Achieving Optima efficiency

Achieving Optima efficiency

Many graduates find themselves making a career out of a part-time university job, but few manage to make millions and compete with major multinational corporations in the process.

Cornel Ung, founder and managing director of Optima, has done just that. Australia's answer to Michael Dell, Ung began building systems for his peers for some extra cash while completing a degree in IT. Four years after graduating his business was named BRW's fastest growing technology company, as he made the transition from retailing systems to building them for other retailers.

These days Optima ships $137 million worth of product, predominantly into the education sector, and continues to grow at rates of 30 to 40 per cent a year, offering a locally branded range from servers to notebooks.

However, it hasn't all been plain sailing. In fact Ung's survival is based largely on his capacity to change direction, and milk an opportunity for all that it is worth.

Launched in 1990, Ung's original manufacturing plant in Rydalmere was facing bankruptcy six years later, having lost nearly 80 per cent of its business share to unscrupulous competitors who gained traction by side-stepping sales tax. Australia's fastest growing technology company was going out the backdoor.

"If I have a level playing field I know I can make it," explained Ung. "I began looking for a market where we wouldn't have to compete with people who didn't pay tax, so we made the shift from selling into the reseller channel to selling into the Government sector."

The gamble paid off, within 12 months Optima was again growing at double-figure rates, as the company managed to win successive tenders to supply the NSW Department of Education.

"I knew the government would increase its spending on technology in the education sector," Ung recalled. "And what they spend on IT continues to increase in each state."

Having secured its bread and butter, Optima began to diversify, moving back into the reseller channel by getting product onto the shelves of both mass merchants and smaller resellers.

"First we have to convince the retailer to carry our products, which means having reliable back to base service for customers. That is what makes resellers and retailers comfortable, that customers will receive good service," Ung said.

While the IT industry generally suffered the highs and lows of Y2K, the GST and the tech-bubble burst, Optima went from strength to strength, increasing its presence in the NSW Department of Education and expanding into other states and government departments.

However, the growth was not without challenges. Committed to local production, Ung had to overcome significant productivity hurdles as he found his company facing increasing competition from multinationals.

"The biggest challenge is being efficient, we are a local company which makes us very flexible, but we need to compete with multinationals so we also have to continually invest in our production and delivery services," Ung said.

"We buy our components on a competitive market, and I'm sure that Dell's buy price is lower than ours, so our production has to be even more efficient than theirs to compete."

Not content with having made his cottage industry into Australia's largest systems manufacturer, Ung hopes to expand both the product line and the company's geographical base during the next year. With a sizable presence in education departments along the eastern seaboard, Ung is eyeing off the South and Western Australian markets, and has outlined plans to set up a plant in Perth should Optima win tenders currently under review.

"We also want to get involved in services so we don't just supply the hardware to the schools, we actually put the networks together as well," Ung explained. "I don't believe anyone buys products because they are made here. We are going to focus on the market, and focus on providing our customers with what they want."

Despite his business successes, Ung said his family is still his key concern, although he is not about to convert Optima into a family business.

"When I move on the business should be taken on by someone who is really interested in driving it, I don't want to force anything on them," Ung said. "It doesn't work that way."

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