Innovator: Q4 Web Systems

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Firm name: Q4 Web Systems Inc.  Date established: 2005 CEO/President: Darrell Heaps

Number of clients: 40 Representative clients: Barrick Gold, Sentry Select, RioCan, Agnico-Eagle, Canadian Oil Sands Trust, AEI Services, The Churchill Group

Number of employees: 12 Principal products/services: Q4 WEB, Q4 PRESS

Technologies used: Microsoft servers and Microsoft .NET, Standardized web formats (HTML, RSS, CSS etc)

Website address: www.q4websystems.com Head office address: Toronto, Canada

1. What does your firm do?

We provide on-demand software for corporate disclosure. Our web-based products help public companies manage the drafting, approval, distribution and auditing of things like press releases, events, presentations and corporate/IR web site content .

2. What products or services do you provide?

We have two products in the market at the moment:

Q4 WEB is a disclosure management system for corporate web sites. It provides a broad array of capabilities to manage all types of corporate and investor content and automates the posting of key information such as press releases, regulatory filings and stock data. It also creates automatic records of all changes and approvals in a verifiable audit trail that allows you to report on your site from any point in time.

A unique feature of Q4 WEB is “timeshifting” whereby you can literally access your site from any date and time in history. This is very useful when you need to know exactly when you disclosed information, how it was disclosed in the site (where on the site) and who drafted and approved it.  For instance, when using your web site to disclose material information as per the new Reg.FD guidance, with Q4 WEB there is always an accurate record of exactly what, where and when the information was disclosed through your web site.

Q4 PRESS is our 2^nd product and is a document collaboration and records management system for drafting, approving and (soon to be) distributing disclosure.   The system allows multiple people to collaborate on corporate disclosure (such as press releases, reports, web site or blog content) where a requirement for process documentation exists to reduce compliance risk. Q4 PRESS enables a transparent collaborative process where users can view and work with the comments and edits of fellow participants.

Similar to Q4 WEB, Q4 PRESS also creates detailed records of everything that happens in real-time - all versions, comments and edits. It provides dashboards of the current status of your document so you can instantly see who received it, who viewed it or responded and whether the author has handled the suggested changes yet. The comprehensive records generated by Q4 PRESS allow you to view and report on information in a variety of useful ways - for example, if you need to know who contributed specific content to a press release, or who was exposed to the creation of it, you can instantly generate reports and view the document at any stage of its evolution. All records can easily exported to word, pdf or excel.

We use both of our products at Q4. Our corproate site is built on Q4 WEB and we use Q4 PRESS to collaborate on content, including blog posts, reports, web site content etc.

Currently we’re working on our 3^rd product which will bring WEB and PRESS together into one platform along with a whole slew of publishing and content distribution capabilities (I’m pretty excited about this).

Q4 WEB can reproduce an exact replica of your corporate website as it was at any point in time. This is important should your company’s disclosure practices ever be called into question.

3. In what ways does your firm help companies be more effective in their online communications with stakeholders? What unique problems are you addressing?

From an internal company perspective, I think the way that we help companies is by first automating the manual process related to creating information and disclosing it to the market.   By automating workflow, approvals and making it easier for their teams to collaborate, our clients are able to focus their attention on the quality of their disclosure rather than the process of creating it.

In the same light, by using our software companies can take comfort in the fact that detailed records and audit trails are being created for their documents and web site. Should they ever need to go back to a previous version or a point in time for any piece of content, everything is easy to access – so there is never any worry of losing something or not being able to answer a legal or regulatory question by providing evidence.

In addition to these internal benefits, we have been evolving our software to improve how companies can interact with their investors and stakeholders. This is a new initiative for us, as we were initially a very internally concerned and compliance driven company.  Although we still care very deeply about improving things internally for issuers, our next evolution is to extend the benefit of our software in new ways to our clients’ investors and stakeholders.

4. Tell us about a recent project that you are particularly proud of? Why do you think what you did is effective?

We have a couple of projects that we’re quite proud of:

The first is the increased relevancy that Q4 WEB has gained since the updated guidance to Reg. FD was announced by the SEC.  Since our inception, we have always felt that there was tremendous opportunity (and risk) for the corporate/IR web site and we believed that this trend would only increase. When we built many of the first features of WEB back in 2005 (specifically the web records and timeshifting) it was difficult to convince many people in the market as to why these features would be useful to their company.  Today (with the new Reg. FD) this has changed significantly and we are seeing ongoing validation to the ideas that we put in motion almost 3 years ago now.  There is obviously much more work ahead, but it feels good to know that we weren’t crazy when we started Q4 with this idea back in 2005.

