Edward Federman says that a multi-year IT transformation at ARA Group wasn’t about realising savings but about making the engineering services company a more effective, more united company.
ARA Group was founded in 2001, with Federman and his co-founder setting out to build a multi-divisional, decentralised building services company. The pair set a goal of within five years building ARA into a $100 million business with a 10 per cent margin and no bank debt.
“We did get to $100 million business after five years, with 8 per cent margins and no bank debt – so we really got off to a good start and we ended up after five years having four of the five divisions we have today,” said Federman, ARA Group’s managing director.
The first four divisions were manufacturing, electrical, security and fire protection and in 2006 ARA group added the fifth, mechanical services. The company’s headcount is around 1200.
In the last 12 months ARA Group had sales of around $350 million, Federman said.
Over the years ARA has seen organic growth of around 30 per cent, with the remainder coming from acquisitions — 32 of them.
The majority of revenue — around 70 per cent — is from services.
“Technology is very important to us and we’ve invested in technology right from the get-go because we wanted to be a world-class service company,” Federman said.
Although the group achieved significant growth from acquisitions and the company was comfortable with a level of decentralisation, there was a downside: ARA was left with a range of legacy systems that wouldn’t talk to each other and a degree of decentralisation that was having a deleterious impact on the business.
“We really matured as a group and matured as a company but I still felt frustrated that we weren’t communicating well enough with each other and too many of our systems were decentralised and not talking to each other,” Federman said.
“Simple things like email – everybody had their own email server, and everybody was on a different domain. Everybody had different phone systems.
“Five years ago we very far away from being a [unified] company. Those are the kind of frustrations that I as a manger felt and led me to say, ‘Okay, well what can we do about it?’”
The email server situation was a particular bugbear, the managing director said.
“They were always going down and the few IT people we had were always spending their time fixing email servers – and that’s very disruptive to business,” Federman said.
“Customers can’t communicate with you; you can’t communicate with each other.”
It was while considering how to deal with this issue that Federman received an email from his Telstra sales rep, which ended up triggering a multi-year IT transformation at the engineering services company carried out in partnership with the telco.
“That was the catalyst to everything,” Federman said.
Out went the in-house hosted email in favour of Office 365. In addition to the transition to Microsoft’s subscription-based productivity suite, the company replaced an “inelegant intranet” with SharePoint. Telstra’s network was also a significant part of the transformation program, Federman said.
“Telstra brought us in their offices in George Street in Sydney and we saw how you could really pull it together with their network,” Federman said.
“One guy can be in the airport with an iPad and another person can be at their desk with a computer, another person can be in a cab with their phone and all of a sudden they’re looking at each other and talking to each other. I was sold.”
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“All our technicians either work through their smartphones or tablets,” Federman said.
“We date and timestamp our arrival and departure on a customer’s premises and with our mechanical and fire businesses we barcode all the equipment we inspect and maintain and electronically record our inspections and our testing.
“We’ve invested in that system with a local software provider. It ties in with our systems and that data is sitting up in Telstra's network along with our financial systems and they’re constantly talking to each other.”
“Over a couple of years we implemented Office 365, we implemented the Telstra network and we now have 19 locations around the country — 17 of them have videoconferencing capabilities. And it’s working. People are talking to each other; they’re not wasting time travelling,” Federman said.
“We’ve closed down servers in our offices,” the managing director said.
The program cut some costs, such as travel, while other saw an increase. The program was not about finding savings, Federman said. “It was about finding technology that made us a better company,” he said.