COMPETING AGAINST GIANTS IN A FIELD CROWDED WITH NATIONAL PLAYERS, 11-PERSON WORKLIFE SYSTEMS OF EAGAN STRIVES TO OFFER UNIQUE SERVICES TO EMPLOYEES SEEKING TO BALANCE JOBS AND FAMILY

Amy Gage, Staff Writer

`If you can't beat 'em, join 'em,'' the old saying goes. That's become a survival strategy for two entrepreneurs who increasingly are fighting giants in a crowded field. Former competitors Theresa Fjelstad and Kathy Kacher teamed up to form WorkLife Systems in 1995. They offer computerized and online information about child care and elder care to employees of 3M, Medtronic and Imation, among others.

Like many people in the growing field of ``work life'' - companies that help employees manage the competing demands of jobs and family - Kacher and Fjelstad began their entrepreneurial careers in child care. Each ran a company for anxious parents who didn't know where to look for care. They joined forces when they saw how much their businesses overlapped.

Their working styles also complement each other. Kacher supplies the energy and charisma. Fjelstad is more deliberate and detail-driven. ``She puts on my brakes, but I motivate her,'' Kacher says. WorkLife Systems' list of clients is impressive, and its online data is uniquely comprehensive and up-to-date, says Sue Osten, work/life programs manager at Imation.
The challenge for the 11-person business is how to compete with the growing list of national players that sell themselves as all-purpose shops to help employees balance their harried lives. The competitors lack the particular service WorkLife Systems offers. What they have is a long reach and deep pockets. ``The issue of big players in the work-life field is pretty recent,'' Osten says. ``Only in the past year or so has there been real competition.'' Fjelstad likes to take the ``McDonald's approach.'' She focuses on customers instead of criticizing the competition.

It's hard to take the high road, however, when competitors are stealing your clients. General Mills defected to Connecticut-based Dependent Care Connection in February when DCC claimed to have national online data about child and elder care. ``I haven't seen it,'' Kacher says. ``What they have are chat rooms.''

One insurer and two banks went with Bloomington-based Ceridian Performance Partners, which plans to launch an online information and referral service in June. Ceridian's competitive advantage is its range of amenities - from phone counseling, concierge services and sober cabs to training former welfare recipients for work. ``That's where the pressure comes from,'' Kacher says. ``People are wanting national, integrated services, one-stop shopping.''

WorkLife Systems believes it can compete by focusing on computerized products and offering them at only $2 to $6 annually per employee. The child-care software is licensed to be sold nationwide and then customized for a particular state or community. Fjelstad just signed up her ninth site.

Kacher manages the Twin Cities' child-care operation, which has 35 clients. The real money will come with the online elder-care system, which carries national data and is designed for easy use at an employee's desktop computer. Fjelstad recently landed two major out-of-state clients, Michigan-based Steelcase and Pharma/Upjohn. She predicts revenue will jump to $5 million within five years. Problem is, her national competitors are building similar databases. And they've got more marketing muscle. ``It's amazing these days how quickly ideas can be duplicated,'' says Imation's Osten. ``That's really the challenge today, to stay ahead of the competitors in the short time you have.'' Osten was an early and eager supporter of Fjelstad's work.

The two met in 1991, back when Osten was coordinating work-family programs at 3M. Fjelstad then was running Consumer Alternatives, a company she founded after becoming frustrated at the lack of accurate, comprehensive data about child-care providers. After quitting her day job as a trainer at Blue Cross-Blue Shield, Fjelstad developed a 1,500-page listing that she updated monthly and sold to companies for $895. ``Employers would put it in a centralized place,'' Osten recalls. ``I saw it and had a vision.'' That vision was technology. Osten encouraged Fjelstad to computerize her child-care listings, giving people instant access at their desks. It sounds like a no-brainer today to transfer hard-copy listings to a computer. In the early 1990s, however, companies were more accustomed to providing information in handbooks. ``To me, this just represented a whole new way to access information conveniently,'' Osten says.

Before moving to Imation, the 3M spinoff, she asked Fjelstad to develop a database on elder care. 3M provided $94,000 to develop the online service, which debuted at the company in January. More than one-fourth of 3M employees care for aging parents or other relatives. ``Because we have employees all over the United States, we needed to make the resources from all over,'' says Jane Royse, work-and-family administrator at 3M. ``We also wanted tip sheets and guidelines, so people can plan ahead as well as handling an immediate crisis.'' Kacher and Fjelstad plan to broaden their range of topics to include adoption information and school choices. Anything they offer, however, they will offer on computer. ``Employees tell us they like to be online,'' Fjelstad says. ``It's like calling an 800 banking number instead of talking to a teller. They like to do a self-guided search.''

Executive summary Business: WorkLife Systems Type: Child-care and elder-care data computerized and online Location: 4848 Safari Pass, Eagan, 452-0301; www.worklifesystems.com Owners: Theresa Fjelstad and Kathy Kacher Founded: Fjelstad's business, Consumer Alternatives, and Kacher's company, Minnesota Child Care Innovations, merged in 1995 Employees: 9 Revenue: $200,000 Key competition: Ceridian Performance Partners, Dependent Care Connection, Working Solutions and other national players that offer a broad range of services to help employees balance their work and home lives. Competitive advantage: Online capability Obstacle overcome: Merging two former competitors Challenge ahead: Sell the products nationally. ``If sales were easy,'' says Fjelstad, ``everybody would be rich.'' Five years from now: Develop online data on adoption resources and school choices in communities nationwide.