were.
Mary: When I came out of that interview, I thought “This guy is going to be a great friend in life.” We got along fabulously.
Allen: Funny how that worked out.
Mary: I wound up going to work for Price Waterhouse. Office romance started to come about.
Allen, what did you think after the interview?
Allen: Well it was interesting. Generally what would happen is they would go through this interview cycle and there were at that time three of us who were managers. The three of us after the interviews would immediately get together and say, “What do you think of that candidate?” Then we’d usually tell the partner-in-charge of the office what we thought about them. She interviewed really well, and after I interviewed her, I went down to my counterpart in tax and said, “We’ve got to hire her.” He said, “I absolutely agree.” (To Mary) I think they made you an offer.
Mary: Right away.
Allen: Literally the next day. I was impressed. I continue to be.
Mary: It was a challenge because at that time dating someone in the office at some place like Price Waterhouse was a real no-no. It was a very conservative environment. [But] we decided at one point, “Okay we’re going to make this permanent, we’re going to ultimately get married.”
Allen: No, we bought a house. We bought a house together before we were even married.
Mary: Oh, that was it. We decided to buy a house. Allen had to go in and tell the partner.
Allen: I go in and say, “I have to tell you something. Mary and I have bought a house and we’re thinking about getting married.” He goes, “Oh yeah, that’s pretty funny.” “No, absolutely serious.” “What?” Then, “Okay, I’ve got to call New York and find out what to do.” They said yes, as long as we don’t share the same clients.
Mary: There were a couple of audit clients that Allen had done some consulting gigs on that didn’t really affect anything I was doing, but just for that sense of independence, confidentiality, whatever, they took me off those two audits. That was the worst thing that happened.
Allen: Come to the other side of the story; my side of the story up to this point. I started out in city management, which was where I had my first exposure to computing. I had virtually no exposure to it at all in any college or any grad school. Zip. I mean everything was mainframe. I didn’t want to know how to do punch cards or that sort of crap. When I got out of city management I decided to go into consulting. I started working for what was Ernst and Ernst, which became Ernst and Whinney, and now of course is Ernst and Young. I was doing a lot of financial modeling. Financial modeling in the 70s was 100% done on mainframes and it was a very interesting concept. We don’t even think of it that way anymore, but basically you defined data points. You defined what the logic was and you defined what the outputs were supposed to look like. So your input, that is, your data points, and your logic, would equal your outputs. You literally had to think all this out beforehand, record it all in each of three general areas, and then you keyed this all into what was then a timesharing application, and then you’d tell it to process and go home. Then the next day you might have your print-outs. Then if there was a problem with that then you had to figure out where something was wrong.
Redo the whole thing.
Allen: Redo the whole thing and crank it again, and because it was on the internal computers at that time, back at the national office, it was expensive to run them. We got charged for it, every minute of it. It was a very, very expensive proposition. As a result, you didn’t take on small engagements, they had to be big entities. And because I was also doing a lot of governmental consulting, we ended up with a client over in San Mateo County on the San Francisco peninsula. They were contemplating merging the city with a fire district. It was a big deal. I mean, it was a potential multi-million dollar merger, but they wanted to know what the financial aspects of it were going to be. Whether or not it made sense. They let out an RFP and we proposed on it and we thought, “Well okay, we’ve got to model this scenario for them.” We knew roughly how much time it was going to take and how much data processing cost that’s going to be, and I think it was about $20,000. They awarded the contract to us and we went over to sit down for a kick-off meeting. We said, “Okay, let’s talk about this scenario that we’re going to model for you and what are the parameters and all that good stuff.” They said, “No, there are actually three different scenarios that we’ve come up with.” The partner-in-charge of the office and I started to look at each other with this silent, “Oh sh*t,” because we’re in the toilet from a modeling standpoint. We thought, “Wait a minute, we didn’t agree to three,” and we kind of said, “We didn’t realize there were three.” They said, “Oh yeah, it says right here we can have you model other scenarios.” We really hadn’t paid attention. We just thought because they had only described one to start with, there would only be one, but of course in the intervening months they’d thought of more. So, we’re driving back to the office and the partner is going, “Oh God, we’re going to get screwed on this,” because there was about $12,000 of timesharing in this thing and $8,000 of professional services in the estimate. So three times 12, we’re at $36,000. Now we’re over $40k and we only bid $20K! He said, “The IT people in the office,” who were really mostly auditors, “bought that little computer. Do you think you can do anything with it?” Somehow or another they had talked the partners into buying an Apple II, which at the time was outrageously expensive.
Mary: What would you guess that cost?
Allen: I think at the time it probably cost close to $5,000. He said, “Do you think you can do anything with this?” I said, “I don’t know, I have never used a computer before.” We got back into the office. It sat in this room that was maybe 10 by 12 feet, if that. We always called it the “computer room” and it had data processing terminals and things like that and there was this desk with this Apple II on it with two floppy disk drives and a dot matrix printer. It had never been touched.
Nobody knew what to do with it.
Allen: Nobody knew what to do with it. The IT people would come and go, “Ha! That’s not a computer. Nothing that size, that’s a toy.” So, I sat down with it in the afternoon, started reading through what was there because I had no idea, and there was a database application. I didn’t know that much about databases, but I knew that wouldn’t work. Then there was this manual on this application called VisiCalc. It was kind of interesting, basically one of the very original spreadsheet programs. I said, “I need time away from the office. Can I take this all home with me tomorrow and figure out if I can use it?” He said, “Oh yeah, definitely do it. I want you to try to figure how to do this without going broke.” I came in the next day and loaded all this stuff up in my car. The manuals, the monitor, the printer and took it home and spent two full days, horsing around with it trying to figure out the paradigm. Of course today we just think nothing about a spreadsheet application, but it was a totally different paradigm at the time. I ended up building three modules in this program. I set it up in such a way that the parameters were in one place and if you changed a parameter, you could see the cells sort of ripple down and re-calculate, and you could re-print the thing out within five minutes, not 24 hours. I did these three models and got all the results together and wrote up the report. Of course the printouts were the main part of the report, and they were being reviewed by the consulting partner and he said, “Oh, this is really great. How’d you do this?” I said, “On that computer.” He said, “Really?” I said, “Yeah.” He said, “We need to change this one assumption from a logic standpoint.” It was basically a formulaic sort of thing. He said, “Can you change that?” I went in, changed the logic, re-printed it, and took the printouts back to him 10-15 minutes later. The printouts took longer than anything else because it was an old dot matrix printer. I said, “Okay, here is the updated report.” He kind of looked at me and said, “What, you just put it on the printouts?” I said, “No, everything is new with these assumptions.” He said, “What?! How could this happen?” I said, “I’ll show you. Let’s just go back and just change this one parameter, a simple one.” I changed it, hit Enter, and he’s watching the update, and he said, “Show me the results now.” I would scroll down. He said, “Unbelievable.” Then he said, “Come with me,” and he ran down to the partner-in-charge’s office. I mean, this a big office, we had close to 200 people. And he says, “Al, Al come down here. I want you to see something.” He said, “Allen, show him, change that.” [The partner-in-charge] looks at it and he went, “That’s amazing!” Then he said, “Wait a minute!” He went out and got a couple of other partners on the audit side and he dragged them down there and showed them. “Change it again, Allen.” That was the beginning of my career in computing because after that I became the guru in the office.
Mary: In San Francisco. Roughly when was that? ’79?
Allen: ’79, ’80. When Price Waterhouse came recruiting, that’s what they wanted; they wanted somebody with computer experience, as well as my other consulting experience, and so they dangled money and opportunity in front me. Price Waterhouse had just started to establish what they called their “microcomputer consulting group.” It was actually based out in Sacramento, but when I ended up joining, I became one of them because I had more experience than virtually any of them. Then the Fresno office wouldn’t spring for an IBM PC, which had just been out maybe 10 months, if that. So, I bought that first Compaq. That became the founder of Beck Consulting later. That cost $2,500 dollars. The office never paid for that, any of that. That was all our money. That’s how it got started.
Mary: When did you move to Fresno? That was ’81 or ’82?
Allen: ’81. ’81, ’82 somewhere there.
Mary: I joined the firm in ’83.
You started the company three years later in 1986. What led to that?
Allen: When I joined the Fresno office, I was being interviewed by the partner-in-charge. One of the things he very pointedly asked me was, “How long do you think is it going to be before you can make the consulting services profitable in this office?” I said, “At least two years.” He said, “Why is it going to take that long?” I said, “Because we’re in Fresno. This is a good old boy town. I grew up in the Central Valley; that’s how it works. You’re not going to be accepted from Day 1, you’re not going to be accepted from Day 2, or Month 2 and you probably won’t be accepted till a year or two. In fact I’d be surprised if you broke even in three years.” The second year I was there, we had the deputy managing partner for Price Waterhouse come visit the office. I had been promoted to senior manager and was privy to the financials because of my position in the firm; I knew the office wasn’t making any money. He came out to see what was going on and to talk to people and he was out for about I think three or four nights. And the second night he was there he asked my counterpart in tax to go to dinner with him. My counterpart in tax came to me before that and said, “I know what’s going to happen. He is going to ask me what I think is going on here in this office.” The next day [the deputy managing partner] said, “I want you to go to dinner with me.” That’s exactly what it was. “What’s your honest opinion of this office?” I told him what I told the partner-in-charge of the office right from the beginning. I said, “I don’t think this office is going to be profitable for probably four years.” He looked me and he said, “I completely agree with you.” I thought, “Oh boy, I think I probably put the final nail in the coffin there,” but he heard pretty close the same thing from the tax manager also. That fall I was told, “We’re going to close the office.” I had to do something different. I actually got recruited to be the business manager for a big farming company, and I took that job starting at like the end of March of 1985 and I had two weeks off before I started the job. Or was it a week? I can’t remember.
Mary: I think you only had a week.
Allen: I got a week, so we decided, “Okay, we’re getting married.” I got a week off. (Laughs) I took that job, but the guy who was the managing partner and I had very different ideas about financial ethics. He got freaked out because I had gotten my hands on the partnership agreement and found out some things he didn’t want me to know. To make a long story short, he started freaking out and said, “I don’t want you here anymore.” I had a contract and he said, “I’ll just pay you for the rest of the contract.” Okay, that was fine. It was $10,000. That money became the seed money for Beck Consulting.
