How a New Zealand tech startup runs their business with Acumatica ERP

Profile picture for user jreed By Jon Reed February 3, 2016
Summary:
Taking on Chinese tech manufacturing from New Zealand? Sounds like a recipe for a failed business. But Triode founder Nathaniel Fairweather did it differently - until his business software became an obstacle to growth. Here's what he did.

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Acumatica Summit day 2

Nathaniel Fairweather, CTO and founder of New Zealand tech startup Triode, traveled all the way from New Zealand for the Acumatica 2016 Summit. Naturally, I wanted to find out why he made the trek to Orlando, and how a tech startup finds its way to a modern ERP system, complete with manufacturing functionality.

Fairweather also had some insights on Excel versus ERP, a bugaboo that continues to plague companies of all sizes. On a happy/warm/sunny January day (cut me some slack, I live in snowy Massachusetts), Fairweather and I grabbed a patio table and talked ERP turkey.

Triode is a long-time Acumatica customer, and their first New Zealand customer to boot. "We'll be the only Acumatica original customer in New Zealand for the next twenty years," Fairweather quips. (Technically speaking, he's right, because Acumatica has expanded partner MYOB's OEM territory to New Zealand, so future New Zealand customers will be via MYOB).

"Our industry needed a bit of shakeup"

Fairweather was always a "maker." He went straight from high school into a manufacturing company that made crystal oscillators. Then he moved to a company that made satellite navigation and marine tech like fish finders. So why did he start his own company in 2007? For a classic reason: he felt his industry - electronics manufacturing - "needed a bit of a shakeup." He started Triode with the vision of contract tech manufacturing, done the customer's way:

I saw it as a need in the market, in particular where we were. What there was available, as far as our competitors were concerned, it was much longer lead times. It wasn't very responsive.

The approach worked. In 2016, Triode has 18 employees and a global customer base, with key clients in New Zealand, Australia, and Ireland. Revenue increased by 73 percent last year, with a target increase of 50 to 60 percent this year. One key to Triode's growth: Fairweather avoided commoditized jobs and sought higher-value/margin projects (in other words, no iPhone builds). Their main specialization is printed circuit boards; they can turn around orders as small as one and as high as ten thousand. Fairweather:

At first, I was focused on low to medium volume. We've increased it to the medium volume over the last few years. We build industrial type products to spec, where the quality and turn around is much more important than the cheapest price. We are not trying to compete with China. If somebody wants a mass consumer gadget, then we are not really interested in that, because it is not our business. All that's going to do is clog our lines up.

"Duplication of effort was costing us mass amounts of time"

Before selecting Acumatica ERP in 2011, Fairweather found himself with the "SMB software nightmare" setup, a hodge-podge of products with limited visibility and elbow-grease reporting:

We had a bit of accounting software; we had other software for inventory because the accounting software doesn't manage it very well. We used other software for time and attendance, and spreadsheets for pulling materials. It was at least half a dozen applications, so any time you wanted to do a report, you had to go to every program, and extract the information. It was a one time use only.

If you purchase something, then you've got to have it in the accounting package and then you have to put the same information, but more detail, into your inventory package so that you know what stock you've got. The duplication of effort there was costing us mass amounts of time. It was really starting to limit our growth.

"Six months of searching" for a new ERP system

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Fairweather in Orlando

Fairweather didn't take his ERP search lightly. He spent six months researching different systems online, even kicking tires on open source ERP. Finally, he narrowed a short list for demos.

Acumatica is hardly the only ERP vendor that can unite disparate systems, so how did Fairweather arrive at this choice after casting such a wide net? One big factor was Acumatica's pricing and licensing, which is based on total transactions rather than user seats. Fairweather:

The licensing was appealing. I only had five employees when I started looking for an ERP system, but I wanted to grow. I didn't want to be restricted by user-based pricing. I wanted it open to everybody so that they all can use it.

Fairweather was able to extend web access to his customers, which informs the customer's design process:

The other appealing side was having customers log in. They can check our inventory levels on raw materials, so that when they are designing, something they can check our inventory and match it up - so they incorporate what we have in stock.

The range of deployment options factored in. Fairweather went with an off-site hosted option when he started with Acumatica in 2011. He's kept that arrangement to this day. The final big factor was manufacturing. Acumatica's manufacturing partner, JAAS systems, had functionality that Fairweather needed:

One thing that stood out to me at the time was the manufacturing suite. A lot of the ERP solutions don't have a lot of manufacturing, and for us it was crucial. I'm a manufacturer. That wiped out a whole bunch of other vendors.

Triode was JAAS Systems' first Acumatica advanced manufacturing customer when Triode moved to Acumatica in 2012. JAAS has grown into one of Acumatica's key ISV partners. I've spoken to JAAS at every Acumatica show I've attended; one thing they pride themselves on is the continuity of user experience between their "JAMS" solution for Acumatica, which is built on Acumatica's xRP platform - and Acumatica itself. Fairweather continues to work with JAAS closely on new functionality needs.

Results - did the implementation address the problems?

Going back to the predicament of spaghetti software, did the ERP move solve Fairweather's growth predicaments? The answer is a definite yes:

All of a sudden we could get the reporting out of the system. We use the manufacturing, financials, inventory, and distribution all the time. It allowed us to grow without the limitations there. We don't have administrative staff, because we really don't need it. We don't have to have people doing data entry all the time.

This is part of a push towards a paper-free process:

We've gone as much as possible to a paperless system. Every document that comes in, if it is a piece of paper, we'll scan it and attach it directly in Acumatica to the transaction itself. That way if there are any queries in the future, we've got the history, and we can see it.

Caveat: Triode didn't get rid of Excel entirely. They still rely on it to build custom quotes for their projects. But there's a happy twist: using Acumatica's APIs, they built a two-way data integration between Acumatica and Excel. Inventory levels from Acumatica are updated dynamically in the Excel spreadsheet. API calls within the spreadsheet automatically update information and push it back to Acumatica.

Fairweather's team was able to build the Excel integration without a need for outside consulting ("It's easy enough to do, and Acumatica's help system is brilliant.") That said, Fairweather does have a wish list. Triode has been using Microsoft Power BI on Acumatica, but he's looking forward to richer Acumatica dashboards in the Acumatica 6.0 release planned for this summer. The announced CRM functionality is also anticipated; Fairweather thinks he can make his sales team's lives easier once the just-announced Outlook integration comes online.

The wrap - visual BI and management-by-exception

There is one crucial point to make about Excel. While Triode still uses Excel for their product quotes, they've been able to move off Excel for reporting. Fairweather has built Power BI dashboards on Acumatica that enable his team to manage-by-exception:

I've put everything I possibly can on there for multiple dashboards. I can log in and know exactly what the status is. In manufacturing. I know what our production schedule is like. I know where we are over capacity. I can see check accounts receivable, see who hasn't paid us, what our gross profit it is. It's all graphical format, so if there is something that is an exception, it stands out. If we aren't reaching targets we know that - without having to search for those numbers or sort the detail. We analyze by exception, rather than having to look at a spreadsheet over time.

Next up for Triode: is a big e-commerce push, which will add another dimension to their integration needs. We'll see how Fairweather's growth ambitions pan out, but it looks like his internal systems won't be holding him back anymore.

Image credit – photos by Jon Reed.

Disclosure – Acumatica covered my airfare and hotel to attend the Acumatica Summit. Acumatica is a diginomica premier partner.