Super VAR
$200 million VAR Kyrus remains committed to its original business goals while incorporating new technology in its point of sale solutions.
How does point of sale VAR Kyrus help its customers store data collected at the point of sale? "We partner with companies that specialize in data mining - collecting and analyzing data, such as customer buying habits," says Tim Roberson, Kyrus chairman and CEO. "For our grocery and convenience store customers, loyalty programs are important. Our data mining partners store data for these customers." Data mining for supermarkets typically involves market basket analysis to determine which items are most often bought together. One storage solution Kyrus offers through its partnership with IBM is the IBM SP2 Supercomputer. IBM also offers other storage solutions, including tape drives and storage area networks (SANs).
Need For Data Mining Increasing Due To Consolidation
Roberson says storing customer purchase data will become increasingly important as companies consolidate. "We see a trend developing where supermarkets are buying convenience stores. The supermarkets want to have gas pumps in their parking lots. Loyalty programs are capturing customer information at the pump and combining it with customer information collected at the grocery store. Customers purchasing gas can then receive cents-off coupons for use in the grocery store."
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When Business Solutions profiled Kyrus Corp. in August 1997, the company had a goal of reaching $500 million in sales within five years. Kyrus Corp. is on track to do just that, although some things have changed. Back then, the company, headquartered in Taylors, SC, was known as MidSouth Data. It had 280 employees and reported $103 million in gross sales. (Not bad for a company that started in 1974 as a cash register dealership in the grocery market.) The name Kyrus, a word with Greek roots meaning an opportune moment in time, was adopted in 1998. The new name reflects the point of sale (POS) VAR's global, rather than regional, reach.
Some things have remained the same. Both Chairman/CEO Tim Roberson and President/COO Randy Kimlin still ride their Harleys. The company still concentrates on its core vertical markets - grocery, specialty retail, convenience store, and school lunch. Gross sales are up, doubling to more than $200 million, while the number of employees has tripled to more than 600.
Acquisitions, New Technology Spur Growth
Roberson credits Kyrus' growth, in part, to strategic acquisitions and alliances. The company completed its first of four acquisitions in 1997. "There is a difference between financial roll ups and strategic acquisitions," he says. "For example, we were a dealer for a convenience store software product. It made sense for us to buy that particular software company because it gave us more control over the product." He points out that Kyrus' overall goal is to provide an enterprise-wide solution. To that end, Kyrus also acquired a software company that focused on back office functions.
The best example of a beneficial strategic alliance is Kyrus' relationship with IBM. For the past 10 years, Kyrus, an IBM Business Partner, has been the number one reseller of IBM POS products in the world. "Our business model focuses on our relationship with IBM," notes Roberson. "Our POS solutions reside on IBM platforms and integrate technologies such as handheld devices. As a result, Kyrus' software development group has several projects underway, including a Java graphical user interface (JGUI) for IBM's 4690 terminal applications." The touch screen software is designed to be used with self-serve fuel pumps, giving Kyrus a competitive edge in the convenience store/fuel market. The JGUI will also incorporate the Internet for displaying products, news, and advertisements at the point of sale or at the pump. "There is a trend for supermarket chains to buy convenience stores to capitalize on fuel sales. Grocery stores will have gas pumps in their parking lots, taking full advantage of integrated reporting systems while offering their customers the same store loyalty programs already in place," explains Roberson. As one of the only players in this market niche, Kyrus hopes to score big. (See related sidebar below.)
Sometimes You Have To Say No
Sticking with his company's vertical market focus is a double-edged sword, admits Roberson. On one hand, it makes for easier decisions. On the other hand, it sometimes means turning business away. "If something new falls into our lap and it fits into one of our markets, we'll explore that opportunity," says Roberson. "But we've had potential customers, with cash in hand, that we've turned away because their focus didn't match our focus.
"Some years ago, we bought a professional services group involved in Lotus Notes and networking. The company had good paying customers in the medical and manufacturing markets. We spun off that portion of the business simply because we were not focused in those vertical markets. We retained and grew the retail portion of that particular company."
Be The Only One Your Customers Call
Despite the company's rapid growth, Kyrus management wants to maintain a small business approach when it comes to its customers, says Mike Todd, business solutions executive for Kyrus. "We believe that being the only company our customers call is a benefit," says Todd. "The complexities of a POS system are best managed when there is only one entity to contact when problems arise." Todd makes the comparison to players on opposing teams wearing different colored uniforms. "Unless everyone is working together to solve a problem, you need the referee in the striped shirt to do it for you." A convenience store chain, for example, wants one point of contact for its POS hardware and software problems. The store manager doesn't want to call four or five different numbers to get the POS system up and running again. How does this impact the VAR channel? "It is redefining distribution and solution selling," explains Todd. "It is no longer good enough to manage only pieces of a solution."
With a commitment to key vertical markets and a customer-centric approach, what does Kyrus see for the future? "POS will continue to transform," says Todd. "Exciting changes will impact the channel, including virtual retailing and POS systems, with very few hardware components."
Roberson agrees, envisioning the continued growth of what he calls the "eleventh lane" in the grocery market. "Grocery stores with Web sites can tie online ordering to the in-store POS system," he explains. "Customer orders are printed on picking tickets. Store employees then fill the customer orders for pick up or delivery. All the totals, merchandise movement, and loyalty information are merged into the POS system. It's basically an eleventh lane in a 10-lane store serving the invisible customer." VARs take note. Roberson says this type of solution leverages VARs' strengths and helps them retain customers. "Being able to integrate an e-business solution with an existing installed POS system is ?investment protection' at its best."