Phoenix Systems: Sky is the limit for this soaring phoenix
By: Jesse Champagne
Phoenix Systems is a privately held Canadian software and business service provider and reseller. Founded in 1980, the company provides support services to more than 400 customers, part of over 6,000 users in North America. Phoenix Systems offers effective, affordable business-critical solutions that are easy to use and maintain. Their operational resources consist of highly skilled and dedicated employees who provide client support, consulting, custom software development, implementation, training and professional services.
Dan O’Toole, the President and Owner of Phoenix Systems, was kind enough to grant us a phone interview and answer some of our questions. Dan formed the company in 1980 and is, in his own words, the “longest standing employee.” Looking back over his time with Phoenix Systems, Mr. O’Toole believes that the primary challenge in business today is continuity.
“We have a 32-year business and our primary partner from the supply side has been with us for more than 27 years. We have many customers in the 25-30 year range, and our average employee has been with us for more than 10 years. In fact, I have many 15-20 year employees. Providing that continuity over a long period of time is a key factor for success.”
Dan added, “Our challenges today are to maintain our ability to deliver high quality services to our clients and to maintain that relationship. In many cases we are working with third parties and we have to ensure that their approach and their vision is similar to our own. As we add more and more product offerings, including solutions for warehouse management, web commerce, payroll and budgeting, to name a few, – we find ourselves involved with more and more vendors. My job is to ensure that their approach towards our customers is the same as our own. It’s imperative for us to ensure that we have that continuity because our customers have grown to expect levels of service and its vital that we deliver them.”
As a company with offices in both Canada and the United States, Phoenix Systems has experience dealing with clients and associates from all over North America. The distinction between the two nations, Mr. O’Toole says, is the level of patience.
“The primary difference we find is the time it takes to make a decision. It’s a much longer term in Canada. By nature we are more conservative. Our US clients tend to be more arbitrary in decisions and there is good and bad in that. Obviously in Canada we have had the good fortune of long-term relationships and in our US clients in many cases that holds true as well, but in other cases the market forces are somewhat different. The competitive forces are different, and businesses will arbitrarily move between vendors more often than you will see in Canada. I think over the long term that is not to their best interests.”
Another disparity, he says, is the speed (or lack thereof) in which Canadian businesses have welcomed new technology.
“I think our biggest issue today is that Canadian businesses are late adapters when it comes to the acceptance of technology. Although we find that we are catching up in the world with respect to our adoption as individuals, business has been very reluctant in taking on, for example, smart devices as a means of exchanging information. The challenge, I think, for Canadian business is to determine how they are going to adapt to this in the near future, and to realize that it creates a competitive advantage. If they don’t adapt they will have a problem with respect to being competitive in the marketplace and that falls into the areas of efficiencies and value.”
Despite already being ranked in the Profit 500, Dan believes that the future is even brighter. Unlike many young companies, which experience “incredible growth simply because of the newness of their offering,” Phoenix Systems grows through acquisition.
“The market is very mature [and] the product offering is very mature, so that leads to consolidation. We’ve spent the last 6 years specifically going through acquisition as a means of growth. That brings in a mature client into our organization. We look at acquisition opportunities from businesses that have a similar product offering with a similar type of client,” says O’Toole. “We’re not looking to be anything other than incremental innovators with a related diversification strategy. We don’t really want to start opening restaurants. Our acquisition targets are for organizations that have a similar philosophy, a similar type of customer, and employees with a similar nature.”
Looking at company growth he also added, “If we look back from 5 years ago to today, we are probably 3x larger. This year we will literally be 3 times the size we were in 2008. In the next 3 years we have the potential to double our business from where we are today. We are aggressively looking at attaining this goal in the near future.”
No matter how big they eventually grow, their core beliefs remain the same as they have always been. Their guiding principles create a strong sense of responsibility to their customers, stakeholders, employees and community. More than just providing superior manufacturing, distribution and accounting solutions, they actively seek to achieve customer satisfaction through quality of service. If current estimates hold true, the sky is the limit for this soaring phoenix.