New owners grow Central Office Systems

Last November, Arthur Flater and Christopher Rosecky, who worked together in the sales department of Central Office Systems (COS) in the early 1990s, bought the company. The pair paid about $1 million for the firm.

In the months since, the company has grown from 11 to 18 employees, adding a vice president of service, two salespersons, an administrative worker, a delivery driver and one additional technician.

More importantly, the company has increased its sales of Konica Minolta copiers, printers and scanners, its core brand, by 369 percent.

COS had $1.6 million in revenues for 2007. By the end of this May, the company had $3.6 million in annualized revenues, and Flater expects it to have more than $5 million in revenues by the end of the year.

COS had a solid foundation when Flater and Rosecky purchased the company, both men said. But something was missing.

“The fundamental was sales,” Rosecky said. “COS’ longevity is in service. It has a really solid service engine and a loyal customer base. When I meet with long time clients, some of them have the equipment from the 1990s that we sold them. That’s unheard of in this industry.”

COS was previously owned by a group of five employees that Flater and Rosecky bought the company from. Those employees still work at the company.

While the former owners kept the company going, COS lacked leadership in sales, Flater said.

“The company needed to be recapitalized, it needed to have a service executive and it needed a strong executive team,” he said. “You had five employees bailing water out of the boat. But the company was just ripe for growth. The infrastructure was here. The customer base was here. It just needed more of a sales engine.”

Since their purchase of COS, Flater and Rosecky have updated the company’s computer system with specialized tracking software made for office copier, printer and scanner sales and service.

“In our business you need a system to keep track of every part, every piece of toner, every paper and every accessory on each copier,” Flater said.

The new software is helping COS keep track of its customers’ needs as well as its inventory and billing. However, if the company meets its sales goals for this year, it will have to hire additional employees.

“I think we’re sustainable to $5 million (revenues) or so,” Flater said. “After that, we’ll have to add infrastructure, people and more logistics.”

COS is taking steps to prepare itself for hiring more workers, Rosecky said, because the company anticipates needing those workers by the end of the year.

“We’re closer to the point of making tangible decisions of if we need to add staffing,” he said. “We’re constantly in the interview process so that we have a bullpen ready and we’re ready to transition talent.”

In the six months since Flater and Rosecky have owned COS, the company has introduced two new products to its customers – a document management software system and an intelligent print management technique for mapping customers’ office systems.

The document management software allows customers to program their copiers into scanners that automatically steer pieces of information from documents like sales orders into their systems, Flater said. Once a sales order is scanned, specific information from the copier is automatically steered to specific employees or departments.

“The future of the (office document machine) industry is in work flow,” he said. “Where the copier is both the on and off ramp for getting information into the system.”

COS has also invested in intelligent print management software, allowing it to map an office or department’s use of printers and other document machines. The technique allows COS to use the right printers for the right jobs, limiting use of the costliest printers and maximizing use of more affordable models, Rosecky said.

“We can walk into an office with our USB key and with permission plug it into a computer,” he said. “It will find all of the printers on the network and give us a report on all of them.”

Printing is the third-largest office expense for most companies, Flater said, and routing the right jobs to the right printers can generate significant savings.

“We can take the third-largest expense and drop it by 20 to 30 percent,” he said. “It’s a matter of having the technology and leveraging it.”

Central Office Systems

Address: 2238 Bluemound Road, Waukesha
Employees: 18
Revenue growth: $3.6 million in annualized revenues for 2008 now; anticipated $5 million by the end of this year. COS had $1.6 million revenues for 2007,
Web site: www.centralofficesystems.com

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