Archived Interviews with:
Information Technologies Inc.
January, 13 2005
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Now that Quorum
Information Technologies is officially certified with General Motors USA, they
are adding individuals to their management team and sales force to help them expand in the
U.S. and beyond
Auto Dealership Mgmt. Software
(TSX V: QIS)
Quorum Information Technologies Inc.
Suite 200, 6715-8 Street N.E.
Calgary, AB, T2E 7H7
Telephone: 403 777 0035 Ext: 110
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
April 21, 2005
Mr. Marks received a Bachelor of Management (with Distinction) with a major in Accounting
from the University of Lethbridge in 1988. In 1991, Mr. Marks received his Chartered
Accountants designation after articling with Deloitte and Touche, Calgary.
Mr. Marks continued to work with Deloitte and Touche in the Management Consulting group in
the systems development area until 1992. From 1992 to 1995, Mr. Marks worked with
various companies, consulting on computer development, implementation, and system
selection projects. Since 1996, Mr. Marks has devoted all his time to building
Quorum Information Technologies Inc., and XSellerator, its proprietary software
product for the automotive dealership market.
Quorum is a Calgary based company with a primary focus on developing, marketing,
implementing and supporting proprietary software products. Its key products are
DISTRIBUTOR, a Windows and Web based network solution, and XSELLERATOR, a
dealership management software program which combine to form a Dealership and Customer
Relationship Management System (DMS) for the automotive dealership market. What makes this
software so exciting, and different from the competition, is that it's current technology;
the same Windows-based technology used by every other industry is finally available for
automotive dealerships. XSELLERATOR isn't just a management system; it's a more
efficient, productive and profitable way for dealerships to do business.
Currently, Quorum has 14% of the GM dealership market in Canada, making it the 3rd largest
Dealership System Provider for GM in Canada. The Company has grown from having their
system implemented in 15 dealerships in 2000, to 30 in 2001, to 60 in 2002 - and has since
added 70 more new dealers for a total of 130 to date. The Company was recognized by the
Deloitte & Touche Technology Fast 500 as one of the fastest growing technology
companies in North America.
Quorum's success comes from
developing, marketing, implementing and supporting the best DMS System, products and
services for automotive dealerships, and from their commitment to total customer
satisfaction. Quorum has expertise in all aspects of Dealership and Customer Relationship
Management, and employs the best people in the business to deliver it.
Marks, it has been about three months since we last spoke and a lot has happened with
Quorum, but lets start with where you are with your GM certification.
Mr. Marks: Im glad to announce that we are
officially certified with General Motors USA, keeping in mind that we have always been
certified by GM Canada. However, now we are also certified by GM U.S. It took us a long
time to get there, but we are the first company in five years to get that accomplished. We
feel that it is a huge feather in our cap and what it also does is provide us with greater
visibility as GM U.S. has published us on their internal DSP website as one of only six
certified DSPs, and this website is accessible to all of their dealers. It also
means that our cooperation level with GM U.S. improves that much more in terms of
continuing to work with them to build new integration points between XSellerator and their
systems going forward.
CEOCFOinterviews: How does that certification help you to get
dealers to sign up?
Mr. Marks: Think of the certification by GM U.S. as
being the gate keeper for getting into the United States. We had to get that accomplished
so that we could grow extensively throughout the U.S. marketplace. It is GMs way of
telling their dealers that GM has worked with Quorum, and the XSellerator system ties into
GM systems on all of the proved integration points. Therefore, now that thats
accomplished, when we go into a GM dealership in the U.S., they can feel very comfortable
that weve worked with General Motors, and as a product, XSellerator meets all of the
requirements set out by GM U.S.
CEOCFOinterviews: What are you doing now in terms of
marketing and selling into the U.S.; is there a big push?
Mr. Marks: We are doing a few things. First, we
continue to work on the strategy to partner with organizations or to partner with one
organization that would be our integrator on a global scale. By integrator, I
mean a company that can implement our software into a dealership. At the same time, weve
been focusing on our own organic growth path to insure our overall success in the event an
integrator deal is delayed or becomes unattractive due to business terms. As part of this
organic growth path, we recently brought on Lee Poseidon, who comes to us with many years
of experience in the DMS (Dealership Management System) business and in the automotive
business as well. Lee now heads up our U.S. sales effort, and we have since doubled our
number of sales teams and initiated a marketing campaign. In addition, we are also talking
to different consulting organizations; these are smaller consulting organizations who are
already working with dealerships, and who can provide referrals. Finally, we hope to
leverage our participation with Maritz Inc., in the Cadillac Standards for Excellence
(SFE) program, by increasing our profile across the U.S. marketplace and identifying
dealerships within the program that are best suited to capitalize on the advantages that
XSellerator provides. So, we have a four pronged approach to moving into the U.S.
CEOCFOinterviews: Do you see the difficulties of the
automobile industry as being a help or a hindrance to you?
