Staff filling consultancy gap

By ADAM GIFFORD

The takeover of management consultancy, Azimuth, by Nasdaq-listed Indian-based services company, SeraNova, has created a gap in the local market that former Azimuth staff are trying to fill with new ventures.

Azimuth acted as an umbrella for consultants who had considerable business and information systems (IS) experience, backing them up with business development specialists who could keep the work flowing.

The new owners are focusing on e-business, looking for projects for their legions of code-cutters back in Hyderabad, Bangalore and Chennai.

During the year, SeraNova has shed many of the "grey hairs" who were doing traditional management consultancy. New Zealand manager Tony Booth says the company now has about 40 consultants.

"Our focus is on e-business consultancy and being developers, implementers and integrators. We offer a wider range of services in a narrower platform."

He says that even in the small New Zealand market it is possible to meet SeraNova's targets of high margin growth.

SeraNova's third quarter results, reported last week, showed revenues of $US23.3 million ($56 million) in the three months ended September 30, compared with $US10.5 million ($25.25 million) in the corresponding quarter last year. Gross margin was 52.2 per cent, up from 41.8 per cent in the third quarter 1999.

"As more projects generated out of the United States, Britain and Australia-New Zealand are executed in India the operating improvements will continue," says the chief financial officer, Ravi Singh.

Former Azimuth Auckland manager, Denis Parkinson, has set up a new business, Thebics Consulting, to fill the gap made by SeraNova and to build on the strengths of the Azimuth model.

"I've set up a virtual company with no bricks and mortar," he says.

"I have several people on board and the first chargeable projects are underway, although this close to the end of the year most firms don't want to start projects.

"I'm looking to work with associates rather than employees so I can cut overheads and give better value to the consultants and their clients."

Mr Parkinson says Azimuth's model suited the local market. "The key factors were independence - no alignment with any hardware or software vendor - experience and tight focus on project control.

"We expected anyone we employed would have lengthy business and IS experience. Unlike chartered accounting firms, we didn't get graduates and put them out there with a methodology."

Another former Azimuth executive, John Allen, has set up a similar business called Callidus Consulting, in Wellington. It has six associates, all ex-Azimuth, and is picking up work from government organisations.

Mr Allen spent a year at SeraNova's North American headquarters in New Jersey and doubts its model suits this market.

"Having seen the size of the projects they are doing for United States and European corporates, I don't see New Zealand organisations having the need or the deep pockets to embark on those projects," he says.