IT firm breaks free of parent

The New Zealand managers of IT consulting firm Mi Services have bought the local operation from its British parent for an undisclosed price.

Director Steve Bergin said the deal includes the Australian business, which is mostly serviced outside New Zealand.

It also includes the SCORWizard and ProcessWizard consulting tools developed here, and the support contracts for customers using Ross Systems software, which include several United States steel mills.

The other owners are ProcessWizard architect Mark Simon and operations and consulting manager Peter de Heer.

The company has 12 months to find a new name.

Graeme Muller, New Zealand manager of research firm IDC, said the Mi Services New Zealand operation had revenue of $8 million in 2003.

"It is definitely a niche player, but it is very interesting because it has a door-opening product to build its consulting business around," Muller said.

Mi Services started as Motherwell Information Systems, a division of Scottish engineering firm Motherwell Bridge.

It was sold in 2000 to European venture capital firm 3i for £84 million ($220.8 million), but was hit hard by the tech bust, shedding hundreds of staff.

Bergin said the New Zealand and Australian operation consisted of 36 people, including those working in the US. It plans to take on up to 10 permanent staff over the next year.

About 80 per cent of revenue now comes from Australasia, a departure from the late 1990s when more than half the subsidiary's revenue came from the export of services to the US.

He said the New Zealand operation had evolved differently from its parent, with more of a focus on supply chain optimisation and process manufacturing.

"This gives us the opportunity to do more than we could with the group, which never really bought into the supply chain stuff, and we can concentrate on local strategy which benefits local customers," Bergin said.

It also spares them the cost of sending a 50-page report to Britain every month.

Fonterra is a significant Mi Services customer, as are companies in the Fletcher group. It is engaged in a big supply chain project for the Placemakers building supplies company.

Bergin said much of the company's work was providing the glue between the operational part of a business and the IT part.

It is also an Oracle implementer and Jade partner.

SCORWizard is software built around the Supply Chain Council's supply chain operations reference model. It has provided a valuable source of consulting work for Mi Services, with users including Boeing, Intel, the US Marine Corps, NASA, Novartis, BHP Billiton and Fonterra.