Eleven years after the Management Buyout of Fusion and over fifteen years since I started Fusion Business Solutions in the Horizon Technology Group, I have handed over the reins to John Mohan, as the new CEO. That time, especially as the owner and CEO of Fusion, has taught me a lot about running businesses in an environment that much has changed. Let me reflect a little on this.
When I started Fusion as part of Horizon, IT was in a boom cycle – part of the internet and dot com era. The emphasis was on revenue growth not profit or cash and it was all about building businesses based on an internet model or based on supporting internet businesses. Creating a sustainable business was mixed up with creating short term shareholder value through excessive valuations. All that changed very quickly around 2002 and the emphasis went back to profit and cash and the realisation that creating those sustainable businesses takes around 10 years.
We defined a strategy for Fusion in 2002 that still works today.
- Focus or niche – we set out to become an expert in BMC Software solutions (or solely Remedy as I was then). We wanted to have a deeper skill set around BMC solutions than a broader based IT Services company. Over the years we have avoided diluting that message by working with other infrastructure software vendors. BMC and our customers know us for that knowledge, expertise and experience. When times got tougher, we made ourselves even more niche, while some of our competitors diversified. We survived, many of them did not.
- Customer centric – we have always said that we are a service provider and the experience of our customers determines our success or failure. Now customers are hard work – they can be inconsistent and sometimes blame suppliers when it suits them internally – but it is also hard work to continually deliver a service to customers that meets or exceeds expectations. We have not always achieved this, but we have always tried to.
- Profit based – making money is a sign of a successful and sustainable business. We have always tried to reinvest some profits to create opportunities for the business to grow but we have never sacrificed all our profits for some future revenue stream (as in the dot com era). We also had a bonus scheme based on profit share ensuring company performance was linked to employee reward and vice versa.
Running a business successfully comes down to consistent execution over many years. IT services businesses, and perhaps most businesses, need to be experts in three areas. You need a strong sales focus and culture to sustain revenues and keep the business moving forward. You need a strong finance focus to ensure you consistently make money and have the right level of investment. And you need technical or operational competency around your core services. In my experience all three are pre-requisite for a sustainable, successful business. This, I believe, we have managed to achieve.
Of course our environment has changed much over the years and we must continually respond to this. Today it is all about Clouds, Smart phones and a ubiquitous network – it was not like that 10 years ago! BMC has also changed much - Remedy, our core expertise, has had four owners in 12 years and many changes in strategy and personnel. We must continually respond and change while continuing to execute on our strategy. Part of that continual change is my move to Executive Chairman, giving John and his management team the opportunity to shape the business within the bounds of what we know to have been successful for us.
I would like to thank everybody involved in and with Fusion over the years for their support, encouragement and business and I look forward to working together in my new role.