Avenir Systems principal Dennis Harward’s business philosophy is simple: Build it and they will come. But it has to be good.

Most local governments and public utilities, the two groups the company targets, are using software programs that date back 20 years. But new accounting regulations coupled with governments’ need to be frugal and efficient are prompting them to rethink the way they do business. Harward said his company’s modern software is the ”end-to-end solution.”

Since July 2002, when Harward Investments, Inc., a technology holding company, acquired controlling interest in Avenir, the company has sold its software to local governments in nine Oregon counties and to several public utilities in the Northwest. The company designs Web sites as well. The $5 million company (in revenues) is expecting to double in size in 2003, then follow a path of more modest growth.

From 1981 to 1999, Harward served as president and CEO of Florida-based Harward Technical Enterprises, or HTE, a government software company that started with $3,000 in capital and grew to $98 million in revenue in 1998.

You started a previous company, HTE. Tell me a little bit about what you learned from that experience and what you’re bringing to Avenir as a result of that experience.

It was a wonderful experience overall. I lived the American dream, really. To go from nothing to building a company that even today is a force in the marketplace. It’s a real pleasure to get to do what you like. We like to create, and this is an opportunity to create again.

Despite what you read, I don’t think there has ever been a better time to be in technology. Ever. Not in my career. Because in the 90s, it was such a frenzy, you had a lot of people in the business who were just in it for the money. They weren’t in it because they had a passion for it. But I think the people who stuck it out and are still in tech have a passion. The natural resource in a technology company is people.

We ran an ad in Florida a few months ago and got 300 resumes in a couple of days. So, there’s never been more talent available, and I think the cost of the talent is back in reasonable terms, where you can make a business case to go out and create something special.

I think there are better tools available today. There are very talented people at the level of computer literacy among the populace. There are so many people with computer science degrees. So, I don’t think there is a better time, and that’s why I’m back in the business.

In many ways, by virtue of the current business climate, Avenir Systems may be a smoother sailing venture.

I think small companies are aware that good things happen. The good things at HTE happened when we were a lot like Avenir is now, where you have good lines of communication, people who like what they’re doing and there isn’t a lot of bureaucracy preventing it. We’re self-funded. My father and I are completely funding the companies on our own, and we think that will keep us from having outside influence from the investment community that sometimes takes more of a short-term view. We’re taking a long-term view here. We’re in the business for the duration.

It sounds like you don’t have any plans to go public then.

Everyone asks me that. I think, first of all, it’s not a good environment for it. But secondly, what we’re building here is a business that is for the customers and our family. We don’t think that, from experience, our values are consistent with the Wall Street mentality. I think it’s good for some people, but it really isn’t going to be necessary for us to do that to meet our objectives. We’re not looking for a way to cash out. We bought in.

You and your father, Jack, came here in 2002. Why Avenir? What brought you here all of the way from Florida and HTE and what you were doing there?

Dad, he always had an interest in Orcom. And if you know the history of Avenir, Avenir Systems really acquired the core Orcom business. We used to compete with Orcom and we always had a lot of respect for this company. And in fact we tried to buy Orcom in the mid-’90s and we were outbid.

But after that, obviously the needs of the customers were not met. There was an opportunity to acquire controlling interest in (Avenir), so we did. We actually tried to acquire (Orcom) when Avenir did, but there were some non-compete issues that got in the way. We’ve always been interested in (Avenir).

We know the company very well. It’s a lot like HTE was in 1990. Its dynamics are similar. It came off of an AS400 platform, same type of customers.

Tell me a little bit about your product.

Well, what we’re doing is re-inventing enterprise systems for utilities and for local governments here. We went to a trade show in 2001 and we saw that the systems out there, our former company included, the people had really not made an investment in new technology. And over the past three years we’ve had a research group working in Orlando to prove the concepts for a whole new generation of enterprise systems. And we went out to these trade shows, we saw that no one else had it. So we decided to acquire Avenir Systems with its existing client base and to roll that new technology out. And that’s what we’re doing.

