Developer jumps at ERP deal
- 09 June, 1999 13:05
Publicly listed local enterprise software developer Prophecy International continued its tale of international success recently when it secured a five-year, $5 million ERP implementation with South African-based electronics supplier Teljoy Television Services.
The deal could be regarded as a drop in the bucket for Adelaide-based Prophecy, which conducts more than 80 per cent of its business overseas and maintains a host of business partners in the US, the UK and Africa.
According to Prophecy officials, the implementation of its ProphecyOpen ERP system will span Teljoy's 100-strong customer sites with an expected "go live" date of November this year.
The deal, which will involve Prophecy's South African distributor Business Enterprise Software Technologies (BEST), is claimed to provide Teljoy with better business management, greater control of inventory and enhanced data tracking.
For Ed Reynolds, Prophecy's CEO, the decision to attack lucrative international markets is a no-brainer for innovative local developers.
"Australia is a small market in terms of business opportunities and, over time, conducting business internationally has become a normal way of life for the organisation," Reynolds said last week.
However, as he explained, international success doesn't come easily as competition from other overseas players and local suppliers is tough.
"Dealing overseas is a pretty tough game," Reynolds said. "Being an Australian supplier of an internationally recognised product is not an easy job. It's difficult for us to make a sale in Johannesburg from Adelaide, for example, because of the remoteness factor.
"But, that's why we scout around for the best partners in each region," he added.
Reynolds suggested that Prophecy's partnering outlook enables the organisation to minimise labour costs and maintain higher than average margins. At last count Prophecy was operating on margins as high as 36 per cent, according to Reynolds.
"We aim to work with established players in each region and cultivate a local presence and support infrastructure.
"We're not in the business of employing massive numbers of staff, unlike larger organisations that would be quite happy to accept margins of 9 or 10 per cent, given their reliance on labour costs."
ProphecyOpen probably wouldn't rate with many customers as a top-line ERP solution either, but that hasn't stopped the organisation from gaining international exposure, according to Reynolds.
"We try to offer customers great flexibility. Most of the larger ERP vendors effectively force customers to change their business to suit the intricacies of the software.
"Our philosophy, on the other hand, is to work with a customer's existing infrastructure and customise applications as their business changes."