With claims that it has been approached nine times in the last six months by various software houses wanting to buy the SAP implementation and business process innovation company, Axon Solutions must be doing a lot right. But rather than take the money and run, the Egham, Surrey-based company says it’s set its sights on expansion with a public flotation looking imminent. Axon was set up in November 1994 by former SAP man, Mark Hunter, with the intention of becoming the best SAP implementer there is. It seems to have been successful; it’s an accredited Accelerated SAP partner and the company was winner of SAP’s 1997 ‘Partner Excellence’ award. And according to analyst firm Gartner Group, Axon’s staff count among the most highly trained SAP professionals in the UK. Axon’s services don’t come cheap, with fees above the market average. However, the company has achieved an impressive 2:1 ratio of service to software costs – ahead of the market average of 4:1 – and this helps bring total implementation costs into line, or even below, the market average. This certainly helps increase R/3’s attractiveness to potential customers who may have been put off by SAP’s reputation as expensive and time consuming to implement. While its primary business may be SAP implementation, the company also provides a range of other services. It supplies various post-implementation services: an ongoing support infrastructure (including 24 hour support), project realignment, business process re-engineering, and staff training. It also sells SAP add-ons – developed for specific customers but sold on where appropriate (including solutions for telesales, telecredit and waste management) – that overcome some weaknesses in the standard R/3 set up. And Axon is not shy of new technologies. It says it is always looking for ways to help customers gain a competitive edge and a better return on investment through implementing ERP in new and innovative ways. To this end the company is embracing new business related technologies, such as e-commerce and enterprise application integration (EAI). E-commerce is becoming an increasingly important part of Axon’s armory. Axon claims to have implemented Europe’s first internet enabled SAP R/3-based project, for hardware reseller, Morse Group. And it now says that business transactions worth between 750m pounds and 1bn pounds are running through its e-commerce solutions. The company estimates it currently has what it considers to be the lion’s share of the market for SAP-based e-commerce in the UK. Certainly, Axon’s list of e-commerce customers is impressive. It has already implemented e-commerce for the photocopier/office automation group of Xerox in 77 countries, and has set up systems for the electronics company, Sharp across 500 of its dealerships. The technologies utilized are all cutting edge, including Commerce-One, BroadVision (for Xerox), Ariba and Haht. The company is also an investor – along with the likes of Ernst & Young and Intel – in EAI developer CrossWorlds, the innovative but troubled Java-based application designed to allow widely differing enterprise systems to communicate. Despite the difficulties experienced by Axon customer, Orange, in implementing CrossWorlds, Axon remains committed to the idea of the technology. By way of the extended business systems allowed by e-commerce technology and EAI products like CrossWorlds, the company’s ultimate aim is to develop what it calls ‘business ecosystems’ linking both supplier and customer communities. Axon’s client-base covers a broad spectrum of blue-chip companies across many vertical markets – though the company insists it prefers to think in terms of a customer’s needs rather than its market, per se. These include consumer goods (Cadbury Schweppes, Scottish Courage), finance (the European Bank of Reconstruction), media/telecomms (Orange, BBC, Mercury), retail (WHSmith), electronics (Xerox, Sony, Sharp, Cable & Wireless) and utilities (British Gas). Axon prides itself in only taking on customers that share its ideals. To this end it is not unknown for Axon to reject potential custom on the grounds that it is not interested in simply implementing ERP for the sake of it. As a result the customers it does have tend to be high profile. Axon also offers shared risk contracts, which help overcome resistance to fixed- price contracts that usually will include a premium to cover unquantified risk. The success of this strategy is ensured by creating a project team made up of one-third customer representatives who can take ownership of the project on completion. The company has grown rapidly with 1998 revenues of about 20m pounds, broken down as follows: SAP implementation, 13m pounds; ongoing SAP support, 2m pounds; SAP extensions, 3m pounds; and e-commerce, 1.5m pounds. These figures are likely to change substantially in the near future, as Axon moves away from its original role as primarily a SAP implementer. Although it is early days yet, the company expects its other three business lines will at least double in revenue in 1999. Axon is an aggressive acquirer of expertise, often winning top SAP consultants for salaries up to 40% higher than being offered elsewhere. It is not, however interested in expanding its activities through acquiring rival services companies.
