March 13, 2007

Warranty Conference Exhibitors:

In between all the keynote speeches and panel discussions in Tampa this week, WCM attendees will have an opportunity to take a look at the offerings of a diverse cross section of warranty software and service providers.

While most of the 275 or so people heading to the Warranty Chain Management Conference this week in Tampa want to see and hear the latest from their peers in the industry, there is a significant group of show sponsors and exhibitors who simply want to be seen. Arrayed in booths along the walls of the ballroom where the lunches and receptions will be held, some 14 or 15 companies will exhibit their wares and vie for attention.

Those exhibitors include: Attensity Corp.; Crawford & Company; Computer Sciences Corp.; 4CS; Fulcrum Analytics Inc.; Partsearch Technologies; PolyVista Inc.; SAS Institute Inc.; ServiceBench Inc.; SigmaQuest Inc.; Snap-on Business Solutions; Sony DADC/MediaKube; Tavant Technologies Inc.; and Value-Added Services LLC.

Many of these names will be familiar to steady readers as being those of Warranty Week sponsors and advertisers. Such a collection of names could also serve as a shopping list for companies in search of product warranty and service contract expertise and software at virtually any level. And indeed, during some of the panel discussions, several vendors plan to introduce some of their satisfied customers, in hopes that others will then want to take a look.

Warranty Partnerships

Several of these exhibitors are now banding together into warranty ecosystems of their own, featuring one company's claims processing functionality and another company's analytics. Last year, just after the WCM show in Las Vegas, Hewlett-Packard announced an initiative that leverages the warranty chain management expertise of four solution providers -� Microsoft, PolyVista, iTAC Software, and 4CS -� to deliver a "closed loop solution" that identifies early product reliability issues and provides information to manufacturing divisions to correct the problem.

Another partnership is now growing around a combination of the warranty wares of Tavant Technologies and SAS Institute. Ron Ezsak, Tavant's senior director, noted that his company's Service IQ offering now combines the warranty claims submission and adjudication functionality of the Tavant Warranty Management product suite with the statistical and predictive analytics functionality of SAS Warranty Analysis.

Last year, Tavant became a silver partner in the SAS Institute channel program, and it has now become a reseller and consulting partner as well. "And it appears that we will become one of the first global resellers," he added. "That makes us absolutely unique within the extended relationships of SAS." And it will allow Tavant to build and deploy systems more rapidly and sell them to customers at a substantially reduced cost.

"We have multiple transactions already concluded," Ezsak said of the SAS partnership. "SAS represents the apex of excellence and sophistication in the area of analytics. From a Tavant perspective, we would unnecessarily compromise what we could bring to our customers in terms of value by using something else."

Warranty software will never be shrink-wrapped into an off-the-shelf product that any company can buy and install. There will always be some amount of customization required, especially in the realm of interoperability with existing applications and data types. However, in order to cut down on the amount of customization required and the time it takes, what Tavant has done is templated as much as possible, so it can be reused from one installation to the next.

"What we've done is create templates for all the dashboarding, and all the detailed reporting," Ezsak said. "All the kinds of things a company would want, we've templated. So we're not charging them implementation fees to do it every time. We've set it up so the cost to deploy and the time to deploy is compressed to the absolute minimum. Which means, in the implementations we've done so far, you're looking at something less than a month for complete go-live, fully operational implementations."

Once a system has been installed, warranty professionals can take a look at a report card full of live metrics, seeing at a glance from the color codes what is within or outside expected norms. If they want more detail, they can click on any given metric and drill down into the full details, right down to the individual transaction, if necessary.

Two New Customers

Ezsak said he has two new deals he wants to talk about, but the customers' public relations and marketing people haven't yet signed off on any public announcements. One is an aerospace company, and the other is a maker of specialty vehicles. In India, Tavant has signed a global automotive OEM. And an existing customer has decided to roll out the product in additional business units around the world this year.

Tavant is doing well, Ezsak said. "We are ahead of plan. And we're expanding." By year's end, he said the company's worldwide headcount should be over 2,000 people. The company has opened an office in China, and it continues to expand in both the U.S. and Europe.

