It is an MSC-status company; it is listed on Mesdaq Market; and it develops its own software and sells this exclusively over the Internet, but Cworks System Bhd CEO Abdul Rani Achmed says Cworks is a marketing — and not a technology — company. His reasoning becomes clear when he explains how the company got started and how it gained market traction.

Abdul Rani’s journey from employee to entrepreneur is a classic example of an entrepreneur who got hit by the dotcom bug, went after eyeballs only to crash, did some soul-searching and decided sensibly to stick to his strengths and not complain about the system. For example, when he could not get any government grants to build his software, he and his team built it on Open Source.

In hindsight, Abdul Rani says it was good that Cworks did not get the grant. “Otherwise we would have wanted to build the greatest and best software and would have built a very complicated product, and would have been pitted against the big boys of software.”

Where is the innovation here, one may ask, especially when the company has no intellectual property rights? Technology is not the only way in which one can be innovative — and for Abdul Rani and Cworks, innovation lay in the business model employed.

After failing in his first business, a dotcom venture, Abdul Rani and his co-founders, all ex-colleagues from Propel-Johnson Controls, decided to go into an area they were very familiar with — computerised maintenance and management systems or CMMS. (A CMMS software package maintains a computer database of information about an organisation’s maintenance operations. This information is intended to help maintenance workers do their jobs more effectively and to help management make informed decisions, for example, calculating the cost of maintenance for each piece of equipment used by the organisation, possibly leading to better allocation of resources. The information may also be useful when dealing with third parties; for example, if an organisation is involved in a liability case, the data in a CMMS database can serve as evidence that proper safety maintenance has been performed.)

The team then decided that since it was unlikely that Malaysian customers would buy Malaysian-made software, they should sell it globally. What better platform than the Internet, which is touted for its ability to take a company global from day one. That was exactly what happened.

Today, the Cworks CMMS software is used by 2,500 customers from over 100 countries and has English, Spanish, Mandarin and French versions. The company is currently working on a Persian version. Cworks opened a US office with four staff in Buffalo, New York, in 2005 to serve US and Canadian customers. Abdul Rani says his customers do not see Cworks as a Malaysian company. “As long as you answer email and provide good service, customers do not care where you are from.”

An engineer by training, he started working with Propel-Johnson Controls in 1999 after returning from the US. Propel-Johnson was the project manager for Faber-Mediserve which had a contract to provide hospital support services to more than 70 government hospitals. Abdul Rani was tasked with rolling out a maintenance management system for all the hospitals.

He learnt a lot from the exposure about not just about software but also how organisations had different ways of managing their facilties. Abdul Rani left after two years due to family reasons and when he was ready to rejoin the workforce, he decided to become an entrepreneur together with two ex-colleagues.

It was early 2001 and dotcom action was at its height, so it was inevitable that they plunged into the thick of it. In August 2001, Abdul Rani and friends launched www.clueword.com which was intended as a multi-lingual puzzle game.

But dotcom riches proved elusive. Failure taught the team that it should go into a business it knew well and where “the effort was genuine and the intentions were to remedy a weakness in the existing market”, says Abdul Rani.

Having decided to target the CMMS sector, the team initially was not looking to build its own software but wanted to become the best implementers for the maintenance industry. “After all, we knew how to use the software and what users needed out of it,” says Abdul Rani.

However, after several jobs, they realised that they were not getting proper support from the CMMS vendors whose software Cworks was implementing for clients. “We did not have the money to become their channel partners and so their support to us was minimal.”

The team then decided to build its own software in order to better serve its customers. The next challenge was how to sell it.

After some debate on the business model, towards the end of 2002, they decided to give it away for free on the Internet in the hope that customers would ask for their assistance to customise and manage the software for them.

“That was exactly what happened. Our first customer was a company selling gen-sets in Costa Rica and this was followed by a district school in California. In fact, our biggest problem in the early days was how much to charge for our services,” says Abdul Rani.

They learnt the four P’s of marketing on the fly. They had the product and putting it out on the Internet gave them the positioning and placement. To bolster that, Cworks spent money buying key words on Google. Today, says Abdul Rani, the company spends around US$100,000 (RM355,000) a year on AdWords. It may seem like a lot for a niche B2B product but he says the cost per distribution is much lower than other mediums.

Abdul Rani likes to say that Cworks services the SMI sector because even though their customer may be a Fortune 500 company, the end-users tend to be the maintenance departments, which are typically fewer than 10 persons, and low on the priority list as far as tech support is concerned.

“These users do not want a complicated product but something easy to use and that is what we always aim to deliver,” he says.

For a technology company, Cworks has an interesting approach to R&D. Its entire development of the CMMS software is driven by its customers’ needs.

“The entire evolution of the software has been based on customer needs. That is why we have never thought of ourselves as an innovative company but rather, it is our customers who are innovative,” says Abdul Rani. “Our job is to computerise what the customer wants. The best part about this approach is that we need not allocate capital for R&D as everything we do on the software is driven by and paid for by our customers.”

Abdul Rani’s advice to entrepreneurs is to just focus on their strengths and try to spot a “pain point” in the market, build a product or service that will solve the pain and then keep listening to customers and give them what they want. Innovation will flow from that.

This article appeared in Manager@Work, the monthly management pullout of The Edge Malaysia, Issue 765, July 27 – Aug 2, 2009