Expert Choice To Target New Markets

Expert Choice To Target New Markets <@VM>Expert Choice Inc.

Daniel Saaty

By Richard McCaffery, Staff Writer

A little company in Pittsburgh plans to step up marketing of a powerful tool that can help government and commercial organizations make better decisions.

What sort of decisions? Everything from picking the winning vendor on a billion-dollar contract to buying desktop computers.

Expert Choice Inc., which has been selling its decision support software to government and commercial customers since 1983, plans to release a Web-enabled version this fall.

The company, which had revenue of $1.2 million last year, designs software that helps groups structure decisions and synthesize information to make better choices. It sells three products: Team Expert Choice, its flagship application, and scaled-down versions of the same product that are known as Expert Choice Platform and Expert Choice Professional.

Approximately 60 percent of the company's business comes from the government and 40 percent from commercial customers. Roughly one-third of the company's more than 20,000 installed applications were purchased by universities at student discounts.

Daniel Saaty, a principal in the private company, said his father founded the company in 1983 to spread his decision-making theory, not build a business. This explains the company's long client list and tiny revenue stream.

But the 28-year-old Saaty, who has a graduate degree in sociology from the University of Pittsburgh, said he joined Expert Choice four years ago with one goal: grow the business.

"Our objectives changed," said Saaty, whose grandfather made a fortune building the first ice factory in Iraq in 1923. "The goal at [first] was just getting people to understand it. Our technology wasn't ready until recently."

It was just three years ago that the company released a Windows version of its software and made it scalable, meaning a group can use it simultaneously.

It was Ernest Forman, president of Expert Choice and a professor of management science at George Washington University in Washington, who took the process developed by Saaty's father and built a software tool from the ground up. Now, he has Web-enabled the software, and Saaty is looking for opportunities to bundle it with other applications, such as business software packages, to be delivered over the Web.

To do this, Saaty has stepped up the company's marketing efforts and expects $2 million in sales this year. The company, which has 16 employees, including eight in Washington, could hire as many as 20 more in the next 12 months, Saaty said.

The company already has had wide success in the federal government. Consider the General Services Administration, which used Team Expert Choice last spring to allocate up to $1.5 billion in IT-related projects.

The agency shaved a month off its decision-making process using the software for the first time for its annual budget allocations, said John Holloway, GSA's senior portfolio manager.

Holloway first encountered the product at George Washington University, where it is used by the school of business and public management. Holloway just received his master's degree in business from the university.

GSA bought the application for $900 via Expert Choice's Web site, said Holloway.

With the software, GSA ranked 82 IT projects based on a set of 16 criteria, and now has an audit trail of its decision-making process.

"We got $60,000 worth of value for $900," said Holloway, referring to the dollars the government saved by the shortened process. "I think this is what the software is going to do time and time again. I see many applications for it beyond resource allocation."

So far, Forman and Saaty have financed Expert Choice without help from banks or venture capital. Now they are looking to spin off companies that will use customized versions of the software to target specific industries.

Saaty would not provide details but said he expects to raise capital from the spinoffs.

The product is suited to government and businesses because its uses include budget allocation, human resource management, procurement selection, strategic planning, financial risk assessment and other decisions that crop up routinely, Saaty said.

For the last four years, Saaty has been going door to door in the government and at commercial organizations, demonstrating the power of his father's Analytic Hierarchy Process. It lets the user take the intangibles of decision making (experience, insight, judgment) and weigh them against a customized set of criteria.

Numerous customers have deemed the tool useful. Clients include IBM Corp., Xerox Corp., Veterans Affairs, the Air Force Space Command and the Federal Aviation Administration.

An intelligence agency that became the company's first government customer four years ago went on to build an Acquisition Center of Excellence in Herndon, Va., that uses Expert Choice as a decision support tool, Saaty said. He could not disclose the agency's name.

Saaty said the company is targeting a wide variety of agencies for its products, including the Government Accounting Office, the Energy Department and the World Bank.

Expert Choice is not the only company that offers decision support software. Competitors include Decisioneering Inc. of Denver and Logical Decisions of Golden, Colo., both small, privately held companies.

The Economic and Business Analysis Group at Booz-Allen & Hamilton Inc., McLean, Va., bought a software package from Expert Choice last fall and upgraded the package in January. It uses the software for cost-benefit analysis when it examines different approaches clients can take for tackling IT projects.

"It builds consensus," said Janet Celly, a senior associate at Booz-Allen. That is because decision-makers have to sit down and talk about the situation's criteria, define parameters and weigh judgments.

"While the tool is churning and doing its thing, the group is coming together as a whole," Celly said. "It sells really well. People like using it."

Booz-Allen and Expert Choice in February reached an informal agreement to jointly pursue business opportunities. Expert Choice will hunt for sales, and Booz-Allen will offer consulting services, Celly said.

Expert Choice also has partnerships with the Gartner Group of Stamford, Conn., and Battelle, a non-profit technology organization in Columbus, Ohio. Headquarters: Pittsburgh

Business: Decision support software

Revenue 1998: $1.2 million

Government Customers: Federal Aviation Administration, intelligence community, Veterans Affairs, Air Force Space Command, Navy, World Bank Financial Planning Commission

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