Similar to Q4 WEB, we also made a similar bet with Q4 PRESS.  From our many conversations with IROs, legal and compliance folks and corporate secretaries, we knew that the internal process for how companies draft, approve and distribute disclosure was typically a manual process and fraught with challenges.  When we designed PRESS we focused on earnings press releases because of their multiple challenging characteristics. However, we also believed that as the corporate web site continued to gain in importance, at some time there would be the need to collaborate and manage the process of all the content on the corporate web site (along with all other disclosure). Although still in a transition phases, it does seem that an outcome of the new Reg. FD will be an increased requirement to collaborate and track all online disclosure, and PRESS is perfect for this type of environment.

Finally, what I would say I’m most proud of are our employees, investors and advisors. Since our inception in 2005 we have been able to attract tier one people to the business, including excellent employees and our growing list of quality investors and advisors. There is a significant movement happening that is changing the way companies communicate and interact with the market. I’m proud that we were early to recognize this and act on it and that we have been able to build such a loyal following committed to being part of this new disclosure movement.

5. What are the biggest challenges your firm faces?

Probably the biggest challenge we face is the time it takes for people to adopt new ways of doing things.  It’s been interesting to work with some companies who embrace change because of the opportunity to improve things, while also working with others that are much slower to change and need to see movement among their peers first.  I think what it comes down is there has to be a valid reason to change.  People in general will not change just for the sake of it, something has to motivate them.

In our first couple of years, this challenge was paramount for us as we were so early into the market - we needed to educate as we brought customers on board. Recent changes like Reg. FD and XBRL have created a new environment for us. These changes enable companies to take control of how they communicate and interact with their investors and stakeholders.  This provides the ability to not only save large sums of money but to genuinely become more connected with their stakeholders than they were able to be in the past.

There are certainly the naysayers in the market that would prefer for no one to change.  Our challenge is to continue to use the web and social media to keep the market informed as to what the real issues are and what options companies have.  The great thing about the world we live in today, is that using our blog and social media levels the playing field and provides  us with the same voice in the market as the major players have. The world has really changed!

Q4 PRESS enables collaborative preparation of disclosure documents and other content while ensuring an accurate audit trail.

6. Which other firms similar to yours do you admire or respect and why?

I have a long list of firms that are similar (to some degree) and that I respect.  Here’s a couple, starting with two Canadian counterparts. These are not ranked in order of admiration:

• Zu Communications - for designing some of the best IR web sites in the world
• Agoracom - for continuing to impress with their growth and business model
• Wikinvest –  for executing a great concept that embodies much of what we see as the future of financial portals
• EdgarOnline - for their leadership with XBRL
• Twitter – for changing the way I look at social networking and communication
• Pitch Engine – for getting the first social media release system into the market
• Monitor110 – although no longer, I admired them for being the first into a new category business  model and for opening my eyes to FirstRain, SkyGrid and other next gen Bloomberg

Finally, (and this one may shock you) I have to include CCBN, which was bought by Thomson 5 or 6 years ago.  CCBN invented the IR section template model, or at least was the first to deploy it to thousands of customers.  Although, we think this model’s time has come and gone, CCBN was part of the initial inspiration for creating Q4 and so I have to give the founders of CCBN (Jeff Parker and Rob Adler) credit for setting the ball in motion.

7. Are there any future plans for your firm that you want to talk about?

Our future is based on the vision that the web is the most efficient and effective method to communicate to investors and stakeholders and that companies have a right to deal directly with the market.  We will continue to aid this vision by advocating the web disclosure model, by addressing myths and helping sort out the confusion for issuers and by evolving our products to keep pace with our vision.
Keep a heads up in 2009 for a couple of very interesting product releases from Q4!

8. Is there anything you wish we had asked you but didn’t?

No questions come to mind. I would like to thank IR Web Report for the opportunity to be featured here. We greatly admire and respect the work that you do. Thanks so much.

Related posts:

1. Innovator: Nexxar/GeBer
2. Why full-text press releases are now your enemy
3. Innovator: George Tsiolis, AGORACOM Investor Relations
4. Innovator: zu.com communications inc.
5. Innovator: Ian Anderson, Twentysix London

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