Six months after founders Lorenzo Guaschino (Replica Sistemi, Mantova, Italy) and Giuseppe Pacotto (Gruppo Tesi, Bra,Italy) announced their “memorable” alliance, they met to discuss future developments, strategic cooperation, WMS and TMS applications and entry strategies for foreign markets. Economic knowledge applied to IT, made in Italy.
These are the unpredictable side-effects of an always changing world where clichés can no longer exist: haven’t we always heard about “the suspicious Italian entrepreneur”, tied to old logic of strategic barriers? Yet here you are, two managers who exemplify a business strategy based on alliances and cooperation, laying the foundations for foreign markets.
Further: didn’t we used to think that sharing companies’ facts, starting from the customers database, technologies and planned projects, reveals a naive attitude not suitable for an (overrated) smart entrepreneur? Once again the two executives discussed respective customers, naming companies’ names, to better outline possible outcomes and synergies.
Are they right? The alliance between Lorenzo Guaschino and Giuseppe Pacotto, six months after, is worth being discussed. As Chief Executive Officers and respectively presidents of Replica Sistemi and Gruppo Tesi, they have on their shoulders decades of business, the creation of something from nothing (in this case we are talking about two firms emerging to the top of the national market) and most of all they share the ability to envision the future even in times of recession. It’s not a coincidence that this word doesn’t show so often in this interview: “the market we address is the same – says Pacotto – of course during all these years we’ve been on the same lead more than once”.
This co-existance, that might have been seen as a threat, turned into an opportunity to Messrs. Pacotto and Guaschino: “Our solutions [the legendary StockSystemEvolution for the warehouse management – by Replica Sistemi – and the equally renowned Net Mover for the control of transportation costs and transportation supplier performances – by Tesi – Ed.] are complementary”, says Guaschino. “Creating and offering to the market an integrated solution for the management of the entire Supply Chain looked like a natural evolution to us”.
“Since we are well-established in the TMS market sector [Transportation Management System – Ed.], why should we try “making up” skills on WMS [Warehouse Management System –Ed. ] sector (already headed by Replica Sistemi)? This would be even more senseless in relation to laying the foundations on foreign markets: why setting up separate organizations to approach the same customers?” The competition from the big multinational firms in IT sector, made this process even faster, as stated by Lorenzo Guaschino: “customers are more likely to deal with one partner rather than going after two or more. Integrated solutions are preferred as their value is immediately experienced by customers. Further, many times customers like to deal with companies similar to them by culture and dimension, instead of reliable, powerful but “frosty” multinational organizations. Our customers may talk to the executives of Replica Sistemi and Gruppo Tesi whenever they please.”
The research of business alliances was in both companies’ DNA: “it’s been more than a while since I’ve been looking for firms like us, to join forces and to leverage the value of our solutions – tells Guaschino -. I never found the right partner by now, because of cultural and approach differences”.
The magic words
The magic words are: “firms like us” in terms of history, dimension, revenue, complementarity, governance and business model. Of course some differences will remain, anyway they are conceived as an opportunity of mutual enhancement not as a barrier: “we started cooperating on highly complex and strategic projects. This procedure “bottom up”, that is starting from customers’ requirements, allowed us to know each other and share the common language of technology” adds mr. Guaschino.
The first cautious attitude gives way to a strong partnership, especially for the foreign countries. It’s easy to exemplify: Replica Sistemi has a subsidiary in Turkey. Tesi has branches and offices in France and northern Europe. A good background to share: “To develop business abroad – says mr. Guaschino – it is fundamental to have analysis skills and working methods. Sure you can’t go conquer the world: it is necessary to concentrate on booming markets.”
On these markets Replica Sistemi and Gruppo Tesi can take advantage by adding to their offer the partner’s solutions. This model works: important projects have started from the Northern Sea to Eastern Europe, from France to Turkey and around. Aware that each country, each market (booming or mature) requires a specific approach: “The developing countries pose more risks, but also more opportunities – says mr. Guaschino -. It is necessary to find out reliable local partners as certain countries require the use of the language to be in play.”
