A conversation with Alan Kahn

Alan Kahn is the co-Chief Executive Officer of AKA Enterprise Solutions, a New York City-based, Microsoft Gold Certified Partner dedicated to the implementation, training and support of the Microsoft Dynamics line of products including Microsoft Dynamics GP – (Great Plains), Microsoft Dynamics AX (Axapta) and Microsoft CRM, as well as Microsoft- based portals and business intelligence solutions.

What's your background, and how did you get started?

"After having graduated from Rutgers University in New Jersey with a BS in Accounting and a BA in Economics, I began my career with Arthur Andersen as a member of the audit and consulting group, staying there about two years. I then went to work for a mid-sized distribution company focusing on the building market in a strategic management role. In the late 80's, the company encountered some recessionary turbulence and reading the tea leaves, I decided that being an entrepreneur was where I wanted to be, so in late 1992, I founded AKA Consulting Services, Inc."

"Jump ahead a few years and its 1996. A client of mine needed an accounting system, and Great Plains seemed to be a good fit. Shortly after putting it live, Great Plains reached out to me to encourage me to get more involved with their software. I decided to do some diligence on the company by attending the Stampede partner conference in Fargo, ND in October 1996. Between meetings, I was sitting in the Holiday Inn bar rooting for the Yankees against the Texas Rangers in the 1996 ALDS. It seemed to me that everyone in the bar was rooting for the Rangers, except for one other lone Yankee fan, a guy who it turns out was also from NYC named Jack Ades. Jack had his own Great Plains consulting company at the time. We ended up watching a number of games together that week and decided to stay in touch upon our return to NYC. Almost a year and a half later, Jack gave me a call saying he had just split with his business partner and he wanted to know if I would consider merging our companies. Well, not long after we did just that, and needless to say it's proven to be an amazing partnership."

So where is AKA Enterprise Solutions now and what makes you unique?

"We are tracking to be $16MM in revenue, vertically focused in financial services, media, and a few process/discrete manufacturing verticals newer to our company, as a result of an acquisition done last year."

"I think one of the elements of our success has been the culture we created for the company. We've anchored our culture around eight shared values that define how we conduct business every day. We hire based on these values, which creates a unique work environment where everyone is on the same page."

"One characteristic that makes us successful as business leaders is that both Jack and I started out as business people, rather than as technologists. It seems a lot of companies in our space were started by one or more technology consultants, who may have done a project for a client, figured out how to install, configure and set up the software, and all of a sudden the licensor of that software approached them to say, hey, would you like to become a reseller for us, and pretty soon they've got a business going for themselves. Having a business background has been beneficial to us, because we don't have to learn many of the basics of growing and managing a business that are harder to learn, and at the same time, we found we can hire the technology talent we need."

What's your outlook for your company over the next few years?

"We're pretty bullish for 2013 and the next few years, as companies continue to slowly recover and invest in systems that will help them improve revenue and efficiency. We're launching two new verticals based on Dynamics AX, one in the public sector, and another in chemical and pharmaceutical manufacturing. We did an acquisition in 2012 and have successfully integrated that group into our company, and we're now launching initiatives based on their expertise. We have a plan in place that will get us to $20MM in a couple of years."

What constitutes a healthy, vibrant IT services company, and what can executives do to position their company for growth?

"A healthy company is one that is profitable over a sustainable period. Profit cures all evils. It creates flexibility and options. The lack of profit restricts a company from the flexibility it needs."

"At a certain point in an IT services firm's life cycle, growth is a decision and an action plan, not something that happens on its own. I believe companies should pursue their specialty and work hard to differentiate their products and services so a highly efficient marketplace can identify them as the best provider of those very specific goods and services. Sometimes this does not require additional product or service specialization, but rather greater clarity on who is the best customer for that product or service. More efficient, more educated, smarter buyers push providers of goods and services to be crisper about where they fit into the market."

"Companies need a growth plan. Too many companies just try to do what they did last year, just better. A growth plan generally involves having more resources and selling additional new products and services from one year to the next. It implies investment, which can impact profit. Often the companies that you see the most growth from are companies who have an equity investor, who has put money into the business and is expecting a return on that investment. In those cases, there is always a growth plan in place and execution becomes the challenge. In companies that are self-funded and owner run, the management team must be more disciplined to create the growth plan and execute it, while funding it with the proceeds of the business. That is a more challenging task."

If you could change one decision you made in the past, what would it be?

"I think we would have been more willing to do mergers and acquisitions. Organic growth is easier when a company is smaller. It becomes harder to grow organically beyond a certain size. Mergers and acquisitions are not easy to get right; however, companies like ours that have a clear set of values make it easier for a merged entity to latch onto and get excited about."

What lessons learned or advice have you accumulated over the years that you would like to share?

"The two obvious goals that companies set for themselves are growth and profit, which have a direct relationship to each other. Pressing down on the growth gas pedal can slow down profit, and decisions to maximize profit can slow down growth. We're all trying to find the right balance. One take away for an owner-run business like ours is to never allow the company to get to a zero or negative profitability with the excuse that we are investing and growing through this period. I might argue this for a firm that has taken on an investor as well, but that depends on the expectations of the investors and the willingness of ownership to put control of the company at risk."

You may Alan at akahn@akaes.com or visit AKA Enterprise Solutions at www.akaes.com.

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