Here, we discuss organic as well as M&A growth strategies and explore how TSG has added custom software development to its portfolio of services.
Tell us a little bit about TSG for those who may not be familiar with the company
We are an IT services company based in the UK. We have coverage from Scotland down to the bottom end of the country in London, running up about seven or eight offices now, employs somewhere in region of about 350 people.
We kind of set up with a vision to build a UK-wide IT services business that not only offered traditional manage services and infrastructure but also offered a lot of business applications, sort of like a one-stop shop.
People will try to figure out how to do exactly what TSG has done, which has involved a lot of mergers and acquisitions. What has been the secret to success so far in terms of making sure those buyouts work well to scale the company?
As with all acquisitions, part of the success is good due diligence upfront, making sure that we find out enough about the company that we’re looking to acquire. Make sure that we gather the right information and what's really important is to understand the company culture, because once you really understand the company that you’re looking to acquire, you can then look how best to map it and align it with yours. Part of the success is we have a very good on boarding plan where we look to integrate companies that we acquire within 90 days.
The boarding plan within 90 days, what exactly does that involve? Are you switching them over to your IT systems, your communication systems, your financial systems? What are the steps there?
Well, it’s quite a well-proven template that we’ve worked on a period of time and it covers all of those things. It covers custom notification, staff notification, integration of systems, looking and planning about how we can maximise efficiency by sharing out our marketing capability, our backend and billing capability and integrating our professional services team.
So it’s a lot of work. A lot of effort goes into it, and it’s quite a methodical process to get it right, and along that journey, making sure that you don’t destroy the culture, the company that you’re acquiring and making sure that you provide a consistent level of service to the customers.
Do you still encourage those branch offices that you acquire to have their own personality as well?
Well, I think part of it over time is never to fall in line with the company culture but we do look to our local offices. We have people that work in each of those offices that are responsible for the social committee where we provide funding for employee events, quiz nights, and days out. We try to encourage people to interact locally with people and also interact with people nationally around the group.
Your role in the business today, does it resemble the business concept and the business you were joining seven years ago, or are things dramatically different based on all the technology and business waves that have come?
I think the actual vision that we set out to create of the national business is absolutely where we’ve got to today. I think it has taken us a lot longer than we thought. I think there was a feeling that we could do it a lot quicker. When I joined the business, I joined mainly to focus on technology strategy to align all of the technologies from all the businesses that we’ve acquired to come up with a single set of products and solutions that we could sell as TSG.
So I did a lot of work around that but the vision has always been to get down into a centralised company with a single back office, with a single management team, with a single network operations center, and regional offices that effectively work as customer hubs and sales offices. That’s pretty much where we’ve got to today.
On that seven-year journey, were there key points where you repositioned the company or you shook things up or ended one service and launched another?
Yes, quite a few. One of the challenges of being a bit of a large organisation is it can be difficult and time consuming to onboard new products. A good example for us was our first move in telephony. We decided to look at how we could best align the propositions for our customers, for offering PBX solutions. We delivered maybe about 80 or 90 units out to different customers across the UK. We were doing okay. We were looking at where the market was going and looking at things like Skype and hosted telephony and so that actually - business in the mainstream may not be adopted in the UK right now, but there will come a time it will happen.
We’ve seen cloud services in the UK really start to come to the forefront now. People are starting to lead with that conversation. So we decided that shortly after launching that service, maybe about a year, we decided to close down our on-premise PBX solution. We outsourced the support for it and we jumped right in with the hosted solution and that’s now become the core offering. So things like that have happened on the journey where technology shifts and changes what happened that made us reevaluate and reposition ourselves.
Are there key vertical markets that you have really gone after and how have they turned out?
We operate in a couple of key verticals. We work in membership organisations, transport, education, wholesale, and social housing. There are areas that we’ve either developed product or developed unique expertise around.
We’re quite fortunate in that we’ve got our own development team, we write our own products and solutions that sit on top of Microsoft core products. I encourage people to partner with people.
Are you actually writing applications that work with Office 365 or some sort of applications that run up in Azure? What has been the focus so far?
What we decided to do was, rather than start from the ground up, to build on top of some of the core Microsoft technologies. So we built a product on top of Microsoft CRM that’s specific for the membership industry. Membership organisations run subscriptions, run events, so we built something on top of that.
We’ve done some stuff around transport for train operating companies, compliance management. We’ve done some stuff for the schools, for accounting, and regulatory stuff that we’ve built on top of Sage. One of the things I would say is expensive, it is a huge investment once you start a journey, but one of the things that differentiates us from our competitors, is we’ve got some real good domain experience in those markets.
Has the software development team existed since the day you joined the company or is that something TSG has been building out in recent years?
Some of it came in from companies that we acquired. In a software space, lots of people buy Microsoft software and Sage software off the shelf and then want to do some small bespoken customisations. So we’ve always had some development resource but never really focused on developing IP for us to go in sale or developing solutions for customers, customer funded development.
So it has always existed and in some way shape or form but we took a decision to formalise it. We just took a decision to make some investment and really go after some key vertical markets. But what I would say is - I mentioned it before is, it doesn’t necessarily need to be around IP. A good alignment with a good supplier of software can really compliment what MSPs are doing to give them a bit of a unique edge in a vertical market. Once you build some domain expertise in that market, you can effectively position yourself as the go-to company for IT and software services.
Tell me a little bit more about where you see this market heading in terms of maybe some of the biggest challenges or opportunities for TSG.
Obviously the cloud. People have thought about cloud for years. Everybody was going to move to the cloud and then it backed off; it was more sort of hybrid. I think that’s a huge opportunity to really help people bring their technology up to date, to be able to take advantage of what technology can offer.
I think that offers a challenge for not only us but for all businesses in that space, is developing the right people with the right skill set to go out and have the conversations with those customers. That always is a challenge, finding enough good people with enough level of ability and being able to educate them to be able to take them out into market.
For 2016 or even as you look ahead to 2017, what do you think your core priorities as COO will be?
For me, it’s easy. Right now, it’s all about systems. We’ve made the decision to centralise and consolidate all of our internal business systems. We recognise that we’ve done the hard work. We’ve integrated the acquisitions. We’ve centralised. We invest heavily in training out people and skilling our people up. If we don’t give them the tools that they need to be able to deliver the services at a level that we want to deliver to our customers then we’ll continue to struggle to really be the best that we can be.
For me, it’s all about getting the systems in place, getting everything centralised, development, enhancing the systems, and making sure that we can take that out and deliver the best we can to our customers.
Joe Panettieri, content czar for ChannelE2E.com
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