The industry is hearing a lot about ERP and print management systems. Radius Solutions, Prism, Printcafe, SAP and others want the full attention of printers as you have seen in recent coverage of these companies.

Even though CRC Information Systems was formed in 1978, the company may not be well known to industry advertising reps. Why? Because the company spent more of its dollars on the development of their software versus full page ads or giant trade show booths. But now, armed with significant experience in diverse areas of the industry, CRC is getting the word out in a big way.

Outwardly, CRC has been ramping up its PR and marketing efforts by exposing its products to the industry at large. Inwardly, the company has been serving the graphic arts industry for twenty years. As a result of the most recent release of its management software, CRC has further expanded the capabilities of its product in areas ranging from Web-based quotation entry to fulfillment. This most recent release of the product, which runs on the Microsoft Windows 2000/SQL Server 2000 platform, provides CRC's customers with more tools to help them further increase operational efficiency.

Business management software is one of the most popular topics in this community. The opportunity to conduct a rare interview with CRC’s CEO, Henry S. Hebing, offers a chance to look inside this privately held corporation to gather the intelligence you need.

WTT: Tell us about your specific applications and solutions and the types of companies who have selected CRC.

Mr. Henry Hebing: CRC’s software package, referred to as THE System, is comprised of over 100 modules and sixteen industry-specific estimating modules. Examples of modules would be Accounts Payable and Commercial Printing Estimating. These modules are comprised of over 5,000 programs all of which have been developed from the ground up by CRC. We are proud to say that every single line of application code was written by CRC. In fact, we are the only vendor to have written so many industry-specific estimating modules from scratch. THE System runs on the Microsoft Windows 2000 Server operating system and the Microsoft SQL Server 2000 database management system.

CRC has a diverse mix of customers. While the majority of our customers is composed of commercial printers, we also have a number of customers in other segments of the graphic arts industry since we have software solutions such as our industry-specific estimating modules as well as other industry-specific applications downstream that are designed for them. Therefore, you will find a number of our customers are folding carton manufacturers, commercial screenprinters, label printers, in-plant printers, business forms manufacturers, textile screenprinters, envelope manufacturers, trade binderies, trade finishers, flexible packaging companies, and prepress companies.


WTT: In the last 18 months, CRC has become increasingly visible, at least as far as communicating to the "outside world." You have accelerated your announcements in the press. Is this result of the new release of your product and how do you market your business to printers?

Mr. Henry Hebing: Unlike many of our competitors, CRC has been a very product-oriented company for most of its existence. While many companies poured significant amounts of money into advertising, CRC continued to reinvest in research and development. Therefore, part of our increased visibility as of late simply has to do with an increase in resources committed to marketing THE System. In addition, the release of the latest version of THE System gives CRC an unprecedented level of flexibility in terms of being able to rapidly develop and deploy applications that further extend the capabilities of our software. For example, some of our latest applications, such as our e-Commercial Printing Quotation Entry module, were developed using Microsoft’s .NET technology, which essentially allows us to develop applications that can be deployed either as a standard Windows program or a program that can be accessed via the Web.

Since we have a number of industry-specific estimating products, we tend to target a wider array of graphic arts companies than other print management system vendors. With regard to how we market CRC to these companies, we convey the message that not only can we provide a comprehensive, fully integrated system that will help add more dollars to the bottom line, but we also will provide a system that the customer will not outgrow. CRC has such a vast product offering that we can provide a client with modules to meet both its immediate needs and its future needs. Since we have a developed a state-of-the-art method for handling custom requirements, we also are able to provide custom software to our customers to handle any unique needs they may have within our standard software package. The bottom line is that we offer a total solution that saves our customers money and helps them grow profitably.


WTT: January of this year, you announced the promotion of Erv Ratazak, a 15-year veteran of CRC, to the position of President. And, previously you also announced the promotion of Michael Bihlmeler to COO. Tell us about your executive staff and financial backing.

Mr. Henry Hebing: Our executive staff is comprised of Henry J. Hebing, founder and Chairman of the Board, Erv Ratazak, President, Michael Bihlmeier, Chief Operating Officer, and myself. Henry J. Hebing and I focus our efforts on sales and marketing, product development, and acquisitions. Erv Ratazak and Michael Bihlmeier oversee and are very involved in CRC’s daily operations working closely with our customers and our software and training teams. Each member of the team brings a unique set of skills to the table, all of which provide tremendous benefits to CRC.

In October of 2000 CRC re-capitalized its business in association with Vista Equity Partners, a private equity firm which has raised capital from private family trusts in excess of $1.2 billion and currently manages Vista Equity Fund II, which has commitments of $300 million. Vista Equity Partners takes positions in technology companies like CRC where the potential exists for long-term value creation. With the capital and resources provided to CRC by Vista Equity Partners and its affiliates as a result of the minority position they took, we were able not only to further strengthen our infrastructure for growth but also direct significantly greater resources to our sales and marketing efforts to accelerate our growth.


