Cogistix Launches Sprocket Solutions to Fill Niche
BOARDMAN, Ohio — An affiliate of Cogistix LLC stands to bring cloud-based business software to small and medium-size companies that otherwise would find it hard to afford this technology.
“We launched Sprocket Solutions about six months ago,” says Kevin Miller, president and CEO of Cogistix and Sprocket Solutions. “The new business addresses a market that Cogistix wasn’t reaching.”
Cogistix, founded in 2009, provides enterprise resource planning, or ERP, software that manufacturers use in the metals, plastics, food, chemicals, automotive and aerospace industries. Many companies that use this software are larger businesses that see the value of upgrading their systems, Miller says.
Sprocket provides similar business software to companies that aren’t as large or complex as manufacturing operations. “The trend and momentum in the industry is toward cloud-based products,” he says.
The cloud is a term commonly used to describe offsite data storage that can be accessed remotely from devices such as a smartphone, laptop or desktop computer, or tablet. Thus, an employee or business owner can access this information through customized applications that can work in synch with mobile devices.
“While Cogistix is focused on manufacturers, Sprocket is focused on distribution and service companies,” Miller says. Sprocket is a licensed reseller of Acumatica, a Seattle-based business software provider that integrates financial, customer, distribution, accounting and production management into a single, cloud-based platform.
“It opens up a brand-new market for us,” Miller says. “It’s geared toward medium and smaller businesses and can be accessible anywhere.”
Small companies that wish to remain competitive must consider upgrading their business software, sayss Sarah Kurpe, senior account executive at Sprocket Solutions.
“Organizations that have outgrown their existing service, for example, can use this,” she says. Often, companies that have either expanded or merged with another firm have found that their existing software is incapable of accommodating a growing small business. “That’s where Acumatica comes in,” Kurpe says, “and matches what growing medium and small-size companies call for.”
Software with the capabilities of Acumatica is normally available to larger companies with sufficiently deep pockets to purchase such products from tech giants such as Oracle. “Small companies just can’t run off to Oracle and purchase this type of product,” Kurpe says. “It’s too large and too expensive.”
Acumatica provides an affordable platform to these mid-size or small companies, and Cogistix is converting its own systems to Acumatica to manage its business. “It allows us to manage our sales cycles, current customers, and helps us to better manage a project,” Kurpe adds. “Like many growing businesses, we experienced the same challenges.”
Six employees are in training to sell and support the software, Miller says. Once they are certified, which should be soon, the company can deliver the product to customers. “Acumatica has a strict regimentation program when it comes to certification,” he says. “Sprocket is really ramping up. Our goal is to become their biggest value-added reseller in the United States in three years.”
Meantime, the business culture is likely to change as the millennial generation moves higher into the ranks of management, he says.
“The trend is pointing to everything becoming app-driven,” Miller observes. “At some point – maybe in three to five years – that will be the platform for all software, and we wanted to make sure we addressed this aspect of the market.”
To accommodate Sprocket’s projected growth and Cogistix’s continued expansion, the parent company relocated last year from offices in South Bridge Executive Park to the former HBK building, 7680 Market St. The company now has 15,000 square feet of space, half of which is earmarked for each company.
Part of the focus over the next several weeks will be moving the employee team to 7,500 feet of newly renovated space. Among these upgrades are two new training rooms and “huddle” rooms designed to foster cooperation and teamwork on specific projects.
“One of the goals in buying this building was to move folks who were working from remote locations into this location,” he says. “We didn’t have enough room in the last offices to accommodate them.”
Cogistix employs 30 at the Boardman location, while Sprocket Solutions employs six. Cogistix also operates offices in six additional states.
Much of the company’s business is conducted east of the Mississippi, and Ohio remains a very important market because of its solid manufacturing base.
In late April, the company hosted a mixer for its customers in the Pro Football Hall of Fame in Canton. “We like to take care of our existing clients,” Kurpe says.
For many manufacturers, making a substantial investment in new software operations is a tough decision, especially in the wake of the Great Recession.
“It’s a little scary at first to navigate, since there are many that haven’t upgraded in 10 or more years,” she says. “We can help ease that and help show you what it can do. Holding on to legacy technology could actually prevent your company from what it’s trying to achieve.”
Miller says the normal cycle for a major software upgrade, especially for manufacturers, is 15 years. Today, however, many of the products manufactured in U.S. factories are engineered products that aren’t mass-produced overseas.
As the processes become more complex and automated, more producers are turning to more sophisticated software to run and manage their operations.
“We’re now doing three to four ‘go-lives’ a month,” he says, referring to when a client company transitions from its old software and launches its new operations provided by Cogistix.
The company was recognized in 2014 and 2015 as one of Inc. magazine’s Inc. 5000 – a list of the fastest-growing private companies in the country.
“We had a strong first quarter,” Miller reports. “Manufacturing seems to be doing well.”
Pictured: Scott McMurray, marketing specialist; Kevin Miller, president and CEO; and Sarah Kurpe, senior account executive, launched Sprocket Solutions, a Cogistix affiliate that specializes in software for for distribution and service companies.
Copyright 2020 The Business Journal, Youngstown, Ohio.