At Tavant's WCM booth, Ezsak said the live Service IQ dashboard of an existing major customer will be on display. "We've changed our exhibit to have a projection screen in the center, and we'll be projecting live dashboards and reports," he said. "The names have been changed to protect the innocent. So we've modified the data sets to obfuscate whose data it really is, because some of those people will actually be in attendance."

He said he doesn't want to just hand out brochures or run Flash demos of the system, showing what he can promise to do in the future. He wants attendees to see it as it is actually running, with the not-so-subtle message that it could be their company with their live data up on the screen in a month or so if they care to buy now.

"People should have a sense of urgency in this space," Ezsak said. "Why would you want to wait to solve a problem? Why have the compromise? If you could have this kind of insight deployed next month, what benefits would accrue to the business for the rest of the year?"

Ezsak said he sees a tremendous value for Tavant, not only in exhibiting at the WCM show, but also in participating in the discussions. "I think it's tremendously valuable for a platform such as WCM to bring the issues and the people who are engaged in the issues together to collaborate and share the stories of success and challenge," he said. "They'll understand that they're not alone -- that other companies face the same kind of challenges -- and they'll understand the processes and approaches that other companies have employed as they've worked through some of these challenges."

Trane Signs With PolyVista

Close by in the ballroom of the Hyatt Regency Hotel, PolyVista will be exhibiting its analytics software, and talking about its latest customer: the Trane Division of American Standard Companies Inc. Shahbaz Anwar, CEO of PolyVista, said Trane was searching for warranty analysis software that could bring it numerous benefts, including cost reduction, quality increases, and discovery and early warning of manufacturing problems.

"I think the big one was early warning," he said. "Sooner or later we'll find out what's happening," he said of his customer, "but can we find out earlier? And if we can find out something that's happening, maybe we can do something about it."

Another must-have item on their list was a solution to the problem of discovery. "How do we find out about something that we don't know about? You don't know what you don't know," Anwar said. "So how do we go about discovering an issue that has never happened before, and we may not have the appropriate checks in place to capture that."

Ironically, the first time anyone from PolyVista met the folks from Trane was in March 2005 at the first WCM Conference in San Francisco. "They came by our booth," Anwar recalled. Back then, Trane was just beginning a warranty project that would wind its way through the next two years.

"I think WCM has been very good for us. We've certainly gotten our money's worth and the exposure and the results -- we are very pleased." Indeed, PolyVista has exhibited at all three annual shows.

"This show is truly unique," Anwar said of the WCM, "in the sense that it's bringing together customers that have a unique need. And then [that attracts] the solution providers that can solve those problems."

Midwestern Manufacturers Targeted

Having signed the Trane Division, headquartered in St. Paul, Minnesota, Anwar said PolyVista will now turn its attention to other companies with manufacturing facilities in the Upper Midwest. "We are prospecting very heavily in Wisconsin and vicinity," he said, from one new office located in the suburbs of Chicago, and another across the lake in southwestern Michigan. "If you think of the classical American manufacturing hub -- Illinois, Wisconsin -- I would say that's where we are finding our new customers."

But he remains concerned about the typically long sales cycles, not to mention the skepticism that the solutions are real. "From a PolyVista perspective, you see, they're always skeptical. 'This thing is too good to be true.' I think they want to kick tires. They want to compare with others," he said.

So they take a first look, they debate, then they look some more. They might go off to work on another project, or they might go looking at other software providers. They might even try to build something themselves.

"The typical approach to solve this problem has been to take query tools and write reports," Anwar noted. "Yes, you can get some value out of that, but it doesn't deliver a robust solution. Some of the things are still slipping through. That's when the customer is going to give PolyVista a second look."

But that process might take months, or even years. And there's no guarantee that the customer will even come back for a second look. They might find something else in the interim.

"That is our challenge: how to convince people that we are the right solution the first time," Anwar said.

One thing PolyVista has done to enhance its credibility is to join in the HP partnership. "I believe some of the other initiatives we're working on are now going faster," he said, because of the credibility boost PolyVista gained from the HP initiative. "Trane is a result of that. There is also another project that we're just wrapping up, which we'll announce shortly. We have managed to fill up our pipeline."