In August, when we had only been here a few weeks, we had a symposium of the Avenir customers, former Orcom customers, and every client that attended has made a commitment to move to the new architecture. So it’s really exciting. We’re re-skilling our people here to bring them up to speed with the way our new systems are working, and we’re gradually deploying over the next couple of years a completely new system. It’s very exciting. It’s going to really turn the industry on its ear when people really have an appreciation for what these systems can do. It’s a 20-year leap in terms of the underlying technology. Most people are just taking and putting a graphical interface on top of their Legacy software. When we came here we told the users every line will be new, every single feature. It’s a completely new approach.

You market exclusively to utilities and local governments?

The way this will play out is it will have a division, the GTR division, that focuses on local governments, and Avenir will assume the traditional role Orcom had in specializing in utilities. So we’ll be combining the companies into something called Avenir/GTR. We’ve already had some big successes locally. I don’t know if you’ve seen the Crook County Web site. That was one of our creations. We’re going to be bringing out (a Web site) for Madras soon. We have a content management system, so we figured out how to treat everything they do as content.

Describe to me the specific needs of a local government or utility versus a business. Why is this a niche market right now and why are they requiring such specialized software?

It’s completely different. The accounting, first of all, for the public sector, is going through some major changes. First of all, they work on a very strict budgeting process. And they have to get a budget approved and live within those constraints for the entire year. Secondly, they do what’s called encumbrance accounting, which the procurement process is considerably different from the private sector. And then finally, there is a new accounting regulation that is requiring local governments to do cost-of-service accounting, basically to tell what it costs to say plow a road, maintain a park and perform specific activities. And that’s requiring them to go to a completely different level. So the Legacy systems, while people will limp along with them for awhile, are really getting in the way of that process and not helping.

How old are these Legacy systems we’re talking about?

They’re at least 20 years old. And that is typical. HTE systems, for example, are 20 years old. We were all sort of inventing this stuff at the same time. I think that’s interesting why the same people are doing it now, those of us who have the courage.

You’re going in and revamping some pretty old systems.

It’s time. I think these systems have been plugged and patched and it’s actually much simpler to apply current technology and bring people exactly what they need. So that’s what we do. We do it in a very sophisticated manner. We actually engineer the software. In the old days, 20 years ago, we sat down and said this is what we want to write. Today we have focus groups with our clients and we document that using structured tools. We don’t just start writing code.

Are you going to focus exclusively on the Central Oregon region, or will you reach beyond that?

Oregon has been very good to us. Since we’ve been here, we have had a good base of clients, and we are focusing this business unit right now on Oregon. We signed nine counties in the last quarter here in Oregon. We have signed several utility districts in the Northwest, some in Oregon.

We’ve also had some significant business in California, where we got a $600,000 contract with the city of Ukiah, and that was recently as well. In terms of sales and marketing, we’ll have a West Coast focus. It’s our intent to have this be our customer support center for the world, really. We have customers that we got in the Orcom days in Saipan (a Micronesian island), Saint Lucia (a Caribbean island), so actually our footprint extends outside of the U.S.

What is your relationship with HTE now?

I’m a competitor. I think, however, we’re delivering new generation systems. I think HTE hasn’t really made a commitment on where they’re going in the future. Some of those customers are moving in our direction. We’re not trying to create another HTE. We’re trying to do something better.

Tell me a little bit about your partnerships with IBM, Compaq/H-P, Microsoft, Cisco, LaserVault and Macromedia, and the strategy behind those partnerships.

Avenir has a history of being a very good technical services company. On the one hand, it’s really a business where once the systems are sold, there has to be deployment. Avenir has a division here that focuses on the networking issues, the hardware installation. We’re really an end-to-end provider. We can deliver a complete solution. Ukiah told us that one of the reasons they selected us was that all of the other companies that bid needed at least four different subcontractors to do the job. We had everything under one roof. Considering we are only 40 people total, they were very impressed with that. We do believe we need to handle the implementation from end to end, so we do need these relationships to do that.

Looking down the road a few years, what are some of the biggest challenges Avenir faces?

I think that any company in this day and age that wants to remain independently owned always is going to struggle with cash flow, especially if you’re in a period of rapid development and lots of research. I think that the key is to keep our customers involved and deliver consistently. I think that’s exactly where we are. We did our homework over the last three years to get an architecture that will clearly distinguish itself, and we just have to keep getting that message back to the customer.

Lisa Rosetta can be reached at lrosetta@bendbulletin.com.