Mary: In the meantime, I was still at Price Waterhouse. I was a lowly senior at that point, so I had no idea that they were thinking of closing the office. He knew, I didn’t. He starts telling me, “I think it’s time for you to find another job.” I’m like, “I don’t want to do that, I just got promoted, it’s going really well.” He’s like, “No, I think you need to get another job.” He just kept this nagging up and it was like, “Okay, fine.” I had got my two years in. I knew that I could get my CPA license once I passed the CPA exam and I was well on my way to doing that. I went ahead and went to work for one of my audit clients, which is pretty typical of what would happen with people who wanted to leave the firm, as a controller. I knew that the client was having some financial trouble, but I didn’t realize how bad it was. I decided, “I do not like this. This is not fun. I don’t like this stress of being the controller when there are all kinds of money issues.” I was just like, “I don’t want to deal with this.” By the way, Allen and I had worked on a couple of projects together at Price Waterhouse and I really enjoyed doing the computer work and thought the consulting side was kind of interesting. One day he said, “You know maybe I should do my own thing. Maybe we should do our own thing.” (To Allen) I think that literally that same day you got a call from Diane Cocola.
Allen: This had been a client at Price Waterhouse.
Mary: She said, “I’m thinking of buying a franchise at FatBurger and I would like your and Mary’s advice on that.” It was like, wait, we just decided we’re going to do our own thing and all of a sudden that day we get a call from a former Price Waterhouse client that says they want us to help? This is meant to be! We went down and talked to the owner of the franchise organization and ultimately helped them get their franchise set up. I helped set up a little computer system using DacEasy as the software.
Allen: It was a predecessor to Peachtree.
Mary: So, we did that. Meanwhile, though, the company that I had been working for said, “I realize you don’t want to be here because of what we’re going through, but maybe you could come and just work as a consultant for us. Do this until we really decide what we’re going to do.” I did that almost full-time, when I wasn’t working with Diane on her computer system. Then [Allen] got also a call from St. Agnes Hospital, and started doing a project for them.
Allen: We ended up having to buy a second computer because Mary was dragging the one computer to her client. I had to have one for myself, too.
Mary: So, we had two computers and all of sudden we had all this business, and meanwhile Allen was on the board of directors at the Chamber of Commerce in Fresno. One of the guys that was also on the board said, “Allen, I think I really need a computer system.” Because at that point, personal computers were a real new thing. I mean most small businesses had actual physical books, ledgers they kept.
Allen: Of course at the time it was much more hardware-oriented than software because there wasn’t a lot of software.
Mary: Right, so it was really just your basic accounting and order entry.
Allen: General Ledger, AP, AR, payroll, and invoicing, but it didn’t even do inventory control to any degree, anything like that. Then, there had been another person that I had talked to when I was at Price Waterhouse who was a dairyman. He was trying to find something computerized for his herd management. Nobody had anything like that because it was keeping track of lineage and breeding and all that sort of thing, and a bunch of various statistics.
Mary: Calf registrations.
Allen: Calf registrations. I ended up building a program in some database application. I can’t remember what it was; I learned it on his dime, so to speak, but he was thrilled with this. At the time he was on the board of what was then Danish Creamery. Then all of a sudden, one day we had a call from this guy who says, “I’m the CEO of Danish Creamery and you did something for one of our board members and I would like to talk to you about helping us. He highly recommends you.” He wanted some help finding a new CFO. Basically a recruiting gig. They weren’t happy with their computer provider. It was a timeshare system and their existing CFO had gotten them into a contract for this stuff. It was outrageously expensive. The results were basically crap and at least a month behind all the time. The CEO basically canned the CFO and then came to me and said, “Can you help me find a new one?” We did and then the new CFO, Joe Heffington, came in and said, “We need a new system.”
Mary: We had started to look at potential software systems for other clients.
Allen: We had done a number of just pure accounting implementations but none of them had got any further than basically just accounting.
Mary: They were very small.
Allen: Most of them were standalone, not networked, anything like that. We thought, “Okay, we’re going to find an application that is networked and that’s got some manufacturing potential.” At the time, probably PC Magazine was the most influential portal at that time. Every year they had this collaboration with Price Waterhouse where they’d have their accounting system reviews.
Mary: “PC Mag Editor’s Choice.”
Allen: Editor’s Choice, that was it. We looked at all this software that were Editor’s Choice. Well some of them of course didn’t do any manufacturing but here was this one called “Macola.” We thought, “Okay they like it,” and it was a decent write up, and we called up this company in scenic Marion, Ohio, which is northwest of Columbus out in the corn fields. They said, “We’ll send you some information and we’ve got a dealer close to you too.” “Really, that’s great. Because we’re consultants and we don’t want to-”
Mary: We just wanted to implement it; we didn’t want to sell that.
Allen: We asked, “Where is this dealer?” “They’re close to you.” “Where?” “Well they’re in Glendale.”
Mary: Southern California.
Allen: Southern California. Four and half, five hours away. I said, “They’re not close to us.” They said, “Well it looks close to you.” I said, “What are you looking at?” They said, “Well, this map.”
Mary: He was like, “It just looks really close.”
Allen: I said, “That’s not going to be acceptable.”
Mary: Anyway, we just said, “Send us the software.”
Allen: They said, “We’ll send you the demo software.” One day the UPS guy shows up and he’s got boxes and boxes and of course it’s all hard manuals.
Mary: Big manuals.
Allen: Big manuals. We load up this software. The manufacturing pieces weren’t 100% there but they had full MRP.
Mary: It had bills of material, you could do production orders, you could report your production, it had MRP. I studied it. Allen did, too, and we decided, “Well, this is pretty good stuff.” We decided we’re going to do it, and I started down the path of implementing software. We got going on that and then we decided that because we wanted to get [our] clients direct tech support, and the software company would only do direct support with you if you were a dealer…I said, “Allen, let’s just bite the bullet and become a dealer. It’s not what we wanted but it’s the only way to get the appropriate technical support to support the client.” That’s how we became software resellers. We implemented those two. That went really well and at that point Macola as a company was doing really well because of these big write ups. They’d won PC Magazine Editor’s Choice at least a couple of times in a row.
Allen: We were the only Macola people in central California.
Mary: There were people here in the Bay Area. There were down in southern California. I think there was somebody maybe in Sacramento. Everything was going gangbusters with Macola and we were one of the top 10 dealers right away. We became part of what they called their “President’s Council” where we would go back to Marion and talk about things that should be done and improved. I mean this was a brand new industry. People weren’t doing software implementations, so we were figuring out methodologies.
Allen: Yeah we basically as a group we made up rules as we went along.
» Company Growth, Y2K, Navision, Microsoft
Company Growth, Y2K, Navision, Microsoft
Mary Beck: Let’s see, from there, I think the significant event that happened next was the Gulf War. That was around 1990. As soon as that war was announced, all the prospects we were talking to basically said, “Wait, with this war going on we don’t know what’s going to happen.” A recession ensued. It hit our company pretty hard and meanwhile in Fresno it was just getting hit hard in general. The unemployment rate was really high. I mean it was like 20 something percent unemployment.
Allen Beck: Interest rates were sky high.
Mary: Meanwhile Macola was saying, “Fresno is not that great of an area. We think you could do a lot better in a different market.”
Allen: They were looking at market demographics and that sort of thing.
Mary: They gave us two choices. They said the Seattle area or the Bay area. I think we did a marketing campaign and we got more leads in the Seattle area? We actually attempted to move. We opened an office in Kent, Washington. We would spend a week up there and then a week back in the Central Valley, week after week. Boy, that was getting old. We could tell that up there they had gotten hit really hard too because Boeing was having a hard time.
Allen: Whenever Boeing sneezes, Seattle gets a cold.
Mary: Yeah. We said, “That’s not going to work,” and decided to give up on that adventure. That was like ’91. Meanwhile back in Fresno, we’re still working but things aren’t going that great. All of sudden, we got a call from the controller of Ghirardelli Chocolate. They’d heard about Macola, and they had heard about us specifically through another Fresno client. They said, “Can you come show us Macola and talk to us about Macola?” They’re in San Leandro and we trekked up there and did a presentation. It went really well and then, long story short, they wound up buying it. It was even written up in CFO Magazine. They needed a new system because they had been part of Golden Grain. They had been split off from Golden Grain and their Golden Grain system was going to go away. They were becoming smaller, and I was like, “Oh my God, okay.”
Allen: They literally had a gun on to their head.
Mary: Yeah, and therefore so did I.
Those are the projects where you can’t push back a go live. “This is the day.”
Mary: It was a hard date, and two pieces of their system were really sophisticated. Their order entry was very sophisticated. In the sense of pricing. They had a lot off invoice deals, they had what they call billbacks. Now you guys handle it in Beck Consulting as “trade deals.” They had all kinds of issues like that on the order entry side. Very custom with the way they wanted their invoice to look. Well, Macola didn’t do any of that but they liked the rest of Macola. Just not the order entry. Then the other thing they really needed was an industrial contract quoting system, where they could put in the market price of beans on the world cocoa market and have it wind up putting in all kinds of other factors. Calculations based on the amount of pounds that one of their industrial customers wanted for chocolate chips, things like that. They needed that. That one was not as crucial because it was being done on spreadsheets, but they wanted that ultimately. My focus was, okay how can I deal with this order entry system? I used a program called “Magic Software.” Stupidest name ever, but it was a great database program and it worked against Btrieve files, which at the time is what Macola used. I was able to design and write a whole order entry front end, and used it also to do the data conversion from the Golden Grain system into Macola. I mean, we had everything converted and tested. It was a wonderful go live. Everything went really smooth. Ghirardelli went on for a lot of years. And in 1993 we decided to move.
Allen: We were spending three and sometimes four days a week in the Bay area.
Mary: If not for Ghirardelli then for somebody else, like in Silicon Valley.
Allen: We’d drive up on a Tuesday…
Mary: …go home on Friday.
Allen: Go to work, live out of hotels, and then drive back Friday evening. It got to be a drag because it was virtually every week.
