The Spicer CRS division will launch operations on 1 July as the new face of Spicer Communications. It will be headed up by Mike Higgo, who is currently embroiled in a legal battle with his former employer ATIO, which claims he lured fellow employees away and used confidential company information in his position at Spicer. But the court room drama has done little to dampen Du Toit`s enthusiasm.
"The CRM [customer relationship management] market is huge, and it is growing very fast. There is an opportunity here. All we need is a six-month window to become established as the default CRS provider," says Du Toit.
Higgo has an important part to play in the "strong team" that will back up the CRS strategy, and Spicer intends to stand behind him all the way. "Higgo is an important player and he has our full support."
And there is little reason to fear that Spicer`s image will be tarnished by legal action not directly involving the company. "If our customers want to know what is happening we are more than willing to discuss the matter. Nobody seems to have a problem with it," notes Du Toit.
The company has high hopes for the CRS division. It is to be that Holy Grail of the IT industry - a long-term investment that pays for itself in the short-term.
Spicer thinks it has an edge that will give it a foot in the door, and that is all it needs. "We are coming at it from the solution side of things," he explains. "We are taking a product-independent view without being product-atheistic." Although careful not to commit to numbers, he expects substantial revenue from the venture, and a R10 million figure has been thrown around. The bottom-line is always adding to the bottom-line.
Going global
The next step beyond CRS is offshore earnings. Those are provided by UK-based MIS, in which Spicer has a 27.5% stake. MIS will continue as a vehicle for expansion and will work in parallel with the CRS division.
Du Toit says Spicer is on track to take control of the company by mid-2000 with at least 40% of the equity. "That is at the latest. It could be considerably earlier." The expansion strategy is a thoughtful one. "We don`t want to be forced offshore because there is no more room to grow locally anymore. It must be planned and controlled."
The idea is to move carefully outward and adapt to each new market. Du Toit foresees a phased approach with Europe first, Australia somewhat later and the treasure chest of North America last. The business model will be tweaked according to each new market to make sure that it is ready to succeed in the US.
"We believe our model is unique worldwide, but we need to prove that it works."
The expansion will probably be acquisitive. Building a company from scratch is fine and well, but takes a bit of time, argues the executive chairman. "It would take us say five years to get to the same place. You have to ask whether it is worth it."
Listing fever
But such acquisitions are driven by shares not necessarily listed only on the JSE. It seems only a matter of time before Spicer spreads its wings. "There are two reasons to list on a foreign exchange," Du Toit points out. "You raise capital and you raise the credibility of your shares. It is pretty hard to sell rand-based shares to foreign guys." It might not happen in the near future, though. "When? I don`t know. It depends on the strategy. But I can tell you that we haven`t started moving on it yet."
If and when there is an offshore listing, it will probably not be on the sexy Nasdaq. "The Nasdaq is very product-focused. Spicer is a services company. The LSE [London Stock Exchange] has a far better understanding of service, so if we go we would go to London. Again the strategy must be consulted before a move is made though. "You don`t do something like this because it is the flavour of the month. You make sure it is the right move first."
That seems to be a Spicer mantra: planning, planning, planning. Du Toit believes this approach is largely to credit for the company`s success. "Our strategy was determined from day one. We decided to not go acquisitive until the right time, and it worked. We will do the same with our international expansion. There is no insane drive for globalisation here, no target to go 90% international in five years. We need to prove ourselves first and then go out there and do business," says Du Toit.
His personal philosophy is not all about planning, however. There is some room for spur-of-the-moment choices, but there is also a strategy for cleaning up if it doesn`t work out. "In IT you sometimes have to move fast and take risks. That means making mistakes every so often, so you correct them. There are no holy cows in Spicer. You don`t cover up mistakes, you correct them and don`t do the same thing again."
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