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December 9, 2013 Issue

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Student Transportation Management Systems and Services

About Transfinder

www.transfinder.com

Founded in 1988 and headquartered in the Capital Region of New York State, Transfinder is a national leader in student transportation management systems and services, offering routing and scheduling solutions for optimal transportation logistics.

Antonio Civitella
CEO


Antonio Civitella began his career as a computer software intern with James Forth & Associates, a management-consulting firm. He successfully developed and launched the company’s flagship product, Transfinder Pro. As Vice President and COO of Forth Associates, he purchased the company in December 2000 and became Chairman and CEO. He changed the company’s name to Transfinder to reflect the focus on the products and services for pupil transportation. He has since successfully led the development of the company’s full product line, management, and support teams to serve a client base of more than 1,500 school districts in North America and The Caribbean. In 2013, Transfinder is celebrating its 25th year in business and occupies a new $7.0 million corporate headquarters located in downtown Schenectady at 440 State Street. He also is creating and locating a business accelerator in downtown Schenectady, called NYBizLab, which is expected to be operational in 2014.

“When we put our minds to something at Transfinder, we hit it out of the ballpark. We are really focused at this point to go global. The word Transfinder is going to be a global term in the next three to five years. That is because every time we focus on something we nail it.” – Antonio Civitella


Business Services

Student Transportation Management

 

Transfinder
440 State Street

Schenectady, NY 12305

800-373-3609
www.transfinder.com

 

Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – December 9, 2013

 

CEOCFO: Mr. Civitella, what is the concept and vision at Transfinder?

Mr. Civitella: The original concept and vision was to design the best routing software for school, people and transportation. It was a designed to safely transport students from their homes to their school, using a school bus. The vision has modified to extend those services now, on a global scale. In addition, now that we have fifteen hundred school districts that use our transportation routing services in North America and the Caribbean, we recognize that there is a great market in education. Our vision has changed based on the market and the economy, of course. You cannot just have a vision and just go with it. You have to constantly keep changing the vision and modify it based on what is going on in your environment.

 

CEOCFO: What are some of the challenges in the logistics around getting so manychildren on the buses at the right time and the right place? What are some of the challenges in putting together the technology, which you have been able to overcome?

Mr. Civitella: One of the challenges for school bus routing is that it is expensive. Many school districts are trying to keep that service alive. Some school districts are almost thinking that maybe it is a plus, an extra service, an amenity that maybe students could do without or they wonder how it affects their education. Therefore, as their budget is diminishing, some schools need real money savings. One of the first places cut is services. Transportation to and from school is a service and some schools recognize it as above and beyond educating kids. A challenge is to keep this industry alive in this country, it really is a challenge. Other parts of the world have seen this as a great way to get more kids educated in a safe manner. Meanwhile, we in the United States are dismantling this. Other countries recognize that we are the gold standard. However, we are dismantling the gold standard because we cannot afford that level of service. That has definitely been a challenge. Where we come in? We have to prove to our buyers and our existing clients that our products can save them money; enough to keep the product alive and then perhaps keep some of the services. Maybe you do not have to cut as much if you could find other savings using our software.

 

CEOCFO: Would you tell us a little about how this software works? What does the school district need to input?

Mr. Civitella: They need to have a lot of information about the students; the demographics. However, the most important is the location. Our product has the location based intelligence built in, so we need to know where the kids live. We need to know where the school is located. We need to know other parameters such as what time the school starts - the first class. What time does the last class end? Those types of parameters then give us the idea of how much time we have to pick up kids in a reasonable amount of time. That is because we do not want to necessarily pick up kids and let them ride on the bus for an hour and a half, because that is the most efficient route. There is a trade off. Safety, convenience and efficiency; those all ought to be variables. You cannot just have a “three legged stool”. You cannot just say, “We only care about saving money, we do not really care about having students stuck on a bus, because we are travelling all over the area. Some of the kids could be on the bus an hour and a half in the morning and then the opposite going home. Three hours a day, just because they have to take a school bus? No thanks! I will take my son using my car! You see there is a trade off to that. We need to make sure that our software is being used, not just to save money, but that it makes life easier for our customers and their own customers, who are students and parents.

 

CEOCFO: Would a school or school district put in what is most important to them? Is the system able to evaluate all of the components and come up with the best solution?