Mary: Nothing was happening in Fresno. We decided, “It’s just silly, let’s just move.” That was in 1993 that we moved to the Bay Area. That was big because from there the business just kept growing. The Macola side went on pretty well for a number of years. The problem as I recall…
Allen: The “Y2K.”
Mary: The coming of Y2K.
Allen: We had been working with Macola by that time for a decade, more than that. They kept saying, “We’re going to come out with a new version. We know all this COBOL-based stuff is not sustainable any more. We’re going to develop a new application and we’re writing it all ourselves.”
Mary: Of course we said, “You know, just to get past the Y2K hump, it would be probably be easier for you to go through and touch all the data points and just get there.” It was also a DOS-based application and not Windows. They wanted accomplish both Y2K and Windows.
Allen: They wanted to do both. They thought, “Well okay, Macola is going to be the legacy program and this new one is going to be the Windows program.” Like a lot of the software companies of that time they could not figure out exactly what their focus was. To make a long story short, they spent a lot of time and effort trying to develop this new program for Windows and didn’t pay attention to their bread and butter and drained a ton of the corporate resources by trying to come up with this application which ended up being a total turd. Never saw the light of day actually.
Mary: Meanwhile they did go ahead and start to put a Windows front end on Macola. They realized they were hitting too many issues; they thought, “We’ve got to keep moving forward.”
Allen: From a marketing standpoint, it was a Windows-like front end but it really wasn’t a true GUI. A lot of software companies did that then. In doing that they introduced a ton of errors and it got to the point where, we kept a bug log because everything we ran into of course we had to send back to them. We [finally] said, “We don’t know if they’re going to make this, so we need to look at something else.” We looked at a bunch of different applications.
Mary: We were looking for a true Windows app, not where they put in an interface. We were looking for a Windows-based application that was Y2K compliant and had manufacturing. That was slim pickings.
Allen: We went through all of them in terms of valuation and then in ’97 we started hearing about this program called “Navision” and they kept getting good write ups. We had been resisting it because, A) it was from out of the country. We were like, “Tech support is going to suck.” B) it didn’t have manufacturing. But in the meantime I had been getting these calls once every month from this guy. “Hey it’s Gary Hager for Navision. I really want to show you this application.” “Not interested, no manufacturing, out of the country.” He was persistent and one day I said, “Okay, come in and show me this. I’ll give you five minutes to convince me.” It got to the point where I was really irritated with him. I said, “By the way, if I ask you to leave and you don’t want to leave, security for the building is literally right across the hall from us.” He said, “Okay.” So at the point in time, he’s at the front door, he’s got his laptop open in front of him. (Laughs) We go into the conference room and he says, “I’m not even going to show you the software, I just want to show you two things.” One of them was, he went into inventory and changed the item number in the master record.
Mary: I mean, it was, say, A-10, he did, Q-25, or whatever. I don’t know, just something. He knew what he was up against; in Macola if somebody wanted to change their master numbers, like a customer number or whatever, you just had to kind of block that number and start over. There was no changing the master.
Allen: What he did was show us something in the customer history where they bought this item. You could see the item number. Just keep that in mind. He goes in and changes the master record. We go back out to the customer, see the invoice.
Mary: The history is changed.
Allen: The history is changed. Holy crap! That’s amazing. Then he did one other thing. He added a field in the master record.
Mary: Yes. Went into a table and added a field, then put it on a screen.
Allen: Then it was everywhere. It was like, it was one of these WTF moments right?
Mary: I think you ran down the hall and got me at that point. (Laughs)
Allen: Yeah, I said, “How much time do you have?” I mean, that was it.
Mary: Because we knew the challenges, the things in the past that had been such a pain-
Allen: From a programming standpoint.
Mary: Many people like Ghirardelli had come to us with, “I have this uniqueness. Everything else I can switch to generic and whatever but I need this to stay unique.” There was always something that no canned software would do. We had gotten to the point where we knew we needed to have some database application that would attach to the back end like what Magic did. Or preferably we wanted to quit having to use it as a something that attaches. When we saw this, “Navision” thing, that was astounding! I mean, my jaw was just dropping at this. By end of ’97 we had our Navision certifications. We hadn’t totally given up on Macola just in the sense that if they could turn it around, we would keep those Macola clients going. But meanwhile until they turned it around, I literally told the existing Macola clients, as well the president of Macola, “We will no longer sell it or upgrade it until you get rid of these bugs.”
At that time was Navision just the financials?
Mary: It was called “Navision Financials.”
Allen: Then they said, “Oh we’re going to have Navision Manufacturing.” Then came Navision Distribution.
Mary: They were three different databases.
Allen: Navision Manufacturing was an add-on piece that they had actually bought from a firm in Germany. We found out real early on that cost accounting in Germany is very different than the rest of the world. We ran into all sorts of issues with it, and finally had to have the developers in from Denmark and we had to educate them on cost accounting because they had been getting it from the German company they bought this from. I think they spent two days with us and they finally became convinced that it wasn’t right and the product would never work because of the way cost accounting was done in Germany. The Distribution, they bought that from Lanham, and that was a mess. You could look at the code in manufacturing and distribution, and you could tell that somebody that wasn’t working against the same set of standards had written this stuff. That was a real rugged period of time. It was a complete mess and I think those programs lasted maybe two years from a marketing standpoint. They ended up developing all the rest, the distribution and the manufacturing, internally. Which was good because it was still the same philosophy in terms of the development.
Mary: In the meantime generally we were focused on putting the right piece into the right client and if it wouldn’t do what they needed, we told them, “Here is what I would have to write” or “Here is what it would have to do.” We never had any problem from a client standpoint. It’s just that we wanted to take it to another level and we either had to do it ourselves or-
Allen: We couldn’t do heavy distribution, we couldn’t do heavy manufacturing because the capabilities just weren’t there for a number of years. Light distribution worked great because we could customize a lot of the stuff from the pricing and purchasing.
Mary: That was getting a little further down the pike years-wise. In the very beginning with Navision, I think it was like in the spring of ’98, I implemented Navision for ourselves because we had been using Macola internally. Then I started Allied Foods, which was our first Navision client. They had been a Macola client and they were getting nervous that it was not Y2K compliant. From Allied, then all of sudden Joe Heffington [from Danish Creamery] called and said. “I want to split Dairy America off.” They had been part of Challenge-
Allen: Dairy America is the distribution arm.
Mary: Challenge was owned by Danish Creamery at the time. From that standpoint again it was a very hard cut-off because they were moving from the Dublin office to Fresno. There was going to be no computer system. So, I had a very hard date for that.
Allen: That’s for sure.
Mary: That was in ’98 that all of sudden I had to get that done and meanwhile we had been staffing up and training but it was Y2K. We were busy as we could be. There was a Navision developer from New York. I was holding off on starting Dairy America till he got here. He had been here for like, I don’t know, just a few days. He didn’t like the Bay Area and said, “I’m quitting.” I had no other staff to do it. I had done some amount of programming just because I wanted to know how to do it. I wasn’t a developer, I wanted to focus on implementation and technical sales and definition. Well anyway, short story is, I end up doing Dairy America myself, having to program it because there wasn’t anybody else to do it. I met that deadline. Then Joe calls up and says, “Well the board of directors of Danish Creamery are talking with the boards of two other creameries and we’re thinking of merging. We would want you to do the computer system for them.” I said, “Joe, that is huge. I mean you’re talking five different manufacturing plants, spread out over California. Some of these people have never used Windows. I mean, don’t know how to use a mouse. We’re not talking that I can do a lot of implementation remotely. I mean it is getting to five plants, physically. This is Y2K.” The merger was going happen on August 1, 1999. This is like the end of ’98 and they’re all on really ancient computer systems, other than Danish Creamery. It’s like, “How am I going to get that done?” I said, “But Joe, I can’t even find any more staff at this point.” Joe was desperate and he said, “Mary you got to do this for me. We’ve been working together for years now. You’ve got to do this for me. You’re the only one I trust to do it.” I stupidly agreed. (Laughs) I just felt the weight of the world went on me. I basically stopped doing everything but the accounting. Allen had to take over-
Allen: Everything else.
Mary: He took over everything. I mean, I literally would come in on the weekends and do payroll or whatever because I would be here programming or I would be at one of the plants. I would go for weeks without seeing the staff. It was a miserably long time for me. I ultimately got the part of it that pays the dairymen done on August 1, 1999, on the day of the merger. Then there was the Y2K piece. I had to have everything basically ready to go for Y2K. I was literally on the road. A lot of times I would leave on a Monday, come home on a Friday, and then I’d go in on the weekend and do the accounting. I did that for a long time. Even into the first year there was stuff that they didn’t have implemented that needed to be implemented, I’d go from one plant to another plant. That probably takes us through to about 2003. The one big thing that happened then is Microsoft bought them.
Allen: (Laughs) I was really uncomfortable.
Mary: The good side was all of sudden, anybody you talked to, “Yes, it’s Microsoft,” and they were like, “That’s cool.”
Allen: They had more credibility.
Mary: But on the other side of the coin we also knew that Microsoft had bought products and then killed them.
Allen: [Our salesman] Mike and I and our Navision rep at that time were waiting to do a presentation in Washington and the Navision rep gets a call. He kind of steps out to the lobby and comes back in. He says, “I’ve got to talk to you guys. Microsoft just bought Navision.” I asked him, “Is that good or not?” “I don’t know.” We’re going to this demo like, “Are we going to demo a software that’s going to be around?” There were rocky moments after that. That’s for sure. There pretty much have been in many ways up until the last couple of years when they finally realized, “Wait a minute, we’re not killing off Navision, that’s the cash cow.”
Mary: We weren’t sure what they were going to do it but ultimately that all turned out okay.
Allen: Especially when they started screwing around with…what was the other product?
Allen: AX. It was like, “Oh, this is going to replace it all. It has a better development environment.” We had already looked at AX very seriously, even after Navision. We said, “This development environment sucks. It’s really rugged compared to Navision. It has more sophisticated tools in some ways but it-”
Mary: There were a lot more options from a setup standpoint which would make it maybe so that we didn’t have to make as many customizations, but it is definitely not going to be as easy to develop in compared to Navision. Our development time is going to go way up and that means from a project cost it would go way up.
