SirsiDynix has taken a number of actions that consolidate and focus its corporate resources. On May 12, 2010, SirsiDynix launched a new Web site and announced a number of major changes related to its operating facilities and its organizational approach to customer service. These moves represent incremental steps toward a number of longstanding business goals. The company positions its moves as offering significant benefits to the libraries that use its products through improved communications channels and more sensitivity to the individual needs of each customer. As a company that serves something over 20,000 library facilities spanning over 70 countries worldwide, these adjustments will have a broad impact.
This recent package of corporate changes includes several components: the expansion of a program of Library Relations Managers to improve customer service; consolidating the company's operational resources into a single development and support facility; a the launch of a new customer support portal with a consolidated knowledgebase of content and improved online communications tools available to customers for product support; and a rebranding of the company, including a new Web site, logos and focused content. Together these moves unify the company's physical and virtual presence, providing more clarity to its communications and concentrating its resources to improve its ability to meet customer expectations.
These actions represent a final stage of business transformation from an amalgamation of multiple merged companies into a single global business with a unified corporate strategy and support infrastructure. In the course of the last five years, the company has gradually morphed from an assemblage of acquired companies into a more mature and integrated multinational enterprise.
Library Relations Managers for Improved Service
SirsiDynix reports that Library Relations Managers have previously played a part in its customer relationships, charged with helping libraries leverage technology to meet their goals. The company announced that the number of personnel operating these roles will grow significantly, adding the capacity to assign one to each library customer. The company indicates that most of the new Library Relations Managers will come from existing SirsiDynix employees around the world who already have specific product and regional customer knowledge.
Their responsibilities will include proactive interactions with customers, helping libraries use their technology investment to meet their users' needs and maximizing the use of their technology overall. The team of Library Resource Managers has been tasked to engage regional customers to share their goals and challenges with each other, and to help the SirsiDynix staff better understand the unique needs of libraries in those regions.
This expanded and revamped Library Relations program supplements the company's existing Client Care and inside sales processes. Terry Jarnagin leads this program as VP, Library Relations. The SirsiDynix website names an additional six senior personnel as Library Relations Managers; the company indicates that it plans to expand this team to about sixteen, including as many as four assigned in Europe and three in its Asia Pacific territory. In the next two months, the company will assign a Library Relations Manager to each of the libraries using its products. Libraries will continue to address support issues through client care procedures.
Scott Wheelhouse advances to Vice President of Client Care as Jarnagin, who held this post for thelast decade, shifts to leading the Library Relations unit. A veteran of Dynix from 1987 through 2001, Wheelhouse returned to SirsiDynix in March of 2010, initially as Director of Client Care and now as VP.
New Website and Branding
A new company website debuted on May 12, 2010, displaying not only the new corporate logos, but also completely refreshed content. This new Drupal-based site asserts a theme of attention to customer support and streamlined navigation to information regarding the company's products and services. Even though the company's products find use in 70 countries worldwide, the site does not yet offer regional views or non-English language content.
New Online Support Center
SirsiDynix anticipates a June or July 2010 launch of a new online Customer Support Center. This new portal will feature improved navigation, a searchable knowledgebase of documentation, known fixes, and other information involving the company's products and services. The site will also provide an online forum for its customers to discuss issues and share information. This online venue will also provide a place for SirsiDynix to communicate with its customers regarding its software development agenda and product enhancements.
This new portal brings together a number of resources that were previously offered through its customer portal, but that operated as separate silos of content. In December 2007 SirsiDynix rolled out a new Client Care Portal that included discussion forums, a new process for submitting technical support tickets, bookmarks, and opportunities for users to submit comments on content pages.
This newer portal, also based on Drupal, places the support tools and content resources accessed separately into a more unified environment, with all content searchable in a comprehensive keyword index. This platform aims to make it easier for SirsiDynix customers to find information involving the company's products and services.
Consolidation of Operations in Provo
The company will consolidate its United States operations into the SirsiDynix Technology Center, located in Provo, Utah. Operations in Huntsville, Alabama and St. Louis, Missouri, will close. This move completes the progression toward centralizing the company's operations in Provo in motion for many years. Development and support resources that have previously been geographically distributed will be centralized.
According to SirsiDynix spokesperson Julianne Hancock, "Having support and development resources under one roof allows the company to create development teams who work specifically with customer support on escalated issues. SirsiDynix employs agile development processes. With a team focused on delivering patches and fixes for immediate customer needs, ongoing development staff will be able to focus fully on next release features."
