Article

Succeeding Where Corel Has Failed
Dominique Froment, Journal Les Affaires

If Tenrox’s owners had said yes to the offers that had been made to them, their financial security would be assured. But the five young men, four of Armenian origin and one Israilian, have other ambitions: " We give ourselves five years to become a software company to reach a capitalization of a billion US dollars", says Ludwig Melik, Sales Vice-President at Tenrox.

Tenrox, a Laval-based enterprise optimization software designer, wants to become what Corel never was. "There is just as much talent here as there is in the United States; it’s unbelievable that not a single firm has been able to reach the international software market", adds 31 year old Mr. Melik.

Tenrox still has a long way to go to reach its goal, but it sure looks like they’re on the right track to get there. In its September 2001 issue, CRM Magazine gave top ratings to Tenrox for their PSA solution, Tenrox PSA, among five providers. In April 2001, the PM Network magazine reviewer wrote: " I was most taken with the change management capabilities of the Tenrox PSA Tenrox Incident Management member."  In September 2000, the CPA Software News had started it all: "Tenrox PSA Suite is a very impressive state-of-the-art offering."

In April 2001, Microsoft Canada awarded Tenrox the Solution of the Year prize. And last October, Ernst & Young rewarded Rudolf Melik, Tenrox’s CEO and Ludwig’s brother, with the 2001 Entrepreneur of the Year Award, in the technology and communication category.

Many clients have taken to the dynamism of these young entrepreneurs: Quebec’s Ministries of  Finance,Environment and Education, BCE Emergis, IBM Canada and Visa Desjardins, and pharmaceuticals such as Pfizer and Johnson & Johnson, as well as Sony, Ericsson, Motorola and Mitsubishi, in Europe. Tenrox gets 60 % of its sales from the US, and 20 % from Europe; the company has 700 clients in 50 countries, mostly reached by using the Internet.

ADP, the most important payroll services provider in the world (23 M workers), has chosen Tenrox for its private label PSA software. Tenrox also entered an agreement with Bell Mobility, in collaboration with the Canadian National Research Center, to develop wireless solutions. Furthermore, EDS is using Tenrox PSA to implement a social security system in the UK, the biggest IT initiative ever seen in Europe.

PSA software is the equivalent of ERP businesses for the manufacturing industry. According to Gartner Group, the PSA software market will reach 3 billion USD in 2004, compared to its actual 600M USD.

While ERP software manages operations, PSA comes into the picture once the product is done, for its delivery and integration in the client’s accounting system. " The main difference between an ERP and a PSA solution, is that the first one doesn’t include a human resources management feature", explains Mr. Melik. PSA allows companies to identify the skilled and available resources to carry out an engagement and better allocate tasks among them. « According to Meta Group, the billable resources (account executives, consultants, etc) have an average efficiency rate of 65 %, explains Mr. Melik. These are the people who will bring money to the company. If you manage to raise that rate by only 3 %, it can have a tremendous impact on the profits.

"Basically, we are telling businesses to find the best software for every feature (payroll, accounting, billing, etc) and let Tenrox PSA make sure they work together to their maximum capacity."

On April 19, Tenrox specialists will launch through John Wiley & Sons the first book ever written about PSA software (www.psabook.com). A French version will be published a few months later. " This book is not about promoting Tenrox products, otherwise Gartner Group wouldn’t have agreed to write the foreword", adds Mr. Melik. Born in Iran, the Melik brothers came to Canada in 1984. Rudolf studied electrical engineering at McGill University, and Ludwig pursued marketing at Concordia University. Rudolf and three classmates from McGill founded Tenrox in 1995. Ludwig joined the team two years later. Tenrox shareholders never had any outside funding; they were working as consultants to raise the money for their Research & Development (R&D). The company invests an impressively high rate of 25 % of the sales revenues in its R&D. Tenrox has been profitable from its first year, which is quite an accomplishment. Since inception, the SME has increased its turnover by an average of 60 % a year. 

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