Christopher Sturm had a radical idea: produce software for municipalities that was designed from a user's point of view.

        That concept, and a determination to provide a high level of service to its government clients, has opened increasing markets for Park Hills-based Capital Software Inc.

        As a salesman for a company that sold municipal software, Mr. Sturm listened to many complaints from clerks and administrators about problems they had with the programs they were using.

Christopher Sturm (center) turned a software concept for municipalities into a business, Capital Software. With him here are Jason Glass (left) and Jim Johnson, an administrator from the city of Anchorage, Alaska, who's training on the program. (Tony Jones photo) | ZOOM |

        “They'd say, "Can't you get us something that will do this or that?' ” Mr. Sturm said.

        A shortcoming was that revenue software — used to bill and accept utility payments, license fees or property taxes — often didn't mesh with the municipality's fund accounting programs. Or it was cumbersome, requiring several steps to log each transaction.

        With the encouragement of clients, Mr. Sturm launched Capital Software from his Covington bedroom in 1998. He hooked up with Tom Vance, a software designer in Georgetown, Ky., and the two set out to develop products that their customers would find useful.

        “Not "That's how it is,' but "How do you want it to work?' ” Mr. Sturm said. “The program has to be understandable to the users. We used their input to design the touch and feel of it.”

        Mr. Sturm said Capital Software provided complete manuals for each program, written in simple, step-by-step terms that non-techie clerks could follow. The company also posted helpful information on the Internet.

        “They bring their service to your level,” said Jill Short, senior assistant for the city of Silverton. “I feel very comfortable with them.”

        Ms. Short, who deals with the city's waste collection billing, said she formerly used two software programs designed by previous city clerks. When bugs in the programs caused Silverton to purchase an off-the-shelf program, Ms. Short found it inadequate for her needs.

        Early this year, Silverton bought the utility billing program developed by Capital Software. Although the data conversion process was time-consuming, Ms. Short's experience with the software and service has been positive.

STEPS TO SUCCESS

Chris Sturm identified factors he thinks have put his young company on the path to success:     • Customers know that if anyone in the organization makes a statement of obligation, it is upheld by everyone.     • The company displays a continued passion for success.     • Capital hires employees based upon intangible skills one cannot teach.     • Ability to identify a niche and deliver a product or service that is affordable but is also profitable for Capital.     • Ability to accept change as a constant.     • Commitment to identifying positive and negative project attributes during the development process.     • Maintaining a highly competitive spirit in the company. “We play to win,” Mr. Sturm said.     Capital Software Inc. is at 1491 Dixie Highway, Park Hills. Phone is (877) 274-0440.

        “The bill printing went wonderful,” she said. “I'm just now receiving payments and haven't begun recording them, but I'm confident it will go well. These guys, you just call them up, and they are very helpful. They talk your language.”

        Silverton also bought Capital's fund accounting package and plans to install it in the near future. When that is complete, Ms. Short's waste collection payments will be recorded directly on the proper budget category.

        Early in the development of Capital Software, Mr. Sturm teamed up with his brother-in-law Jason Glass. While Mr. Vance continued to work from his home, the two entrepreneurs moved their fledgling company from the Sturm bedroom to the basement and in June 1999 began pitching their Windows-based property tax billing software to the Northern Kentucky municipal market.

        “I had never led a company before. Jason had never sold municipal software. But we knew that each one had the other one's backing. We knew we were a cohesive team. And we were hungry,” Mr. Sturm said.

        By December 1999, Capital had 17 customers in Kentucky, mostly small towns. During 2000, the company added three new products: programs for fund accounting, utility billing and licensing/permit fee collection. Capital's client base had grown by 31 municipalities and had spread into Tennessee and Georgia.

        Mr. Sturm said part of Capital's success is the quality of the company's products and the fact that they are integrated. But equally important is the service Capital tries to provide to the people who use those products.

        “These customers had a lot of neglect in their market,” he said. “They were taken for granted. We take more of a commercial approach to the government market.”

        Said Mr. Glass: “We stress to our customers, "You've got a teammate now.' ”

        Capital hired two new team members in 2000 to boost its training and to keep the company in line. To acquaint new customers with the products they would be using, Capital turned to Jeff McDonald. True to company practice, Mr. Sturm wanted someone who was not steeped in computerese but understood how to impart information in simple terms and encourage risk-taking. Mr. McDonald's experience as a teacher got him the job.

        Mr. Sturm said Amy Bayless' background in retail management is valuable because she helps the young company stay focused and organized. She makes the follow-up telephone calls, logs feedback, keeps the salesmen on schedule for checkups with their customers, and handles personnel matters.

        Continued growth convinces the company that it is on the right track.

        Mr. Sturm explained that as clerks and administrators began using Capital's software, they talked about the streamlined processes to their colleagues in other locales.

        “Word of their success has spread into bigger cities like Covington,” Mr. Glass said. “So now, cities that would never have given us the time of day are calling us.”

        So far this year, Capital Software has been a company on the move, literally as well as figuratively. Recently, the entrepreneurs moved out of the Sturm basement and into their father-in-law's law office in Park Hills. Heading toward retirement, he charges them a nominal rent, and they are slowly remodeling the space to suit their needs. The first priority was to create an in-house training facility where Mr. McDonald can work with customers from various locations.

        The company also got word that a municipal software distributor in St. Louis was dropping its partner to add Capital Software products.

        “It's a major victory for us, since they have existing customers in 40 cities,” Mr. Sturm said.

        Capital is also spinning off two new companies, one that provides Internet services to small companies and another that supplies software for critical event management, a means of coordinating and tracking everything that's going on within an organization.

        But the new directions haven't interfered with Capital's central focus on its software products. Mr. Sturm concedes that other companies may have good individual programs but thinks that his enterprise has the edge in offering all four types of software that are essential to municipal finances.

        “If the Bengals and Hamilton County had used our fund accounting software, they would have known to the penny what they were spending on that stadium,” he said.
       

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