Allen: Because AX was actually kind of a multi-layer code set. You had to do some things here, you had to do some things there. It wasn’t in my mind a real integrated code base. We had worked with a highly configurable product at one time in our company history where it had a huge number of setup parameters that made it extremely flexible, but it was just a b*tch to get right because it wasn’t well documented, and when you flip this switch it also affected these other switches, that sort of thing. It wasn’t just 0 and 1. AX is that kind of an application.
Mary: At least we were concerned that it would be.
Allen: We said, “No, we’re going to pass on that.” Initially they kept saying, “We’re going to replace everything with AX, and we’re going to have the small business version for it, blah, blah, blah.”
“We’re going to merge them all together.”
Allen: Yeah, merge them all together. “That’s where we’re going to put our resources.” For quite a while Microsoft put a lot of marketing dollars into that.
Mary: And not into Navision.
Allen: Not into NAV at all.
I remember, AX was always front and center.
Allen: They put so much money into it, and for a number of years they virtually ignored Navision, and every year Navision outsold everything, by a factor of three.
Yeah, it was exponential.
Mary: At first it really felt like they were taking it away. It’s like, “Is this going to be a relic that we’ll maintain but not do anything?” Then they started doing more again, so then it was like, “Phew, dodged that bullet.”
What were your thoughts when the RoleTailored Client came out and you had to go from Classic to the RTC?
Allen: I don’t know what other people’s take on it would be, but, because of our size and the relationship we had with Microsoft at the time, we actually had the RTC before most other partners saw it. It was one of these things that you looked at it and thought, “This has a lot of potential, but-”
Mary: “Today, it’s kind of rugged.”
Allen: But it was really rugged. We had actually been in a focus group a year and a half, two years before where they had a UI design team that was built around really what became the RTC. There were I think two people that they sent out. They were actually from Denmark, and they had things they wanted to show us on screens and stuff like that. We looked at it and went, “No. Conceptually, it’s a great idea, but you’re slowing down the user. You’re making this much more difficult for the user.” “Oh, but it looks better and it’s more intuitive, and this and that and the other.” “Yeah, but now you’ve got to do the click count. I can get to this task faster in the Classic environment than I can get to it through this UI. For a power user, it’s not a productive front end. Because when I look back at the legacy that we came from where we were working with 100% numeric menu-driven applications, power users, even though the menus might be three levels deep, they knew, “Okay, I’m going to hit 1, Enter, 7, Enter, 4, Enter,” and I was right into my input screen or my report, the exact report or whatever. The reality is that those users that the RTC was really tailored to aren’t the people who put the data in the system. The data doesn’t magically appear. There’s actually fingers putting this data in there. The RTC, in many ways, took the efficiency away from true data entry power users. Of course, the flip side of the coin is people that aren’t quote, “power users,” that are really just inquiry people or “I want to see this data,” it makes perfect sense because it’s a lot easier for them to get to what they need to do because we can use the RTC and make it do what they want to do.
Mary: We used to have to do a lot of programming to do stuff that-
Allen: To create those shortcuts, if you will.
Mary: Yeah, and that just made for more problems upgrading, and that all went away [with the RTC]. I think there were advantages and disadvantages.
The bc Products, the Food Industry as a Vertical
The bc products, bcFood, bcERP, etc. When did you actually have a formal product that you were offering? “This is our food product or our ERP product.”
Allen Beck: We built a lot of pieces, and we utilized them in our marketing and sales because we knew that they were unique. I shouldn’t say 100% unique, but they were relatively unique to the food industry, and so we thought it would be easier to market to that and call it a food product. Well, it really wasn’t a product in the truest sense of the word. It was really a bunch of pieces. But of course that’s what NAV has always been in many ways. But when we started with SunWest Foods, and the scope of their project was big enough and they had enough new things that they wanted us to do, like the pack-outs on the trucks, and they said, “Well, gee, now we want to take a picture of what the packed truck looks like before we ship it. Can we integrate our camera with it?” and that sort of thing.
Mary Beck: And there were different things in the lot traceability, with the quality characteristics-
Allen: Right, which we had done in other engagements, but really, it was not a cohesive-
Mary: It was like we started pulling together other pieces. And the other thing that I wanted to really move into was how to handle warehouse stuff because, I said to [Allen], like the Lanham product, “I’ve heard too many complaints with that, but we need a product we can integrate with.” And dealing with having the handhelds was a big thing. I said, “That’s what we need, something in that direction. We either need to develop our own or we need to find a partner. We have to go one way or the other.”
Allen: And we basically showed it to the Microsoft people, and they went, “You can do all this stuff?” We said, “Yeah, we can do all this stuff. We’ve been doing it for years actually, but this is in one code base.” They said, “Oh, you need to get that in the product catalog,” and we did, slowly. Yeah so, that was the whole thing with that. Then we started doing a whole bunch of things. The whole EDI area. We had been involved in EDI for years, actually from the Macola days, with SPS. SPS used to be called something else. I can’t remember what it was. It was their predecessor that we actually used years ago with Ghirardelli. EDI then was one of these mumbo-jumbo mystical things that evolved from the mainframe environment. It was so kludgy, but we had to deal with it because more and more people started using EDI for all sorts of things. Originally, it was Lanham that had the EDI product. We competed with them because we had used their code on a couple of implementations and [our developer] Anthony was trying to support their NAV code. One day, he came to me and he said, “This is just a mess,” or words to that effect. That’s really what got us started down the EDI trail. It was the same thing with the shipping stuff, too; our frustration with shipping applications.
Mary: We finally just got fed up with trying to deal with other third-party partners. It’s like, “We need to be able to check that box, and if we can’t check that box, we’re not going to get those deals. We might as well deal with it ourselves to get this accomplished and know that it will work.” It just very gradually evolved.
Allen: Yeah, it evolved. It was not an a-ha moment.
So it was not a conscious decision to say, “We’re going to create a food vertical or a food product or an EDI product?”
Mary: Well, we always said we were in that market, and I think because we just kept doing things for that market, it evolved. But I think it was with Bruno and Dirk that we finally said, “Okay, even though we’re known for being in this market, we need to have it be more of a product that people see it as.”
Allen: Well, the whole NAV business, the whole software business, in many ways, changed because going back over what we had said earlier in terms of the evolution of not just Beck Consulting but the whole PC-based computing model, was that it was very general to start out with, and then it expanded into other areas. But any early developers of vertical applications, they were all glue-ons. They all sat on top of something else. They were all very distinct. BatchMaster, classic point. Classic application, from the standpoint of a glue-on, BatchMaster ran on Great Plains.
Mary: That’s how my Magic Software order entry worked, too.
Allen: Yeah, GL, AP, AR systems. While it addressed certain industry requirements, it was no stronger than the foundation that it was built on. All those applications had relatively mundane inventory, they didn’t have real robust inventory systems. They didn’t have a lot of the key data fields that you needed as part of your item master, for example. They didn’t handle a lot of things. These applications would say, “Okay, I’ve got item number and item name, and my unit of measure and all this standard stuff.” Oh, but in the food industry, we need this sort of thing. Well, so that got built out here in a database that was glued on, so their application bridged these two pieces, which was fine. It addressed a problem, but it created a problem, too, because now in reality, I have two databases, and I have, really, two applications. So what classically happened then is, we need to upgrade this, or they made a code change. Well, something over here doesn’t work anymore.
Mary: Like when I did Hilmar Cheese, I used basically the same order entry front end that I’d done at Ghirardelli and at Fantastic Foods. Hilmar Cheese wanted to talk, so I showed them that part. They really liked that, but they needed two things that were different from the other ones. One, they had customer preferences. It was that, say, a certain lot number’s salt had to be at a certain level because that customer used that ingredient in something and needed it to be a certain spec. So I added customer preferences to sit on top of that, but in addition, I had to add lot numbers, because Macola didn’t have lot numbers. So yeah, it’s all in this other table that’s not part of Macola. It was a separate table, but it worked quite well. Then we got into the Navision world and I knew we could start adding that, so I started teaching the guys about customer preferences. At some point we needed to be able to have a handheld and scan, “I want to pull that pallet,” and it will automatically assign those lots and blah, blah, blah. It was experiences I’d had already that I could then say, “This is what we need. We need this.” I looked to see if there were third-party warehouse applications I could tie into Navision and other than Lanham, which I wasn’t happy with, there just wasn’t a good fit. That’s when we all started talking and said, “There’s really only one way to go.” We didn’t call it “bcFood” at that point. It was, like, “We need this if we want to get into these kinds of deals.”
Allen: Yeah. It was the same thing I think even before we started doing that. We were actually selling our EDI add-on through other partners. We kept refining it and kept refining it. That was when Bruno said that he wanted to start doing sales. He literally came in to my office one day and said, “I want to learn to do sales.” You could have knocked me over with a feather. It’s like, here’s this guy that’s just-
Mary: As technical as he can be.
Allen: Mr. Hardcore Technical, and at that time, his social skills in terms of dealing with clients were limited to very technical topics. Our attitude was always if you want to try something here, this is the place to try it. You fail, that’s okay. You can do that. It’s a learning experience. Bruno got a little bit more in tune with what marketing was and what it wasn’t and what it was designed to do and what it wasn’t designed to do. That’s when we started thinking, “Well, we’ve got to differentiate this stuff.” That’s when we came up with the bcEDI thing, and then of course the bcFood fell into place after that, because we were trying to come up with a name that really wasn’t long or anything else and because we were using “bc” as part of the logo on things, it’s like, “Okay, well, that’s natural. Why didn’t we think of that?”
Mary: In the meantime, back at the office, Dirk was taking over all the operations stuff for me, and that was just going beautifully. I mean it was so much less stressful for me, and he was doing a fabulous job of it. Of course, because he was looking at the change orders, with his depth of knowledge, I think that whole process got much more accurate and with better delivery. Between Bruno taking over in sales and Dirk taking over in operations, I mean that made it where we had the confidence to say, “Yeah, this is going to work.”
Did you at that point have a plan in mind for retirement?
Mary: At some point we did want to ride off into the sunset, and my ideal would be to have some of the employees buy us out. That would be my first choice.
Allen: In the meantime, we’d had a lot of other people make a run at us.
