“For every industry challenge, a Cegid response”

Patrick Bertrand

Mr. Bertrand, accelerating Cegid’s growth was the principal operational initiative you announced for 2010. You said you would look to enrich your ecosystem, implement a multi-channel strategy, continue to make acquisitions and increase your international footprint. It’s now early 2011. How would you sum up the past year?

The strategy we have been carrying out for several years now has clearly positioned Cegid as a major player in the enterprise software market. By remaining focused on our strategy, we were able to hold a steady course in 2010, despite a turbulent economic context which caused many companies to hold back on investment.

Let’s look first at international development. We posted a 35% rise in sales. The increase derived principally from the retail sector, where we now position ourselves as a global company, able to accompany large-account retail customers on every continent. Many of them currently use a different solution on each continent. Cegid offers them a global solution, with product ranges available in more than 65 countries and in more than 25 languages. 2010 was also a turning point in that it demonstrated Cegid’s ability to win over local customers. This very favorable trend not only inspired all of our foreign subsidiaries, which are all growing rapidly, but also the Group as a whole. The market now has a positive view of our international growth.

Secondly, we get significant support from our ecosystem and from our multi-channel strategy. We plan to accelerate our growth by leveraging our strong product, sales and deployment partnerships. Over the last few years, Cegid has gradually expanded its ecosystem. Resellers now contribute to the sales realized by the Group, with 2010 seeing a 23% advance in sales from this indirect sales channel. The alliances we formed with major integrators who can accompany Cegid in the deployment of large projects was also a determining factor. An example is the Aoste group, where our partnership with IBM enabled us to deliver the most appropriate HR/payroll solution to the customer in the shortest possible timeframe. Telesales were successful, as was the launch of the Cegid Store, an e-commerce portal, and these activities also supported Cegid’s business in 2010. In the era of cloud computing, it is important to open up and enrich our product range by adding functions and content that form a comprehensive service package. In this spirit, we forged numerous partnerships with specialized providers such as Kyriba (cash management), Isotools (e-commerce solutions), Carlabella (expense report management) and Sidetrade (working capital management). And the list goes on.

Finally, let’s talk about acquisitions. They are not something we do when opportunity knocks, but constitute a key element of Cegid’s strategy. Acquisitions help us to achieve several objectives: hire employees with dual "IT/industry" skills, increase our installed customer base, ensure a base for future organic growth, consolidate our technological know-how and round out our product suites. In this regard, consolidating VISA in 2010 strengthened our position in the public sector market. Similarly, by acquiring Vedior Front RH, we added to our expertise in human resources, while Axeteam gave us new skills in the area of contract management software for service companies.

The IT market is now dominated by huge international companies. What is your secret? What do you have that these giants don’t?

We can’t say it often enough. A software provider’s job is above all to deliver functionality that dovetails with the way end users conduct their activities. As a result, we are convinced that the generalist approach—producing software that requires a great deal of investment in configuration—no longer corresponds to market demand. Rather, companies want to invest in IT systems with a rapid ROI. They are gradually abandoning "big bang" projects in favor of smaller, targeted projects that quickly enhance the productivity of the operating process in question, such as HR, supply chain, production management, point of sale management, or finance/reporting. Another underlying trend we see is that users want top-level, management information, not just raw data that they must then manipulate or process to get information they can use to manage their company. Software companies must now provide this information natively, in the form of function- or industry-specific dashboards, for example.

Cegid designs programs that can be integrated without a "big bang". They communicate with the other market solutions the customer uses and are a far cry from monolithic ERP, deployment of which is long and sometimes very complicated. Numerous companies have chosen Cegid, manufacturing companies for example, even though their parent company uses another large ERP-type solution. It is the subsidiary that proposes Cegid, and now, increasingly, the parent company that approves the choice. In doing so, the parent ensures the best responsiveness, while keeping the entire IT system secure and coherent.

The "best-of-breed" phase lasted until the end of the 1990s, when "ERP" became dominant. We’re now entering the "best-of-best" era. New technologies are facilitating this, via connectors and web services. They enable all the modules of the information system to communicate with each other without the need to develop specific interfaces like before..

The way people use IT systems is changing rapidly with SaaS and the emergence of cloud computing. What is Cegid’s strategy for dealing with these changes?

We have been building strong skills in SaaS for several years. It started in 2004 when we acquired Ccmx, an expert in hosting and payroll/HR solutions since the beginning of the decade. Since then, we have stepped up the pace of change and are now a major player in enterprise solutions available in SaaS mode. In 2010, SaaS sales totaled €16 million, up 23%. This growth rate was higher than the market average. We have beefed up the human and technical resources devoted to SaaS so as to increase market uptake of it. We now have considerable expertise, which means we can offer customers the flexibility, security, technology and openness they now need to use an IT system. Independent professionals have understood the advantages of SaaS. Retailers have, too, and so has—and this was more surprising—the public sector, which is undergoing a complete makeover. CPAs have been adopting the SaaS mode not only for their own use, but also to facilitate communication with their customers.

By leveraging this expertise, we will be able to take full advantage of the big changes ahead that will come out of cloud computing. How? By using the new resources for developers that providers of cloud technologies are now offering. Cegid’s ambition is to make these innovations accessible by federating its ecosystem and offering its customers service packages based on this know-how, with a "cloud" for every industry and for every function. The service packages go beyond traditional functionality to provide management-level information tailored to the user’s industry or function and fully integrating the advantages of the cloud: availability, security, and of course, accessibility anywhere in the world from any portable device.

What is your challenge for 2011?

Customer satisfaction and above all, new business! Recurrent sales now represent 50% of the total and is the highest ever, because SaaS sales have ramped up, but also because the customer support business has remained healthy. We are proud of the trust our customers put in us and to remain worthy of them, we must increase service quality. In 2011 Cegid will make a strong commitment to providing the best possible service to its customers and developing new services intended to facilitate their everyday use of the software. Very simply, we want to make their IT system an ally that supports the growth of their business.