At a recent meeting of the Bluegrass Innovation Network, three-quarters of the attendees were technology or computer-related businesspeople. They were there to hear one of their own speak -- Lexington native Patrick Smith, president of Software Information Systems (SIS). The subject was "Market Definition."

Leading the pack among growing technology firms is one way that SIS is defining its niche. A long-time IBM Business Partner, SIS was accorded the honor of Premier Business Partner in both 1997 and 1998 by virtue of its business results, customer satisfaction, and quality measurements. Only one percent of IBM's 1,300 mid-range Partners worldwide earn this distinction. SIS offers technology consulting; system, networking, and printing hardware; a complete menu of software products for accounting, manufacturing, and other applications; and services that include custom application development and system migration. They represent such industry leaders as Microsoft, SupportNet, GeneXus, and DataMirror.

The company has been up and running since 1982 under the guidance of Smith and three other principal owners: his wife Jean, Steve Sigg, and Greg Otis.

"I do sales and marketing, hardware sales primarily," says Smith. "Greg is more oriented toward the performance side of the project work, and Steve has more responsibility on the sales side. Jean's responsibilities are administration and human resources, and she does some application development work as well."

"We are doing a lot of executive consulting," says Steve Sigg. "What is their strategic intent, their vision? What are the key processes they have in place to make that happen? We're decomposing and reengineering those processes to meet their objectives. Then the development begins."

Long-term solutions

Key to the process is understanding that customer's business from the ground up, says Sigg, taking time to learn how their company works and what solution will be the best fit.

"You can go in and just do a little piece of work, but then all you did is a little piece of work," he continues. "You haven't impacted the business substantially -- you helped them out of a crisis situation. We're trying to approach it much differently than that."

"We take ownership of the project and make certain that it's done right -- we don't just walk away. Many companies just send in bodies, but we take a much broader responsibility."

"The importance of relationships is a key to our success up to now," Smith submits. "First and foremost, we want to do what's right for the customer. We want a winning strategy for everyone: our customer, our vendors, and ourselves. It's a juggling act sometimes, as in any sales organization."

"We are willing to accept change and work with our partners for the long term. Our customers like us to have some skin in the game, to share the risk and be a partner in growth, rather than just another supplier."

Developing a focus

"IBM's downsizing was a boost to SIS," Smith admits. "Frankly, we picked up the bulk of what their smaller sales and marketing division was no longer able to handle."

"We work mainly with IBM systems and platforms. There are over 400,000 of them in use worldwide. We don't just wait for IBM leads. We buy lists, pursue our own leads as well. You find the best solution and go with it."

The process of developing those solutions involves several important partnerships. One is with GeneXus, the American branch of a Uruguayan company called ARTech, which specializes in "automatic administration of knowledge technology" and application and development of artificial intelligence.

"GeneXus is a unique technology in handling database applications," explains Sigg. "It can work with applications in Java and HTML, with stand-alone or networked PCs. In the area of data warehousing, massive amounts of data can be accessed quickly, then summary data used for analysis, updates, and sales histories. It's a way to capture knowledge and redeploy it."

In Kentucky and elsewhere, the business focus has been on "nonglamorous software development": primarily accounting, inventory, and purchasing systems. Recent regional projects include major system upgrades for the Lexington Fire Department and Police Department, partly to handle enhanced 911 service. SIS is also working with the Commonwealth's Empower Kentucky program, though the AS400 somehow didn't make the State's list of approved systems for program funding.

As Smith observes, companies are realizing now that there is a significant competitive advantage to state-of-the-art systems in these heretofore taken-for-granted areas.

"For a lot of companies," he continues, "this is the third time around with figuring out how to use their computers and software. Now they have reached a phase where they can use foundational building blocks to put together customized, targeted applications."

"For instance, we worked with a steel company on developing software," Sigg illustrates. "At first they were planning on marketing the software afterward, but then they thought 'No way. We're keeping this to ourselves."'

Planning for growth

"SIS has been a conservative company," Smith concedes. "Not funding through outside sources has restricted our growth so far. If I'd do anything differently, I'd probably be more aggressive in this arena. We've been working with a business consultant to evaluate a half dozen potential opportunities for us. We'll also be looking at funding: banks, venture capital, and mergers and acquisitions."

"We're a real hands-on company too, which makes it more of a challenge," he continues. "The four principals are very active and involved at a detailed level in a lot of things. You hit a point where the management and planning has to be tended to, on top of your regular chores. All this growth creates a cascading effect."

"Right now we're looking at opening an office in Columbus, Ohio. Our Indianapolis office opened in February. Recently we reached a working agreement with SAP, which is what the people in Indianapolis wilt be primarily working on.

People talking, people listening

With all these new communication tools and methods and protocols, have you ever wondered how the folks that sell it actually use it themselves?

"Well, first of all we have a phone system that is about to be replaced because it's reached capacity," Smith ruefully observes. "We have a large network-based system here in addition to AS400s and RS6000s, so every employee is capable of connecting to those systems. We use LotusNotes for e-mail.

"I think e-mailing has been one of the big communications vehicles that has helped us this year. We broadcast messages that reach everybody in the company. Jean does a lot of human resources projects, and the memo process for that has been shortened considerably. We also have an internal employee e-mail newsletter called "Inside Scoop," where every employee contributes something every week. Carol probably used to spend half a day every Monday printing it out."

"We're using NetMeeting as well," Sigg adds. "Tomorrow, we're having a development project meeting with another company located in Indiana. We're going to have a project review with both voice and data and complete demonstration of the product without using a telephone. It's a three-hour drive to the client, a three-hour meeting, and a three-hour drive back, and instead we're going to do the whole thing in three hours. Right now we're doing it on an exception basis, but we've already saved travel time five or six times this year."

Reaping the rewards

Through steady company growth, the SIS roster has increased to about 30 employees, with very little turnover.

"We've only lost four employees since 1982," Smith says. "One of our big drawing cards is how our employees are treated and viewed. We invest in them and they invest in us as well, for the long term. They are our biggest asset, there's no question."

Sigg adds, "Our people really have the opportunity to be their own selves, to lead, to take on responsibility. We cannot be holding their hands every step -- they really get to run what they're doing.

There's the trust and confidence in them that allows that to happen, and we see phenomenal things happening when you have that kind of environment. It's very positive."

"People are also challenged here," Smith continues. He points to the company's total focus on customer satisfaction as the chief motivator and the reason for its phenomenal success. Listening to those customers has not only spurred new project areas like data warehousing and insurance claims processing, but has also resulted in the surest sign of satisfaction for all parties -- repeat business.

"We had 92 percent customer satisfaction in 1997," Smith says proudly.

Last October, SIS earned another accolade. Inc. magazine named the company in its annual Inc. 500 report as one of the nation's fastest-growing companies. The firm ranked number 160, with an increase in sales from 1992 to 1996 of 1,353 percent. "To announce the Inc. award, we had bagpipers, cake, and gave everybody the rest of the day off," Smith fondly remembers.

Company owners reward such performance by devoting $30,000-40,000 toward training and continuing education, giving frequent awards in various guises, and offering 100 percent free medical benefits in addition to competitive salaries. In return, they acquire and keep the best people -- just who they want to be offering the best solutions.