STL Technology Solutions ltd – The Interview

068-tim-dobie-ivan-durkin-mark-garland-jonesSet up and run by professional wholesalers for professional wholesalers, the fast growing STL Technology Solutions is the UK’s only IT provider dedicated to supplying modern, integrated merchandise control applications, devices and integrated solutions specifically for cash & carry operators and delivered wholesalers, and counts 10 of the top 30 UK wholesalers among its customers.

STL’s portfolio includes its flagship Merchandise Management System (MMS) and Sales Order Processing (‘STL SOP’) software, mobile terminals, on-line Order Wizard and centralised cash facility solutions. STL’s Merchandise Management System is now ‘live’ for several major wholesale customers, including A.G Parfett & Sons, Dhamecha Foods Ltd and Stax Trade Centres PLC.

STL continues to innovate: it recently launched a new mobile Rep Ordering System, which does exactly what it says, and a digital pen for delivery tracking which works like a normal pen on standard forms but automatically converts written strokes into digital data for transmission to head office.

STL has also piloted a new scan to order system at Forward Foods, including a key fob-sized bar code scanner, STL’s online Order Wizard and its SOP software, which enables easy, seamless ordering for shopkeepers direct from the store. STL founder and MD Ivan Durkin spoke to The Grocery Trader.

The Grocery Trader – Ivan, before we get into the detail of STL, your CV is formidable! Did you always have a clear idea of what you wanted to do next?

I didn’t really – after school I worked for a grocery distributor, who opened a cash ‘n’ carry depot and later a number of c-stores. I worked at all levels of the company and got a thorough education in the cash ‘n’ carry and delivered wholesale business, before taking charge of their IT.

I found myself in the unique position of simultaneously being part of a grocery company’s senior management team and having a strong relationship with its IT provider, Riva. Eventually Riva said it would help them if I joined, so I moved in 1989, and worked exclusively in their cash ‘n’ carry division. I started in sales support and ended up as Group Sales and Marketing Director of the Anker Group, after they bought Riva, This role included a spell in the Middle East, extending Riva’s sales to cash ‘n’ carries and wholesalers in Dubai and elsewhere.

GT – How did you come to start STL?

As I mentioned in my previous answer, I spent much of my earlier career working in the cash ‘n’ carry business and then on the IT side serving cash ‘n’ carry customers, so cash ‘n’ carries were in my blood. After the acquisition Riva’s management weren’t as keen on cash ‘n’ carry and distribution as their predecessors. I reckoned there was plenty of potential, and I approached Mike McGee, then MD of Landmark Cash & Carry, to see if he’d like to start a company investing in this area. If anyone’s interested, we talked it through over a meal at the Noble House Chinese Restaurant in Bolton! Mike thought it was a superb idea and came in with us.

alt-screen-keyboardGT – What was the initial STL proposition?

We launched STL in 2001, based on a combination of long-standing relationships with the key cash ‘n’ carry operators and in-depth experience providing IT solutions for them. Our pitch to our IT and venture capital partners was that we offered something new, which was technologically innovative and shook off the cloak of the past. When it came to seeking funding, there was no lack of support: the key wholesalers and the regional funders were very helpful.

GT – Wasn’t anyone else offering such software?

No, they weren’t! All the software specifically designed for the wholesale industry was ageing, and very little fresh investment was going into R&D, producing modern software using the latest Microsoft platforms.

GT – So what was your initial vision for STL?

I wanted to produce software for the cash ‘n’ carry and delivered wholesale sector that was easy to use, simple to support, would improve their business performance and strategies, and was both easy and cost-effective to install, customise for individual businesses and manage. Grocery wholesalers don’t like taking risks on infrastructure: by offering solutions based on Microsoft, which has huge R&D backing and a solid road map, we can provide them with a really sound business investment.

GT – Who else was on the founding team? Are they still involved?

