Powerdial Services reached a low point in 2008 but the transformation that followed has brought the company to a much happier place.
During a period of business remodelling one determining factor stood out - the leadership of Managing Director Paul Farn who devised and implemented a watertight turnaround strategy. Now he's stepping up the company's ambitious growth campaign.
Powerdial was established in 1993 and operated successfully until 2008 when it was sold to a UK listed company. But the parent organisation had significant debts and was placed into administration in late 2011. Powerdial, as an asset of its administered parent, was put up for sale and attracted several bids. "Myself and two high net worth partners bought the company as an ongoing concern," recalled Farn. "My partners are still involved in the business on a week-to-week basis. One owns an asset management fund in New York with 70-plus companies and the other is a former global head of corporate law at one of the top five law firms in the UK. They bring a wealth of experience to the business."
Seaham-based Powerdial began life selling small key systems to companies with up to 50 users. Today the firm delivers much larger solutions to customers such as Dickinson Dees with 2,000 users across five locations and the Ministry of Justice which has 3,000 users covering 20 locations. "We have turned the company into a service driven ICT provider, encompassing all of our traditional technologies and augmenting those with new technologies that we see as a synergistic addition to our clients' ICT and business application strategy," added Farn. "We are now well positioned as an ICT services company with over 20 years experience of delivering solutions to our clients. These customers are located as far apart as Aberdeen to Angola and Manchester to Munich. Whether a five user to 3,000 user solution we deliver the same results."
During the primary period of restructuring between 2012-2013 Powerdial had static revenues of approximately £1.5 million, but Farn forecasts strong organic growth as demand in UC markets increases and the company's new portfolios start to ramp up. "We are currently on target to hit £2.5 million in the current year based on healthy order books and big increases in contracted revenues from managed services and applications," he said. "We aim to hit £6 million revenue in 2016/17."
Key points of focus for Powerdial in its core markets are around the UC piece. "We are constantly being asked about hosted voice, digital signage, hosted desktop and hosted video," said Farn." We can deliver these solutions via the cloud or traditional CPE vendors such as Avaya which has launched a hosted portfolio. We are seeing most demand in video, BYOD and mobility, and we are investing significantly in those areas in terms of sales and technical training as well as branding and support.
"We also see massive potential in the digital signage space. This market has grown to $20 billion inside five years and has double digit CAGR for the coming five years. We are well supported in this space as my partner in the US has one of the largest digital signage companies in north America in his asset management fund. We also partner with BCS Cloudmedia. We are currently working with several international companies on 'point of contact' solutions including a 73 site motor reseller. We are also focusing on business applications and VM solutions. In that space we have recently deployed a call recording solution incorporating speech analytics and workforce optimisation using VMware."
Trend alignment is now more critical than ever, according to Farn. "The UK communications industry has changed more in the last three years than in the last 30, and we must change with it," he said. "We spend time researching market trends and aligning ourselves to areas where we see sustainable long-term growth. Over the last 18 months we have incorporated managed cloud services into our value proposition meeting demands from our clients. We are now strongly positioned to scale that growth area to match the market demand. It is also worth noting that while we see faster growth in cloud spend, it still only represents less than 10 per cent of the overall market spend on ICT."
Having rationalised the supplier base and customer value proposition Farn set about focusing on core markets such as UC and formed strategies to move into the aforementioned high growth emerging markets. "Everything we have expanded into is synergistic to our existing propositions and can be included in a customer's UC strategy," he said. "Our customer proposition is based around offering a consultative approach aimed at improving their UC strategies and driving costs out of their P&L."
The profile of Powerdial's customer base has naturally changed in line with its propositions. The company has strategically positioned its solutions portfolio in the mid-market space as this sector responds best to new technology. Also, the cycle of first appointment to sale payment is significantly shorter in the enterprise space.
Now that Powerdial's core solutions have been enhanced with business related applications, Farn, where possible, sticks to a policy of offering customers at least two choices of solution. "For example, we have clients with CPE video conferencing equipment but at the same time demand is growing for hosted video with desktop applications," he commented. "From a voice perspective we still see growth potential in CPE solutions as well as hosted, although the demand for hosted is growing faster in certain verticals."
Farn's background in finance and advertising gave him insights into how a business should operate fiscally. His working life began in 1976 as a trainee accountant at the National Coal Board. Eight years later he sold advertising in newspapers and in 1987 moved into manufacturing and was appointed Managing Director of a company making stainless steel components for the food and drinks industry. Farn managed and grew the business significantly and opened a wholesale and distribution warehouse in 1990.
"I sold my stake in all of those businesses and joined Powerdial in 1998 as Sales Director, working for a long-term friend who founded the company," he said. "The advertising role taught me that sales is really all about activity, creativity and mental toughness. The manufacturing business taught me how to operate profitably at high volume and low margins, while the distribution and wholesale businesses taught me about logistics. These experiences helped me appreciate the value of teamwork, and I understand the plus and minus points of every role inside our business."
Farn's immediate and mid-term objective internally is to build on his hand-picked team. "Without them my planning would be meaningless," he said. "It is important to recruit wisely and correctly as we need the right people in the right roles. When recruiting sales people we test every candidate in literacy, numeracy and Belbin tests. I have learned that effective recruitment is one of the most important cornerstones of any business. We cannot have square pegs in round holes. Within 18 months we aim to grow our headcount to 30-plus."
Powerdial's recruitment-driven expansion, underpinned by a clear strategic vision and a highly effective customer retention and satisfaction programme, will push revenues to circa £10 million within five years, hopes Farn. "To achieve this objective we have written a well thought out business plan and had it vetted by two of the best names in the industry as well as our three shareholders," he commented. "It is a solid plan with built-in sensitivity and accounts for all eventualities. We have our P&L firmly under control and have established the right partners and solutions in markets that are growing."