St. Louis Park-based Techies has simplified its contracts after early, rapid acquisitions created many ideas, but a lack of focus.
Techies CEO P.J. Voysey has recharged the 21-employee company by streamlining and simplifying operations. Internal committees and meetings have been slashed, and contracts and compensation plans have been simplified. During Voysey’s reign, the company has gone from losing money to making a moderate profit on $3 million in revenue.
Techies, a Geek Squad spinoff that repairs and maintains computers for small- and medium-sized companies, is rebooting itself.
P.J. Voysey hit the restart button shortly after taking over as president and CEO of the St. Louis Park company in April 2007.
The turnaround was necessary to regain focus, streamline operations and reach profitability for the first time, Voysey said.
Earlier acquisitions had spurred some growth but also caused confusion, Voysey said. The deals brought name changes and a proliferation of client contract models and compensation plans for company technicians.
At the same time, the company began to lose sight of its mission. There was talk of going after bigger clients. Some wanted to push on-demand repairs, others contract maintenance. The idea of opening a retail store even popped up.
"They wanted to grow by acquisition, which is a good strategy. But you've got to do it right," Voysey said. "They didn't really get focused on what they wanted to do. They had good technicians, a good core -- good bones -- but got very distracted."
In stepped Voysey, 45, a native of South Africa with a background in both information technology and turnarounds.
Voysey had moved to this country 20 years ago with his wife and family. He has lived in Minnesota the past 15 years and, he noted, became a citizen 10 years ago.
What Techies needed, and what Voysey said he has brought, was decisive leadership and streamlined operations.
Most internal committees and meetings are gone, the client contracts and technician compensation plans have been simplified. A new task-management system has improved follow-up on service requests.
Voysey also instituted a new performance measurement -- tech utilization, or the percentage of time technicians actually have jobs scheduled. Previously, technical prowess alone has been held in higher esteem.
Technicians and everyone else, the CEO aside, now receive bonuses based on the new measurement, Voysey said. That's because everybody -- account managers, sales people and schedulers -- can help get technicians scheduled on projects.
"Ultimately what we're selling is peace of mind that we'll keep your computer systems running and your IT infrastructure working,'' Voysey said. "The way we do it is through technicians with good certifications and good training. Focusing on utilization ... is what we needed to dig us out of a hole here at Techies."
After inheriting a loss when he took over at the end of the first quarter last year, Techies ended the year with a moderate profit on revenue of close to $3 million. That represents a 4 percent bottom-line margin, said Voysey, who is aiming to raise that to 5 to 10 percent.
The company repaid $100,000 on its credit line last year, Voysey said. It paid off the $50,000 remaining balance this year.
Techies, which has had a relatively low profile, will soon launch a marketing campaign that will highlight its website -- www.333tech.com.
Managed service model
With operations running more smoothly, the focus is also on rolling out an all-inclusive model under which Techies will operate as a managed-service provider.
That means providing both on-demand repairs and regularly scheduled maintenance for a flat fee of $129 a month for each user at a client company, Voysey said. The fee also covers unlimited calls to Techies help desk and after-hours emergencies.
The company also works with vendors such as software companies and Internet service providers on the client's behalf, Voysey said. Technicians remotely monitor servers to make sure anti-virus software is up to date and handle potential problems before they become serious.
Techies will continue to work with clients who don't fit the all-inclusive model, Voysey said. Some are large enough to have their own technician to oversee hardware or software; some are so small that staying on a repairs-only plan makes sense.
Evelyn Persons of Kleckner Advertising in Wayzata said the longtime Techies client just signed a managed-service contract. The company's internal changes have never affected the service Techies has provided, she said.
"The biggest thing all along is that when you call, they respond right away," Persons said. "That's the toughest thing with this industry. If you're a small company and you don't have people on your site to take care of that, it's hard to find reputable people who will take care of you in a timely fashion."
Techies began life in 1994 as a business services division of the Geek Squad. It became a separate company five years ago when Best Buy bought the Geek Squad's consumer business.
Geek Squad founder Robert Stephens still owns Techies, Voysey said. Platinum Holdings Group of Eden Prairie, a private equity group that was the Geek Squad's first investor, holds a minority stake.
Voysey is a longtime acquaintance of turnaround specialist Dean Bachelor, the Platinum Group's founder and chairman. After meeting with Bachelor, Voysey joined Techies as a part-time consultant in November 2006, five months before he became CEO.
Voysey had worked in a series of IT jobs, pursing an early interest in computers. Then, his work on an IT team that turned around a $100 million public company got the CEO's attention, and the idea of running companies got his.
"That gave me a really good taste for business, because previously I was just going to be a hard-core IT guy," Voysey said. "I was a good IT guy but the thing is, when you can get an IT person that's got good business acumen, you want to latch on to them. I think I have that."
The expert says: Avinash Malshe, marketing professor at the University of St. Thomas Opus College of Business, said the two-pronged approached of Techies' turnaround -- focusing on technician utilization and streamlining internal work processes -- appears promising.
"That is a smart thing to do for a young company, since the CEO is attacking the problem on both fronts," Malshe said. "Great technological expertise is of no use unless every function in the company is in sync with one another. Streamlining the processes will help this firm understand customer needs, leverage their technical skills, come up with superior products and services in a timely manner and ultimately offer a better customer solution."
Techies can't overlook marketing. Moving into value-added services, as the company appears to be doing with its managed-service contracts, will help differentiate Techies from competitors, Malshe said. "Further, the revenue stream from these kinds of contracts is likely to be better and long-term compared to a repairs-only model."