Allen: Yeah. SCS had. Aston Group had. Who was the group from Iceland?
Mary: Oh, I totally forgot about them.
Allen: Those are the ones that were actually the most serious. We’d been offered a lot of money. Yet, it was sort of like, “Oh, this isn’t a good fit.” We didn’t have a real exit strategy. Then one day, Bruno came in to us and said he and Dirk had kept in constant contact. He came in to both of us and said, “Dirk and I want to buy the company.” We said, “But he’s not here.” He said, “Well, that’s the snag. We’ve got to get him back.” That took us, what, a year and a half? A year and a half, two years.
Mary: Maybe more. But anyway, Dirk got back, and we were like, “Okay, then we’ve got to start doing this. You take over operations.” Bruno wanted to get into sales, and had been doing some of that, I think.
Allen: A little bit, yeah.
Mary: But that was the idea. Bruno would take over Allen’s side from what we did day in and day out, and Dirk would take over mine. And I would teach Kristin and Sara the accounting. We all agreed that would be the last thing. “Dirk does the operations, Bruno does the sales and marketing, and once we see that that’s in place and we know you can do it, then great, we’ll start the next thing with the transition of accounting.” They did a fabulous job.
Do you think that when the time comes, they’ll follow your lead?
Allen: One of the things that we tried to tell them was that the mistakes that we made, in terms of planning for succession and that sort of thing, had a lot to do with the talent pool that we had, or didn’t have at various times, and their relative strengths and weaknesses. You can’t, honestly and ethically, sell the business to a group of employees that don’t have the skill set to continue to maintain the business because you set them up for failure and you have to live with that.
Mary: And not everybody wants to lead. Not everybody wants that level of responsibility. So at the time that Bruno and Dirk are thinking, “Okay, in five years, we want to retire,” if there is not a group of employees that want to be entrepreneurs, they’re going to have to let it go to another company. Because if Bruno and Dirk hadn’t stepped up and said, “Yeah, we want to do this,” we wouldn’t have really had a lot of choice.
Allen: We were entirely candid about where we always were financially, and there weren’t a lot of secrets. Everybody knew what was going on, and everybody knew what there was from a work standpoint.
Mary: We used to, quarterly, whenever, when we did the business meetings, we presented from the gross margin up how we were doing. Good, bad, and ugly. I mean I’d explain each line. It’s like, “Recent sales are down.”
They still do that to this day.
Mary: And I think it’s really important because if people see it’s going down or, conversely, going up, you need to be able to explain the why’s, what’s going on. People need to really understand because it’s not just us. It’s our industry. It can be Microsoft. It can be food processing. I mean I was concerned a ways back, like what’s going to happen if there’s a drought in California? What’s going to happen to food processing?
I remember back in, was it 2008, 2009, the recession?
Mary: Oh yeah. That was huge. We were lucky that it didn’t hit us harder because we were well-positioned.
Allen: Especially from the food standpoint. We realized fairly early on that even back from the Macola days that food, especially the primary levels of food processing, was good because everybody needs to eat.
Mary: As opposed to one of the other verticals. For instance, we had a good opportunity in the Macola days to get into construction, because there was a lot of need for good job costing, construction-oriented software. I looked it up and said, “You know, the problem is that industry goes [in cycles].”
Allen: Huge cycles.
Mary: There’s big money in that, but it’s up and it’s down, and I don’t want to be on the down side of that because, then all of a sudden, we’ll be out of business. Whenever we looked at a vertical, we looked at it from, “Hmm, what’s going to happen when a recession hits? What’s going to happen to that one?”
What other verticals did you look at?
Mary: Well, let’s see, besides construction, we did do a lot of nonprofit things. We had the California Chamber of Commerce as a client. KQED, that was the radio station or TV station. We had a variety of those kind of things. I know we had opportunity to think about retail stuff but I kind of didn’t want to do that. Again, that’s a real up and down kind of thing.
Allen: There was somebody that approached us with a jewelry vertical.
Mary: I wasn’t interested in that. It had to be somewhat interesting, too.
Allen: And we screwed around with that forklift, the heavy equipment.
Mary: A heavy equipment vertical that was in Navision.
Allen: Equipment rental, that was one. That was a big market, trade show stuff. Trade show management software.
Mary: Like at conferences where people would ship in all kinds of equipment for conferences and conventions. A lot of that went away after 9/11 because all of a sudden, people didn’t want to fly so much. There was a real fear for that. It was going great guns for quite a long time until 9/11 happened. Do you remember all the lead up to the Y2K with the “dot-bombs?” Oh my God. Some of these people we’d go talk to, they didn’t have a clue how they were ever going to make money ever, but they “had an idea.” Like pets.com, they were big. I was out doing the CDI stuff, getting them live on their system, but Allen, you guys did a huge project.
Allen: In six months, they probably paid us over half a million dollars. It was a big project for 1999 or whatever that was.
Mary: Yeah. It’s like they just would give the money away. Some of these others that, well, we never had them as clients because I think they thought we were crazy and we thought they were, they didn’t really believe in accounting processes and procedures. “That’s really old school.”
Allen: They didn’t like the questions I would usually ask. “How do you expect to make a profit?”
Mary: They were not fun to talk to. I just wanted to go back to the cows, the dairy, and to the food and the chocolate. It’s like, “Get me away from these people. They don’t have a clue.” It just seemed like my background was way back from this, and let’s just stay with food. I like food people.
Allen: They’re all good people. They were all happy to operate on the handshake. It’s what we grew up with. “My word is my bond,” sort of thing. Like I said, we figured out that, “Hey, it may look like food processing to you, but it’s our bread and butter,” pun intended.
Mary: We enjoyed it. That’s the thing; I really did enjoy what we did for a long, long time. I think CDI burned me out, and that was a problem. And we didn’t take enough time off. Allen and I worked, I think, too many hours, so we didn’t take the time to do vacation. For instance, well, I had billing and then I turned around and in X amount of time I had to have payroll done. I could take a week off at a time, but I could never get away for more than a week. Billing first then right after that, payroll. I could get away for maybe 10 days. But I think, literally, in that whole timeframe, until Dirk took over operations from me, we took one two-week vacation in that 25 years. That’s the one, I think, kind of regret, that I didn’t really take the time to-
Allen: We didn’t have any time.
Mary: Yeah. I think my regular day was at least 10 hours. I got to the point by the time that the guys were done, I was just damn tired. It wasn’t that I didn’t want to do it so much as I felt like, “If we don’t stop working, we’re never going to go do some of the fun things we wanted to do, and we’ll never get to do any volunteer work and all these other things in life.” It just seemed like it was time for us to do more stuff. And parents were adding more and more and more to the days. So it was just time.
Allen: You’d think that the standard 24-hour definition of a day was, that was it, it’s an absolute, but those days seemed to get longer.
Mary: But that’s why I kind of did a bit more lecturing with everybody else. It’s like, “Don’t do this.”
Allen: “Don’t fall into this trap.”
Mary: Yeah. But for a long time, it wasn’t like that. It got to be like that later. But I still, I really enjoyed it. It was a great profession. It was a great run, but I was ready for it to be done. But now, the thing that I miss, I still miss the camaraderie that I had, and I miss going out to those new prospects and walking through manufacturing plants and learning about businesses and what they’re doing and what their problems are and thinking about how we could fix it. I do miss that. I thought that was a lot of fun.
Allen: Yeah, it was. That’s what I told Mary when we first started doing food processing. I said, “This is kind of interesting.” The first time I remember going to a manufacturing plant of any sort was probably when I was about seven years old. My father was a veterinarian. He took me out to a rendering plant with all these dead animals, but it was fascinating. (Laughs) It smelled like Hell, but it was fascinating. Then literally across the street and down the block from his veterinary office was a turkey processing plant. One day, he said, “Would you like to go see how they do turkey processing?” and I mean literally walked down across the street and went into the president’s office and said, “Can you show my son through the plant?” That made a huge impression on me. I was, like, “Wow, this is really cool to see how they do all this stuff.” Then later on, when I was a little bit older, I got involved, because I was in 4-H, in a…it was like a class put on by one of the local dairy processors that taught you how to identify and judge milk and milk products. This was in the processing plant, so the first thing we started out with was a tour of this milk processing plant. I look back on it, and those experiences made a huge impression on me. To me, that sort of thing, seeing food being converted from the field, if you will, into something else, to me, it was just fascinating as a kid. It has always stuck with me. I always wanted to go through manufacturing plants, always.
Mary: And we’d always ask to go through.
Allen: Anytime, the first thing we’d say is, “We want a tour.” I guess it was like even if they’re a crappy prospect we still want to see.
Mary: It was interesting for us.
Allen: It’s not quite as fun as Disneyland, but in other ways, it’s better.
Mary: Oh, I’ll never forget Ghirardelli! It was just fascinating watching the chocolate chips being made because this depositor would go down and drop the chocolate into place and then do this little thing to make that little twirl at the top. Then something else would slide and more chocolate doing this little twirl and I think I just sat there mesmerized by it for a minute or two. They’re, like, “Come on, Mary! Let’s get going.” I used to love watching the manufacturing stuff. I like watching all the milk processing and cheese and that was always interesting too, but chocolate was the most fun. Who could not like that?
So it sounds like you want to go back…
Mary: No, I’m still enjoying retirement. Like I said, I miss that, but there’s still good things we’re enjoying. We’re enjoying our volunteer work. I do enjoy having very nice long mornings with my coffee and puttering around on my computer. Then when I get around to it, I get my exercise. Most of the days are, be busy in the mornings and then learn something in the afternoons. I’m doing good. I’m not bored. Maybe if someday I get bored, I might approach Bruno and Dirk and say, “Hey, you want me to go back and do this?” I might, but by that time, my God, I’d have to re-learn the software.
» Ownership Challenges, a “Lifestyle Company”
Ownership Challenges, a “Lifestyle Company”
Allen, you’ve referred to Beck as “a lifestyle company.” Can you talk a bit more about that?
