1997 promises to be a big year for distributor Q*Soft. From its well-entrenched position in the Queensland market the company made its first foray into the rest of Australia last year with the opening of offices in Sydney, Melbourne and Perth.
Managing director Douglas Heath expects annual turnover to jump from $32 million to $55 million as a result - an impressive achievement for a self-funded expansion program.
Bought by Heath in 1993, Q*Soft has enjoyed rapid growth under his stewardship. In just four years, the Brisbane-based company of nine people has grown to an Australia-wide operation employing 65 staff.
Heath was no stranger to the distribution market when he acquired Q*Soft, having run a successful specialist software distribution business, Intellitron, in Brisbane. But Heath felt that to be successful, a distributor needed access to mainstream hardware and software products.
Heath now co-owns Q*Soft with his mother, finance director Elaine Heath, and sales director Barbara Tobin. Both are veterans of the Queensland IT industry.
The company offers a relatively small portfolio of big name products, including Compaq, Epson, Canon, Lexmark and Microsoft, as well as networking products from Intel, Alloy and SMC. Heath believes that not stocking thousands of lines makes keeping control of margins easier, and allows the company to offer better service around the products it does sell.
"We try to keep it deliberately tight so we can keep our product knowledge up," said Heath. "We feel that with a huge range of products, it's very difficult to provide the service to our customers. For a company our size, our product range is appropriate. We're not particularly looking at expanding our range at the moment."
Service is at the top of Heath's agenda and, he claimed, distinguishes the company from its rivals. For Q*Soft the concept translates into two practical elements: good product information and speedy delivery.
The bulk of Q*Soft's business is still in Queensland and many of its customers are dealers in the regional towns of Gladstone, Rockhampton, Mackay, Cairns and Townsville that service government departments and local industries such as mining and agriculture.
"Our spread of customers is from the consultants right through to the fairly large government and corporate dealers," explained Heath.
The company goes to lengths to ensure it is kept abreast of the latest product developments, conducting roadshows every three months.
Heath said offering regular seminars is part and parcel of dealing with a far-flung customer base and the costs incurred are not much greater than those attached to doing business in city areas.
A corporate aircraft kept specially for the purpose handles much of the legwork for this activity and is another differentiator for the business, as is the flight simulator which Heath keeps on site at the company's Bowen Hills headquarters to keep him in practice!
"We do make a significant impact and people are always pleased to see us," he said.
The aerial roadshow is also being introduced down south. The company has just completed its first tour of duty through NSW, Victoria and Tasmania.
Heath expects service will also be the key to cracking the lucrative southern and WA markets. He dispels the notion that Q*Soft might be something of a late entrant into the already well serviced NSW and Victorian markets, believing customers have little loyalty for distributors and will go where they can get the best service.
"It's like the fuel industry. You just have to offer good service," said Heath. "It's not necessarily based around prices - it's all based around service." There are no plans to open offices in the remaining capitals, as Heath believes they can be serviced efficiently from existing bases. However, the company has a sub-distribution agreement with Hi Tech in Adelaide.
The US connection
As well as keeping its own customers happy, Q*Soft has a long standing fulfilment agreement with Ingram Micro which sees it carrying many of the US distribution giant's specialist software lines here in Australia.
"We only sell products for which there are no distribution agreements in Australia," explains Heath.
"We wouldn't cut across anyone else's distribution."
The long-term future of this relationship is unknown. It is understood Ingram is looking to expand into the rest of Asia from its base in Japan, but Heath claims to have no knowledge of its designs, if there are any, on the Australian market.
Closer to home, Q*Soft is focused on improving its own practices and processes in a bid to remain profitable in a market that Heath believes has been in downturn for the past 18 months.
Like many in the industry, Heath's answer to this ongoing problem is to cut costs from within, by finding more efficient ways to offer the same level of service.
"I don't know of one company in the computer industry that's not looking at itself at the moment," he said.
"You batten down and try to run your company as lean as you possibly can. You just restrict your spending and you make do with what you've got."
A new software system implemented last August is helping fulfil this aim.
Written in-house over three years, the Clear Objective package integrates the company's accounting, distribution and dispatch functions and replaces an outgrown off-the-shelf accounting system.
"Because vendors require such specialised reporting now, you really have to have the ability to tailor-make your own software, your own reports, otherwise you get left behind pretty badly," says Heath.
The company plans to market Clear Objective commercially via a separate company of the same name, once it has finished refining the product in its own business.