Service provider and software vendor Powerlan has formed a wholly-owned subsidiary to tap into the burgeoning business process outsourcing market after landing a $12 million BPO tender.
ASX-listed Powerlan secured the three-year contract with property and mortgage fund company OFM Investment Group on December 31, 2003.
Powerlan managing director and CEO, Tomislav Matic, said the company had been planning to build a business process outsourcing division for some time. The contract with OFM acted as a catalyst and provided Powerlan with the funding it required to form the subsidiary.
The subsidiary will be known as FinancialBPO.
Under the contract, FinancialBPO will provide investment administration and client registry services based upon Powerlan's Garradin Portfolio software. FinancialBPO will be taking over the reins from OFM’s existing provider, State Trustees Ltd.
"This agreement will establish Powerlan in one of the fastest growing services area -- Business Process Outsourcing in the financial services sector," said Matic.
"Formation of FinancialBPO is consistent with our strategy of developing quality recurring income streams through provision of solutions and services based upon Powerlan's intellectual property. In this instance we combined our Garradin software and our [subsidiary] Zento's expertise in provision of secure application hosting services to provide a service demanded by some of the existing and many prospective Garradin customers."
Powerlan has appointed Byram Johnston as CEO of FinancialBPO. Johnston has had extensive experience in commercialisation and operations of large scale BPOs.
“Powerlan was in need of management expertise in BPO and now we have that after signing on Byram Johnston,” said Matic.
Matic said FinancialBPO will generate $4 million in revenue and grow between 30 and 50 per cent in its first year.
Powerlan’s business model has changed considerably over the last couple of years, with the company almost completely withdrawing from the reseller market and plunging into software development through the acquisition of intellectual property.
Powerlan is made up of six software development and services businesses, including Clarity, FinancialBPO, Garradin, IMX, Office Converter and Zento, that are virtually independent of each other while benefiting from the synergies, know-how and internal corporate services that Powerlan provides.
“Powerlan has effectively become a smart venture capitalist that invests in developing its own intellectual property,” said Matic.