Experts say the future of education is inextricably tied to technology. Greenville’s Encore Technology Group makes its profits in the places where the two meet, literally.
The company was founded two years ago by former members of the technology division at Computer Software Innovations (CSI), when CSI sold to another company. Since then, Encore has charted its own path on the IT landscape.
“When we first carved away from CSI in the spring of 2013 and we were moving into our new Greenville office space, we were setting up new accounting and enterprise resource planning systems as well as implementing new operational policies and procedures,” said chairman and CEO Todd Newnam. “Because we were doing all of that in the midst of our busy 2013 summer season, we had some operational challenges. We didn’t execute some things as well as we should have.”
Encore’s core business remains the same as when it was part of CSI: hardware reselling. However, it is taking a slightly different position as a young and growing brand.
“From a rebranding perspective, you’ll see a lot of things on our website about being a solutions provider,” said Michael Knight, Encore’s chief technology officer. “Where our value really comes into play is when we bring together multiple hardware and multiple software providers into a cohesive solution for the customer.”
Knowledge and capability
The company sees itself as stepping into providing the broad knowledge of available technology some local school system IT directors, for instance, might not be fully aware of, as well as the engineering capabilities to bring them into the schools.
Encore provides IT engineering services and cloud-based hosted solutions, and also resells IT hardware to clients in the public sector. Newnam, who took on the CEO role last year, said what has surprised him most about the business is the long sales cycle in the public sector, particularly within the K-12 market.
“In the K-12 market, it’s a much more measured approach to planning and procuring and deploying than I’ve seen in other businesses – two to three times as long,” he said. That reality has meant the sales team needs to have more transactions on the books in order to maintain the company’s overall volume, as well as larger sales and engineering teams for a sector that tends to require more and ongoing support than most commercial customers do.
Another issue has been the wintertime dip in a business that has proved to be seasonal. The company has addressed it by cross-training some employees so that they can do other jobs during the slower season. For instance, pre-sales engineers are training to also take on installations during the summer. Newnam said employees like the additional training, which essentially expands their own skill sets and makes them more marketable.
The company targets public school systems, municipal governments and similar organizations, selling hardware such as interactive touch screens, storage and data networks, and physical security systems, as well as IT engineering services like data centers and cloud-based services such as computing and Internet phone systems.
Opportunities for growth
Encore has four total current data centers and is actively building its a second one in the United Kingdom. Annual revenues are about $50 million and growing, Newnam said. Accounts include more than 2,000 cloud-hosted phones for Detroit public schools and a recent data migration for 44 Ohio public libraries.
Overall, cloud services are also growing “very fast,” and the company has added some new product lines, Newnam said. Those hosted platforms present opportunities for national growth. Yet Newnam said the company’s principal focus is on being the leading IT provider in its niche in the Southeast. The bulk of its business is in the Carolinas, and part of the company’s growth has come from finding new markets within those states, Newnam said. In addition, Encore has expanded into Virginia and more aggressively into Georgia and Florida.
A high demand for technology in education has also presented important growth opportunities. It is unlikely to be abated any time soon as federal, state and local governments are funding the infrastructure to support that, Newnam said.
David Masters, vice president of sales, added that the market is growing in “flipped” classrooms where students access lessons outside the classroom and educators use class time for deeper exploration. For Encore, that creates a market for integrated devices that travel home with students and staff networks to enable such functionality.
Efficiency and effectiveness
Although the business has grown, the staff size has not. Just over 100 employees work for the company today, compared to about 120 when it first started. Technology and increased efficiency have allowed Encore to reduce staff even as business increases, Newnam said.
The faces at the top have changed. Newnam became CEO last year after serving as board chairman, and the rest of the staff has seen some rotation that he characterized as normal for the industry. Occasionally, employees have gone to work for some of Encore’s providers, maintaining a relationship from the outside.
Newnam said the company is looking to grow its business and expand its geographic footprint, which will lead to more hiring. But there isn’t any rush: New operations require finding people with the right mix of industry expertise and sales experience.
Now that the company is more efficient and effective, Newnam said he feels the company can look toward acquisitions.
“What I would love to do, whether it’s in one year or three years, is look into doing an acquisition of a competitor either in-territory or out-of-territory – something that expands us in Florida or maybe something that expands us into Maryland,” Newnam said. “The management team here is very good and has the capability to execute it.”