UCS outlines expansion plans

Johannesburg, 25 Oct 2007

UCS Solutions is making headway in breaking into the Middle East and US markets, says Jessica Knight, head of UCS Business Solutions.

"After 18 months of researching opportunities in the Middle East, we have secured the first phase of a programme with Dubai-based Al Futtaim.

"This company operates retail stores as diverse as Ace Hardware, Ikea, Toys 'R Us and Marks and Spencer in its retail portfolio in the Middle East."

UCS has secured a contract to upgrade Al Futtaim`s SAP platform. Knight says the companies are also busy formalising a broader programme.

However, UCS has no immediate plans to set up offices in the region.

Knight explains: "We are being reasonably conservative about how we tackle the Middle East market. For now, we are shipping resources there to do the implementations, but looking to leverage our offshore delivery abilities for services and support."

Facilitated entry

UCS`s entry into the US market will see the company set up operations in the region in January.

"We are taking our SAP Ready to Retail business to the US market with the help of SAP. At the moment, SAP has no value-added reseller in the mid-tier retail space, so we will fill that space. This partnership is important to both players. We are keen on accessing the opportunities in that market. SAP was relatively late in entering the US and the retail markets, and our solution will help them break into the market," says Knight.

UCS is expecting to spend between R7 million and R9 million in establishing a US presence. This would probably have R2 million to R2.5 million impact on its earnings. The company`s South African region would still deliver the majority - up to 70% - of services and development for the market.

However, Knight says the investment is certainly worth the projected returns from that area.

"We believe the US market could deliver $500 million. By 2010, our business plans expect that region to be delivering 30% of the Business Solutions division`s turnover. This is despite the fact we see strong growth from our established regions. We are aiming to triple revenue emanating from this division," she explains.

Local commitment

Although the company is excited about its international prospects, it is aware of its local commitments.

Says Knight: "We are firmly established in 12 of the 15 major retailers, with touch-points in the remaining three. There is a lot of inbuilt growth available which we cannot afford to neglect. It`s a resources balancing act that we will be firmly focused on."

Knight says that like other companies, UCS is battling with finding and hanging onto human resources.

"It`s a war out there. I wouldn`t say it`s a crisis, but it certainly adds a lot of pressure when your key offering is around knowledge. We are continually looking and have recruitment agencies that are tasked with finding appropriate people. We are even part of Homecoming Revolution`s overseas conferences to try and attract people back to the country."

Offering opportunities in the Middle East and US could help the company to retain the interest of its workforce, she adds.

"Several people have already expressed an interest in going to the regions on contract. Its one of the things we will be able to offer as part of a technology and career path."

UCS is also in separate negotiations to enter the UK and US market through acquisition. The company hopes to make announcements in this regard shortly.