Chairman and CEO, Xenos Group Inc.

Success, they say, leaves clues – particularly global success.

Identifying and understanding those cherished clues and strategies was the aim of a recent event geared at helping Canadian technology companies expand internationally.

Dubbed Global Smarts, the event was jointly organized by the Alliance of GTA IT Associations, the Information Technology Association of Canada, Ontario, Canadian Information Processing Society, Toronto Chapter, and the York Technology Association. I’ve passed through the school of hard knocks…and many valuable lessons learned reside with me.Stuart Butts>TextParticipants got to learn all about global success from two IT executives who know quite a bit about it: Stuart Butts chairman and CEO of Richmond Hill, Ont.-based Xenos Group Inc., and Richard Sikes, who has spearheaded globalization initiatives for many software companies.

For Butts – whose globalization skills have been honed over two decades – it’s a matter of “been there, done that.”

Drawing from his vast reservoir of experience, the Xenos CEO outlined four time-tested practices for global success: smart alliances, scrupulous market selection, shrewd timing, and seamless customer service – though not necessarily in that order.

It helps if you have a great product too, he said.

In a talk peppered with anecdotes, Butts described how these very principles helped transform Xenos from a small, struggling business 20 years ago to a major global player with customers in three continents.

Today Xenos’ data to e-content (d2e) solutions are deployed by firms in disparate sectors – banking, brokerage, government, healthcare, insurance, manufacturing, ports, telecommunications and utilities.

But success didn’t come easy.

Though from its inception, Xenos intentionally built products for the global market, the firm’s early promotional strategies weren’t exactly savvy – to say the least.

Butts recalled his company’s first faltering forays into overseas markets with JES-Master and Console-Master – Xenos solutions built around mainframe technology. “Console-Master was a disaster recovery product we priced at $3,000. We sold 100 copies in North America in the first two years…but then ran into a lot of tech support issues.”

Those early challenges taught Butts and his team “never to underestimate the importance of properly supporting the customer.”

This valuable lesson was reinforced when Xenos teamed up with a German firm to sell the same product in Germany. “(Our partner) gave us very tough time over technical support, forcing us to smarten it up,” Butts said.

But the effort paid off in spades. In 18 months, the German firm sold 126 units of Console-Mater in Germany for $14,000 a pop – and Xenos raked in half of that.

That’s how it’s usually been with Butts and his company – their greatest insights have been acquired in the laboratory of life. “I’ve passed through the school of hard knocks,” said the Xenos head honcho. “And many valuable lessons learned reside with me.” Another lesson learned the hard way, he said, had to do the importance of studying local conditions before venturing into new markets. Failure to do so can have unpleasant consequences.

For instance, Butts recalled that three years ago his company signed up a VAR in China and picked the months of March-April 2002 to tour that country – the time of SARS! By a stroke of good luck, however, everything eventually turned out well. “It was a challenge but ended up as a bonding experience for all of us.”

Knowing local conditions, he said, also helps you identify and implement workable marketing strategies.

For instance, Butts said, while Xenos does around 75 per cent of its sales directly, in Brazil and Hong Kong the firm uses distributor-type partners. “Brazil’s experienced a serious recession over the past few years. But we trained our VAR appropriately and he committed to selling our products.”

For software vendors, the Xenos CEO said, forging a relationship with local device vendors is also vital. Technology devices, he said, require all sorts of supporting software. “You have to persuade device vendors that your product is a must, not just a nice to have…That it’s essential to their sale.”

Knowledge of local conditions is a point Richard Sikes also emphasized in his presentation.

This knowledge, said Sikes, should encompass awareness of how communications systems in a country typically function.

For instance, he said, when two North American companies do business, personnel from one company – senior management, sales/purchasing, marketing, R&D or legal – usually interact “on a parallel basis” with their counterparts in the other company.

By contrast, he said, Japanese companies adopt the “portal” model – where one person represents all departments. North American firms doing business with Japanese companies need to adapt to the very different communication model and style, Sikes said.

He strongly recommended preliminary market research to determine whether there’s a need for one’s technology or product.

Sikes recalled how a company neglected market research and then attempted to sell a software tutorial on how to recycle aluminum cans in Denmark. “The venture failed…because they don’t have aluminum there.”

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