The facilities being shuttered represent the remnants of the predecessor companies that comprise SirsiDynix—Sirsi Corporation and Data Research Associates; the Provo building was the headquarters of Dynix Corporation. Through a gradual process of business integration, the company has gradually shifted its resources to Provo. The executive management of the company has been based in Provo since 2007.
Sirsi Corporation was founded in Huntsville in 1979, occupying different facilities as that company expanded. As Sirsi Corporation grew from its start in 1979 as a small consulting firm, it progressed through several Huntsville industrial park locations. In 1998 the company moved into downtown Huntsville, occupying a renovated Woolworth's building at 100 Washington Street SE. In recent years, the presence of the company in Huntsville has contracted. In September 2009 SirsiDynix vacated the downtown Huntsville facility, moving its downscaled workforce to an office building in Cummings Research Park.
The company's offices in St. Louis, MO, trace back to Data Research Associates, or DRA, acquired by Sirsi Corporation in 2001. Many DRA employees and executives continued within Sirsi Corporation and later SirsiDynix. At the time that DRA was acquired by Sirsi, the companies were approximately the same size. The DRA facility has steadily decreased in personnel since.
SirsiDynix expects to close its Huntsville operations by the end of July 2010 and its St. Louis office later in 2010. A limited number of positions will work remotely, especially those assigned as Library Relations Mangers and those involved in regional sales. Other personnel remaining in these legacy locations have been offered relocation packages to Provo. It is not known how many staff will continue with the company in Provo versus those that will exit.
Some changes involving the various SirsiDynix international offices are under review for possible reconfiguration. The SirsiDynix Technology Center in Provo will be staffed 24/7 and will have multilingual capacity. SirsiDynix will continue to maintain an operational presence in each of its international regions. The degree to which support, development, and sales are performed locally or through the central US headquarters will shift, taking into account regional requirements.
The building in Provo was originally built and owned by Dynix Corporation. In October 2006, according to the Salt Lake Tribune, Dynix sold its facility in Provo to B.H. Properties, though it has continued to lease and occupy portions of the building. The sale of the building occurred prior to Vista Equity Partner's involvement with the company.
Although the company will consolidate their operations to their Provo, UT facility, it asserts that the shift has not been implemented to reduce its overall workforce. Although some employees may not choose to relocate from Huntsville or St. Louis, new personnel will be hired as needed to fill vacated positions.
For SirsiDynix to mature as a merged company, it faced the need to create a more ordered set of business processes out of those in place via the legacy companies. It had as many as eight different applications in place for managing its internal business operations. Beginning in Oct 2007, the company launched a major internal initiative, dubbed Project Dynamo, to redefine its business processes and to implement a set of applications that would form a common operational infrastructure. SirsiDynix engaged the consulting firm Bluewolf (http://www.bluewolf.com/) to provide assistance with these activities.
The business infrastructure selected to support the worldwide operations of the company consisted of three major products, each delivered through software-as-a-service, consistent with the company's need to support its globally distributed organization and with its orientation to this model for the delivery of its own software products. These components included Salesforce.com as the platform for its customer relationship management (CRM) and sales force automation (SFA); BigMachines (http://www.bigmachines.com/) to facilitate the process of creating quotations of pricing for software products and services, and NetSuite OpenAir (www.openair.com), a tool for professional services automation (PSA), providing functionality for resource allocation and project management needed once a sale is made to track and assess implementation. Bluewolf provided assistance in business process analysis, the implementation of each of these components, as customizing and integrating them into a unified environment. These three hosted applications replaced as many as eight separate products previously used in different parts of the organization. Through this customized integration, SirsiDynix was able to achieve significant efficiencies, especially in the way that it manages information involving its massive customer base. The project began in October 2007 and was completed in April 2008 when the new environment went into production use throughout the company. [Source: “Bluewolf case study: Bluewolf and BigMachines help SirsiDynix transform their business with a completely tailored end-to-end business process” and a May 20, 2008 Webinar that included Bluewolf representatives with SirsiDynix COO Mat Hawkins and former Chief Sales Office Eric Keith.]
Synergies with Vista Equity Partner Portfolio Companies
In addition to some degree of direction in business strategies, as seen above, ownership by a private equity firm can also involve working in concert with other companies in the portfolio. SirsiDynix has direct business relationships with at least three other companies owned by Vista Equity Partners.