Tools for Warranties & Service Contracts

Fulcrum Analytics, which on Tuesday is presenting a warranty workshop, have made a business out of advising companies who sell extended warranties about metrics such as loss cost and reserve levels. Years ago, it developed a set of tools that could help a retailer or manufacturer analyze extended warranty claims data.

Fulcrum is now ready to launch that tool set as a commercial product, with the Tuesday workshop serving as a preview of what they plan to formally announce at their WCM exhibitor booth. Fulcrum president Paul Swenson said one of the key features of the tools is the way they bring together data gathered through previously separate product warranty and extended warranty operations.

"CFOs love us," Swenson said. "And they love this set of tools. We've met with several retail and manufacturing clients, and their CFOs understand and 'get this' right away. It's not a beginner course, but the tool set is so logical when you look at it -- and we start from the ground up and explain what a loss triangle is, how loss triangles are calculated, and how they're utilized in the business, what the math tells you when you're all done, and how to build business intelligence behind that, so the actuarial expertise can be overlaid with business intelligence. So we build from the ground up, so that actually, someone who is responsible for this area will be able to pick it up and understand it pretty easily."

External auditors will also love this tool set, Swenson said, because it will help them feel comfortable with the warranty reserve levels maintained by the manufacturers and retailers they audit. "They feel confident there's the right kind of logic behind this, so that when they sign off on the reserves, that it's very buttoned up."

Introducing SigmaQuest

Another WCM exhibitor hoping to make some news at the conference is SigmaQuest Inc. Last week, in advance of the conference, we heard about SigmaQuest's new hosted warranty software-on-demand offering from Nader Fathi, the company's CEO, and Owen Tucker, vice president of marketing.

SigmaQuest offers a Java-based business intelligence solution called SigmaSure 6.0. This week, the company is adding a repair module to the package, which is priced at $8,500 per month. With the software, OEMs can quickly pinpoint the exact source of product failures, track and compare historical information on which types of repairs have been made on products, and receive recommendations on which repairs are most effective, the company said. SigmaQuest also offers modules such as supplier quality, design and manufacturing test, and field service.

The target customer would be someone involved in high-volume electronics manufacturing. "The top three markets for us continue to be telecom, consumer computer, and medical devices," Fathi said. "We focus only on high-tech electronics. That's really our market." He said SigmaQuest also works with some of the contract manufacturers that serve these markets.

The $8,500 monthly price, Fathi noted, is equivalent to the salary and benefits cost of perhaps one full-time analyst who might be trying to analyze repair data using an Excel spreadsheet. Some customers pay more, depending upon how many sites and how many modules they use. There's a 90-day free trial period available, he added.

As Warranty Week was going to press, SigmaQuest was hoping to hear back from Palm Inc. as to whether it would be OK for the company to distribute a case study at the WCM show. "We can announce that we have Palm as a customer, but we don't have the details of the success story," Tucker said.

Fathi said Palm was up and running less than two weeks after the deal was signed. "They were working on this internally for nine months," he said. "And we show up and in two weeks they are using our system to get into the root cause of their issues." First they bought the repair module, and next they plan to buy the manufacturing solution, he said.

Another customer using the repair module is Plantronics Inc., makers of wireless telephone headsets. Plantronics uses SigmaQuest's software for the testing of headsets manufactured in China and Mexico. Engineers used to face both language and time zone problems when trying to interpret testing data.

Now they have a dashboard interface that tells them immediately where things stand. Tasks that used to be done over the weekend such as report generation are now reduced to "push-button" operations during which the contents of the dashboard are captured converted into a word processing document.

This is the first time SigmaQuest has exhibited at the WCM Conference. "We're also hoping to join the institute that was just formed," Tucker said. "This is a passion for us. We definitely are going to be participating in Warranty Chain Management in the future. We're looking to this show to generate awareness of who we are and what we do, and more importantly, to better understand what customers are looking for. We want to be places where people that care about their brand, where people in the warranty management, repair, and manufacturing field are. And we want to participate as much as possible, so we can make sure that we're in front of the audiences that find this a compelling opportunity."

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