Been in business for 31 years

30 years ago, J. Richard Schien founded Karmak Technologies and on Tuesday, June 5, he explained to the Benld Area Rotary how the Macoupin County business has evolved and survived over the years.

It was spun off his father’s business at the time which was a machine shop located in Carlinville, Illinois. In 1948, his father then bought a welding shop. J. Richard was usually seen running around in his diaper in the shop, but he was only 7 at that time. “I take exception for that,” he opened.

His father started building truck bottoms for Prairie Farms through the welding shop. He was always busy during the summer time due to tractor and farm equipment repairs, but business went dead in the winter time. That is when J. Richard found his niche.

Karmak grew out of the heavy equipment truck business because machine body parts and technology grew rapidly in the late 1960’s. His father’s machine shop was the receiver of some big ticket repair work. The parts business then grew and grew and grew. “The parts business got to be about 1/3 of the machine shop’s business which was about 6 to 7 million dollars a year,” Richard noted.

To try and keep up with the large amount of business coming through the machine shop, Richard looked into various computer systems. Richard graduated from Greenville College and then attended SIU Carbondale to achieve his master’s degree in physics and math. He never was able to finish his master’s because he was exposed to computers as he worked in the computer center at SIUC.

“I got a good understand of what they could do, so that was a big plus for me,” Richard explained. He also met his wife at SIUC, so that was a real big plus for him. Still in search of the computer system to solve the machine shop problem, his wife’s brother told him that he should write a computer program like he did in Carbondale.

Karmak was then formed on December 31, 1981 and has been in business for over 31 years marking this year. They are the leading designer and provider of business management solutions specializing in the commercial transportation industry.  They have been delivering innovative software and superior customer service to heavy-duty businesses throughout North America.

The company design, develops, and then sells the software to companies who sell trucks, repair trucks, sell truck parts, or lease trucks. “Some of our customers do all of these things,” Richard added. Karmak also has companies who are strictly leasing or rental companies who have a repair shop and some who do not have a repair shop. “It is really a big field.”

Advertisement

One of Karmak’s most surprising moments was when they thought they would make money by selling computer systems. “Those are high priced, but computer popularity has driven the price down,” he added. Richard then realized visual equipment was not a vertical market, but he did establish that Karmak has only been successful because they have stayed one niche: heavy duty industry.

“We really understand heavy duty industry,” Richard hammered. He went on to say that the company lives off their continuing support revenue. They are not inexpensive for support, but are also not the highest guy out there either. According to Richard, Karmak is in the top tier.

We really provide support. Richard’s brother used to work with Karmak and his favorite thing to do was to call Karmak and time how long it took to get an actual person on the phone. Sometimes he even had two cell phones set-up, one with Karmak and one with a competitor, and timed both conversations before he spoke to a live operator.

Generally, Karmak’s time is around 2 minutes. Their biggest competitor, ADT, is around 30 minutes. That is a big difference and Karmak has to charge for that. The company has systems all over the United States and even up into Canada and down in Mexico and Puerto Rico.

The major part of their growth, especially since the downturn of the economy, has been from companies consolidating. It is the same aspect of car dealerships combining, Richard explained. Truck dealerships combine and the industry is adding twice as many branching as it is losing branches. “In other words, if ADT has a customer that has 15 branches and a branch buys another branch, they are not going to switch to Karmak for that additional branch,” Richard explained.

Karmak has had tremendous growth from their businesses’ success. Richard thinks it is a nice compliment to Karmak’s software as well as their good business practices and picky customer. “There have been deals when I have said we don’t need to sell this guy anything,” Richard explained.

Over the years, Karmak started out with one system they designed and developed in Carlinville, Illinois. Then in 1997, Karmak bought out a competitor in Springfield, Missouri. Right now, Karmak has 40 employees in Springfield, Missouri office and about 140 in the Carlinville headquarters. They were forced to keep the 40 employees in Springfield because they were unfamiliar with the system in use.

“We are trying to replace both systems and have been since the early 2000’s,” Richard said. “We want a full-blown windows system. Our strongest competitors don’t have a full blown windows system other than one.” Karmak is finally cracking away at finalizing that product and have 3 customers running a trial version since March. They expect that number to triple by the end of the year. When Karmak gets to 25 customers on one item, Richard will then consider it a product.

Advertisement

Karmak has 70 companies’ systems sitting in Carlinville, Illinois tied through the internet. “We are a big fan of the cloud,” Richard noted. But, it has to be maintained properly before we put anything in the cloud. “They have to have really good back-ups and, of course, generators if they lose power. They must have a second telephone line in and out of their building in case they have problems,” Richard explained.

The headquarters in Carlinville has two paths out of the building in fiber optic wiring and two paths to their office in Springfield, Missouri. One path is in fiber optic and one regular wire. “That has been a lot of years and money,” Richard noted.

Right now, Karmak is second in the industry behind ADT and has developers living all over the United States. They have about 240 employees worldwide.

Comments

comments