“Quality and innovation are the keys to compete on the market and differentiate ourselves. Net Mover is a complete and highly performing software for the transportation management, on which Tesi keeps on investing, as well as we do with StockSystemEvolution for the warehouse logistics management. Due to this partnership we are able to give a complete range of advanced-technology software applications for a concrete management of the entire Supply Chain.” Lorenzo Guaschino, President & CEO Replica Sistemi
A different story
A different story, made in Italy: “All medium companies in Italy are investing in the processes optimization– adds mr. Pacotto -. They are maximizing their networks, reviewing strategies and procedures, that’s why they need the support of IT tools. Many firms think about offshoring or relocating elements of their business abroad, becoming distributors in place of manufacturers. 3PL companies reorganize their networks taking the opportunity to enhance their performances. Consequently new entities are rising in line with the increasing of 3PL industry ”, what the university “Politecnico di Milano” has defined as “Strategic outsourcing” [see: “Contract Logistics: le potenzialità di sviluppo” – Il Giornale della Logistica – april 2013] in opposition to the outsourcing, merely intended as a commodity.
Merger & acquisition among logistics operators and lowering the number of warehouses are far from being considered disadvantages, they’re good opportunities as the remaining warehouse will require advanced software applications and technology: “this phenomenon is clear for the TMS side – tells mr. Pacotto -: we notice great interest in automation, automated planning, loading time and tour planning optimization, network cooperation, complete availability of data. The possibility to extend this visibility of information inside the warehouses has represented a big opportunity for the customers of Gruppo Tesi” as the other way round for Replica Sistemi.
“Sharing values and experiences, as well as customers and markets, has led to this partnership, with a double objective: better meeting the customers’ needs and strengthen our competence. Integrating StockSystemEvolution with Net Mover means offering two leading products through one solution “ready to go”, supporting both old and new customers operating in complex contexts through a complete, efficient and successful software application”. Giuseppe Pacotto, Chief and General Manager Gruppo Tesi.
WMS software applications have been on the market for 30 years, TMS application are quite young instead, but share the same direction: managing data through an integrated platform able to interface with different systems and flows, a platform, offered also as cloud computing, to manage data and make them available for any work-related task or entity involved in the chain: manufacturer, 3PL, retailer. Sharing data, associated to the complete availability of data in a network, help to maximize efficiencies. This is no fantasy, for example, it’s already available through the platform TC1 (Tesi Collaboration One) which has been illustrated through these pages more than once.
We’ve been also widely talking about firms that, due to the euro-crisis, have discovered many management inefficiencies, wastage and non-optimised processes. As far as we sailed across the Great Ocean of business all these issues has never emerged, since the revenue slow-down brought them to light: “there are lots of obsolete software applications – warns Guaschino – I mean, not able to support workability and decision procedures. There’s no more time for poor companies kept alive by rich families, now firms have to be managed for real. The time has ended for suspicion towards innovation and software applications that make it possible. Today, growth is tied to investment in tools that meet the global-market requirements and service-level”.
And there is vast room for improvement: “Holland– replies Pacotto – is investing in IT as much as Italy, having 1/6 of Italy’s population. The comparison of firms and people’s per-capita level of investment is unforgiving, but allows to see the vast room for improvement we still have”.
Tesi, founded in 1995, markets its services as a producer of software solutions, modular and integrated with the applications already used by the customer. Thanks to its strong innovation and design capability, Tesi is able to cover the full range of a modern company’s IT needs, from technological infrastructures to software solutions, through a collaborative business model aimed at performance improvement.
In 15 years of trading, the Gruppo Tesi has become a market leader in the design and development of innovative solutions for Supply Chain & Transportation management and for the Distribution & Retail sectors, earning the trust of its clients in Italy and abroad. Products for the management of GRC (Governance, Risk & Compliance) and HR processes and services that regard help-desk and customer service complete the product range.