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Updated: Data#3 goes through restructure to adapt to market needs

Updated: Data#3 goes through restructure to adapt to market needs

Focuses on three areas of specialisation and consolidates internal services functions

Earlier this year, ASX-listed ICT services provider, Data#3 (ASX:DTL), embarked on a restructure of its business model, consolidating five lines of business down to three.

The five areas included People Solutions, Licensing Solutions, Integrated Solutions, Product Solutions and Managed Services.

This has now been condensed into three areas; Software Specialisation, Infrastructure Solutions and Managed Solutions.

The company began looking into the restructure process in May and by July, it was implemented.

"We changed all of our internal systems, workflows, accounting, payroll and targeting and measurement systems in about six or seven weeks," managing director, John Grant, said.

"Customers want to have conversations with us around one or all of their software, infrastructure and operating environment and do that from buying a product to sourcing it out of the cloud. What we needed was a business structure that allowed our people to engage customers in that discussion and bring solutions to the table that delivered to that product to cloud promise.

"The way we were structured before in our five lines of business was complex in trying to make that happen and the structure wasn't suited to the conversations we were having with customers."

Data#3 has also consolidated its internal services functions which includes warehouse logistics, internal IT systems, HR, marketing and vendor management and finance, into one business as well.

This has taken some costs out to help deliver a net pre-tax benefit of about $4 million this year. Some staff were made redundant as a result.

"It's a restructure aligned with how our customers and partners want to deal with us," Grant said.

“We’re in a unique confluence of economic and technology disruption. We’re very well positioned for improving times with a great team in place, leveraging in our cost structure, market positioning with a track record and experience that will see us as a successful player in our customers’ hybrid IT future.

“It’s times like these that fuel industry consolidation and we see an opportunity to be part of this.”

Grant described hybrid IT as a combination of integrated applications and infrastructure on-premise, outsourced and in the cloud.

“We see our positioning as both integrator and provider of hybrid IT as our future,” Grant said.

The company has set out a financial objective to at least match its performance in 2013 financial year: $771 million in revenue; a gross profit of $122.5 million; and services revenue of $130.1 million.


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