CIMdata PLM Industry Summary Online Archive
14 April 2005
Company News
Spescom Software Announces Strategic Initiatives for 2005 and Beyond; Company Outlines Strategic Plan for Growth and Leadership in Enterprise Content and Configuration Management Sector
Spescom Software, Inc. announced its Strategic Initiatives for the remainder of 2005 and beyond. The announcement was made by Carl Mostert, CEO of Spescom Software.
Mr. Mostert stated: "With many exciting things happening within our market and company, we are announcing our strategic initiatives-which outline what we believe to be a promising future for our company. We have positioned ourselves to become a leading provider of solutions based on our powerful enterprise content and configuration management platform. The worldwide explosion in the growth of computer-generated data that has accompanied the rise of the Information Age has created an enormous need for solutions to manage the sprawling data assets of large and complex enterprises. However, these data management requirements have long ago outstripped the management and change-tracking capabilities of the separate software applications that contain them. Large and highly complex organizations, whether they are managing nuclear power plants, the Space Shuttle, or submarine fleets, simply cannot operate with optimal safety, security or efficiency under the fragmented computing and software environments that have evolved."
Spescom's proprietary eB software platform is a proven information management solution with the unique ability to manage multiple types of structured and unstructured computer data on a single software platform. Spescom's eB software enables not just the consolidation of multiple systems into a single coherent platform, but also has built-in business process rules for effective management of change, catering to the constantly changing environment caused by maintenance and expansions to plants or systems. Mission-critical functions for complex industrial, military and manufacturing organizations, such as utilities and other large enterprises require the effective and user-friendly management of many millions of pieces of individual computer-based documents and other types of data. Spescom's solutions provide a new generation of content and data management capabilities that address a range of critical business issues including regulatory compliance, asset information and change management, as well as document and records management. With an existing blue-chip customer base, we have been laying the foundation for achieving our goal of becoming a major player in a large and growing market.
During 2004 Spescom's key achievements included the following:
• Solidified our flagship product eBT as one of the premiere ECM solutions, providing cost-effectiveness, scalability and flexible architecture to our clients.
• Released a test version of our latest eB Version 14 platform based on the Microsoft .Net framework.
• Continued to build our client base of blue-chip companies, including such industry leaders as Entergy, Constellation Energy, Network Rail and Lloyds Register. These customers serve as a key launching pad in the sales environment, as they provide excellent customer references that will testify to the performance of Spescom's products and services.
• Increased substantially the number of potential new business opportunities pursued as our market profile has heightened.
• Experienced our third consecutive year of significant margin improvement (72% gross margin in FY 2004), as well as positive EBITDA in FY 2004.
With that said, the following are our key initiatives for the coming year:
Strategic Initiative 1-Increase focus on selected target markets:
Our existing blue-chip customer base is a key asset of the company as well as a source of recurring revenues. We will continue to provide the highest level of support and will also pursue new opportunities within these enterprises. A key component of our corporate strategy, and one that we feel will pay significant dividends, is to focus on selected industries. While our solutions have universal appeal, we feel that the targeting of specific markets, particularly those in which companies tend to follow the lead of technological innovators, is the smartest direction for a company of our size, and which in our opinion will lead to the fastest growth. Specifically, we intend to focus aggressively on the energy industry-utilities, and the oil and gas sectors-in which we already have a strong customer base and proven value proposition. To that end, in January we presented and demonstrated eB at the daratechPLANT2005 event in Houston. We continue to actively market our solutions into this sector by attending relevant industry events, creating industry advisory councils and identifying suitable partners.
We have also employed industry experts from the energy sector, to further expand our footprint in this market. Our goal is to leverage these experts, along with a strong focus on sales and key account management, to help us broaden our target markets and convert more of our current opportunity pipeline to revenue.
Strategic Initiative 2-Expand partner network to leverage their market presence and brand:
We have always worked hard to build solid relationships with crucial intermediaries, such as strategic partners and system integrators, who are a vital link between Spescom and its end users. These partners are key players in our industry, and it is paramount that we forge strong alliances with them.
In addition to establishing new partnerships, we hope to expand relationships with some key existing strategic partners, including Aker Kvaerner, a leading integrated solutions company in Europe, with annual revenue of approximately US$ 4.5 billion; CACI, a major systems integrator in the US and UK; and MRO Software, the leading strategic asset management solutions company, based in Bedford, MA. By further developing our sales channels with existing and new partners, we believe that we can increase our penetration of new market sectors by leveraging the relationships, people and expertise of our partners.
Strategic Initiative 3-Provide packaged solutions to reduce sales cycle:
One of the major challenges of selling enterprise software to large organizations are the long sales cycles of typically 9 to 12 months caused by the many levels of decision making. The result of this is greater unpredictability of when orders will be closed. In order to address this issue we have recognized that shortening our sales cycle is a top priority and have several initiatives planned to accomplish this goal.
First, we plan to simplify and shorten the sales process by providing packaged applications, thereby enhancing our "one-stop shop" strategy.
Second, we plan to streamline the applications development effort through a standard application framework. This will allow us and our partners to rapidly bring new applications to market.
Lastly, we are planning the launch of a configuration and change management application for IT service professionals. The need for effective IT configuration and change management has been identified as a major challenge facing most IT operations.
Strategic Initiative 4-Raise market profile and awareness:
We have worked hard to position ourselves as an innovator and to gain industry recognition for the advanced capabilities of our products-not an easy task in our space since every software company thinks they have the "latest and greatest" product. Until now, we have let our solutions and blue-chip client base speak for themselves. We realize, however, that in order to take the Company to the next level, we need to raise our profile within the ever-growing IT community.
One way we plan to accomplish this is to increase exposure to IT analysts whose research is widely trusted and disseminated to new technology decision-makers across the globe. This would be akin to a new, top-of-the-line automobile being written up in a leading consumer automotive magazine. Favorable analyst reviews can give us tremendous leverage as we move forward.
Another important step is our plan to increase our already existing efforts to market directly to our key demographics. With our recent closing of $2.2 million in new capital, we have increased our marketing budget into our target markets. Consistent with our first Strategic Initiative-to increase our focus on selected target markets-we intend to grow our sales staff to more effectively identify and pursue opportunities across the country by attending trade shows, conducting seminars and webinars, and generally pursuing various lead generation activities.
Summary
We know that as a company's products and services gain attention and popularity, it is very common for a firm to overextend itself. Missteps can be costly and it is easy to mismanage growth. We realize that, just like our software solutions, all of our Strategic Initiatives must be integrated to work together in a careful, well-thought out approach to growth.
Our mission has always been clear and simple-to become the leading solutions provider in our chosen markets. We believe we are well on our way to achieving this goal, and we have implemented a consistent, realistic strategy to get there. We are pleased with our early successes and, always keeping shareholder value our number one priority, welcome the opportunity to convey our compelling vision for this coming year."
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