Mr. Civitella: It definitely can come up with all the different solutions. However, it has to recognize what the community is looking for. The community is really driving this. If you live in a school district and there is a certain budget crisis, the community will drive it. That is because, if the community did not drive it the taxes would be raised and there would be no issues. However, the community is fighting back and saying, “My taxes keep increasing here.” My taxes on my house are what really cover the education in this country, or at least in New York State and in many other states. If we think as a community that this is an amenity that you could do without transportation, then there is going to be a big vote. There are going to be parents in the community who are really going to come out and start complaining that the expenses for my child to be educated have gone up too high. Then guess what; start figuring out the challenges for these business managers and chief financial officers for the school districts to have to come up with another way. Cleary, the way they have been doing it for the past ten, twenty or thirty years is that as services become more expensive, they raise people’s taxes to cover that. First of all, in New York State there has been a law that states that you cannot increase the tax any more than two percent. It is a tax cap. Some communities are excited that they are not going to see an increase in their taxes beyond two percent any more. However, for some of the services the cost has been going up at a much faster rate than two percent. They are going to continue growing faster than two percent, which means that the alternative is to completely cut some of the services. That may mean football programs and after school programs which are really going to be eliminated from our education curriculum. They are going to be gone. Most people are wondering,how does football affect my education? These special trips, going to the museum, how does that affect my education? If you eliminate one piece the education might still be okay, but they are still part of our education. We grew up with these types of things. We are raising kids in this society to know as much as possible and be well rounded. When the cuts start and some of these districts are cutting them as the “fat”; now they are “hitting the bone” at this point. There is a major issue in this country about education. We are clearly laying off teachers, because we cannot find any other way to cut cost. When you start going down to the teachers it means that you have already changed all of your light bulbs down to your least expensive light bulb. You have already turned off every other light. You have already cut services. Now you are laying off teachers. That is a last resort at this point.

 

CEOCFO: How do schools find Transfinder? What are the one or two key points when you are making an initial presentation to a school, as to why they should be utilizing your service?

Mr. Civitella: That is a great question. There are many different ways. This year we attended about forty to forty five trade shows. They were national level and state level. We have a great website. We do a lot of marketing. However, when we do presentations we really promote how we are going to be a partner with these school districts. We are a technology company, but technology companies are a dime a dozen. We have to show our clients that we are going to be partners with them. We are not going to necessarily help solve all their issues. They are not going to just buy our software and press some magical keys after they put all this information in and press the button and then it is done for them. They need us along with the software to help them find the right solution and that might not be the only solution, there might be many different solutions. The most benefit that our school districts have had is when they include us as part of the package. If they just buy the software without our professional services, I think it is okay, but when they partner with us, they get the biggest return. We have saved some school districts millions of dollars and that obviously keeps some of those teachers employed. I do believe that it is important to keep these teachers employed so that we can continue to have the best benefits and the best education we could possibly give to our kids.

 

CEOCFO: What is the competitive landscape? Are there many companies in your space?

Mr. Civitella: I do not know what is “many”; there is definitely a handful. I think that with every industry that you are in there are going to be competitors. We have very strong competitors. They have all been there for twenty or thirty years, so these are not just companies that are popping up. Therefore, the competitive landscape is mature. These are the same companies that have been around for a long time. A few companies have tried hard to come in and it is hard to penetrate a mature market where you have a handful of competitors that have been “duking it out” for a couple of decades. For a brand new company walking in, it is very hard to do that. We are the market leader in the country in addition to many states; New York and Texas being the two best states. That means that no other competitor could say that they have the market share that we have in New York and Texas. We have fifteen hundred school districts that use our solutions. Competitors are out there trying to take over our old clients, but let us face it; we are trying to do the same thing, too. However, there are still about fifty percent of the school districts out there in the country who could use our software solutions. There are seventeen thousand school districts altogether. We think that about eight thousand are really in a position that could definitely benefit from the type of service that we provide. The other half are just very small. They have less than five hundred students.About fifty percent of the country is made up of these small school districts. For about ten years there has been a huge push to consolidate those school districts. That is just not feasible. Many times they are rural and located very far away from each other, so there is no benefit in consolidating. Let us go back to that other fifty percent, or eight thousand. That is what we think of as our “sweet spot” that really should benefit from a routing system. If you consider a market of eight thousand potential customers, and we have fifteen hundred and are the market leader, then maybe about half of that eight thousand, or four thousand, may have a system. The others do not have any. Therefore, that is why we are scratching our heads; how do we promote why it is important to have our software to those four thousand school districts. They have waited all these years, even through during those years there was plenty of money. Now that there is no money at all, how do we convince them to buy our software? We call them manual as they are not using any system. However, every year our numbers have been very consistent. About sixty percent of our new business comes from school districts that have already had a competitive system. Forty percent are manual. It has been very consistent. That remains our market for new business.

