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25 January 2004
Sunday Herald
Software firm’s global bid - Graham Technology to take on US giants after huge profits leap

Graham Technology has stepped up an aggressive international expansion on the back of a steep rise in revenues and profits.
The Renfrewshire company, whose flagship GT-X software is used to improve customer- service management in all business sectors including the call-centre industry, has opened new offices and gone on a hiring spree on four continents over the last few months.

The privately owned firm, founded by Iain Graham and his wife Sheena in 1989, revealed last week that turnover for the last nine months to December 31 reached £10.8 million, already outstripping revenues for the previous fiscal year. Profit has more than doubled to £2.7m for the nine months, over £1.1m for the full previous fiscal year.

Chief executive Iain Graham said his company had been able to ride out the technology slump by reducing overheads by consolidating its operations to its current £10m India of Inchinnan head quarters; and securing contracts with five major blue-chip companies.

Revenues are now being put towards strengthening its global presence. Graham, who has ruled out a flotation for the time being, emphasised that increased international sales would lead to more jobs in Scotland – the centre of software production and research and development.

Graham Technology has partnered with consultancy Accenture, a competitor in the UK, on a secret public sector deal in South Africa. Graham hopes this relationship will be a conduit for more business in that country. At the same time, the firm is in final negotiations to hire a chief executive to head a new Paris office to win additional sales to its existing contract with internet bank Egg (France). Until recently, the majority of work on the Continent has centred on the Netherlands. But plans are underway to set up a European hub near the Hague to target more countries by 2005.

On the Asian front, rapid hiring is underway to staff new operations in Jakarta to support a contract with Telkomsel, which has nine million mobile phone service customers and provides network coverage for 80% of Indonesia.

For the past five years, Asian business had been handled through Graham Technology’s office in Sydney, Australia – which has £40m worth of potential sales in the pipeline. However, the executive team believed that it was important to be closer to the action, to be “careful about our own corporate governance”, and make the most out of an emerging market.

Graham explained: “The potential is unbelievably huge. There are 20 million people in Jakarta alone and 200 million in the whole country. If they get even a 7% increase in the use of cell phones, can you imagine what that does?”

China is an equally attractive proposition with the number of people taking up land-lines increasing exponentially. Graham is also working with Scottish Development International and the British consulate to make inroads into this territory.

For the time being, however, the most challenging marketplace will be the United States. The company opened a small 10-person unit in the Scottish Enterprise incubator in Boston in 2003, but plans to boost that number to 20 and move into larger stand-alone premises within three months. The team already counts Bank One and PacifiCorp, the American subsidiary of ScottishPower as clients. Despite being pitted against such titans as Oracle, SAP and Siebel, Graham estimated revenues could exceed £5m annually within the next few years. While the technology marketplace shows signs of improvement, customers are demanding far more for their money — an attitude that Graham believes will work in his favour.

“There are no more nonsense purchases. People are looking for return on investment within 90 days, which we can deliver. We are succeeding better in a more intelligent market space. Before, people were buying solely on brand recognition.”

He added: “Within five years, it would not be surprising if most of the commercial large-scale business was being done in the US. Most of the decision-making is done in the US. Even if you were doing a deal with IBM or Cisco in the UK, that decision wouldn’t be made in the UK but the US.”

By Julia Fields

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