A self-described 20-year-old teenager, Revitas is a company with a long history of helping its customers make complex manufacturing and distribution channels easier to manage. For our Q&A with Revitas, we sat down with President and COO Al Smith to learn how the company is reinventing itself for the 21st century using its unique Flex platform and suite of tools including Contract Manager, Pricing Dynamics, and more.
LOCATION: Philadelphia, PA
This interesting thing about this company is it was founded in 1989 and so we’re kind of the 20-year-old teenager if you will or the 20 year old overnight sensation. The company had a lot of folks who were working with a large pharma companies and other companies in the life sciences phase who have incredibly complex manufacturing distribution channels and like many small software companies over time they went from a consulting relationship to building a canned product to then actually making that a commercial product. One of the things I love about joining a company like this is that the heritage is so rich and deep. I’ve been around the software industry for a long time and I think the statistics are something like one in eight thousand software companies creates a new defined space. This company did that around contract management and the whole notion of the contract lifecycle is something this company defined. We have the heritage of very long relationships with customers that once they adopt the solution it’s a long relationship, very much the old saw that customers may date their hardware vendors but they marry their software vendors.
We end up becoming an operationally dependent solution and if I step back from that a minute, what we really saw was a very a straightforward set of problems. If your business has a complex distribution channel and you tend to do a lot of the incentive management to help move the goods through the channel you have this high value good, it has a perishable shelf life, and you tend to have a lot of channels to market and each of them has a different kind of incentive you put on those channels. Managing all of that is really hard to do and that’s really how the company started. It started helping people with these complex distribution problems. First of all is just keeping track of all of this then realizing we actually can find places where customers are overpaying on rebates or chargebacks or under paying or having a situation where goods didn’t actually transfer hands but they’re still making a payment. There’s a really sexy term for this called revenue leakage. We have specialized over the years to companies I call ‘at scale’, really large companies, because the more of this you do and the higher those volumes are a couple of things come out. The complexity factor goes way up of course and the amount of money we can save you in running your business goes way up as well. That in essence is kind of what we do.
Also over the years we grew from building out individual products that we sold to companies and over time the technology moved on, those became an integrated suite of products in a common technology platform. There aren’t very many like us that have gone from having best of breed standalone products to an integrated platform to now in today’s generation having the power of shared master data, shared workflows, and the ability to use information picked up in one part of your business as a business decision framework for another part of your business so you make better decisions.
In the enterprise software space there are large segments that are pretty well defined today. Most large companies have an ERP system, an enterprise resource planning system, that they use for their manufacturing and their pricing and product management and the big players there are SAP and Oracle. It handles their manufacturing side of the house quite well and often covers their financials, and integration to inventory control systems. On the other side of the house they often have supply chain management systems where they manage different suppliers, their purchasing and all that stuff. The third area that’s a really well defined segment is CRM, the customer relationship management area, and this is their whole interaction with their end user, everything from the service management to order processing to section handling and satisfaction management. Those three markets are fairly well formed.
There are a lot of dynamic things that go on in them but interestingly enough there’s a hold that sits for enterprise companies between all three markets and the notion of contract is what actually ties those three things together. With your customers you probably have a contract. With your suppliers you probably have a contract. When you build things or post things financially you probably look at it from a contract term and yet none of those three ecosystems strongly manage the notion of contract and so if you think of aspects of contract lifecycle management and then the interaction between those three ecosystems and your suppliers, your distributors and your customers, it’s really what drives your revenue and profitability. A big part is also the revenue management as things interact through your business and your relationships. We define enterprise relationship management as kind of a white space that sits in between those three ecosystems and integrates strongly as an extension to ERP. It integrates on the contract offering side with the CRM and your customer relationship management and it integrates through supply chain, chargeback and rebate management to your supply chain side. This is an area that’s been around for a bit but only a few companies have been servicing it. If you have an ERP system, adding an ERD system, the enterprise revenue dynamic system, really boosts the effectiveness and efficiency of running those systems.
One thing I have left out of that conversation that is an overlay in some vertical industries is the heavy cost of compliance and regulatory management. As the company started, our strengths historically have been in the life sciences, the pharma industry, and other really heavy duty compliance markets. They have to deal with constant auditing. They have all kinds of crazy programs that they participate in where they have to be able to make sure that what they sell to one part of the government or through government programs is not in conflict with what they do with others. That’s really hard to manage and a system like ours, by sitting between those other major systems, ensures compliance and that you are ready for auditing and in fact we have specialized software for some industries where we actually do the compliance processing for them.
The underlying Flex technology platform is a modern, service-orientated architecture platform. What we built into the platform is shared master data, shared common services that any application might need in delivering its capabilities to the end customers and because those things are shared between all the applications that sit on the Flex platform, you have a lower cost of total ownership and a consistent user experience. The efficiency of your employees is fairly high because as they grow in their responsibilities and skills they can use different parts of the Revitas suite with a very low learning curve because there’s a consistency across it.