Mike brought Ron Colley from Landmark, and I brought Tim Dobie and Mark Garland-Jones from Riva, where Tim was Finance Director, and Mark was Senior Project Manager. Ron Colley left in 2006, but Tim and Mark are still here. Mark is Project Director and spends a lot of time in the field, currently (August 2009) looking after 14 ‘live’ projects. Tim is Finance and Operations Director and leads our day-to-day operations, supported on the financial side by our new Financial Controller Julie Walker.

GT – Is Mike McGee still with you?

No, he’s not. As part of the Landmark deal we also brought their data management business: Mike McGee has taken that on as a separate operation, but we’re in regular contact regarding mutual business opportunities.

credit-card-readerGT – What is your day-to-day role in STL these days? Are you still involved in working with the clients, running the relationships and developing solutions?

Yes, very much so. I spread myself across all departments, but I’m happiest working with clients and spend three quarters of my time with end users. It’s a testament to Tim Dobie that I don’t need to worry about finance and admin.

GT – Who heads up your IT development?

Mark Vasey, another ex-Riva colleague, heads the development and design of our applications, and keeps up to speed on emerging technologies. Mark and I have worked together for 17 years. We develop our products in house at Darwen near Blackburn, Lancashire: the heart of each application is a highly configurable package solution, to which we make small changes for different clients.

GT – Can you name your major clients and talk about your work for them?

Our leading clients include Parfetts, Dhamecha, Stax Trade Centres, Bestway and United Scotland. We’re putting the finishing touches to a major project for Dhamecha:  we’ve deployed a head office software solution giving them control at the centre, where all the buying for the branches is now done. They can see the real-time stock situation and volume sales in each depot, and enjoy high-speed data transfer.

GT – This centralisation is a big change for cash ‘n’ carries, isn’t it?

Yes, it is. Until recently cash ‘n’ carry groups used to have managers and buyers in each depot, now it’s all done from the centre and data flows through the company. The drivers are increased levels of efficiency and reduced staff levels: our technology means clients can still have complex pricing structures and different prices in each branch, as previously. It gives the wholesalers the technological advantages the major multiples have had for years.

We’re currently doing much the same thing for Parfetts with a head office solution controlling six branches from Stockport. Stax Trade Centres have opened an £11m head office and a new branch in Manchester, and we’re about to roll out our solution throughout the business. With each of these clients, it’s all about modernising working practices and driving efficiency.

GT – From your vantage point, which is more important in your business – knowing about IT, or knowing how cash ‘n’ carries and delivered wholesalers use it?

In-depth understanding of the wholesale industry is more important. People don’t appreciate the complexity and the different methods that each of the cash ‘n’ carries employ: their IT partners become intimately involved. It’s a rapidly changing environment, with increasingly larger organisations with multiple sites, which all need consistent data.

stl_julie_walkerGT – Could a ‘pure IT’ company – if there is such a thing these days – simply decide to march into the wholesaling sector and make a success of it?

They might well try, but they’d come unstuck. The technology has come down in price, thanks to modern browser-based systems, but the bigger problem is, many bigger operators don’t want to pay the price tag the big IT companies ask. We have the advantage of being a private company; we’re a very flexible, flat organisation with considerably lower overheads, much quicker on our feet. We’re developing solutions in today’s Microsoft applications, not in a 30-year-old environment.

GT – Are you offering your system to delivered wholesalers and depot-based wholesalers in other markets?

We are, but we’re in the early stages. We recently worked for a medical product distributor; the Stax Trade Centres are all non-food; we’ve also worked for automotive and building materials wholesalers. Our products will fit any distribution operation, so we’re looking at all the options.

GT – Is there any maximum number of depots you can cover?

We can set up systems for pretty much any size organisation. The first depot is the difficult one!

GT – How scalable are your systems as customers’ businesses grow or change shape, including new sales channels such as on-line retailing?

With modern technology it’s far easier to develop quality code than with antiquated software. We already have our own on-line ordering application, STL Order Wizard, which transmits orders seamlessly into our order processing system.

GT – The new Rep Ordering System sounds superb. Is it the end of the road for the old order pad?! Any plans to sell this to FMCG companies and others?

It should be the end of the road for the order pad! Essentially Rep Ordering is a value add-on to our core system, which we’re selling initially to our ‘install’ base. We’ve developed it for our distribution clients but you’re right, Field Sales is potentially a far bigger opportunity.

