In a globalised economy where the big guys just keep getting bigger, smaller companies have to be either very clever or very niche to avoid getting squeezed out by the competition.
Essentially, smaller channel companies are faced with the daunting task of catching up with their stronger counter parts in markets which favor size, market reach and buying power.
Joint ventures, partnerships and mergers are common but prone to difficulties, unless meticulously organised and operated. However, in 1999, a Danish-based entreprenuer set out to prove there is more to Copenhagen than Lego and children's stories.
"I came up with a crazy idea," says Peter Warnoe, CEO of the Aston Group. "I wanted to create an international consulting company in a totally different way."
Armed with the financial backing of investment group CVC, Peter Warnoe oversaw the amalgamation of seven different companies in an attempt to target global markets from a regional base; and thus the Aston Group was born.
"If you want to take on global markets you need money and you need size," Warnoe says. "The way we got that was by merging a series of companies [and] funding from one of the biggest venture capital companies in the world."
However, the key to the success of Aston stems from both the idea and the rapidity with which Warnoe began to implement the plan. Focusing on quality, Aston set out to take on IT companies that excelled in either consultation and project management, technology and innovation, or communication and creativity.
"The aim is to offer a complete suite of services globally and do so in the most efficient way possible," says Warnoe. "That means looking for companies that are already successful, not companies that need help."
Within 12 months, Warnoe managed to acquire 55 new companies and increase Aston to 1400 people in 12 countries. According to Warnoe, Aston's whirlwind expansion is set to continue, with the company setting a target of 5000 employees by 2004.
While other merged operations find themselves floundering when they realise that twice the infrastructure has doubled their operating costs without necessarily doubling profit, Aston has managed to avoid teething problems by designing a very loose corporate structure around well-functioning companies.
Companies that make up the Aston Group receive the benefits of global branding and contractual support, yet continue to operate with a relatively high level of autonomy within the group. Warnoe focuses on the company at the macro level, and for the most part allows the merged companies to self-manage.
"When you start a business you have to have a clear set of targets. We wanted 1000 people in 365 days and we made that target. Each of the businesses we have incorporated into the group have their own targets," Warnoe said. "They are all good at what they do or we wouldn't have bought them, so we basically let them get on with it."
Aston's merger success seems to stem from a mixture of breakneck goals, flexibility and autonomy. In keeping with his soccer-mad homeland, Warnoe draws strength from team motifs.
"The idea is getting the best players on board, and often the bast players are also individual players so if you don't treat them like indivdual players you will lose them," Warnoe said.
As the mergers are generally positive and focused on strong companies, the Aston Group has largely avoided the morale issues associated with takeovers due to poor performance.
Aston's foray into Australian markets began last year when Aston acquired ERP integration group Naviteam. The Brisbane-based Australian branch of Naviteam became the first of Aston's antipodean outposts. About 12 months ago, Aston followed with the takeover of Sydney-based Management Control Systems (MCS), which awarded the group with offices in both Sydney and Brisbane. Hot on the tail of the MCS acquisition, Aston expanded their range to include Melbourne-based GEM Integrated Solutions.
In keeping with the Aston approach, the companies were left largely intact and continue to operate much the same as they used to. In fact, the feedback from Aston's Australian contingent has been overwhelmingly positive, with former managers comfortable with the hand-over, and the hands-off attitude that Aston implements.
Continuing to shoot for heady targets in terms of growth through acquisition, Warnoe is convinced of the importance of planning and targets in business, although he believes the key lies in knowing when to break out of the mould.
"It is not like making a MacDonalds hamburger," said Warnoe. "You have to weigh up the need for consistency with flexibility."
The Aston offer
Growing through acquisition, in three short years Aston has expanded its business into services such as:
- Financial management information systems.
- Front-office CRM.
- Workforce automation.
- Systems integration and network infrastructure services.
- Supply-chain and warehouse management systems.
- Manufacturing systems.
- Advanced project accounting and management systems.
- e-Business and Web-friendly applications.
In 15 different countries around the world.