 

CEOCFO: You have been on the Inc. list for the past seven years, so we know you are doing well. Would you tell us about your new facility?

Mr. Civitella: We could say the word “first class”. For sure it is first class. However, it is something that you do not see in this part of the country, in Upstate New York. It is a high technology space in a community where you use your iPad and control screens. We have almost twenty flat screens throughout the building. With your iPad you could determine what each screen shows. We could have a kind of dashboard system throughout the company. The modern technology in this building is exciting. Music speakers are everywhere. Collaboration spacesfor our employees are everywhere and we have a twenty five hundred square foot terrace that overlooks an amazing city. With most people that come in here, the word they use is “beautiful,”it is breathtaking. They say, “There is not one thing that you missed.” The colors, the desks, the chairs, even the quality of coffee; there is nothing in quality that we spared. We have the best you could buy.

 

CEOCFO: Why was this the time?

Mr. Civitella: We are celebrating twenty five years in business.You do things when the time is right. One of the greatest companies out there right now really got involved during the great depression. It is because they were motivated to do something different. We always say that if you keep doing the same thing over and over again and expect different results, it is called insanity. Therefore, we have got to do something that is innovative. We have done well. We have had incremental growth, but to have exponential growth, you have to do something different. Therefore, it is an environment that enables that.  It is the way our own people think. Downtown Schenectady has really gone through a huge change. it has an environment that is hard to compare to any place around this area here. It is growing and we are trying to attract the best employees and clients. This whole area has about one million students that are educated in the undergrad programs of our colleges and universities. They come here from all over the world. Unfortunately, for many years these individuals come here and get educated and leave. People keep saying that this part of the country, Upstate New York, has gone through a huge “brain drain”. We have to completely change our mind. This is the true “fountain of youth”. You have all of these people coming through this area, this region, to get educated here and then they leave. Companies like Transfinder are going to keep them here. We are going to attract them, because we are going to give them the best place to work. We just won an award here in the Capital District. We were recognized as one of the “2013 Best Places to Work. We are going to receive an award for this is December, which is really an accomplishment. Our employees were surveyed and this is the first time that we went for it. We never applied for it. This is the first year that we applied for this recognition and we won!

 

CEOCFO: What is the key to your personal enthusiasm and zest?

Mr. Civitella: My family moved here from Italy when I was nine years old. It is a beautiful country. The food and everything is great. However, my family moved here because it was not great for us where we were. We were poor. Not everyone is fortunate the way you see it on TV. Not everyone has those beautiful villas in Italy or drives two Ferraris. Now everyone in Italy is in that state. We were a humble family. We did okay, but my Mom and Dad wanted much more for their kids. Therefore, coming here really gave us a whole different view of life. I enjoy what I do, but I also see an opportunity to do big things; to see seventy five employees actually have a job here. Some of our employees are the primary providers for their family, which means that we can provide an environment for our employees to thrive and go home to their wives or their husbands saying, “I did well this year! Look at what we can do now, because I work at Transfinder.” That is such a motivating drive. What drives me is that I came here with near zero, so if I lose it, the worst is that I go back to zero. It is not a huge risk for me. Obviously, after all these years it is hard to say that you have no risk. The risk gets bigger every year and every day, of course. However, it is not a new risk, it is a new challenge. Many people ask me that exact question; what is the formula or what is the secret. I do not even know. I wish I could write a book to let everyone in the whole world know, but I do not even know myself.

 

CEOCFO: Why pay attention to Transfinder?

Mr. Civitella: When we put our minds to something at Transfinder, we hit it out of the ballpark. We are really focused at this point to go global. The word Transfinder is going to be a global term in the next three to five years. That is because every time we focus on something we nail it. When I focused on having the best building in the area, it was a long process, it did not happen overnight, but we nailed it. Every time we put our heads together and say we are going to do this, we do it. Our latest strategy is to go global. One day you are going to see our advertisement during the Super Bowl; “Why work at Transfinder”. That is really what I see.

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