Allen Beck: It evolved in a way that probably doesn’t evolve in other lifestyle companies. When we moved here and wanted to hire employees, it became very quickly apparent to us that the employment market was very different than what we were used to in the Central Valley because all of a sudden, we were competing for talent against tech companies. At that time, and even today, a lot of the attraction is, “Oh well, I’ve got a cafeteria here,” or, “I’ve got my foosball tables and my basketball court. I play ping-pong and things like that in my work environment.” But we found out that they weren’t paying for health benefits. I mean, yeah, the employee, but that was it. If you have family, that’s fine, you can add them on, but you’re paying for that. Oh, you want to have life insurance beyond $10,000 or something like that? Well, you can pay for that part, too. A lot of other things that actually had true economic ramifications. We also didn’t say, “If we do well, you’re going to get stock options.” One of my brothers who’s worked in that industry for 50 years says, “I have enough stock options from failed companies that I could wallpaper three rooms.” We said, “No, people are going to get a fair wage here, and we’re going to pay for things that make a difference to you economically.”
Mary Beck: And then give them a bonus if the company does well. When you contributed to that, you’re going to do well. But if you haven’t done well or the company is not doing well, don’t expect a bonus.
Allen: Simple economics.
Mary: But again, that was part of, “Hey, this is where we’re at. Things aren’t looking so hot. We’re fine, but right now, there might not be any bonus money. I’m setting that up way in advance.”
Allen: And for the longest time, everybody basically knew how much we took out of the company, and they knew a lot of times, we were making less than they were. So it was like, “Okay, I get it, you’re not screwing me to feather your nest.”
Mary: When there was that one recession we let them know we cut our salaries in half and we’re maintaining just fine.
Allen: Not letting anybody go.
Mary: Not letting anybody go. “But I need everybody to pull as hard as you can, look for work, whatever. Help me out here!” And at the same time, I think part of that lifestyle is that we had clients that would simply expect, say … I remember there was one who wanted us to come and do all the training for the staff in the evenings. Well, they had work to do during the day, right? I thought, well, as a staff person, they probably wouldn’t appreciate having to go to the evening sessions or weekend sessions. I basically told the clients, “Look, I know you do this hopefully not more than once every five to 10 years on a software conversion. We do this every day, so we can’t be there all day and for our other clients and be at your place all evening and all weekend, so I’m sorry. You have to get this done during the day, during the work hours when my staff is available or we can’t do this deal.” They’re, like, “Really?” I said, “Yeah, your staff can work in the evenings, then. If you feel like they have to work in the evenings to make up for it, then they can work in the evenings, but not my staff. We can do test data conversions. That’s different. I realize that has to happen on a weekend oftentimes, but it doesn’t mean we have to be on site, just available. You need to be running this. It’s your project. We do test conversions during a day, but maybe one big final conversion that’s a test, and then another for the go live. Okay, I get that we want to run that over a weekend, but that’s got to be the middle [ground]. That’s not the everyday for us.”
Allen: And the other aspect of it too, from a lifestyle perspective, I mean it falls in what I always thought of as lifestyle, and our software partners always hated it, was that we didn’t have a rigid, classic sales compensation model. They’d say, “How are you paying people working on sales?” “We pay them on a salary.” “Oh, you need to put them on commission or base plus commission because that’s an incentive.” I’d say, “It may be from your perspective, but it’s not from mine. The incentive then is to sell something that might not fit, and everybody else pays the price for it in the organization. So I’m supposed to reward one person to cause a problem for everybody else? That doesn’t make any sense.” “Well, all the other partners do it that way.” Yeah, and how many of those implementations do we get called to un-screw after they completely screwed it up because the salesperson promised this and made the million dollar sale and got their commission and then they disappeared? They went someplace else, and left the ruins for everybody else.
Mary: There are people that do very well in commissions, I mean, for motivation. They are fine and they stick around because they want things to be good.
Allen: Yeah, there are, but we always took the approach that if you’re on a commission basis, then your real incentive is to produce when you run out of money and not keep it continuous, and so we resisted that model.
Mary: For a long time. I mean, it’s not that we don’t have goals.
Allen: Yeah. We had goals but then we also told everybody, especially in these meetings where we talked about the financials, if the sales were down, there were usually other factors. It wasn’t who was selling. There were other factors. It was something going on in the economy. It was a number of other factors. Or we just couldn’t generate leads.
Mary: I remember there was one version of Navision, there was a costing issue. There was something going on, and we literally decided not to do any implementations until that was fixed. Was it 2.01? I can’t remember. Many years ago.
Allen: Yup, it was 2.01 where they really screwed the pooch on that.
Mary: So we just said, “We can keep selling, doing whatever, but-”
Allen: “We’re not selling any new software until you fix this, end of story.” And we were one of their biggest dealers. They said, “You can’t. It’s going to hurt you.” I said, “No, it would hurt us worse selling crap code. You fix it.”
Mary: But I think we had to keep the cycle going, but we just, I don’t know, we figured out a way to push forward.
Allen: There is still sort of this rivalry between the implementation people and the developers. I mean it’s like, “Oh, you’re a developer.” “Oh, you’re implementation.” “Oh, you’re a salesperson.” That sort of thing. But we always tried to make people understand that you are in a 100% symbiotic relationship and that there are going to be times when sales are going to suck for a lot of good reasons, and we always said never make a bad sale because a bad sale is always an unhappy client, end of story. There is no way you can salvage that, ever. The relationship may exist, may exist for a long period of time, but it’s never going to be a really good fuzzy feeling relationship. When sales are bad, fine, we need to look at more opportunities within our existing client base, to do those things that we deferred.
Mary: Try and get upgrades done, what have you.
Allen: Whatever. Because then that way, you’re helping build the client satisfaction, which helps the salespeople. It’s a cycle and it’s a circle. Everybody is holding hands there. I think most people really understood that. For a while, people sometimes went, “I’m putting my hours in. They haven’t sold anything for three months.” That happens.
Mary: We explained what was going on. For instance, Y2K, there was just a point where it’s like, “We can’t sell any more. I mean we can’t implement. We have to keep telling them we can’t implement for a year.”
Allen: “We’ll just start it in 2003, first thing.” (Laughs)
Mary: Yeah, we’ll get to it first thing 2003. For a period, I think we didn’t even try to do any sales or marketing. I mean if somebody came, like pets.com came to Allen, okay, fine, but we didn’t-
Allen: There was no outbound effort whatsoever, zero.
Mary: No outbound marketing effort. We couldn’t take on any more.
Allen: We were swamped. But the whole idea of the lifestyle [company] was-
Mary: Have one. Have a life.
Allen: Well, it was to try to make sure that everybody that was an employee had an opportunity to have a life, number one, and that they weren’t bound by a bunch of ridiculous rules about, “You’ve got to be here right at 8:00 in the morning and you leave at 5:00.”
Mary: Yeah, clock punching.
Allen: If you don’t get in until 9:00, that’s fine. You need to leave at 4:00 for your kid’s baseball game or whatever, that’s fine too. I just expect you to put in your hours. I want to see that, if you’re a developer, implementer, I want to see your chargeability. Because I know you’ve got these things to do, so as long as you’re producing, I don’t care where you do the work. Just get it done. It’s interesting because, I find that the mix of people and backgrounds that Bruno and Dirk have brought into the firm in the past couple of years has been very interesting. In many ways, there’s more eclectic backgrounds, and I think that that brings a greater breadth to the organization. As long as they continue to pay attention to what that talent pool is saying to them, and that group of people are paying attention to what’s going on in the world around them, and reporting it back, then I think that the prospects for the future are really excellent. It was always part of our philosophy that, “Tell us what you’re thinking, you’re not going to get fired because we disagree. We may think you’re idiot, for a while, but we also don’t like to think that we hired an idiot, we just have a disagreement on something.”
Mary: I used to say it’s a benevolent dictatorship. We wanted to hear ideas because we got some damn good ideas out of people.
Allen: The whole dynamic of the business has always been listen to each other.
Mary: At our meetings, that’s what I would think about in advance. “What do I want to ask these people to think about?” Sometimes I’d present the challenges like, “This is the challenge I’m facing. What do you think we ought to do about it?”
One of the things that Bruno and Dirk have always advocated has been, if you want to try new things, you want to take on a new role or responsibility or whatever, you’re always free to.
Allen: They grew up with it. (Laughs)
Mary: Yeah, because we started it, yeah. Otherwise they’d be still doing development, right? I think sometimes business owners have to decide things on their own, but I think a lot of times there’s a real benefit to reaching out to the great minds that you’ve hired. I think that’s probably the biggest challenge the whole way through, finding the right talent.
Allen: Overall we were pretty damn lucky. There were a few turkeys.
It’s going to happen.
Allen: Right yeah. Even out of season you can find them in the grocery store.
But overall, they really do a fantastic job of hiring, not only good talent, but good talent that integrates with what’s already there.
Mary: That is the challenge.
Making sure that it’s a fit, as opposed to just, “The resume is spotless.” If that person doesn’t work well with the group, it can become an issue.
Allen: That was something that was kind of passed on to Dirk and Bruno, too. Of course, the European model is very different. It is that; education, experience, who you worked for. They were treated more like just employees, not part of the organization. They weren’t treated as true resources for the organization other than as a revenue-producing resource. When we started bringing Dirk and Bruno into doing interviews, sometimes we’d say, “I don’t like that person.” They’d say, “Why not?”
Mary: “My gut feeling.”
Allen: Yeah, you got to just gut feel that they’re really not going to fit here. “Look at this [resume].” Yeah, that’s on paper, but it’s the interactions, it’s whether or not you feel comfortable with somebody. You really have to go with that because they have to work with everybody else. This isn’t a factory. Over the years, everybody makes some bad hires, and we ended up with some people that didn’t end up fitting well for one reason or another, or didn’t really live up to their potential. In most cases it was their own demons, and in some cases we probably didn’t help the situation, but we always tried to fix it. Some people, you just can’t fix it. They’re not comfortable. In a lot of ways, the organization is somewhat touchy feely, and it was more so going back to when everybody was in the same office. There was a lot more sensitivity to each other, and each other’s feelings and concerns, and their own personal issues, because it was largely shared. Some people don’t like that. They’re really, really uncomfortable with that environment. We had a couple people over the years that just didn’t work. They were uncomfortable, and they didn’t participate, and they didn’t produce at the level they should have.
