In 1994, Robin Smith and Scott Beaver started Virtual Logistics Inc. in Montreal to continue a business that a division of CN was walking away from. They assisted companies in integrating the data from their EDI-based financial transactions into a variety of accounting software systems. In fact, Virtual Logistics was one of the first to enter the EDI integration game. But soon a series of “clouds” came upon their business and they needed to learn to respond quickly if they were going to continue.
The Ugly – Political Cloud
It wasn’t long into their business that a cloud of political turmoil began forming over their city and province. The Quebec separatist movement had succeeded in putting its plans to separate from Canada to a vote, scheduled for November, 1996. Even though the people chose to not secede from Canada, many in the business community decided to move their operations out of Quebec. As Robin and Scott watched their clients leaving Montreal, they made the tough call to uproot their lives and open a second office in Ontario.
After moving to the Halton Region, they returned to serving their clients and pushing their flagship product – EDI Desktop. This was an on-premise offering targeted at small- to medium-sized players in the retail and manufacturing supply chain. They enjoyed solid success as the economy grew and the number of transactions increased at a steady, rather predictable rate.
The Bad – Economic Cloud
The fall of 2008 was a challenging time. Stock markets were plummeting, real estate values in the U.S. were dropping, unemployment was up and a worldwide recession was taking hold. As consumer spending nosedived, retailers large and small closed up shop. At the same time, web-based retailing was on the rise, driven mostly by small “Mom and Pop” operations that were often the result of people without jobs finding a new alternative to earning an income.
Virtual Logistics was faced with a seismic shift in its market. The number of EDI-based transactions for the traditional retail supply chain was falling dramatically, and almost overnight there was a moratorium on the purchase of on-premise software among small- to medium-sized enterprises as people hunkered down. VL’s long-standing core client base had suddenly dried up. At the same time, during the recession, the one place experiencing transaction growth was web-based online commerce. Supply chain integration was still a requirement for these smaller companies; unfortunately, VL did not have an offering that served their needs. These companies knew, however, that Virtual Logistics had established a solid reputation as the “go to” team for supply chain integration expertise.
The Good – Computing Cloud – Integration as a Service
As VL faced tough decisions on how to manage this revenue drop, a new “cloud” was forming on the horizon and moving in quickly. This “cloud” was cloud computing. A rapidly expanding number of web-based retailers were looking for a cloud-based system over the traditional on-premise. They were not interested in a large capital outlay, nor in the need to build an internal IT infrastructure. A one-time setup fee and monthly subscription was the way most wanted to go.
The VL team chose to leverage their integration expertise and seized the opportunity to develop a new cloud-based brokerage offering in the Integration-as-a-Service space. Enterprises both large and small could now take advantage of virtual “any-to-any” integration for all their supply chain transactions. This offering was built in such a way that bricks-and-mortar retailer suppliers, web stores and fulfillment houses could, at any time, elect to exit from the external cloud and bring the system on-premise should their volumes grow too large.
This new offering supports more than 15 accounting, ERP and WMS packages. The service facilitates the transfer of financial data from dozens of file formats (e.g., EDI, xml, pdf, xls) across many protocols (e.g., AS2, Secure FTP, web services).
VL have also been quick to embrace web 2.0 marketing tools and have launched Integration TV, an Internet-based TV-style show that provides education and insight from subject matter experts in the industry. The first show premiered in mid-September. Check it out at http://tv.virtuallogistics.ca.
Robin and Scott have demonstrated that tenacity in the face of adversity, knowing their strengths, and being creative in how they deliver these strengths to clients has allowed them to weather the economic and technological storms that are a reality for all tech-based businesses.
Contact points for Virtual Logistics
4141 Sladeview Cres., Unit 22, Mississauga, ON
Email: sales@virtloic.ca
Phone: 905-814-1790
Toll-Free: 888-31-VIRTUAL ext. 2223
Web www.virtuallogistics.ca
Blog: blog.virtuallogistics.ca/
Twitter: @rhsmithvl
LI: www.linkedin.com/in/robinhsmith
Youtube: youtube.com/user/VirtualLogisticsInc
Integration TV tv.virtuallogistics.ca