Friday, February 22, 2008

More on Epicor's management changes

On Wednesday's post regarding Tom Kelly's move into Epicor's CEO spot, replacing George Klaus, an anonymous commenter points out that Klaus's departure "had been announced for over a year."

A quick search (which I should have done yesterday before posting) does find an Epicor press release from 2005 that refers to long term succession planning and implies the departure of Klaus sometime after 2007: announced the promotion of three senior executives designed to continue to support the company's successful growth and market expansion and to solidify the long term succession planning for the organization. The company also announced that George Klaus will remain Epicor chairman and chief executive officer through 2007.
The press release doesn't indicate who Klaus's replacement will be, but the clear implication is that it would be one of the three executives newly promoted. One of the three was including Mark Duffell, who moved into the post of President and COO. Duffell's departure from Epicor was announced yesterday, along with Klaus's transition out of the CEO role.

So, the most likely explanation is that Duffell was considered for the CEO role and, for whatever reason, was passed by. That would explain why his departure was announced at the same time as Kelly's move into the CEO position.

It's not possible to confirm my theory at this time. Managing Automation has a more extensive report on the management changes at Epicor, but notes that Epicor is refusing requests for interviews with either Kelly or Klaus. This again would be consistent with a transition that was not entirely happy.

Investors seem to see it the same way, as Epicor's share price fell 2.84% on the news of the management change, to $11.99. Yesterday, two days later, the stock closed at $11.73.

Still the question remains: why the need for fresh leadership? I speculate that reported quality and support problems with Epicor's Vantage product may be part of the equation. I saw first-hand such problems several years ago, and a quick check of Internet chatter shows that the reports continue.

Again, if readers have further insights, I'd love to hear them.

Related posts
Epicor replaces CEO and COO: why?

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