By Keith Reid
(Photo: PDI CEO Jimmy Frangis on stage at the company’s user’s conference.)
PDI, a leading global provider of enterprise software solutions to the convenience retail, wholesale petroleum and logistics industries, hosted its 2018 North America user’s conference Aug. 19-22. PDI noted that this was the company’s largest to date, attracting more than 800 attendees from the U.S. and Canada. Given the number of new corporate acquisitions, the large turnout was to be expected.
Since its last users conference, PDI has acquired five companies—TelaPoint, TouchStar, Excentus, DM2 and IIS FuelsPricing—adding significant wholesale and logistics, loyalty marketing and fuel pricing capabilities to its portfolio. With the exception of FuelsPricing, and to some extent DM2, Fuels Market News covered these and previous acquisitions extensively in THIS article.
In addition to the more than 110 training and networking sessions offered to attendees, PDI also shared its vision for a unified, cloud-based software portfolio during its general session update.
PDI will host next year’s conference at the Gaylord Opryland Resort in Nashville, Tennessee.
FMN editor Keith Reid was able to attend the conference and in a meeting with PDI leadership received a run down on the new acquisition and a progress update on several post-acquisition developments.
On the DM2 Acquisition
DM2 was a well know solution provider focused primarily on fuel wholesale/distributor operations and retail heating fuels delivery. As with a number of previous acquisitions there was plenty of overlap, but some unique capabilities as well.
“They have a great customer base and they’re very strong in the lubes market,” said Jimmy Frangis, PDI CEO. “So as we look at the overall market, especially on the wholesale side, through our own organic applications and then through the acquisitions. We’ve started to get strength in each of the wholesale sub categories –there’s the transport business which is actually delivering to retail locations; there’s a commercial and industrial side; there’s a cardlock side; and there’s lubes, etc. We had some capabilities in lubes, but DM2 is really strong in that area and has an excellent customer base.”
Frangis also noted that DM2 brought with it quality team members that add to the PDI organization, and that it provides strength in the Pacific Northwest which fits well with its geographic expansion and service needs.
On the IIS FuelsPricing Acquisition
As PDI describes it: IIS FuelsPricing’s software provides comprehensive price management solutions for fuel distributors, helping programmatically increase both volume and margin. Its highly configurable pricing systems allow operators to better predict and adjust to fluctuations in pricing from suppliers and competitors’ posted prices, while also providing analytics capabilities to better understand prior pricing behavior and forecast future market movements.
The acquisition will add some of the biggest, most well-known brand names in the petroleum and fuel industry to PDI’s customer roster. It will also expand PDI’s portfolio and increase the company’s footprint around the world from Brazil to Japan.
“We’re very familiar with price optimization solutions and we interface to the major providers,” Frangis said. “We felt like it was critical as part of our strategy to be able to offer a solution ourselves. That doesn’t mean we won’t continue to support the other providers, as we believe in open solutions.”
He noted that one aspect that set IIS apart from its competitors is that it not only focuses on retail price optimization but on wholesale fuel pricing as well. And, as with a number of previous acquisitions, it strengthens PDI’s global reach.
“IIS has a significant installed base in Europe and Asia Pacific and in Latin America,” said Frangis. “So it gives us a great solution and some infrastructure, team members and customers around the globe. We will continue to offer them the price optimization solution, but then we also want to offer them our full suite of software applications.”
On the Excentus Loyalty Application
With all of the wholesale acquisitions the retail standout was the recent acquisition of loyalty provider Excentus. While Excentus serves as an in-house loyalty program PDI will continue to support competitive third-party solutions. Loyalty is a simple concept but one that can be complicated in successful execution.
“If you think about this marketplace, I’d argue that loyalty as a term potentially has some dirty laundry associated to it because it’s had a long evolution path and it’s taken time for retailers to be able to clearly articulate the value that a loyalty program provides,” said Brandon Logsdon, SVP and President of PDI’s Customer Engagement & Loyalty Business, Excentus. “And one of the reasons has been access to the data necessary to articulate that value. So think about back office solutions– price book and transaction log data which historically have been completely separate from the loyalty provider. That puts category management, a core operation of the business, and the marketing side effectively at odds because they’re not playing in the same sandbox. So now we have this opportunity now to put those two things together.”
Logsdon noted that by linking those operational processes operators receive one version of the truth with one set of reporting. “You start to think about the powerful things you can do with the price book combined with loyalty and offers to deliver more clear value to the consumer,” he said. “You can optimize promotions further, and then start to think about the data on the back end from a return analysis. We’re now at a point where we can clearly articulate to the customer the value loyalty’s providing. Here’s the lift and shift that you’re seeing.”
Logsdon added that the IIS price modeling acquisition enhances the mix by showing the full flexibility of a fuel-price based loyalty offer.
On The Technological Challenges
Supporting and eventually integrating the range of solutions that have been acquired into a more unified footprint represents a significant technical challenge. Chris Berry, PDI’s Chief Technology Officer provided some feedback on that process.
“This past year what we really have focused on are some of the foundational components and services,” said Berry. “Things like our security service and what historically might have been competitive applications. How do you become the same user as you move throughout the portfolio? So that’s been some of the complexity ‘under the hood’ and we’ve made great progress. We’ve also made a lot of progress on proving out our ability to support a hybrid cloud deployment. We’ve got services sitting in our public cloud and we’ve got application sitting on premise at sites and how do you consume those services between them? And we’ve started to our first, full application that will be live next month — our next generation dispatch product. So we’re very excited about the progress of the last year.”
On the Future Roadmap for Solution Integration
A major and likely ongoing question with all of the acquisitions for the customers of the acquired companies is what does this mean for me? What is the TimeLine; what is the roadmap?
“Their expectation should be that we’re going to serve them on the applications that they’re using today at the same or better level of service than they experienced previously,” said Frangis. “So that would be expectation number one. Expectation number two would be that we are investing in the solutions that they will be able to utilize in the future at a rate that is much greater than we believe anybody else that serving this market. So we would want them to have confidence that they’re working with a provider that will be able to serve that for many, many years to come. We are creating great new technology platforms that meet all of the requirements in the market. It’s going to take time, which is why point number one is so important.”