From 2005 to 2009, I worked for CDC Software in the Food and Beverage group - worked with a lot of great people, had some great successes, worked with some wonderful clients - but the company fell on hard times.
Last week, (Aug 8) things at CDC hit bottom. The stock reached an all time low, the CEO was suspended, NASDAQ issued a letter regarding non-reporting of 2010 results, they named another CFO (perhaps CFO #22 could certify the 'numbers' for 2010) and a judge ordered payment of multi-million dollar settlement bonds within the next ten days - in all legal damages from various cases were north of $135m.
What's going on?
I'm no longer an insider and the crew I worked with have long since been 'brightsized' (a version of rightsizing a company whereby any bright or intelligent employees get the heck out) - but it seems problems are systemic in the company
To start with, in 2005 I was recruited to work with Ross Systems, run out of Atlanta by CEO Pat Tinley. At this time, CDC was described (if they were mentioned at all) as an investor or merger partner.
I had a great first year - and things started to change within the company - but my second year there was still record breaking in several ways - year #3 we had concentrated on million dollar plus accounts and had 3 huge deals in the works, with nearly $7m projected within 18 months.
Then, the C-Level team was let go, my bosses were fired and two months later they would replace the entire new account team.
1) Pat Tinley leaves Ross
2) Company rebrands from Ross Systems to "CDC Software"
3) Peter Yip, CEO of CDC Software starts becoming involved in the day to day management of the former Ross Systems division.
4) Final management members of Ross Systems are replaced - including new account team members (yours truly).
Historically, we can now look back at the 2008 time period and see recessionary economic times and recall most food manufacturing companies were undergoing massive layoffs and cutbacks - and ERP software purchases were the last thing on anyone's mind.
But we can also see the involvement of Peter Yip corresponded to the downturn of the company - as the new US CEO, Eric Musser once commented, (paraphrasing) 'Yip turned China.com (the CDC Parent company) from a $90m company to a $19m company and now he's doing the same with Ross Enterprise". It may well be that Peter Yip is a global business genius solving unseen problems on a worldwide basis before they even become visible to normal humans. It's also possible there's some basis to his nickname "Insane Chinese Billionaire Peter Yip."
From my own perspective, I remember the end illustrated at the 2008 Sales Kickoff. I'd spent the previous week in Las Vegas at the Wonderware Software Convention and heard the CEO of Wonderware talk about how it was their best year ever, customers were happier than ever, and best of all, they'd roll out a new version within months that would be even easier to install and use.
So imagine the contrast - when a week later - I'd be at the CDC Sales Kickoff and our CEO, the aforementioned Mr. Yip - would speak and say that 2008 would be the year of cost control. That all travel would need pre-approval and he, personally would view all approvals and expense reports in excess of $750. Since I was regularly taking sales teams into 3 cities a week, entertaining clients on each stop, staging demos and discovery - - - well, the new management solved it - instead of three legged travel, we'd have to fly back to our home airport after every client visit, file that expense report, open a new one, fly to the second city - and on and on.
So while successful companies like Wonderware were focusing on creating a greater customer experience, CDC was focusing on creating a bureaucratic nightmare. Wonderware's CEO focused on leadership, team-building and forward looking vision. Yip focused on last week's travel vouchers, became a travel clerk and completely took himself out of the role of CEO.
And it would go on and on.
At this point it's sort of humorous - they have revolving CFO's, someone told me they'd been through 18 CFO's in the last 4 years - the rumor being the numbers are so cooked, a CFO certifying those books could end up in jail - I don't know if that's true or not.
It's too bad really. Although the technology is a bit old, the functionality of the product is solid. And while the consulting teams have been decimated, there's lots of outside partners who can really make the product perform.
One can only hope that CDC has fallen on such hard times that they'll have to spin off/sell the Ross Enterprise package to a company that will invest in development and rescue a once-great name in ERP software.
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