Mary: They didn’t want to think. Sometimes in the interview process, you try to ask a lot of questions to see if people can think. Because [you] can teach people. You can teach them how to run software, you can teach them how to do development, whatever. You can’t teach people necessarily to think, to be analytical thinkers. I did pretty good definitions, I’d get pretty darn detailed. I knew with some people I had to get much more detailed than others, and that was fine. But once in a while I’d find somebody who just couldn’t get there from here. It’s like, “I don’t know if they are too stressed,” and I’d try a different approach. I found that’s one thing that was very hard. If somebody really can’t think outside the box at all, they can only-
Allen: Follow instructions.
Mary: It’s hard to be in this business if you can’t be an analytical thinker.
Allen: We’ve had developers that did great at a high level, but if they had a challenge where they had to, say, “Okay, I’ve got these data points and I have to figure out how to get…I’ve got A, D, F, and Q, and I have to get to Z,” they could not figure out how to get to Z. Even though they had all the other knowledge they needed to, but they couldn’t really think things through, which of course is a disaster from a development standpoint because then somebody else at a higher level has to lay it out in excruciating detail for them to be able to get to Z. It’s completely inefficient.
Mary: It’s like, if they get stuck, “Fine, just come on in and let’s talk about it.” You know, if they’re always having to come in and talk about it, then it becomes a problem. You’ve ought to be able to get past that. I would say the biggest challenge is the people. Technology will change, and you have to adapt to it, and you have to be looking for the changes coming. That was something Allen and I were always trying to do, look and see what we thought might be the next thing coming. The real challenge was the people, hiring the right people. Also, getting in the right engagements, too. Sometimes Allen and I, we decided a ways back, if our gut feels, “I don’t trust those people. I don’t like them,” and we both get that gut feeling, let’s just find some way-
Allen: Just won’t return the phone call. Give them the $750,000 proposal for a $50,000 job. Something for pain and suffering. (Laughs)
Mary: Yeah. That’s usually what we would do. We’d take a quote and make it just ridiculous. They’re like, “Wow, that’s a lot of money.” “Yeah.”
Allen: “A lot to do here.”
“I think a couple of other places are cheaper. The one down the road.”
Mary: We learned to trust our guts both with people as far as employees, and possible clients. Whenever we went against our gut feeling, like somebody would convince us to do something, it usually didn’t turn out well, or it was mediocre at best. It was just not real good.
» Technology’s Impact on Business, the Future
Technology’s Impact on Business, the Future
Allen Beck: As the technology evolved, things became much, much easier. Especially when we could do demos over the Internet. It was huge. It was an immense time saver.
Mary Beck: But people still want to have a warm fuzzy feeling. I mean [aren’t the salespeople] still traveling a lot?
All the time.
Allen: Oh yeah. Well, it’s a personal service business, when you get right down to it, and without a person, it’s hard to make it personal.
I think definitely it’s true also on the implementation side, where clients still want to see you out from time to time.
Allen: Oh yeah, you’ve got to go there and do the definition. A lot of the training [can be handled remotely] but the hands-on implementation, you still have to do that.
Mary: I remember just from methodology, it’s like you didn’t have any choice but to go out, and like if I was going to travel to Sacramento, that’s two hours each way, and I billed for basically half my travel, so the client, they’re going to want me to be there for the rest of the day to make it worth having paid for my travel time. Whereas in later years, sure, you’ve got to go on site and do some of that training, but for instance, it would get to the point where it’s like, “Okay, so and so in accounts receivable is ready. They need to know how to put in terms codes and this and that, build these little tables before we can get to the customer tables, say.” You can just do that over a GoToMeeting in just no time, and they were thrilled because then you didn’t take up a chunk of their day and they weren’t paying for travel time. They’d get that work done. It was fresh in their minds and they could just get it done. They could call you in another day and say, “Oh, let’s do the next thing.” It was just, whew! It was just fabulous.
Allen: Yeah, it was a huge paradigm shift. It was a great sales tool because previously, to get to that point, you were out in the field shaking hands. You spent a lot of time waltzing around before you ever cut to the chase where they really want to seriously look at things. I can remember days where I spent an hour and a half driving to San Jose in rush hour traffic to get to a presentation and spent hours basically just waltzing around doing an overview demo because you’ve got a bunch of people in the room that, because you’re there, they’re a captive audience, there’s no time boundaries, and nobody in management wants to call timeout because they’ve, quote, “empowered” their employees now to be in this demo. And you’d spend three or four hours there and realize literally within the first half hour that you don’t want to go down this road but you still have to be polite. Being able to do this stuff remotely was a huge time saver. Just for us, it was huge because there’d be days literally where to drive 30 miles, I spent four and a half hours in the car, round trip. That’s why I gave up driving cars with a clutch.
Mary: Yes. We used to both have cars with clutches.
Allen: And I literally one day got to the point where my leg cramped up so badly because I was putting in the clutch, letting it off so often.
Mary: Yeah, I remember getting leg cramps, so we finally just said, “You know what? We’re giving those up.”
Allen: Yeah, but it was a huge, huge difference there. Just to be able to do the introductory demo. I mean, not a canned demo because there was usually a high-level requirements definition as part of the sales process. You could give them an hour-long GoTo demo. In a lot of cases, you could tell literally by some of the feedback whether you want to go after it hard or not, and in a lot of cases, the people would say, “Okay, I’ve seen enough. When can we schedule you to come on site?” We were doing this stuff fairly early on. The first time we ever saw a Web demo, it was another software company. It was somebody actually we were talking to in terms of a product. It was rough. It wasn’t like GoToMeeting. It was a predecessor to that. It was a little rough because, of course, there were latency issues and things like that.
Mary: pcAnywhere, wasn’t it?
Allen: Yeah, pcAnywhere. We actually did tech support with pcAnywhere.
Mary: Yeah. It was okay to do tech support, but it wasn’t fast enough, in my opinion, to do demos or to really do a good job with training. But, when we started doing tech support at the very beginning, I mean people would come up with error messages on the screen, and I would have to start visualizing, “What could it be? What could it be?” because there was no way to get to what could they have done or what were they really seeing on the screen. They would try and describe something, and it would just be like, “I can’t even begin to imagine.” We finally got to the point of, “Okay, faxes, oh my God, we got a fax machine,” so I could tell them, “Print this for me, do a print screen of this and this and this, and fax that to me,” and they would do that because a lot of the clients were really naive about computers. They would fax it to me. Well, in the very beginning, a couple of mine had to Federal Express me stuff. Like, “The check isn’t coming out right.” “How do you mean?” “Well, it just doesn’t look right.” “Well, can you be a little more specific?” Then later, I got to the point of, “Well, make a copy of it and run it through the fax machine.”
Allen: People couldn’t afford fax machines. We literally forced a lot of people early on into buying fax machines for tech support. So in a lot of ways, we were early adopters of technology, and it was because a lot of our clients were so far away it wasn’t like you could jump in the car and drive to the next town over and solve their problem, which was really the business model for a lot of resellers; they didn’t go beyond their general urban area, and we did, so we knew that we had to find ways to support these people short of driving three hours to deal with their check alignment issue sort of thing. But it was interesting because, now that I think about it, when we introduced using things like WebEx, I can remember some employees said, “That’s going to cut down on our revenue.” Which was true from an economic standpoint, because in the past, they would either have to spend more time trying to mentally figure it out or talking to the client over the phone or going on site. I said, “We bill for time, and the goal is the client’s satisfaction. So if it takes you 15 minutes to solve the problem instead of an hour and 15 minutes, yes, we’ve given up an hour of billable time. But the client’s a Hell of a lot happier because they’ve had to invest less time in it and they’ve had to invest less in us. And look at it from my perspective. You still have an hour to fill for billable time. You could do something else. So it really doesn’t affect us.”
Mary: They could be working on other projects, new clients, whatever.
Allen: Yeah. You can use that time more productively. When you’re driving in your car, it is 100% unproductive time. Even though you might be on the phone in the car trying to solve a technical problem with somebody else, it’s not highly productive and it’s dangerous.
Mary: It became such a different world from what we started with, and the tools were amazing by comparison; much better, much easier, less stress. [Dirk and Bruno] wouldn’t have been able to just hire from across the country if it weren’t for that technology.
Allen: It was hard finding talent that had some NAV exposure for the longest period of time because you really needed to have somebody pretty much on premise to make it work. There were some partners that had, especially developers, that were other places, but they all suffered from the same issue that we wanted to solve early on; everybody is taking their own path on how to do something, so they’d give a job to this contract developer some place and they’d get the end product, but it was undocumented, or put together in a way that may not make sense to anybody else from a support standpoint. That sort of problem, and it still goes on today, I’m sure. It was hard recruiting people then. But as soon as we started putting some of these technologies in place, it made it effective, from a communication standpoint and, later on, for demos. Initially, it didn’t work for demos because the technology wasn’t there.
Mary: It certainly made things challenging, yeah. I’m sure now there are challenges that Allen and I don’t know about that the guys face. There’s always something.
The one thing that you do lose is the camaraderie. You’re isolated, you’re on your island.
Allen: It’s a different bonding level.
Mary: Back when we first moved in probably at the Alameda office, which was around ’97, I think, at that point, it was really a lot of fun to be in the office because we were all working hard, the Y2K thing was coming and all that, but when we were in the office and not out doing implementations or demos, lunchtime was something that was really fun. We’d sit around, we had great political discussions, or like, “What was that idiot doing on TV?” or somebody just finished reading a great book. I mean, it was really fun. We kept beer in the refrigerator, and on Friday evening, we’d sit around and have a beer. It would be kind of fun on Friday afternoons because the traffic would be Hell for a while anyway, so I’d just say, “I’m tired of working…”
Allen: Everybody kicked back and waited for the traffic to die down and had a beer or two.
Mary: We did that in the Fresno office only at the beginning. I was gone too much. We gave up on that.
Allen: The other thing that I found too once we started doing remote demos, and I pointed this out to Bruno and even before then to other employees that I worked with in sales, because a lot of them said, “Oh, this is great. I don’t have to travel to do this and that and the other and it’s really, really good and there’s not so many distractions,” and I said, “Well, that’s true, but you lose an important strategic advantage, and that is you can’t see their faces. You can’t see their body language.”
