SSSI hopes applications are key to its expansion

Small business

September 23, 2002|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

A. Nayab Siddiqui thinks he is on to something big.

The president and chief executive officer of Columbia-based Scientific Systems & Software International Corp. has spent the past 17 years building a company that provides training, Web site development, customer support, and systems and software development for a dozen government and corporate clients.

But in the past few years, with revenue growth narrowing, the company developed a spectrum of Web-based applications to help in business organization. Now Siddiqui is shifting gears, hoping the application side of his company will prove explosive.

The company has hired a vice president of sales, Cheryl Waldrup, to build XPD Inc., a subsidiary of SSSI. Siddiqui is projecting that revenue will grow rapidly as its Web-based products hit the market, and a senior manager is looking for office space in Northern Virginia, where the company hopes to expand this year.

"We are trying to create products to enhance organizational performance," Siddiqui said from his offices in Town Center. "Products is going to change our destiny."

SSSI has a suite of applications called XPD Time that helps companies keep time sheets, direct projects, and manage contracts and human resources functions. Other applications include IntraReady, an off-the-shelf intranet, and Webzerve, a management program for Web site content. With the products, SSSI will become an application service provider (ASP), which sells licenses to companies that want to use the services.

Though SSSI is highly optimistic about its prospects, it faces a number of challenges entering the ASP market, one analyst said. Several companies - many of them, such as Microsoft, that are larger and better-known than the 45-person SSSI - have similar software on the market that users are already familiar with.

Another challenge for application service providers like SSSI is managing the cost of creating the system against the amount of revenue the services can generate. Annapolis-based USinternetworking Inc. filed for bankruptcy protection over those issues in January, said Andy Efstathiou, program manager with Yankee Group, a consulting firm.

"They might be able to sell this to small companies which don't have the ability to develop and implement this on their own," Efstathiou said. "There should be a fairly good market for that, but I would say that doesn't mean there's a fairly large market."

A company like SSSI will have a greater chance for success if it stays regional, he said.

"That's not a terribly large market, but it's a market with a need," he said. "It would be difficult for a small company to hire enough sales people to sell all over the U.S. Plus, people in small business would be leery about buying from another small company on the other side of the country. Five to 10 years from now they could probably do well selling in California, but for the next few years they should focus closer to home."

Siddiqui said his goal is to make SSSI a nationally known entity.

SSSI, started in 1985 as a systems software engineering company, has expanded into many different kinds of work over the years, such as Web site development, training and customer support.

It has small offices in New York and California, and it contracts with nearby federal agencies and corporations to help run or maintain databases and informational systems.

In the past three years, Siddiqui said, revenue for the debt-free company has grown between 10 percent and 15 percent. As sales begin for the ASP services, Siddiqui said, he anticipates that revenue will increase 12-fold. The president said he is confident that the company has enough cash reserves to sustain operations while sales grow.

"This organization is very solid," he said. "We have enough cash to sustain ourselves. Our receivables are 1,000 percent of our payables."

The Web applications that SSSI has developed focus on day-to-day business functions - timekeeping, electronic communications, assigning tasks and managing contract employees or contract services to a client. The applications are compatible with largely used business software programs like Quickbooks, for example, and information entered in the SSSI applications is automatically transferred into the user's business software.

As SSSI forms its sales channels, it will focus on small to medium businesses, Waldrup said. For those clients, a Web-based model is important, she said, because it offers customers swift real-time reports, and accessibility.

"The ASP model gives us a real advantage," Waldrup said.

Jim Theakos, a computer specialist at the U.S. Small Business Administration headquarters in Washington, where SSSI manages some computer systems, said the company developed a system from scratch for the SBA that left him impressed.

"It's a very well-run company, and they've got some very talented programmers and analysts there," Theakos said. "I've never seen a company work all the time at peak performance. I don't think there's anything they can't do."

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