Encompass routes a path to profits

FORT COLLINS – It all started when a father asked his son a favor.

Could he create a better software program to help dad more efficiently manage his beer distributorship?

That request from Kent O’Neil to his son, Jonathan, resulted in Encompass Technologies Inc., a Fort Collins company that specializes in developing software to help beverage distributors better track their products as they move from the warehouse into the marketplace.

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Jonathan, then still a Colorado State University electrical engineering student, wrote the software program for his dad as his senior-year project.

“I wanted a program that basically could handle everything from the supplier to the retailer, including inventory, accounts receivable, general accounting – everything we needed to do,´ said Kent.

He said the route accounting software program he’d been using often left many questions unanswered about the deliveries being made. But his son’s program put those questions to rest.

“Today, we can track the minute (the product) hits the warehouse,” he said. “The amount of detail we can provide an operation now is almost infinite.”

The O’Neils, originally from Akron, founded Encompass in Fort Collins in 2001 with four employees. Since then, the company has grown to a staff of 24 in its Fort Collins office at 324 Jefferson St.

Most of its employees install software and provide customer support for Encompass’s subscribers in the U.S. and Canada.

The software is installed on customer smart phones, allowing a dramatic savings from the typical specialized hand-held tracking devices, which can cost about $2,500 each.

“I guess the biggest difference between us and our competitors is they’re really tied to the (routing) hardware,´ said Jonathan. “It’s a major part of their sales.

“People who use Encompass software can run it on their own cell phones. No special hardware, no special software – other than our own – is needed to run it.”

“We got out of the hardware business and just went into the software,” added Kent.

Serving as Encompass president, Jonathan, 34, focuses on the constant revision of the software, which is specific to the needs of each company that uses it. He notes that the software is not for sale and is continually being updated with new features.

“We do ongoing updates for our customers, changing it about every six weeks,” he said. “It’s gotten much more complicated because computers have gotten faster and can hold more data, and we just keep adding to it.”

Kent, Encompass owner and co-founder who works the sales side of the business with Darin Spence, general manager, said an initial subscription for the software costs between $50,000 and $500,000, depending on the customer’s operation size and needs.

“That’s quite a range, but there’s quite a range in the chores we have to do,” he said.

Jonathan said New Belgium Brewing in Fort Collins and High Country Beverage in Loveland are among the 100 or so companies now using Encompass software.

Ben Hockett, New Belgium’s Brewery Direct Services team manager, said the company has been using Encompass software since 2008, replacing a handwritten invoice system.

Hockett said the software has allowed New Belgium to “intelligently streamline our sales and delivery routes and improved accuracy in the field,” among a host of other function improvements.

In addition to the company’s 24 local employees, there are another 25 in China.
Jonathan said the Chinese workers are “basically just employees who also do (software) development.”

“We’re all working on the same problems,” he said.

Jonathan said he studied in China during his college years and learned to speak Mandarin while at CSU. Contacts he made during those China studies led to hiring some workers there in 2006.

Jonathan visits China about four times a year to maintain personal contact with the Chinese operation, although everyone stays in daily contact via the Internet. “We’re working together with them all the time,” he said.

Encompass is in a growth mode, and Jonathan said the company hired seven people this year and expects to hire at least six more in 2012. General manager Spence said the company’s revenues are now growing at a rate of about 50 percent every year.

Encompass earned about $3 million last year and expects that to jump to about $4.4 million this year, Spence said.

The company was honored earlier this month by the Colorado Department of Economic Development, which selected it as one of 50 “Colorado Companies to Watch” in 2011.

Projected rapid growth at Encompass will require a new building in the next few years, and Kent said the company has purchased a 1.1-acre site a few blocks away on Linden Street, where Encompass plans to build a 16,000-square-foot office building – four times the size of its current home.

Construction is expected to begin in 2012 or 2013 with occupancy in 2014.
Kent O’Neil, 64, recognizes that the company has already seen tremendous growth in its first 10 years.

“It’s come a long way for an old man and a boy,” he said proudly.