When did you start your overseas expansion?
Richard White: Really in the main in about 2005. We were dabbling from about 1997 onwards but we went through a product re-write in 2002 and in 2005 we took that product global.
Which markets have you attacked with it?
We are installed in about 50 countries. Our main markets are North America and the EU and Asia. They are the three food bowls as it were.
Is it possible to characterise the challenges and opportunities for Australian companies heading overseas generally?
Each of the regions has a different set of problems and opportunities. The first thing that happens when you truly globalise a company is that it requires a very different business structure. You require a lot of people in a lot of places that you haven’t had people before and so just getting to a position that you can actually function internationally is quite complicated. You go through a lot of different strategies and trying different things to learn how that fits together. We eventually arrived at a single company, single culture, global processes with all of the business units. We are a software company so we were able to transmit that as software so we built a lot of internal systems to drive the business. We’ve got local adaptations in different locations that deal with different aspects of business and product need. In principle we have the same departmental structures – it is an Australian head office, line management with a matrix, all of the business processes we do whether it is sales, support, training or development they all have a common thread which leads back to senior managers, mostly in Sydney. Whether we are seeing a customer in Heathrow in England or talking to someone in Chicago or visiting a client in Singapore we really present the same company with the same product, with the same process and same general systems. That was the first thing and it was quite hard to do.
What came next?
It becomes evident that there are differences in those market places. In Asia we are really in the same time zone as our staff and customers. But Asian business needs are different because – and our business really has as lot to do with supply chain distribution – they are export oriented. Almost everything they do is related to transporting freight or exporting it. That is a particular business focus and it requires a slightly different focus and view of the product. In North America there is a significant domestic market which is not like Australia. There is a lot of what appears to be air freight in the US that is in fact road freight. When you talk about Asia you are in the same time zone. But when you talk about the US you only have an overlap of a few hours with our staff. My day has become smeared over from early morning to late evening.
Do you sleep in shifts?
I’ve managed to adapt and delegate a lot now. So America is sort of a morning task. I’ve spent four months of the last year overseas and most of that was in America. And I think the UK and EU market is different again. It has a slightly different business model and it is a market of markets rather than a single market. And it has some language problems, so we have made the system multilingual.
We all know the world has been in the grip of an economic downturn, how has that impinged on your business?
It is the best year we have ever had. We are 60 per cent up on last year. I think that is really not to do with the global financial crisis, but rather arriving in a market with the right product, right structure at the right time. All of the tail winds pointed in the right direction. There was no doubt our US domestic customers experienced quite a deal of pain and that part of the market we were in was quite soft. On the other hand we see the company as having four cycles in an economic sense. There is the up cycle, the peak, the down and the trough. I think it does very well in the down cycle because during that time you have to optimise business and cut cost. Hence you have to have a software information system and a comprehensive information and management system to understand your business. We picked up a lot of business from companies that were merging and downsizing. I think in the up cycle people are trying to avoid employing and putting on too much overhead – they invest in systems rather than raw labor. In the top of the cycle you can’t get labor and have to buy systems. It is in the trough that things become difficult. Probalby this economic cycle now is going to look like a V shape, that is my best guess. If that is the case we will probably do fairly well out of the upswing as well. That is not a usual scenario I would have thought. When I talk to my fellow software developers both here and in the US and businesses that are going internationally, I would think the software industry has been one of the most resilient. It is not impervious to the global recession as clearly some people have fallen back, particularly in the services area. So if you are talking about software services, development, programming, intergration and that kind of thing, they have taken a hit. Those that provide product and have maintenance streams along with software as a service, in worst cases I am hearing 10 per cent down and best case people with fairly large growth. So the typical case is five per cent growth instead of 15 this year.
Going forward, where do you see other opportunities?
I think South Africa is fairly good. We have a joint venture partner in South Africa and Germany because those markets are complex and probably don’t represent our core. We will look at some sort of distributor or partner in the Middle East – we probably couldn’t be there ourselves and be entirely confident about our own success. Our major focuses I think will be America and Canada, the EU which will be the biggest focus, and possibly South America.
In terms of other companies, particularly software ones that are looking to emulate what you have done, are there things you would tell them to do when they are first starting out?
Well I think one of the biggest lessons was that we needed to have single global processes and we needed to make sure those processes were implemented and followed. We put an enourmous amount of time into that and we actually had, I won’t mention areas of the business directly, but we had an area that was difficult to change, it was international. The massive growth in our business corresponds almost to the month with the changes we basically decided to make and get that part of the business doing the same as all the other parts of the business. It really did start to fire on all cylinders when we got that right. Prior to that we allowed people to have their own view, pathway and some of their own local things. But having everybody fit into a global system really made the business much more competitive and gave us an enormous amount of traction in sales and delivery. I slept easier and had less hours in the day that I had to stay up.