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June 6, 2016 Focus: Technology

Shoptech’s tracker tools fuel growth in CT, abroad

Shoptech customer uses enterprise resource planning software PHOTO | Contributed A Shoptech customer uses the Glastonbury company's enterprise resource planning software to track inventory and materials costs.
Paul Ventura, vice president of marketing, Shoptech Software
By Mathew Broderick Special to the Hartford Business Journal

As the operations manager for Berlin precision tool and fixtures manufacturer Sirois Tool, Andre Nadeau is concerned with efficiencies.

“In manufacturing, it's important to have a snapshot of your jobs,” Nadeau said. “It helps us understand how far along a job is, how much time we've spent and our costs.”

For many 21st-century manufacturers, that snapshot is increasingly being created by Enterprise Resource Planning (ERP) software, which tracks business resources — cash, materials and production capacity — and the status of business commitments, purchase orders and payroll. That in turn, has fueled an ERP industry that's projected to expand by more than 7 percent annually and grow to $41 billion by 2020, according to Allied Market Research, a global research firm.

That trend has been good news for ERP software companies like Glastonbury-based Shoptech Software, which has been recognized for the past nine years by Inc. Magazine as one of the fastest-growing 5,000 companies in America, the only shop-management provider on the list.

“Only a tiny fraction of the nation's companies have demonstrated consistently high growth, particularly in the difficult economic environment of the past few years,” said Eric Schurenberg, editor in chief of Inc. Magazine. “Winning the award nine consecutive years puts Shoptech in rarefied company.”

Driven by small to midsize manufacturers

Shoptech's growth over the past decade has been driven by a focus on small to mid-sized manufacturers, said Paul Ventura, the company's vice president of marketing. “Most small shops are coming off QuickBooks or Excel spreadsheets ... for [tracking] their shop floor needs,” he said. Ventura says the company's flagship E2 software tracks clients' personnel time, reduces the margin of error and provides complete visibility — from quoting, scheduling, material management, quality controls and finances — in real-time. “It helps [companies] to make better business decisions in a timely fashion, which results in higher profits.”

It's also expanding Shoptech's client base and bottom line. Ventura said the company has more than 7,000 clients across the U.S. and is growing its client base 10 to 15 percent annually.

That's meant job creation in Connecticut.

“We have been adding between 10 to 25 employees per year over the past few years,” Ventura said, noting Shoptech now has more than 200 employees. And the company continues to invest in its infrastructure, expanding its Connecticut headquarters and Cincinnati offices, while opening a new office in Toronto, Canada this year.

Key to Growth

A key to the company's growth — Shoptech hit $30 million in annual revenue and is projecting 12 to 15 percent growth over the next three years — has been the diversity and size of the small business manufacturing industry. According to the National Association of Manufacturers, there are more than a quarter million small manufacturers in the U.S., which collectively contributed more than $2.1 trillion to the U.S. economy in 2015.

“We service all industries across the United States,” Ventura said, noting Shoptech is the No. 1 vendor in North America in the small to mid-sized market. “We have [strong business with] defense contractors and medical industries in the northeast, automotive in the Midwest, oil in the southeast and aerospace out west.”

That geographic and industry variety has helped keep the company growing, even as certain sectors — such as the oil industry — have dipped.

Ventura says many clients are on their second or third generation of the E2 software; product innovation and strong service and support have driven client loyalty.

For Nadeau of Sirois Manufacturing, Shoptech's service model was a big factor in selecting them as a vendor. “The ease of implementation, their training and the fact that they were based in Connecticut were all important,” he said.

As Ventura looks at the near-term horizon three to five years out, he says the company would like to grow to $50 million in revenue in that time. And Shoptech is continuing to add new features to its products. The company's latest innovation in development, reflecting a larger ERP industry trend, is the software as a service (SaaS) — or internet-based on demand software — model, which would enable clients to access the software online rather than install it.

“As long as our customers are staying busy, we should be in good shape,” Ventura said.

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