Cashed up and ready to conquer
Agile has grown from a simple reseller to a fully fledged integrator and software developer in just 10 years. It recently sold its contact centre software business to American giant Avaya for an undisclosed sum. Chief executive Tony Jayne spoke to Telecommunications Review editor Sarah Putt about the company’s evolution, the sale of its software division and its plans for expansion into Australia, Asia and America.
POSITION: CEO, Agile Commenced current role: 1 July 1999 Immediate past role: GM, Fisher & Paykel Communications Car: Mazda CX7 Mobile phone: Motorola V9 Staff: 85 Education: School of life (masters degree) Most admired person: Sir Brian Lochore Favourite Website: www.3news.co.nz Customer numbers: 200 in New Zealand, 3000 in 72 countries Turnover: $25 million + Website: www.agile.co.nz
Q: Are you still Agile? You sold your business last month, give us an update on that.A: About five years ago Avaya invested in Agile software, which was basically our software development part of the business. They took 23% stake at that time and we signed a global contract for distribution internationally. So that was set up as a subsidiary of Agile.In terms of what we do in New Zealand and what we do with our services business, that still remains the same – Avaya haven’t bought any of that.Q: How does it all fit together into the Agile puzzle – you’re part of the Comworth Group aren’t you?A: We started the company July 1999. How it came about is, I was working for the Fisher & Paykel communications business and we had the Lucent technology distribution in New Zealand. David Charlesworth, who owned Comworth Solutions, they had a product for Lucent Technologies at the time, so there were two parts of the distribution for New Zealand. Fisher & Paykel went through their reorganisation and decided to focus on the core appliance and healthcare business, so we effectively joined forces with David as the principal shareholder, and then I and some of the other management team took shares in it. One of the core principles of the business we’ve found is that the management has ownership and equity. Both from a financial point of view but also emotionally in running the business. Q: How many staff?A: Within Agile there are 85 employees, plus contractors.Q: You began with?A: 23 or 24 staff – interestingly two-thirds of those people are still with the business 10 years later.Q: You’ve managed to retain and grow as a company and it’s got that feeling that you’re all in it together.A: Part of that is the equity and part of it is that we’re in a specialist field and our people are our differentiator; they make the difference. We’ve been through a time of significant skills shortages and we’ve been fortunate to both recruit and retain during that period of time, so that’s been an important part of the development of the business.Q: Is there still a skills shortage today?A: Yes, because we’re in a specialist field. We’re a communications integrator as opposed to a general systems integrator, so we’ve got a very specialist focus and we’ve done a lot of our recruitment offshore. I think it’s something like 20 different nationalities in the group and we’ve both recruited specific skills and also put a large amount of investment into training and development of those skills locally. Q: Is it because you’re a specialist and so will always struggle to gain and acquire those skills? Or is it because the polytechnics and universities aren’t training people for this kind of work?A: I think a bit of both, because statistically there are fewer enrolments in IT for universities and polytechnics and so there are fewer people coming through. Also Telecom used to be the fertile training ground for bringing people through – that’s certainly changed. I think it is more specialised: you’re going from the old PABX to Unified Communications and VoIP, which has changed the skill set. A lot of people training 10, 15, 20 years ago find their skills are no longer relevant. There’s a whole combination of factors have led to where we are today.Q: What about your customers how skilled are they? How technically savvy are they?A: Some very savvy, but I think it’s evolving because you are now seeing a combination of what was the voice guys and the IT guys coming together.The big difference now is that all these systems touch each other. It’s a very complicated environment these organisations work in and everyone’s driving towards the panacea which is easy for customers to contact the organisation, easy for colleagues to communicate with each other. Q: Unified Communications (UC) has been out there in the industry as a term, a catch-all for everything, for the past two years. But a lot of surveys coming out say half of enterprise managers don’t want to go there. There’s a certain amount of hype from the vendors and these channels are being pushed upon CIOs, but they don’t see the need – what’s your response to that?A: I agree that UC has become a catch-all for everything and it’s vendor driven to say we’re leaders in UC. The reality from where we sit – it’s not actually UC; it’s what are the business outcomes that you want to deal with. UC is just this big lump which says, how are we going to communicate internally within the business and with our customers? The real trick is working out what the business is trying to achieve, what the business outcomes are and tailoring a solution that meets that. Q: Agile is very closely associated with contact centres and in New Zealand there are probably 40 contact centres that are 500 seats and the rest are hovering around 30 seats or less. What’s it like developing solutions for such a small market?A: In some ways it’s an advantage because in a small economy you just don’t have the economies of scale, so we see businesses in NZ doing really innovative things with technology to overcome some very real business challenges. They can’t just throw people at it; they haven’t got two or three thousand people in a cc that can handle it. We’re doing some very interesting work in the US at the moment with a very large translation company. You’ve got agents all over the world providing translation services to government departments and financial institutions in North America and they’re using our innovation purely because we’ve had the experience of being able to work with organisations and figure out solutions for them. So I think, in a perverse way, it has been an advantage working in a very small market with real financial and physical restraints and then taking that experience and scaling it up. What you can do for 30 people in a contact centre in New Zealand you can to do for 3000 internationally. Q: You’re doing business in America – where else?A: In Asia and Australia, but we’ve been doing that for some time. Very opportunistic, from our point of view having now sold Agile Software and Avaya now taking our product globally as a core technology of theirs, that’s created a huge opportunity for us around our integration skills and our knowledge of that software gives us a competitive advantage. Q: Are the proceeds from that sale enough to be able to push this integration side of the business internationally?A: Yes, absolutely. So we’ve invested very heavily over a long period of time in Agile Software, we’ve got a good return on that investment and as a management team we said “what next?”