Mary: Their reactions.
Allen: Which is really what you have to key off of in a sales presentation because if you know how to pay attention to that and interpret it correctly, you can immediately change your direction or hit something that you know is a hot point or something you better stay away from, it’s toxic. You can’t do that [remotely], you can’t get any nuance whatsoever other than maybe through voice inflection at the other end. [It] is one of the things that you definitely give up because you can’t see everybody. It continues to evolve. Pretty soon, we’ll have virtual reality demos. Just put on your goggles and, “We’re all in the same room and you’re going to love this. If we had an interface, this is what it would like. If we had an application, this is how it would work. Can you visualize the reports?” (Laughs)
When you think about the future, what do you think about for Beck and for the industry, ERP, food? Where do you see the pitfalls, the challenges, the potential opportunities? How do you see the company faring in the next 30 years?
Allen: It’s hard to say because when you go back 30 years, the business really didn’t exist. There was no such thing in the context that we understand it today. Nobody could do this sort of thing other than on massive scale in terms of equipment.
Mary: Big teams, and they’re all specialists.
Allen: Huge, huge teams and an incredible amount of resources on the part of all parties, and I’m not talking just about money. I’m talking about huge amounts of time. Literally in 30 years, the business evolved from what was really nothing in terms of true network applications, to where we are today, which is tremendously different. We’re doing things in bcFood that the biggest computer systems in the world weren’t doing in 1981. Think about the magnitude of that, it’s almost breathtaking when you think how different that paradigm is. To think that they’re doing that today, when not that many years ago, it was completely different. A lot of people don’t really think of the context of that. I think of it this way. My maternal grandmother: who was born in 1902 and died in ’98, ’99, she saw things like airplanes, jets, man on the moon, in her lifetime. Some of the big accomplishments, clearly, big differences, but we’re talking about nearly 100 years. We were into full-on ERP, close loop, in food, really after 25 years, when the industry didn’t even exist.
Mary: Now it can be all mobile. I thought it was amazing to be plugged in, and now it’s all mobile.
Allen: In many ways though, we’re actually reinventing the wheel in the industry in my view, because of the whole concept of cloud computing, and SaaS, and all these concepts. We’re right back to where we were 30 years ago, because when you get right down to it, it’s a timeshare model. You don’t own anything in a lot of these schemes, you’re basically buying access to storage and application. Where Beck Consulting has evolved to, what caused that was corporations saying, “I need to take ownership of this stuff. I don’t want to pay somebody in Timbuktu or wherever, that I don’t know what they’re doing with this software, for something that I have no control over.” In many ways, we’re back there right now today. It’s difficult to say where the heck this is going because literally we’ve done a complete 360 in a quarter of a century. When you get right down to it, it has nothing to do with cost of ownership, it has nothing to do with maintenance in many ways, although all the arguments are around cost of ownership. It’s hard for me to even guess, because like I said, literally in a quarter of a century, we’ve gone full circle. We’re back to where we started in many ways.
Mary: Except there’s a lot more flexibility.
Allen: That’s true.
Mary: The cloud is simply a storage thing as opposed to what we were dealing with. The timeshare was very limited, and you had to do it exactly one way.
Allen: The rigidity is largely gone, but on the other hand, we have the schemes like, I don’t know what they’re going to call it, but the package NAV product, the low-end thing that they’re talking about.
Allen: Yeah, the out-of-the-box solution that they’ve talked about for years off and on. All cloud-based, and subscription-based. The idea there, again, is low cost of entry, low price point. So simple your idiot brother can run this stuff, or whatever the case may be. Of course we know it isn’t necessarily true, but it’s a great pitch. It’s a way to get people into the ecosphere, if you will, but how well is it going to work, who knows? Nobody has actually proven out that model works. There has not been anybody that has a track record of offering a low cost, canned, cloud-based, entry level solution, and then being able to migrate people up to the next level. They seem to think that they’re dope dealers. “Free taste, free taste? Okay, this one’s going to cost you.” So, I don’t know how that’s actually ever going to pan out. It’s hard to say. I don’t know where the company’s going to be in 30 years.
Mary: I can’t even imagine, because it’s changed so much.
Allen: It has in terms of the underlying technology and some of the strategies, but the software’s the software. The requirements are the requirements. The requirements in terms of manufacturing have not fundamentally changed in 100 years, ever since the assembly line came into being. Once we got away from craft shops, manufacturing is manufacturing. There are just a couple different types. When you get right down to it, once we evolved to the concept of a closed loop MRP/ERP system, and realized there’s all these pieces that are all part and parcel of this environment that we have here, and there’s all these touch points, and really it should be in a single, unified database…nothing much has changed other than outside touch points. “Oh we want to do remote payment processing. We want to do direct deposit for your payroll.” Those are just ancillary, they’re convenience features.
Mary: Yeah, all the work on a handheld in a warehouse. They are still doing the same transactions.
Allen: It’s the same thing. It’s the same thing as a ledger paper was. It’s really no different, it’s just a different methodology. Same data.
Mary: Yeah I guess I haven’t thought about it, I’ll have to think about that. I think I have tried not to think about that. (Laughs)
Allen: I’m a deconstructionist. (Laughs) To go back more to your question, it’s hard to say because like I said, fundamentally, in terms of the core functionality, what’s in the application is [already] in the application.
Mary: I always see clients needing expertise to guide them. I don’t see that becoming-
Mary: Yeah, where people just inherently know how to do all this stuff. They might get better project managers in, I saw that as a trend, but I don’t see them being able to do this on their own. I see that project work will always be a necessity. And with businesses always needing to have an edge of some kind, they’re never going to want 100% canned, and have to use spreadsheets to work around things, like way back when that was accepted as a standard. People now, they know time is money, so they need to be as efficient as they can, so I see development as being an ongoing thing. Now, how software as a service is delivered from the standpoint of making money on, if you will, the sale of software, I don’t know. Where the software resides, or whether it will be the revenue generator, other than your own IP that is developed in-house. That was another great reason we wanted to do [our own software]; it’s your own IP. You never know what Microsoft could do, but I think the services side will continue for sure. [Microsoft is] going to continue to develop, and where are they going to get their ideas? They’re not necessarily innovators these days.
Allen: Everybody likes to think they’re unique, every business. I’ve never been into a business that’s in the same industry as another business that thinks that they do things the same way. Everybody has a different way of doing business. In many cases, it’s what differentiates them from their competitors. When you stop and think about it, there’s a lot of different people that, say, process beans, or whatever. They all sell dried pinto beans, okay? They’re all paying the growers the same price for it, so how the Hell do you stay in business if you’re selling the exact same product as the guy down the street, right? It’s how you do business that makes the difference, or who you have in your business. It’s the personal relationships, it’s something you do for people. Guess what? By and large, that gets built into your information system. What is that, what do you call that? “Custom software.”
Mary: Or it’s how they want to analyze. Maybe it’s their sales reports, there’s always something. I see reporting still, having to develop reports, that kind of thing. There’s always going to be an analysis tool that they’re going to need help setting up. Maybe it’s not physically a report, it’s a drill-in/drill-down, whatever, some sort of analysis that they can do. I saw that with a lot of different clients. Different people who have the creativity to start businesses have different ways they want to look at things. They don’t want to see a canned thing. They want to be able to tweak it and turn it. Yeah, I see the services going on for sure, and IP going on for sure, but I’m not so sure about how the software will be delivered. Who knows, at one point there was a concern Microsoft would just go direct, they’d just cut out the dealer channel. But I think they’ve given up on that too.
Allen: They’re never proven they can sell anything themselves anyway. When you stop to think about it, Microsoft by and large doesn’t sell anything. Other people do it for them. They really have no sales organization; they have a marketing organization, and a channel organization, that’s it.
Mary: Who knows, in the future there could be some kind of…like we had Y2K. It drove us out of one piece of software and into another. Something rather dramatic could also occur. [Beck Consulting] would have to change gears and go to a different thing.
Allen: I think the other thing that’s going to change is we’re going to see companies that are not traditional software vendors get into some of this space. In some ways I think, and have for some time, that Microsoft is vulnerable, because Microsoft, as long as we’ve worked with them for the better part of two decades, never seemed to have their act together. They never knew what business they were in other than software. I think that potentially people like Google could get into this business, and while in some ways people like Apple have backed off some of their software products, I think that they could get into this space because they have enough money to buy their way into this space if they had a product that would run there. I’m saying that because I look at somebody like Apple who has now forged two massive business partnerships in less than a year; the one with IBM where they’re doing all these mobile applications using IBM back end, through cloud services, and they just did one with SAP, same sort of thing. I’m looking at this from the perspective of, they’re trying to get their technology into the corporate environment because in many ways it’s a more secure operating environment than Windows, and easier to actually maintain from an update standpoint, and they’re using proven applications provided by people like SAP and IBM. Now they’re going to be in this corporate space for these specialized applications, and that’s what they’re focusing on now. How long is it going to be before they’re talking to somebody like SAP and say, “Okay, we’re doing all the front end, you guys don’t worry about the front end anymore. We’re going to provide the front end, people are going to be running this stuff on iPads and MacBook Pros instead of PCs under Windows.” That’s going to be some of the challenges in the future; the delivery method isn’t going to change radically, but who’s delivering it is going to change.
Mary: That’s why I say [Beck Consulting] may have to make a shift and say, “If another company is going to be the 100 pound gorilla now, we need to go grab that application and that tool and learn that, so we can do what we do.”
Allen: Pay attention to it.
Mary: We’ve been there, we’ve done that. The Macola switch to now, that was not a cakewalk.
Allen: I think in terms of whether the company will be here in 30 years? Hard to say. There’s a lot of companies that disappeared in this last year that were a Hell of a lot bigger. (To Mary) I haven’t seen you talk so much since we did demos together. You’re a happy cat, I can tell.
Mary: Yeah, it’s been fun.
Allen: It has been fun.
Mary: It’s fun walking down memory lane of a good path. It was a great path, actually.
Allen: That’s because I was there.
Mary: I wouldn’t have done it without you babe, absolutely. That’s why we wanted to work together, that’s why we started it. It was because we wanted to be together, do our thing together.
Allen: Equal partners.