Achieving a five year growth plan amidst the challenges faced by a modern technology company
“One of the key things for a technology company is being able to add value,” believes Richard Dendle. “Some will still apply a version of that expression ‘stack ‘em high and sell ‘em cheap’ but I know there has to be a difference with true added value or the product or service is just a commodity.”
The founder and MD of voice communications, systems integration and managed services provider Britannic Technologies expands on his point: “If I’m buying a television I look at the spec and then for the optimum price; that’s what people do. But our products are not a commodity; you can’t just get it out of the box. In B2B procurement you need to add value but your idea of value has to match what the client thinks it is. You can have what you think is a great feature but the client might say ‘yeah, but I don’t need it’.”
Indeed, customer expectations have risen across society, he says. “Customers want to have their questions answered quickly, so we have to be able to respond to that. You have to be able to put yourself in the customer’s shoes; what would you expect? Now what I expect from Amazon Prime, for example, is that I can order a part for a job I’m doing at the weekend around the house, and it arrives the next morning.”
Five year growth plan
Turnover at Britannic Technologies was £13.5million in 2017 and Dendle is aiming for £18million to £20million within five years, by natural organic growth. “For me there is no limitation to what we can do or what we can achieve, but I don’t have the ambition to make a lot of acquisitions. So many companies have taken that route and then completely failed, or it has papered over the cracks in their business model. But eventually the dust will settle.”
There are certainly growth opportunities, though, from the emerging technologies. “At the start of the financial crisis in 2008 we invested more than £600,000 in data centres; we had no customers for them but I absolutely knew that’s where the market was going, that companies would need the cost savings, that enhanced resilience,” says Dendle. “And that area has now grown massively. It’s about identifying demand and having the confidence and financial strength to make it happen.”
In the beginning
The business, founded in 1984, developed a call centre platform thanks to a contract from a well-known publisher. And in 2003, Britannic were one of the first companies to provide SIP trunking (Session Initiation Protocol allows users to make voice and video calls over the internet). “Today we have SIP gateways coming out of our ears but back then we had to develop our own,” recalls Dendle. “We saved the regional parliamentary offices a fortune by getting rid of thousands of ISDN lines and consolidating them down to 300.”
The next generation of product provided by Britannic allows companies to manage their own system. For example, they can easily transfer calls to a different office (manually or automatically) or limit the number of calls on a particular phone number to avoid swamping the people who answer the phone. “For example, if you wanted to limit direct dialled calls to specific numbers coming in at certain times, you could accept twenty calls at certain times, but send the twenty-first to an automated message,” explains Dendle.
The next generation platform, which comes into effect in March 2018, will automatically encrypt every call and Dendle sees big potential overseas. They already have customers in twenty-nine countries and he thinks there will interest from “seriously large companies” with offices all over the world who would benefit from completely encrypted traffic.
Dendle’s ambitions have always been about building a business which has lasting stability, so he thinks medium to long-term – not so easy in the technology sector where left-field opportunities and threats are the norm. “Decisions to address the here and now are important but they must comply with the medium to long-term goals.” His focus is on achieving recurring revenue. “With the data centre business I would like to be able to get to a position where recurring revenue pays our outgoings.”
Dendle is a firm believer in the concept that cash flow is king. “It really is,” he says. “Recession really focuses the mind on the need to get the money in. It isn’t enough just to focus on being as efficient as you can be, in areas where you can save money.”
It’s no surprise then, to hear that Dendle is “exceptionally risk averse” from an IT platform point of view as well as cautious from a financial perspective. “There’s a big difference between technological and entrepreneurial risk aversion,” he says. “Some companies will shrug their shoulders and say ‘what do you expect?’ if there’s an outage or a more intrinsic problem, but I don’t want a potential failure; it’s not acceptable.”
As an example of his risk aversion, he has two data centres and every core piece of equipment has a duplicate. “It increases the cost of course, but up-time is of the highest importance to customers and they want that level of resilience,” says Dendle.
He is a great believer in automation to help reduce mistakes. “If we can take away the mundane work by automating the process of, for example, building a server and then checking it manually later, that’s the ideal. We can press a button to run a script to build the infrastructure and the network routing. If you get the script perfect in the first place, it takes away the potential for human errors. And that gives you more opportunity to excel.”
Planning, procedures and processes
He goes on: “I talk a lot about planning, procedures and processes. We embrace the ISO standards for security and business continuity, not so we can tick the box, but because we practice those standards. With every project we do, we look at what went well and what could have gone better. Then we try to make sure that the best working practices are applied all the time. Make-do will never do.”
One of the company’s early successes was developing a dedicated phone-in system in the 1980s for BBC Radio 1; a later version was rolled out to more than 100 stations nationwide. The project gave Britannic a valuable profile, but brought with it an unforeseen problem and one that became a learning opportunity for Dendle. “I got a third party, who was working out of his bedroom when I met him, to write the front-end to my specification for the project. Even though we had what I thought was an effective non-disclosure agreement, he later put it in someone else’s product and made a business out of it.
A lesson learned was to avoid using third-party developers where possible. “Third-party development is not necessarily a bad thing but it has to be completely managed and crystal clear where the IP resides,” muses Dendle. “We took development in-house, which should have happened earlier, but it is a question of having the money to be able to do it.”
“I’m not bitter about what happened. It was a learning experience and you need those. Gaining experience and making mistakes are both part of business and personal development. But if you keep repeating the mistakes because you don’t learn from them, more fool you.”
Dendle subsequently bought a software development company to square that particular circle, so Britannic are now happily in control of their own IP – and destiny. Some IT companies never seem to make that kind of strategic step towards growth, he suggests. “Perhaps they don’t want to make the further investment and have the hassle of having to take on more people and bringing in additional management. Or they might just be quite comfortable and not ambitious. But in business, regardless of sector, you can’t sit still. “We have been through the pain of different thresholds of growth and from that we now have good working practices, processes and eighty-plus people.”
If there is a particular challenge in this sector for both technology company and customer, it is what is called toll fraud. “Hackers are taking over company phone lines, making thousands of expensive calls. Mainly to international and mobile destinations where a third-party shares the call revenue,” Dendle explains. “Thousands of pounds worth of calls can be made in an hour and I am not aware of any prosecutions.”
The new platform provided by Britannic will track and stop such calls with no manual intervention. Dendle explains; “We might identify that the customer suddenly seems to be making thousands of calls to mobile phones in Latvia for example. If, for some reason, they say that’s what they want to do, we’ll put individual numbers on a ‘white list’. The system then allows only those numbers to continue.”
A related issue is credit card fraud. Having the customer read out the long number on the card has obvious security issues for retailers. The same goes for typing in the number on a keypad. It’s possible to recognise the number by the tone it makes. Britannic’s system dissociates the voice from the buttons being pressed. This means that during a particular call so no-one can work out what the card number is.
Looking to the future
The company has won various industry awards. However Dendle says that while he loves the recognition, that is not what motivates him. It is the technology and how Britannic can apply it to support the customer.
There have been “an awful lot” of approaches to buy the company, but he says; “Money and lifestyle are obviously very important. I’m fortunate in that respect, but I have no grand ideas of disappearing to Bermuda or somewhere. I even get bored on holiday. I’m very driven and relish the challenges in business.”
Should he be able to step back, looking surprised at the suggestion, Dendle says the business could continue without him. “If I wasn’t here for any reason, the company could completely function. If a business is sustainable, no-one is indispensable.”
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