At the March 2009 COSUGI conference and in a subsequent press release SirsiDynix announced Mentor, a new online learning program that libraries can purchase to supplement their training on its products and services. Mentor relies on the SumTotal Learning Management System platform produced by SumTotal Systems, acquired by Vista Equity Partners in May 2009.
The company's faceted search product, SirsiDynix Enterprise, relies on the Globalbrain search technology from Brainware. This company was formed in February 2006 out of a division of SER Solutions, acquired by Vista Equity Partners in 2004. SER Solutions was sold to Gores Group while Brainware remains in the fold.
We noted above that SirsiDynix relies on BigMachines as part of its global business infrastructure. BigMachines has been involved with Vista Equity Partners since 2001.
Dispute with Queens Borough Public Library Resolved
On April 8, 2010 the Queens Borough Public Library and SirsiDynix issued a joint stipulation to the United States District Court – Eastern District of New York that they had negotiated a private resolution to the complaints filed in July 2009. All terms of the settlement remain confidential.
Completing a Strategy of Business Integration
Vista Equity Partners acquired SirsiDynix from Seaport Capital almost 4 years ago in December 2006. At that time, Sirsi Corporation completed the acquisition of Dynix only 18 months prior. Sirsi Corporation had previously acquired Data Research Associates in August 2001. As Vista Equity Partners gained ownership of SirsiDynix, each of these acquired businesses, as well as its different international offices, continued to operate in varying degrees with differing corporate cultures, business infrastructure, and physical facilities. Over the tenure of Vista Equity Partners ownership of SirsiDynix, the company has carried out a strategy of business integration to simplify and streamline its each aspect of its operations.
The changes announced represent incremental advancements in business strategies that have been underway for quite some time. SirsiDynix, since its formation through the merger of two major competitors in the library automation industry and subsequent acquisition by Vista Equity Partners, has been on a trajectory as a global company able to leverage massive economies of scale and enterprise business infrastructure.
An April 2007 publicly available posting for the position of Chief Executive Officer outlined expectations for the incumbent that gave a glimpse into the broad business strategies that Vista Equity Partners had in mind for the company from its earliest days of involvement:
- Overseeing of all of SirsiDynix's corporate functions, including sales & marketing, development & product management, customer support, professional services, and finance & accounting as well strategic and tactical planning;
- Working with the President of International Operations to increase SirsiDynix's international presence;
- Building consensus, communicate the rationale behind decisions, and creating a culture of 'One Company' focused on dominating the library automation market;
- Evaluating and building a top management team and enhancing corporate culture, developing and maintaining high corporate moral standards in all dealings and delivering superior value to owners and stakeholders;
- Working closing with the members of Vista Equity Partners to ensure established goals are met or exceeded;
- Product and platform optimization and convergence;
- Optimizing territory-based sales management and driving growth of the highest margin products and services as well as recurring revenue;
- Driving adoption of the Company's SaaS solutions;
- Consolidating and centralizing dispersed development, support and G&A functions;
- Focus on productivity and utilization of professional services organization;
- Driving efficiencies within G&A [general and administrative expense] and focus on cost controls;
- Cross-training of employees in sales, development, support, and services to enable greater; productivity, customer satisfaction, and operational efficiencies.
Seen in the context of these executive mandates, one can see how the events of the last four years fit into the company's strategic course.
The transformation of the company from a cluster of acquired companies into a single global business operating with shared processes and infrastructure follows as the inevitable conclusion of the sequence of business transactions that formed SirsiDynix. Only the initial stages of integration happened between the initial merger and the subsequent acquisition by Vista Equity Partners.
From an external viewpoint, some of the changes at SirsiDynix may have appeared abrupt. But when viewed from the broader perspective of the process of integrating multiple acquired companies into a single business, it has been a relatively long transition period.
Such a transformation inevitably involves makes a large impact on the employees of a company. Although SirsiDynix has been able to retain many of its experienced personnel, the company has seen significant turnover in its workforce. The operational centralization and the implementation of a high level of automation through the enterprise business infrastructure described above may also impact the size of the workforce needed to sustain the company. The company's overall headcount has reduced considerably from its zenith in 2006.
While the evolution of the company has been ongoing, the three measures recently announced aim to make a dramatic improvement in the company's customer support reputation. While these measures represent the culmination of a process long underway, they also set the stage for the next chapter. The coming months will tell how well customer libraries react to these changes. Given the massive number of libraries using SirsiDynix products worldwide, the stakes are high.