WTT: February 2000 industry information indicated you had 150 installations. In January 2002, you announced your 2001 year-end results: you received more than 60 new contracts for the year. You now report over 300 graphic arts plants using THE System. Tell us about this growth and your outlook for the rest of the year.

Mr. Henry Hebing: CRC realized over a twenty percent increase in sales in 2001, and despite the unfortunate events which occurred in the midst of Print 01, we still were able to close on a significant number of deals with both customers and prospective customers as well as finalize many multi-year support agreements with customers we obtained via our acquisition of Seattle-based Kaizen Software. Since we had spent a great deal of time and money building our infrastructure, we were able to handle the volume of new contracts quite easily.

Our outlook for the rest of 2002 remains positive. Because of our ability to market THE System to numerous segments of the graphic arts industry, most of the deals CRC has closed this year have involved companies outside of commercial printing such as commercial screenprinting, label printing, business forms manufacturing, and flexible packaging. Even with the challenging conditions for commercial printers, we have closed a number of deals with companies in this segment of the graphic arts industry as well.


WTT: CRC offers "more than 100 modules" that can comprise a business management system called THE System. What is unique about your architecture and integration and explain how your system is scaleable for the future?

Mr. Henry Hebing: With regard to the architecture of THE System, it is unique in two respects. First, there is not another business management system vendor to the graphic arts industry that offers a solution as comprehensive that is based on the Microsoft Visual Basic/SQL Server platform. Second, the product is completely modular. So whether a customer is seeking an entry-level system or a complete ERP system, we have the flexibility to provide our customers with the best mix of software which will meet their needs.

In terms of integration you will be hard pressed to find another system on the market with the level of integration resident in THE System due to the fact that every single application from the Internet through accounting was written by CRC.

THE System is highly scaleable in two respects. The Microsoft platform gives us the ability to serve single plant operations with a few concurrent users to multi-plant companies with many concurrent users. THE System itself is scaleable due to the number of modules which comprise it. As companies grow or diversify and their needs change, there already is a wide array of additional modules which they can license that would potentially handle those needs. The modules simply can be installed and will be fully integrated with the rest of their software they have licensed from CRC.


WTT: Can the individual modules be integrated into other applications? For example, can a company integrate modules from your system with other systems they're already using?

Mr. Henry Hebing: Since THE System runs on Microsoft SQL Server 2000 which is an open database, we are able to work with our clients to provide integration with a wide range of applications ranging from EDI to shipping systems such as Clippership. In addition, we also have been able to provide in-plant printers for Fortune 500 companies with interfacing capabilities to their corporate accounting systems.


WTT: Give us your overall view of efforts like PrintTalk and CIP4 and the push for open-ended systems. Do you support these organizations?

Mr. Henry Hebing: While we have carefully evaluated what these organizations are espousing, we currently do not participate in either organization. Due to the open Microsoft platform on which our software runs, we have a great deal of flexibility in terms of providing access to other systems already. Our customers have helped drive the development of THE System over the last two decades. While much of what these organizations are proposing sounds good in theory, the majority of our customers simply is not clamoring for us to incorporate their functionality in THE System at this time. In fact, most of our new clients are looking to consolidate the number of systems they need to manage so that they do not need to deal with multiple vendors for business management software, Internet software, data collection software, etc.


WTT: Printcafe appears to be the most known of the print management firms if only by all the IPO news and the way their business was created via acquisitions. Do you find yourselves in competitive situations? How do you differentiate your solutions from them and other companies?

Mr. Henry Hebing: Primarily in the commercial printing arena, we will find ourselves in a competitive situation with a Printcafe product. However, we rarely have any competition in the other segments to which we sell in the graphic arts industry. With commercial printers the following would be major points of differentiation between CRC and Printcafe: overall number of modules and applications, industry-specific estimating modules and other industry-specific applications, experience with the Microsoft SQL Server/Visual Basic platform, and our Internet modules especially those dealing with fulfillment which is an area of great importance for many clients.


WTT: It appears that CRC has taken a new "low risk" (for the buyer) approach to delivering software to the graphic arts industry. In February this year, you announced a new pricing schedule based on training and software support fees with no license fee. How does this program work? Has it been effective?

Mr. Henry Hebing: Quite simply, we provide a client with a license to use the specific modules they have selected at no charge, and the client signs a multi-year software support agreement and also purchases the required amount of training for each module selected. The program has been very effective, and all of our new customers this year have signed up for it. Customers like the idea of not having the large upfront costs that are typically associated with most business management systems, and this, in turn, allows them to realize a return on their investment much sooner.