- BRW Lists
Published 21 August 2013 21:30, Updated 26 November 2013 18:35
Pronto’s David Jackman says he’s looking at further growth opportunities in the US. Photo: Arsineh Houspian
Mid-Market Awards 2013 | Best Mid-Market Business ($50m to $100m): Pronto SoftwareThe managing director of Melbourne-based Pronto Software, David Jackman, is looking forward to the federal election.
“I’m so glad we’ve got an election coming on because the uncertainty of the whole hung Parliament has affected consumer confidence and that has meant that investment confidence in business has declined,” Jackman says.
“There’s a huge subset of businesses that admit they need software and may have funding for the software, but they’re choosing to wait and see what happens because they don’t want to invest under the current system.”
The greatest uncertainty is whether there is going to be a price on carbon emissions and what form the system might take. Pronto Software’s enterprise resource planning and business intelligence software includes components that let companies measure their carbon footprint, but Jackman says uptake has been patchy.
“Some customers are spending effort on measuring their impact on the environment and other customers are not doing it at all, even in the same industry,” he says. “A year or two ago there was a lot of activity, but others are sitting back and saying they’re going to wait and see what happens with the election because Mr Abbott has said he’s going to ditch it all.”
Despite this obstacle, Pronto’s business is going from strength to strength. It has posted revenue of $69 million and has 333 employees.
The company also won the prize for best mid-market business in the $50 million to $100 million revenue category in the BRW GE Capital Mid-Market Momentum Awards, which acknowledge high performance in revenue, profit and employee growth, demonstrated innovation and leadership in an industry sector.
In the past year, Pronto has opened three new branches in Perth, Adelaide and Dallas, Texas in the United States. It has also doubled the floor space of its research and development centre in Melbourne and launched a new R&D group in Sri Lanka focused on cloud technologies. The company invests more than 10 per cent of annual revenue into R&D.
Jackman says last year’s growth was about 3 per cent, down from the annual compound growth rate of 12 per cent of the previous decade. After the election, regardless of who wins, he expects it to get back to 12 to 15 per cent. The company is debt-free.
The staff count has risen from 296 in 2011, despite the slowdown in growth, and Jackman says that is because he hires people in anticipation of needing them. “If I wait until I need them, I’m too busy to train them,” he says.
Pronto has a staff turnover rate of less than 5 per cent per year. Half the company’s employees have been with it for more than five years and more than one in four for more than 10 years.
Jackman tries to promote from within the company and uses training and job rotation to achieve that. His human resources practices include an open-door policy, regular one-on-one meetings with senior management, the intranet and workgroup meetings.
Staff donations to charitable causes are matched dollar for dollar by the company and the business has taken steps to reduce its carbon footprint, for example by data centre virtualisation, which reduces power consumption.
Pronto is not just a mid-market business, it is also a technology provider that specialises in serving the mid market.
The biggest player in the ERP and BI space is German software firm SAP, but Jackman argues SAP is more geared to the high end.
“I would never suggest that Pronto could run Shell . . . but we are actually suited to the mid market,” Jackman says. “The large organisations that have hundreds of thousands of employees need to spend a lot of money to work out where they are; the mid market can’t afford to spend a lot of money but they want to be lean, mean and more efficient. Why would you buy a Formula One to drive to the supermarket?”
Jackman says Pronto has been in business for 30 years and has built a trusted brand. Its customer base spans everything from mining companies to retailers – any business that “makes something or moves something”, as Jackman puts it.
Pronto clients include The Body Shop, Inspirations Paint, Meyer Cookware, Wallace Bishop Jewellers, Austral Construction, Hitachi, Hirotec, The Co-op, Hart Sport, and Retail Prodigy Group (Nike).
Pronto does most of its business in Australia, New Zealand and Papua New Guinea, but also has a good presence in Malaysia, Canada and the US, and has made recent inroads to Indonesia and Vietnam. It technically has customers in 30 countries, but Jackman says that is because it has a number of mining clients with operations in several countries.
Once the Dallas market is up and running, Jackman hopes to open offices elsewhere in the US, including Chicago.
“The American market is coming out of the doldrums and has a good cultural alliance with Australia, and I’m looking at it as a good market because they are not parochial, they are happy to look at Australian stuff and Australians get on well with Americans,” he says. “As an exporter, the falling Australian dollar is great. I’d love to see the dollar drop like mad – we’d make more money.”
The company has been moving into the cloud computing space in recent years and will allow customers to rent the software on a monthly basis with no fixed term. (However, unlike some of his competitors, he declines to call it software-as-a-service because the software typically requires some customisation.)
“As you add other features and software gets more mature, many customers of various sizes, not just small ones, say they don’t particularly want to maintain it themselves and that can be done more efficiently with the cloud,” Jackman says.
“We can sell someone software, we can rent someone software, we can have a term, we can have no term, we can run it on your hardware, our hardware, or hardware on your premises that we host like a local cloud.”