Behind the HighJump amp; TrueCommerce purchase

My first thought when I read that HighJump had purchased TrueCommerce was to confuse that company with TrueDemand, another supply chain software company. True story: It was one too many companies named True.

Once Chad Collins, HighJump’s vice president of marketing and strategy, set me straight we got down to business and talked about what the acquisition brings to HighJump’s table. Collins highlighted two areas:

First, it strengthens HighJump’s offerings to mid-market organizations, a sweet spot for HighJump. “Within our core verticals, like food and beverage and 3PLs, we have no problem going into big accounts,” Collins said. “But, the mid-market has been a horizontal play for us. That’s our bread and butter.” TrueCommerce has about 3,000 mid-market customers; that’s 3,000 potential WMS, TMS, labor management and direct store delivery customers.

Second, it furthers HighJump’s strategy to take its product suite to the cloud. A few years ago, HighJump retooled its core WMS product for rapid implementation by small to mid-size users that don’t have a hefty IT department and six months for an implementation. The next iteration is to offer its products in a Software-as-a-Service, or cloud deployment model. That would allow users to access their applications through the Web. TrueCommerce’s solutions are already available in traditional and SaaS models. “We’ve invested in rapid implementation technology, by reducing the infrastructure investment,” said Collins. “But our eyes have been opened more by the simplicity at which TrueCommerce onboards new customers. We think that’s what you need to do for the mid-market business.”

That’s the rationale behind the acquisition. But, what exactly does TrueCommerce do?  The company provides trading partner integration applications for the small-to-midsize market. “Think of them as EDI for the other guys,” is the way Collins put it. The typical TrueCommerce customer is a small CPG manufacturer that has to comply with a big retailer’s EDI requirements, say to accept and confirm purchase orders or send advance ship notifications. “They provide all the plug-ins to the mid-market ERP packages and they have connections to most of the trading partners in the market,” Collins explains. “If you need to send an ASN to Target, it knows what and when you’re shipping and securely delivers that data to Target.”

Without downplaying the benefit of 3,000 potential new WMS customers, Collins thinks there is more pressure than ever for the small to mid-size manufacturer to integrate and collaborate with its trading partners. “TrueCommerce provides the messaging that enables that collaboration,” he said. “We also think the cloud is going to provide some opportunities for supply chain collaboration. Our view is that’s where it’s going.”

In addition, it opens up an opportunity to provide WMS-lite applications to smaller companies that may not be able to justify a full-blown WMS. “There’s an opportunity to investigate bar code scanning applications with the smaller companies,” said Collins. “We can help them tie what’s physically on that pallet to what’s on the ASN and then send that information to their customer.”

For now, HighJump will position TrueCommerce’s applications as add-ons to its WMS. “Over time, we’ll have it prebuilt so that data coming out of your WMS will flow right through these connections,” he said.

The acquisition may also be a vote of confidence by Battery Ventures, the investor that bought HighJump in 2008. “I think there’s a message about the longevity of our business,” Collins said. “Battery is still strongly behind HighJump and allowing us to execute on our strategy.”