Communicat founder and managing director Malcolm White does not just pay lip service to the one-stop-shop concept, if his Melbourne-based business is testimony. He and Queensland manager Robyn Turner talk about riding the SME wave as the company expands northARN: Staff recruitment is an unusual line of work for an IT company. What advantages have you found in offering your clients recruitment services?
White: A temp from Communicat knows they can contact us if they find themselves needing support. That is a special thing that a traditional agency can't do. With permanent placements people tend to come to us because they know our staff have strengths with particular brands of software. They tend to register with us because we have access to qualified people who perhaps aren't available to normal recruitment agencies. With the GST, there has been an incredible shortage of accounting people.
How do the operations vary in between Brisbane and Melbourne?
Turner: In Melbourne, there are about 40 staff and that includes a network support and workshop area. We also comprise an Internet division. So we have our fingers in lots of pies down there. In Queensland, we have five staff and are basically covering the accounting software side in terms of support and recruitment. We have had an ISP business in Sydney and Brisbane for two-and-a-half years.
The accounting software market slumped in the second half of last year. How are you dealing with such a flat market?
White: What has helped us a little bit on the accounting software side is we have moved into e-business areas. We are now using some of our resources that we were using on the accounting software side in business-to-business systems. We have developed a CRM system and shopping trolley and it has soaked up the accounting software drop. We are also running quite a few training courses. Network integration is now a big part of the business. Ninety per cent of our clients would be using a package of accounting software, network services and, in recent months, recruitment and training.
Turner: The training has been going on for a while. The recruitment side is certainly the newer part of what is happening. Our clients in Melbourne say they have to get around the fact that we can help them with staff as well. Being new in Brisbane, it's almost like whatever you say is fine because nobody knows the company anyway. In Melbourne, the company started in 1987 - it is 13 years old and a lot of clients are used to going somewhere else for the recruitment side of their business.
Why did you choose to expand into Brisbane?
White: We decided we could not exist in just one city. From our point of view, the market is now an East Coast market so we want to cover Melbourne, Sydney and Brisbane. Brisbane is a more accessible city - that is why a lot of businesses have a Melbourne-Brisbane axis. It is quite common. I always call Brisbane the northern suburb of Melbourne and vice versa. But we recognise that having launched Brisbane successfully off the ground, Sydney will definitely be next.
How long before you begin operations in Sydney?
White: We will just say in the not-too-distant future. We still have some work to do in Brisbane, but we are trying to show leadership to our clients as well because a lot of them are in the same boat as us.
Have you managed to capitalise on the growth in the SME market?
Turner: In relation to the GST, small- to-medium sized companies had some issues where their systems were perhaps not quite up to scratch. In the larger markets there was generally a system in place and in a lot of cases clients generally had tried to keep their systems going, and fit the GST implementation with what's already there. Whereas the SME market maybe weren't quite happy with their systems, they had lasted through the Y2K issues and the DOS/Windows issues, and GST was the final straw.
White: We are probably expecting to see even more change coming up. We try to run at least four proactive seminars per year because a lot of our clients look to us for ideas and leadership - in some cases, we are the main source of information on where technology is heading. Most of our clients have a turnover of between five and 10 million dollars. A lot of those organisations had put on a band aid for Y2K and upgraded for the GST, but we don't believe that the potential in the market has run out at all. Many of those businesses are now telling us they need to get their front-end systems in place so that their [networks] can move into the e-business space.
So when you start thinking about e-business, the Internet, intranet, XML and e-commerce you will often find that businesses really have to put their thinking caps on to gain momentum in that direction. So yes, the SME area has been quite good in the past year but we expect it to get very, very strong in 12 months. We know it will. You only need to do a survey of clients to find out where their businesses need to go and what shortcomings their systems have to find there is enormous potential in e-business.