. So now we’re developing an expansion plan based on utilising the technologies in New Zealand. That’s always going to be home and that’s where we’re going to focus our energy, but then expanding that through to Australia, Asia and North America. Q: How necessary is it to have someone on the ground in these countries?A: Yes, you can do the physical stuff, the software stuff and the technical things in New Zealand, but you’ve got to have relationships there. And I think that’s what we’ve learnt through the experiences even with Agile Software. Having the right partnerships and having the right business model to meet the particular markets is really important. We’re not egotistical about having to have our name up front – happy to work in partnership with other organisations. Q: Do you see the staff number growing?A: Yes, it will have to because a lot of what we do is about people who deliver, develop and maintain the solutions we offer. In New Zealand we have a wider portfolio – we’re a Microsoft gold partner, a Tandberg gold partner, NICE and Avaya – a well-rounded product suite – but more important is the ability for our people to add their intellectual property, their knowledge of the integration of these technologies and other technologies as they come along.Q: If you’re running a CIO in a typical company – what is it you really need?A: The real basics in a tight economy are that you’ve got to look after your customers. So customer service is paramount – whether it’s banks with several hundred in a contact centre, or an organisation like ours with a network operation centre taking calls. You’ve got to have the ability to be able to communicate effectively with your customer. Also, video has now come of age because people don’t want to spend a lot of time in planes or commuting, but equally you’ve still got to be talking to branch offices. Q: What makes you say video is coming of age? Is the cost of connectivity changing?A: There are a number of drivers and I think cost is one of them.Q: So cost is coming down?A: Absolutely, and also the ease of use. In the old days it used to be expensive to fit out a boardroom or whatever with VC. There’s also the green argument around carbon emissions and organisations driving costs down. We’re seeing the technology available on the desktop – you’ve got video phones available now. You don’t have to book a room to have a conversation. We’re using video to interview people in America for roles here. Q: How much is dependent on what the telcos are offering and what you can offer?A: The availability and cost of bandwidth is critical, not just for video. Applications in health and education aren’t being restricted by end-point technology – it’s all about the availability and cost of bandwidth. That’s all heading in the right direction, albeit much slower than what everybody would have liked.Q: Do you think there has been a vast improvement in the last two years?A: I think in the general business sense, yes. If companies are prepared to invest in bandwidth, yes it’s available in the CBDs. Certainly it’s an issue residentially and in the provinces to get reliable broadband. I’d like to think that we can be sitting in a boardroom in Auckland in a discussion with a customer in Sydney, or LA, or Hong Kong or potentially all of them discussing their business needs and being able to do it with a reliable technology and sharing documentation, sharing information that doesn’t make any difference. Certainly we won’t be efficient and we won’t be successful if everything we want to do means spending time on a plane to fly to LA to have a two-hour meeting with a customer – you can’t do business that way. We’ve got to be the proof of the pudding and make it work for us as well.Q: Ten years ago when you started the company – where did you think you’d be now?A: We had a very strong voice pedigree, so we were always going to be in that communication, voice space. Those days it was different because it was very proprietory, we were a vendor. We effectively set the business up to be a reseller of technology, the old traditional PABX black box. The real difference is that after that time we said, what do we need to be to be really successful? And what came out of that is that we need to offer more value to our customers than a product; we needed to be able to have a service that’s wrapped around that, so we’ve not only got the ability to implement it, but support it and do that locally. Q: Where would you have picked the technology?A: Ten years ago the contact centre was only about voice, that’s all you did, and CTI – Computer Telephony Integration – being able use databases and CRM, was all new. Now in some contact centres 30% of their incoming traffic is via email and they’ve got a whole text messaging environment. I don’t think I’d have even thought about what impact text messaging would have, but many organisations are struggling with that today – how do I deal with a whole generation of people who aren’t going to ring me?Q: Ten years from now, look into your crystal ball and it’s 2019?A: The only thing that’s absolutely sure is that the technology is going to keep changing and evolving, the pace of the change. I don’t know what the technologies will be, but if you come right back to that fundamental part – the ability of organisations to provide good customer service – will be an absolute driver. That will never change.Q: It’s difficult to imagine another channel of communication that we haven’t already got – voice, video, text, web chat, email, fax – what else is there?A: Whether there’s a real breakthrough technology that changes everything, possibly not, but we’ll get much better at using the technology available as it becomes more reliable and becomes more user-friendly, so that we can develop whole new applications around it – plenty of innovation around that.Q: What about Agile?A: For real growth we’ve got to look internationally. The software business gave us a good taste of that. We learnt a lot of lessons about how to do business internationally. Got a few blood noses on the way as well, but you learn from those things.Q: What was one of the blood noses?A: We were naïve enough to think that having a good product alone was an opportunity to break into international markets. The reality is that product is probably about 10% of the value. Distribution is absolutely key.We worked very hard on developing partnerships with Avaya, that they saw the value in what we’d done to initially invest five years ago. We thought that’s it – we’ve got a major company internationally that’s sponsoring the product; all we have to do is sit back and wait for the royalties to roll in. And that was absolutely wrong. Big multinational organisations are like a big steam ship or a huge liner; once they get going they’re very, very hard to stop, but it takes a long time to get them going. The expression – 10% inspiration, 90% perspiration – that’s certainly true.Q: You don’t seem to be affected by the recession. You’re talking about expansion – you’re going to use the proceeds of a big sale to push the company internationally. Is this the right time?A: We’re not heavily geared from a debt point of view. We’re in a position where we can make strategic investments because it’s the right thing for the business and doing that from a very strong market position. Doing it with a capable and competent bunch of people and doing it from a financial position where we have the ability to make those investments – it is a good time to do that. If we wait for a recovery, then try and do it, a lot people may be doing it at the same time. If we do it and we do it well in a difficult economic climate, then we’ve got to reap the benefits of that coming out the other end.
