Russ: This is The BusinessMakers show, heard here and seen online at thebusinessmakers.com. It's guest time, and we're at PKF Texas at their Doing Business Over Coffee event, and my guest is BJ Farmer, founder and CEO of CITOC. BJ, welcome to The BusinessMakers show.

BJ: Thank you, Russ. Thank you for having me back. I really appreciate it.

Russ: Why don't you give us an overview of the company?

BJ: We started in 1995, and so we've been around for quite a while. I actually started the business when I was about 20 years old, so it's been my mainstay forever. So, C-I-T-O-C, the name, it's a weird name. It stands for change is the only constant, and in technology, change is definitely - well, in business, in general, change is definitely the only constant. Throughout the years, we've been maintaining small business systems and doing some hosting and some Voice over IP, and the latest development we have is now doing business process management, where we're developing systems to help people replace human manual tasks and replace them with technology automatic tasks. So, reviewing reports and those kind of things are done by technology now instead of by humans, and it saves the company a lot of money, and in today's time, that's very important.

Russ: Okay. Absolutely. Well, it sounds like you're staying loyal to the name Change Is The Only Constant by making those big changes. It always seems to me to be a challenge in the technology business all the change that's required, and anytime I've ever sort of been close to your area, I've always tried to look for some sort of recurring revenue opportunity. Do you actually have any of that in CITOC, or is it always sort of changing so much that it's always to the next project?

BJ: Well, we've got clients that have engineers of ours that stay on site, so there's some recurring revenue __________. Typically the ones that are doing lots of mergers and acquisitions require a time of a lot of change, and my guys are very, very good at that. We've got four data centers, so we host a lot of people's equipment, some of it that is on our equipment and we just simply rent them space. We've got people who leave their phone systems in the data center, too. We are in a hurricane path right here in Houston, it happens to us a lot, and so they put their phone systems in the data center so they can stay online all the time. That's another recurring one, and then the business process thing is typically something that's done online. It's a hosted thing, so people have to use that to conduct their business, and it runs more efficiently so it reduces their overhead costs. So, there's a lot of things we do there.

Russ: Okay, now describe this decision, which I feel like would be a huge one, to get into this business process part of your business. I mean did you just look up one day and say, "Wow, here's an opportunity," or did you look up one day and say, "My goodness, we need another category of income"?

BJ: Well, no. It was a funny thing where we're eating our own dog food. I'll give you an example. I'll use us for the example. We generate a few hundred invoices every week, okay? This comes from a lot of service tickets, and so. Well, I had a guy that would sit there and review to make sure my guys were spelling things right, and making sure travel times and so on are associated correctly, and so on. He's human. He's only gonna have a certain amount of accuracy doing that, so after he reviews them, he then sends them to the accounting department, where they create invoices and they further review them. I lose an entire day, or I spend an entire day of one guy reviewing them, and then I spend another entire day of the accounting department doing it, so there's 16 hours every single week that we spend just doing the invoices. I replaced that with a piece of software that's checking for these things ad comparing it to a Word dictionary, so that way, if it's some weird thing that it hasn't seen before, it will add it one time and then we continue moving, and now the 16-hour days now takes us half an hour.

Russ: Wow. Cool. Now you say you add a piece of software. Is this something that you actually created and wrote, or is this something that you can get off the shelf and customize to fit your application?

BJ: We typically are making something for them because different companies use different systems, and they need whatever runs their shop or their technicians or their manufacturing, or their Quick Books, or whatever their accounting systems, sometimes these are all gonna be different. In some cases, when we can use an off-the-shelf product, that's the easiest way, but in the cases where we can't, we don't hit an obstacle. We overcome it either way.

Russ: Right. Now, increased productivity and efficiency makes all the sense in the world, as you just described it, but it seems to me like it could be a challenge, BJ, to even find those applications within a company. How do you do that?

BJ: Well, we look for things that are maybe their bread-and-butter business or what might be their most profitable business, and then what's causing them the most amount of turbulence in that world, or what is causing them an alarm. If it isn't until a shipment doesn't go out the door that you found out that your product is behind schedule, it's too late. If a customer is calling you and they're upset about something that didn't happen right, there was some precursor to that that could have notified you. If we can help you identify what those are and then resolve them for you, it helps your business, it makes the customers happier, and all those things are very important.

Russ: That's still kind of a challenge to actually get in there and earn the customer's confidence to be there to begin with, and then, secondly, to find those, and then, thirdly, to get the customer to agree to implement it and give it a try, right?

BJ: I agree, so a lot of times, the way that we're introduced to a client is gonna be on the surface-level technology world, or just their phone system, and so on. Now, we implement these things and we say, "Okay, now," in the case of a phone system, "Do you have salespeople that are filling out reports every single day, that then turn into a sales managers who's changing to a different Excel sheet, who turns it into the CEO?" We can give you an automated report off of the phone system to save that salesperson time, and if you get an hour back in your salesperson and five hours back on your sales manager, and a couple hours back - you know, the ripple effect starts saving the company a lot of money. So, we're introduced more on the surface-level technology, but we help them dig a little deeper on, "What can we get the technology to do for you?"

Russ: Okay. Well, I'm real interested because you've obviously done a good job of staying in business and growing the business, but the shifting, I mean I remember you were a big Citrix reseller and telephone systems - all of that stuff that you were doing were real cool - and now business process. Today, in 2010, what percentage of your business falls into the business process category?

BJ: Well, with change being the only constant, that's something that I introduced in the early part of the summer, so it's -

Russ: Okay, so it's brand new.

BJ: - very, very small. Yeah, it's very new to us. I've only hired on three guys so far to do it. I thought it was only gonna be one guy for six months, but it's ramping up so fast, and I think that a lot of this is because we're finding things where a company has a - you know, in the case of my 16-hour investment before, we're finding things where they're spending thousands of dollars per month to have a problem, and we can put in a one-time solution that's 10 percent of the problem or 25 percent of the problem. It really makes financial sense to do these things to reduce your costs.

Russ: Okay. I'm curious, are you already looking at perhaps the next big category of business that you're gonna add to CITOC?

BJ: Yeah. With the growth of my company, the great thing is that my job is getting better each year, and my job really right now is to be the visionary. I've got wonderful guys that are maintaining the shop and maintaining the operations, and making sure we're doing things efficiently every single day, and keeping their eyes open for that, and my job is to look down the road and see what's changing.

Russ: Sure, and what do you see?

BJ: Right now, it really is kind of sad, but there's a lot of cost cutting going on in the industry right now -

Russ: Absolutely.

BJ: - and the place where people are focusing the most right now is in their employees, how to get more done with less, and so where we can start integrating all these different technologies that we've been doing all these years, and then creating the reporting system to overlay the whole thing and making them all work cohesively. That's gonna be the coming wave.

Russ: Cool. All right, BJ, before I let you go, let's imagine that there's an aspiring entrepreneur that's listening right now, watching your interview, and is kind of impressed. What kind of advice would you give him and her, in general?

BJ: Read as much as you can, as fast as you can. Fail, fail fast and fail often, just don't fail in the same place twice. Jump out and do it. Work hard, be honest, and put in the 100-hour workweeks. I didn't do much college. I did a whopping one semester, but my thing was just go work, work, work, and that's the kind of ethic that I have. I think I got that ethic from my dad, and that was my trick.

Russ: All right. BJ, I really appreciate you updating us on CITOC.

BJ: Thank you so much, again.

Russ: You bet. That's BJ Farmer, founder and CEO of CITOC. This is The BusinessMakers show, heard here and seen online at thebusinessmakers.com.