CEO recognized that mobile technology would make his company obsolete if it didn’t change its strategy.
Using mobile technology, CEO Jay Coughlan rebooted his company. Then he renamed it XRS Corp.
The tiny tech company, which makes communications systems for the trucking industry, was recognized for its transition to mobile with a Tekne Award in the “mobile technologies category’’ from the Minnesota High Tech Association last month.
“We moved all of our chips onto the table on mobile,” Coughlan said.
At a recent conference, Coughlan explained to a group of tech entrepreneurs and mobile application developers his perspective on the concept of “discontinuous innovation” — the idea that entirely new products and technologies can quickly make established technology obsolete.
A former computer mainframe salesman and later the CEO of Lawson Software, Coughlan spoke from personal experience as he rattled off some obsolete (or nearly so) corporate names from the recent past.
Companies like Control Data, Unisys, NCR, Univac, Wang, Gateway Computer, Tandy, Nokia, Palm and BlackBerry were undone by the rapid succession of personal computers, cellphones, smartphones and tablet computers.
Coughlan recognized the iPad and the greater adoption of smartphones, both at work and home, as the sort of discontinuous innovation that could overwhelm his company if it didn’t stay ahead of the trend.
In 2009 the company, then called Xata, acquired Toronto-based Turnpike Global Technologies, which provided a trucking compliance solution that ran through a handheld device.
Truckers and their companies must comply with myriad regulations, from logging hours driven and duty status to tracking state fuel taxes. The XRS service also helps improve performance by keeping track of maintenance schedules, fuel economy and more.
That $20 million acquisition would be the foundation of a complete shift in the company’s approach to providing logistics for the trucking industry. Xata used to be primarily a hardware company that installed a communications dome on top of truck’s cab and then tore apart the dashboard for a four-hour installation of a fixed-panel display and keyboard.
Now, with its mobile technology, it takes about 10 minutes to connect its XRS relay device and sync it with a wide variety of Android and Windows Mobile smartphones, rugged handheld devices and tablet computers that will automatically transmit vehicle and operator data directly to a management dashboard in the cloud.
In making the award to XRS, the Tekne Award judges said: “XRS is a convergence of wireless trends in the important trucking industry: It goes anywhere because it’s mobile; it’s flexible because it’s in the cloud; it’s social because it operates on the driver’s personal communication device; and it collects and manages mission-critical compliance and performance data for trucking firms.’’
In August 2012, the company changed its name from Xata Corp. to XRS Corp., which helped mark its transformation from a hardware and software company to a mobile application company.
The company and its agency partners — Bellmont Partners Public Relations and Rumpza Consulting — also recently won two Platinum MarCom Awards from the Association of Marketing and Communication Professionals for their work on the 2012 rebranding initiative from Xata Corp. to XRS Corp.
One of the big messages Coughlan delivered to the audience of mobile application developers at the MobCon conference was that change is hard and required more than making a few tweaks to an existing mobile application. The transition required new skills in engineering and software development. The way the new system will be sold is completely different.
“When I went down the road and jumped in with both feet, I didn’t realize it was going to be that much of a transition,” said Coughlan, who admits that part of the transition was painful. He estimates the company experienced a 70 percent turnover in employees during the process.
Coughlan thinks the adoption of mobile application development is going to be big. Industry reports in 2011 suggested that $54 billion would be spent in the mobile application market by 2015.
Björn Stansvik, CEO and founder of Minneapolis-based Mentormate, which also owns and sponsors the annual MobCon conference for mobile application developers, said XRS represents a perfect case study.
“Jay listened really intently to the competitive landscape,” Stansvik said. “He realized very quickly that this was going to be their new business.’’
Having that conviction early on and acting on it with expediency and determination has given the company a competitive edge. And it comes at an important time in the trucking industry. Pending new rules will require more drivers — from fleet drivers to individual owner-operators — to keep electronic records.
In the next few weeks the Federal Motor Carrier Safety Administration will publish rules for the trucking industry that will require electronic onboard recorders, or EOBRs, to track hours-of-service and other driver data. Those changes are expected to be implemented in the next couple of years.
XRS, which has typically worked with trucking fleets, will benefit from those rules, which should open up a new set of customers and help push some of XRS’ legacy customers to transition to XRS’ new service.
Coughlan recognized the discontinuous innovation that mobile represented, but he’s modest in his assessment of the change.
“I’d like to tell you I’m a great visionary,’’ he said. “[But] I was just solving my problems and I saw an opportunity.”
Patrick Kennedy • 612-673-7926