Greetings,
I have been digging into information on this company ever since Waldo posted that this was one of his featured companies on his web site.
For a variety of reasons, this company and its business model is of particular interest to me.
For a time in my career, I was involved in the HR departments of three International retailing companies. I specifically remember been given the responsibility for the development and implementation of an automated payroll application that our I.S. group had developed "in house." This application and everything associated with it gave me headaches. For months, it was a total disaster. It was a lot of work and frustration for a minimal return. I knew that we had to go through this hell because unfortunately we couldn't find a good time and attendance application that suited our needs.
Later on, I was also given the responsibility for leading the drive to standardize and improve the accuracy of data captured within our company. The overall goal was to use the data to enhance the efficiencies throughout the supply chain. We also wanted to optimize the use of data within our organization and with our suppliers. This job made me very familiar with many of the hardware firms who sell data collection units, as well as the software firms who then market their product to collect and analyze the data. We needed the information to feed it into our new ERP application that the company had purchased.
I am only telling you this as I feel it give you a sense of the perspective that I bring to the table. It also may explain why I became interested in what this company is doing. So basically it was the combination of my experience, knowledge and interest in this area that prompted me to look much closer into what they were all about. After receiving the investor's package, I became very impressed with what they had already achieved, who they had steering the ship, and where that ship was headed.
I guess the thing that spurred me to take more of an specific interest in this company was the recent release of the financial results. These results showed me that we were not dealing with a company who would struggle to survive. ASI proved to me that they mean to become a big player in this field. I firmly believe that they have a very bright future ahead of them, and this is why I am taking a much more active approach to with my investing in this company.
Regrettably, I have to say that in my opinion, the specific market niche that they are in, and their unique position they hold in this area is not very well understood. Over the years, many other people have helped me understand my investments, so now it is my turn! I want to explain what I see here, and why I like what I see. I also know that by doing this, I will gain a deeper understanding and appreciation for the business as well.
I also think that before someone invests any money in a stock, it is important for them to first understand what business the company is in.
This company is specializing in an area where they enable businesses to accurately collect, route, analysis, distribute, and utilize data. If a business wants to stay successful, then they will need to continually develop their ability to collect information so that they can make better and more informed decisions than their competitors. ASI's products allow their customers to enhance their productivity, as well as their scheduling, efficiency, and document tracking. They also help them to reduce paperwork and eliminate inefficient work processes. For many organizations, this translates into Big, Big dollars!
ASI was specializing in the collection of Time and Attendance information for large corporations. However, even though this has been their main area of focus, they have now established an infrastructure and product suite that allows them to do so much more for their customers. ASI is focusing on the firms with the deep pockets, long term needs, and the ability to pay their bills. There is often the economies of scale that come with dealing with the larger organizations. This also means that they have frequently have access to the multi building / facility installs and therefore, larger contracts.
Many of these large companies also have established ERP systems in place. Due to the future potential that these organizations offer, ASI has targeted them as preferred customers. These organizations can also realize greater benefits due to their ability to utilize the information that they receive.
As I mentioned earlier, everything hinges on the accuracy of the data and the smooth and efficient capturing of that information. Believe me, I speak from experience that is much easier said than done.
Now it is common knowledge that for most businesses, labour costs are one of the most - if not the most - expensive operating costs that a business has. The maintenance and administration of this data collection is also extremely labour intensive and is prone to abuse or error. In its extreme it can be at the core of some very volatile incidents that can have a direct impact on the health of the relationship between the labour and management within an organization.
I don't really care whether a company has initiated the latest and greatest TQM (Total Quality Management), Process Re-engineering, or Customer Relationship Management program. These programs all can help their organizations grow for the future, but the bottom line is that before a company can even think of tackling these initiatives, they have to ensure that their staff and management feel that they are being paid fairly for the time that they spend away from their families! The management of the company also needs to know that they are operating an efficient operation and that they have their costs under control. They do not want their supervisory staff spending non productive time working on administrative paperwork. Supervisors, and logistics people should be able to quickly plan their resource allocation so that they can spend more time on the activities that make the company money.
Because of this, any company who can offer a good, simple, effective, and scaleable (can be added onto) system should do well. The market need for this product and service is just too great.
To take this statement a step further, any company who can bring forward a line of products and services that are not only innovative, but are scaleable, and which do not require huge associated costs to implement (e.g. replacement of existing hardware, etc.) will do very well. Now this is where I see Advanced Systems International excelling.
Unlike many of their competitors, this company has developed their products based on an open architecture standard. This means that they can have the flexibility to integrate their product with many different types of systems. Closed systems, also known as "proprietary" systems do not allow the plug and play type flexibility that open ones do. Proprietary systems are facing an onslaught of demand to open up their systems to allow the companies to add functionality that they do not provide. Unfortunately, several of these firms (and some of them are BIG firms) are suffering badly because of this. They are losing both management and customers who are struggling with a closed inflexible core system. ASI's in comparison is extremely flexible, scaleable and dependable. Their existing customers have attested to that.
ASI also has a huge advantage in their ability to enable a variety of dissimilar data collection units to interface with their application. This is a big advantage for large companies with different plants and/or in situations where companies (with different hardware) have now merged. ASI allows these companies to retain their existing hardware and still feed the ASI application with the data it needs.
Now, what I find interesting is that many of the ERP companies are showing slowing revenues. This is generally attributed to the fact that many companies have put new core ERP installs on hold as they focusing on the Y2K issue. Yet, it is interesting to note that several of the big companies already have their ERP systems in place, and they have already addressed their Y2K problems!. What many of them don't have are the applications that can feed their ERP systems. They need these add on applications to provide them with the data that they require to function efficiently.
In my opinion, the market potential that ASI has before it is staggering. I believe that the Q1 1999 results prove that out. So, despite the fact that the ERP market may slow as we get closer to the year end, in my opinion, 1999 will be a significant growth year for ASI. When these large companies have the Y2K issue out of the way, then the ones who have not installed the ERP applications will be crawling all over each other to try to get them in place. They will want to catch up to the firms who had them up and running a year earlier. To me, this means the year 2000 will be an enormous one for ASI. The market is just too big, and the pent up demand will be staggering.
I believe that ASI has the right business model, the right infrastructure, products, and people within the organization to become a powerhouse in this business. This is why I am investing in this company.
Now, I also believe that there is much to talk about, and I can not cover it all in one or two posts. So I am proposing a to contribute a series of posts over the next number of weeks to discuss this company and its business. To help me in this task, I ask that anyone who has any information, links, or "On Topic" comments could you please send them to me. Please do this either through the Private Mail on SI, or hold the information until we get to that topic. I know that this may be as effective as trying to herd a bunch of cats, but what the heck, if you don't try . . .
I can promise you that I will be spreading these posts out over the next number of weeks, and if necessary, I may juggle their sequence a bit as well. So here they are . . .
1. Market Size and Potential
2. ASI's business model and plan
3. The company's management and staff
4. Their products
5. The innovation that they bring to the market
6. The company's capitalization and their ability to carry out their plans
7. Who are their competitors
8. What is their Marketing Strategy
9. What risks and challenges do they face
10. What support and alliances do they have
I apologize for the length of this post, but I feel that there is just so much to say. I would appreciate your comments or suggestions on the topic list, and I look forward to sharing my thoughts with many of you over the next number of weeks!
Here is to a great 1999!
Crazy Canuk |
