Article

Tenrox Thinks Big
Madeleine Guay La Presse, May 14, 2002

Nestled in the green Science and High Technologies Park of Laval, next to the pharmaceutical companies and the New Economy Center, Tenrox is pushing its R& D to the limit in order to feed its ambitions of becoming a software firm to reach one billion US dollars market cap.

"By maintaining a fast growth rate and profitability since inception, we’re on the right track to become a public company", says Ludwig Melik, VP of sales at Tenrox. 

Founded in 1995 by Rudolf Melik, Ludwig’s brother, and three other specialists from McGill University, Tenrox designs and sells project and human resources management software. The company sells its tools for $10 000 to $100 000 per unit (each unit serves up to 100 employees) help organizations increase productivity and lower production costs. According to the Meta Group, a research and consultation firm specialized in IT and business strategy, the average efficiency rate of resources is only 65%, the rest being lost in unproductive time. According to the analysts, integrated management solutions called PSA (Professional Services Automation), such as Tenrox PSA, Tenrox’s new PSA software, increase efficiency by 3%. For example, the EDS firm, who is supervising the implementation of a social security system in the UK, reports that the use of Tenrox PSA allowed for the generation of several different reports on workforce costs in only 14 seconds, instead of four full days as it would have taken before. "Clients are very demanding and want a quick return on their investment ", explains Mr. Melik. 

Honors

Around the world, about twenty companies develop human resources management software, such as System Corp from Montreal, and the great American Niku and People Soft. "When our products are being compared to those of the greatest companies, we get the best ratings", states the VP. 

In November 2001, ComputerWorld magazine chose Tenrox as one of the rising companies to look out for. In September, the CRN gave its highest rating to Tenrox’s PSA software, Tenrox PSA, among five solution providers. 

Microsoft Canada rewarded the Laval based company with the Solution of the Year 2001 prize, while Ernst & Young awarded Tenrox’s President, Rudolf Melik, the Entrepreneur of the Year 2001 prize for the technology and communications category.

IBM, Visa, Sony, and AT&T are using Tenrox solutions. In total, more than 800 organizations have bought their products. These clients are spread in more than 50 countries, such as the USA (65% of sales) and overseas (20%).

According to the spokesperson, sales have increased by an average of 40% each year, but have jumped to 120% since last year. Important players have joined the family of Tenrox users, such as ADP, the world leader in payroll services (servicing more than 23 million employees), as well as Hydro-Quebec.

In only nine months, the company went from an approximate 30 employees to a hundred, which got them the Quebec Government award for the best job-generating company "Managing such a large number of new workers has been our greatest challenge so far", says Mr. Melik.

Among the 100 employees, 30 are assigned to the R&D department. "Analysts have a hard time believing us when we disclose to them the R&D budgets", he says.

A quarter of Tenrox’s revenues are invested in Research & Development, the sinews of war in the market of the intangible. After three years of research, Mr. Melik reveals that the accumulated R&D expenses are approximately 10 million since the organization launched its first product in 1998.

"My brother and his associates were providing consulting services during the day and worked on the R&D at night ", says the manager who joined the group in 1998, to take charge of the marketing for the Tenrox Time & Expense solution. Development of the first software, which allows tracking of time and expenses, cost 1 million dollars. "In the past seven years, developers must have written a total of three million lines of code ", he estimates.

The company also develops wireless solutions with Bell Mobility, in partnership with the National Research Council of Canada. These studies, initiated 12 months ago, quickly led to the marketing of solutions that allow, for example, a manager on a business trip to approve by phone the data entered by the employees working in the company. 

Even if only a few organizations are using those products so far, they generate a lot of interest. "When we tell companies that we sell those products, they don’t necessarily buy them, but want the traditional products ", notes Mr. Melik.

Already, the company is working on the fourth generation of solutions, including a biometric application, which will be available in 2002. This application will allow the user to punch in and out, for example, by pressing his thumb on the computer screen.

Tenrox is also the author of the first book on PSA software (Professional Automation: Optimizing Project & Service Oriented Organizations), published early this month. " Our editor, John Wiley & Sons, is already out of stock", says Mr. Melik.