Distribution entrepreneur builds business success with JIWA Financials

IT entrepreneur Scott Frew believes there are two key fundamentals to business success: having the right people and the right financial software...

In the early 1990s Scott Frew founded the IT distribution company, LAN Systems. When he sold the business five years later, revenues had grown to $200 million and the company had earned a place amongst Australia’s Top 1000 companies.

After a five year hiatus in Europe Frew returned to the local IT distribution industry, buying a start-up company now known as Distribution Central. Within four years he has taken company revenues from $1 million to over $50 million and Frew is confident that this figure will exceed $110 million within the next twelve months. Throughout, Frew has relied on JIWA Financials to support his business ventures.

Know your market
Distribution Central provides specialised, technical- service oriented distribution and channel support for IT products. Success has been driven by the company’s ability to understand the needs of two widely differing markets – resellers and IT vendors.

It’s an understanding that has been hard-wired intothe structure of the company since its earliest days. Vendor relationships are managed centrally while the reseller channel is looked after by separate, independent, specialised business units.

The approach is unusual in the IT market but it has enabled Distribution Central and its vendor partners to fully capitalise on opportunities within the Australian and New Zealand market without diluting the level of specialisation required to service complex technology markets.

For resellers it has meant a distributor that is focused on supply and marketing support; one that can offer the additional expertise required to deliver the most profitable and technologically advanced solutions for their customers.

Frew sees Distribution Central’s value-add for resellers in two main areas: money and expertise. “If I don’t make my resellers money or save them money, I’m not doing my job and there is no point buying from me,” he says.

Regarding expertise he adds: “When I first started out with Distribution Central we only dealt in security products. I didn’t know anything about security but we employed people who did. It’s exactly the same problem that our customers face. A reseller may know everything about CRM but his customer may need to implement security. We supply the expertise to help that reseller engage with his customer. ”

It’s a model that has held the company in good stead as it has grown from a single technology focus to six business units addressing security, infrastructure, storage, voice messaging, training and renewals.

Success fundamentals
Frew believes that the first step in building business success is getting the right people on staff.

“I try to employ people who are smarter than me and I let them get on with the job,” he explains. “I’m not a marketer, a salesperson or a technician. I just make sure I have the best people in my business.” Many of the employees that Frew has attracted to Distribution Central were also part of his team at LAN Systems.

His second fundamental is somewhat unexpected: financial software. “You can’t build a company without having fantastic and accurate financial systems,” Frew states.

“There is no point getting out there if you can’t – from day one – tell how much money you have in the bank or if you don’t know what your creditors and debtors are. So many people fail because they don’t invest in the right system or because they outsource it to someone who doesn’t really care. You can’t do that. Finance is a critical part of the business.” It’s a topic that Frew has some experience in: he burnt through two financial software systems at LAN Systems before settling on the solution that he still uses today – JIWA Financials.

“I tend to do fast growing businesses, so one of my main considerations is that the software will scale easily,” he observes.

When LAN Systems first introduced JIWA it was close to being a $50 million company. Six years later Frew introduced it to the fledgling Distribution Central where the software has been instrumental in managing the company’s rapid expansion.

Web technologies
One of the main characteristics that attracted Frew to JIWA was its openness.

“I was looking for a financial system that would give us access to do some funky things in the back end and saw JIWA, which is based on Microsoft SQL. That base meant we could design other software engines to access the financial data. It made it possible to do more with the software, making it so much more open than many of the other packages out there,” he says.

“At Distribution Central we’ve been able to write some very funky web engine technologies and configurators that directly access the data that JIWA holds. We’ve used this to develop ways to help resellers to grow their business profitably. We identify cross sales opportunities and take the pain out of putting a quote together.”

Other factors that Frew was looking for in financial software were cost, ease of operation and data traceability. “Cost is a primary consideration for any business but it’s not just the upfront cost that you need to be aware of. Reliability is important and unlike many of the U.S. systems, JIWA doesn’t need us to mount an entire IT team to keep it alive,” he says.

“We use our financial system for sales order entry, purchase orders, profit and loss, balance sheets, inventory management and so on - all the traditional ERP-type functions from ordering a product from a manufacturer through to shipping it out, ” Frew says.

As one of Distribution Central’s core software systems it operates across all business units.

“JIWA does an awful lot of tracking, so if things go wrong we can find the problem, fix it and make sure it doesn’t happen again. Every small business needs a financial system that they can rely on that tells them the state of play. If you go to the bank to get funding but can’t represent your books accurately, that funding is never going to happen.”

What next?
Distribution Central’s financial software has also inadvertently helped to open the door to future ventures. “By accessing the data in our JIWA system and manipulating it for the benefit of the channel, we’ve built some world-beating software technologies,” he says. Frew isn’t ruling out the idea of one day exploring the market potential of these internally developed systems.

However, for the immediate future Frew plans to continue building Distribution Central. “I’m the start-up guy. I began here with a five year plan intending to build a $60 million company. I achieved that one year early.” Frew pauses before adding, “I’d like to be able to say I’d built two Top 1000 companies.”

For more information

JIWA Financials
www.jiwa.com.au
Ph: 1800-00-JIWA (1800 00 5492)
or +61 2 9409 0700
istart@jiwa.com.au

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