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Outsource, of course: firms handling functions for others top list.

Article Excerpt
No. 1

CASESTACK INC.

Logistics

2001-2003 Growth: 990.6 percent

Founded: 1999

Origins: As an executive in the logistics group at Nabisco, Dan Sanker saw a need among small businesses for the sort of supply-chain logistics systems employed by their larger competitors. Sanker formed CaseStack, which brings integrated inventory and tracking systems to small and mid-sized players by acting as an outsourced logistics arm. "We wanted to level the playing field with an outsourcing distribution solution including national transportation, warehousing and the software to manage it all," he said.

Greatest Contributor to Revenue Growth: Its clientele includes companies that need national supply-chain systems. CaseStack's clients can adopt its system without spending months downloading and integrating the company's software. "Every company spends $1 million on the same software package," said Sanker. "With us you don't need to. We've already spent a couple of million dollars on our software, and it stays on our server."

Risks Inherent in Rapid Growth: The company is growing faster than its ability to hire qualified employees. "It's hard to find really great people, and there's not an existing industry to take them from," said Sanker. The workforce has increased from 16 employees in 2001 to the current 87, and in the coming year he expects to hire 25 sales, logistics and technology personnel.

Biggest Competitors: UPS and FedEx are entering the market with turnkey shipping services. British-based logistics giant Excel Plc is offering domestic beginning-to-end logistics services, including freight forwarding, warehouse management, multi-modal planning and information technology. CaseStack also faces competition from regional warehousing and transportation companies.

Biggest Challenge in Coming Year: Continuing to overcome the resistance to logistics outsourcing. CaseStack must convince a company to change its way of doing business before it can make a sale. "Competition these days isn't product versus product," Sanker said, "it's supply chain versus supply chain, and some clients need to understand that."

--Eric Berkowitz

No. 2

OUTSOURCE PARTNERS INTERNATIONAL INC.

Finance and Accounting

2001-2003 Growth: 941.5 percent

Founded: 1998

Origins: OPI's predecessor company was formed when a group from New York accounting firm MLZ Partners started itAccounts, an accounting outsourcing company. After the 2002 passage of the Sarbanes-Oxley Act, which bars accountants from doing certain finance and accounting work for their audit clients, itAccounts acquired the business process outsourcing practice of KPMG LLP. In 2002, itAccounts changed its name to Outsource Partners International.

Greatest Contributors to Revenue Growth: The acquisition of the KPMG outsourcing practice and infusions of capital from venture capital investors. OPI also employs 300 workers at its service center in Bangalore, India, which has reduced its overall finance and accounting operations costs by about 50 percent, according to the...