If I switch to the kind of applications that sit there and benefit from the Flex platform, starting from how customers view things we have a contract creation, authoring, repository, compliance and workflow manager we call Contract Manager. We have a number of a mobile features for it so if you have a sales team that goes out and works their customers you can review contract terms, pricing, and initiate activity from an iPad, Android device, or laptop and the idea is that you start managing the outbound part of what you sell. Now a lot of our customers have a very complex business on their sale side. Their sales people go start a contract then it has to go to legal for review, it may also go through financial or pricing committees for discounting and then they have to go through their manufacturing or development side for workflow approvals and configuration management, and then they may have to go get executive sign off particularly if you are getting certain discounts or deals over a certain size for visibility. Today what a lot of companies do is use a horribly complex and messy email chain. Stuff flows around on email and each person has to get re-orientated to what the deal is, how it’s going, and everything else. What Contract Manager does is it lets you first of all use predefined templates your company might want using all your standard words, and all your standard terms and conditions. It lets you do all the redlining using your normal desktop tools like Microsoft Office products, you can put in Excel tables and it manages all the workflow approvals and all that redlining so that everybody involved in the process can see the complete picture. Once you have actually approved that contract, it also acts as the repository and audit place for all those documents. It also has a lot of really cool advanced capabilities like e-signature and digital transfer.
Now you just won that big deal and you sold your product, now you’ve got to go execute on that contract and that’s where we have a series of products we call Pricing Dynamics and this is where we manage the execution and adjudication of that contract. Your contract probably has terms and conditions that you have to be compliant to and reporting requirements that have royalty needs. You may have incentive that you pay to your buyers, your wholesalers, and your distributors so it does rebate management and chargeback management. You may need to do accruals or other activities as you do your transactions to keep your financial fees in place. It really is the heart of our value proposition.
One reason we’ve dominated is that we created the solution space so you get a chance if you create the space and you are successful to kind of become a gorilla. In the early days, we were the only one doing this. Over time if you are successful you attract competitors and we welcome that because for a market to grow you need many companies to compete and so we do have some competitors but the one thing about this kind and this class of software is once you become operational on it, it really is very sticky and what I mean by that is it integrates itself into the day in day out of how you run your business. As long as your company is gaining value from it, you have very little reason to remove it, very little value in displacement and quite honestly we stack up really well to the competition. While some of our competitors have small benefits of what they do differently than us, I think we have the broadest, deepest, best integrated solution out there so once we are there it would be hard for somebody else to displace us. When we both go and try to compete for a new opportunity, somebody who is not using our offerings today, we do well in a head-to-head so from a vendor point of view our focus in growing our company is really around sales reach and getting enough opportunities.
Your point about the cohesion is a really good one. I think in the old days when we had separate products, the benefit a company got was really narrow to just the individual silo of how they saw that product helping that part of their business and so it tended to be a departmental decision to that function. When you look at bringing the products integrated on a common platform with shared master data, things that solve other business problems at the CXO level become a much more strategic decision and at that level you really have much longer retention.
There’s a long history here so I will give you two that jump out at me. One I think when the company was founded, I don’t think the people could have foreseen the changes in the life sciences and healthcare industries and the level of regulatory change whether it’s Obamacare, changes that are going on recently or the managed care that went under the Bush Administration. I don’t think that the company could have foreseen the introduction of government into healthcare that has ramped so rapidly over the last 15 years and that has fundamentally added both complexity and opportunity to the business and it definitely has shaped that part of our market.
The other one is without a doubt the globalization of high tech. Again if you go back 20 years, I think it would have been very hard to foresee the supply chain that somebody like Apple has today and the kind of distribution channels that the other high tech manufacturers have and it’s fascinating when you look at these industries’ incentive management and distribution channels, the companies in their distribution channel often don’t make any money on the goods passing through them. They make their money on the incentives and chargeback they get for handling the goods so it’s fundamentally changed the economy into a service economy from a manufacturing economy in the U.S., and that change I don’t think it could have been foreseen. It created both challenges in making sure that the kinds of capabilities we had built in out of the box in our solutions could meet these needs and then obviously every time there’s a challenge, it’s an opportunity. If you step up to it and you are the best at it, you are going to have people come to you and I think we’ve largely done that.
Yes thanks for the opportunity, I really appreciate that. To prospective customers, I say a couple of things: If you are in a business where you have a perishable value to your goods, you have an emerging or complex distribution channel, and you are struggling to manage all that, come take a look at our offering even if you are a smaller company. If you are in the middle of a fast growth rate or you are an industry that has hockey stick growth rates, you don’t want to be in the middle of that growth rate trying to put in a new solution and having to re-platform and make sweeping changes in the middle of all that growth. Come look at our SaaS offering, come look at getting started. We put twenty years of work and hundreds of enterprise leading companies’ best practices into this platform. You use the part of that you need now, you pay for it as you grow, and you add value and add capabilities as you need them and that’s a smart way to grow a business because you don’t have this big disruption in the middle of your growth.
Looking for more information on contract management software? Check out our side-by-side comparison of leading platforms in the Top 10 Contract Management Software report. You can also browse exclusive Business-Software.com resources on CLM software and e-signature solutions on our contract management research page.