GT – Your digital pen for delivery drivers also sounds great. Can you tell us more about it?

Another IT company makes the digital pen: we’re exclusive resellers in this sector. It offers a fabulous capability for the client, transmitting data to head office in three minutes of leaving a call.

GT – Do you provide the IT backbone for your system?

We can provide the backbone: or, if there’s an existing IT system, our products interface smoothly. Many cash ‘n’ carries, even large groups, don’t tend to have big IT functions. One way we market ourselves is to say to the client, make us your IT department. You decide: is it cheaper to pay us, or hire an IT person?

GT – Do you run and manage wholesaler customers’ IT systems, once you’ve installed them?

We set up systems, and provide training on site and phone support seven days a week. We solve problems on the spot: our modern system architecture enables our support analysts to look remotely at any machine, client or till point, whether in mainland UK, or one of our clients overseas in the Falklands and Mumbai. There isn’t much we can’t fix by phone.

GT – It sounds like you’re set for massive growth. How many more clients can you take on?

We’ve still got plenty of capacity: in the last six and a half years we’ve adjusted rapidly and brought in extra resource. We also have access to former Riva colleagues as needed when we reach peaks of activity.

GT – Has this recession has been good news for STL?

The food wholesalers and distributors haven’t really suffered in the recession, partly because poorer shoppers have switched from their supermarket to their local store. Historically the wholesalers have tended to be cautious about spending on technology, but as your recent story showed, L&F Jones for instance have saved one day a week in its picking operation just by having a more efficient system. Cash ‘n’ carry chains can also drive efficiencies with centralised data. It’s often overlooked that because our software is Windows-based, it’s quick for staff to learn to use it and it looks and feels familiar from the outset.

GT – To summarise your proposition, how can IT systems like yours help cash ‘n’ carries and their customers fight back at the supermarkets?

Our systems deliver integration of back office, warehouse and POS so real time data is visible and shared, and stock levels are known and controlled. Executives and managers can plan effectively, and using merchandise management software to centralise data and processes, coupled with industry-specific tills and RF-mobile terminals; improve efficiency, allow full stock data to be shared with customers: enable centralised purchases and promotions: and control on-line sales.

GT – Can you quote payback times, return on investment and so on?

If clients can disclose their existing costs, we can make a case. Payback with STL is typically three or four years. The other big benefit is that our systems are pretty future-proof, the industry technology of choice.

GT – In your solutions, do you supply kit from other vendors such as tills, RF terminals and EPOS?

We can supply turnkey solutions if required: we’ll also install our software onto a client’s existing hardware providing it’s adequate for the job. We’ll say at the outset what the minimum spec needs to be. We don’t do financial systems ourselves, but we use Sage as our chosen accountancy package and partner with SPJ, a large Sage distributor.

GT – How long is it from first conversation with a customer to go live with a solution?

It can be as little as four weeks. We’re deploying an existing package each time, not going from scratch: we configure the system to meet most needs.

GT – Are you members of any retail bodies or associations?

We’re associate members of the Federation of Wholesale Distributors (FWD) and work closely with Nisa-Today’s and Landmark. We attended the recent Today’s conference in Morocco and presented at last year’s Today’s conference in Prague.

GT – Finally, where do you see STL going from here?

Our products are still evolving in a never-ending ‘circle of life,’ refreshing and new improvements, unlike some competitors peddling 30-year-old products. We’re spending a lot of time looking at IT for warehousing and distribution centres, offering complete management of warehousing and put-away. There are a lot of antiquated systems out there, but no new and innovative systems.
Outside the UK, the wholesale sector in Europe and beyond is ripe for technological change, and various overseas operators have asked us to deploy our systems in their businesses. So far we’ve installed systems in the Falklands and Mumbai and I’ve got considerable Middle East experience from my time with Riva. Given our current size and our UK base we’ll be looking at offering our systems overseas through distribution partners.

STL Technology Solutions ltd   tel: 0870 240 2140   www.stl-solutions.com