Mr. Marks: Its actually an opportunity and Ill
tell you why; I think everyone is well aware that the automobile industry is a very
competitive industry. What the manufacturers are now realizing as they look at the retail
distribution side of things is that every dollar of inefficiency in that retail space
basically costs them a dollar in terms of discounts on the vehicles. Hence, manufacturers
are now realizing that they have to look at their retail chain, just like in the past when
they looked at their supply chain and fixed inefficiencies they found there. Now they are
looking at their retail chain and wondering how they can make it more efficient. They have
to get their processes a lot more streamlined, and a lot more integrated from the
dealership back to the manufacturer, and that is what Quorum has been working on. Our
software solution for dealers focuses on allowing that dealership to be tightly integrated
horizontally inside of its four walls, but also to be tightly integrated vertically back
to the manufacturer. We selected General Motors as the first manufacturer that we wanted
to build all of those integration connections through to. We started with GM Canada,
and we are now working towards doing that with GM U.S. This integration will allow
the dealership and the manufacturer to improve efficiencies, drive out costs and leverage
customer data in a coordinated way. We believe that it positions Quorum really well,
because what we bring to the table is a necessary change for the retail level of the
CEOCFOinterviews: And ROI is what people are looking for
Mr. Marks: Absolutely; and now they are not only
looking for it at the dealership level, but the manufacturer is realizing that they need
ROI throughout their entire retail chain.
CEOCFOinterviews: Youve recently added some new
dealerships; how many are you up to today and is there a strategy for how many should be
added over a period of time?
Mr. Marks: To date, I believe that we have added 14
dealerships already this year. Of course you need to keep in mind that we added 25
dealerships all of last year. So we are on a pretty good growth curve for this particular
year, just organically growing this business ourselves. However, at this point and time of
Quorums lifecycle, there is a limit to how many dealerships we can add organically in a
particular year. It depends on how quickly we can grow our implementation teams to
implement our software and how quickly we can grow our support desk. One of the reasons we
are looking for an integrator with global reach to partner with is to improve our
scalability dramatically on the implementation side. So organically, we have a whole plan
in place in terms of year after year, but partnered with a global integrator, we have a
different plan in place.
CEOCFOinterviews: I know you are looking at partnering with a
global integrator; however do you need more people in other areas?
Mr. Marks: Yes, we are constantly adding more people
and its one of our biggest challenges. We are getting a lot smarter in terms of how
we find people, bring them into our organization and get them trained effectively. We do
put a lot of effort into that process. Bill Ray is our new Manager of OEM Business
Development, and he was added to our organization to help us develop relationships with
other manufacturers beyond General Motors. Strategically, when we started the company, we
realized that it takes a lot of resources to look after multiple manufacturers, so we
decided to focus on General Motors; work with them and do a better job with their dealers
than anyone else. We feel that was a great strategic decision, but we are now getting to
the point in our companys lifecycle where we are ready to look at other
manufacturers; the Chryslers, Toyotas and Hondas of the world, and start to work with
them. Bill Ray brings years and years of experience in working with these other
manufacturers, so he is a great fit for our organization.
CEOCFOinterviews: Could you summarize the points that
investors should remember about Quorum?
Mr. Marks: Quorum will continue down its planned
organic growth path, growing our sales and implementation capacity and expanding into the U.S.
marketplace. We will also continue on our path with GM Canada and GM U.S., and will pursue
other OEM connections as well. We will continue the search for a global integrator as a
partner, and we are getting very close on that. Those are the key strategies we are
working on, and we believe were on the right path. There is an eagerness for new
technology and change within the dealership and manufacturer communities, and Quorum is
poised to capitalize on it.
CEOCFOinterviews: In closing, what does it mean to be the
best integrated Windows based system on the marketplace?
Mr. Marks: Our XSellerator software is the best, fully
integrated Windows based system in the marketplace. Obviously, our product is critically
important to our success. When we first started to build our product, we took a very
different approach to the marketplace; our competitors typically are delivering systems
that use old technology that is modular based. That means they have a series of modules to
handle the Sales department, a series of modules for Parts, another series for Accounting,
and still more for the Service department. We bring a completely different model to the
dealership; one integrated system, where all facets of the system communicate seamlessly,
and the whole system is focused around the customer and the customers vehicles. CRM
(Customer Relations Management) is embedded throughout the system, and we also have the
best practice business processes embedded in the system and everything is tightly
integrated. In addition to that, we also bring forward a strategy where we are tightly
integrated to the manufacturers, currently GM Canada and GM U.S., better than anyone else
out there. So our real message to dealers is that XSellerator is built on a modern
technology platform, that is tightly integrated, and we just continue to work to improve
on it. We also continue to make our business processes and integration through to the
manufacturer better and tighter. In addition, we continue to improve on our product by
listening to our customers who understand their business the best, and integrating their
ideas into our software. Overall, its been very successful; if you look outside of
automotive and consider some of the most successful companies in the world in the
technology business, they are all about integration. Nobody wants little silos within
their business anymore, they want a tightly integrated product, with as many business
functions as possible on one system with everything seamlessly talking.
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