Our primary goal is to strengthen our position in the Nordic region, Rikard Petri, financial director of Swedish based IT services provider WM-data told us, referring to a Scandinavian IT services market that’s worth in excess of $8.13bn according to European Information Technology Observatory figures for 1998. Out of this WM-data turned in record profits for the financial year ending December 1998 with a 64% improvement in its net earnings, taking an estimated 18% scoop of the services market in that part of the world. We have our eyes on continental Europe only in the very long term, Petri continued, though having to cater to some multi-national customers means it does have overseas outposts in Poland, Germany, Holland and France.
Revenues for the year ending December 1998 showed WM-data Group’s numbers up 56% to $1.48bn with a profit margin for the year of 7.5%, also up from 7.2% for the previous year. Of this WM-data attributed 46% to organic growth, the remainder being made up by revenues from acquisitions made during the year. In financial years 1997 and 1998 we acquired around 30 small IT businesses, commented Petri, in January 1999 the purchase of Swedish application developers Caran provided 650 consultants. It’s an acquisition that shows we are prepared to acquire larger companies where we think it appropriate.
Caran was formed in Gothenburg in 1982 and became one the market leaders in its field. Its ‘Total Design’ approach aims to provide know-how and resources for implementing complete development projects from conception to finished product. The acquisition should bolster WM-data’s consulting operations as well as providing added expertise in its software product offerings.
WM-data’s figures for the year include revenues from both hardware and software sales. For the year ending 1998 consulting services represented 32% of total revenue, down from 39% for the previous year. The company’s computer and network operations meanwhile accounted for only a slight 7% of the group’s total for the year-end December 1998. Computer services therefore accounted for approximately $578m. Some 15% of business done with financial sector, 59% industry and retail. A massive 98% of its revenues derive from Scandinavia.
The company admits that Y2K has slowed the ERP end of its business but it expects that once this is out of the way things will quickly pick up again for its 100 or so SAP consultants. The 3,400 consultants on its books work in the main on roll outs of WM-data’s own software but they also do get involved in Oracle, and to a lesser extent Baan back up services.
By year-end the number of employees stood at 6,500 an increase over the year in headcount of 26% or 1,350 employees. At the close of the year staff turnover stood at 12%, still slightly off its stated goal of 10% for the year. Overall, 25% of employees have been with the company for more than five years. By geographical location, 4,236 of WM-data’s employees were based in Sweden.
WM-data’s systems design division was formed in 1969. With 2,000 consultants the unit specializes in the design, development and administration of large scale IT infrastructure systems using WM-data’s own proprietary tool-set. These operations can be divided into two main areas – one for data and telecommunications and one for technical systems and infrastructures. The first encompasses specialist areas like LANs, WANs/internetworking, internet and intranet, CTI, message handling, EDI, workflow solutions, infrastructure, security and systems and network management. It also gets involved in and more strategic assignments. The second area of technical consulting provides specialist expertise in client/server technology, relational databases, systems development, internet/intranet solutions and systems for document and case handling. WM-data will often assume full responsibility for implementation of a customers’ overall corporate IT environment.
WM-data also provides consulting services in decision support, financial administration, production, distribution, personnel administration and financial control. In addition to earlier agreements with suppliers such as SSA, Geac and Oracle, WM-data has recently formed an agreement with SAP over its business systems programs. WM-data can be expected to increasingly shift over to non product-based applications consulting and systems integration due to a reported increase in customer demand for such services.
In May 1997 the company acquired DocEye, specializing in document handling and workflow, from Saab Combitech. With expertise in work routine analysis, process-orientation, case handling, data storage, data retrieval and analysis, WM-data says it can now offer a comprehensive information support solution.
WM-data’s computer and network operations unit focuses on the operation of central and distributed computer systems and communication networks, including customer support. WM-data has around 200 customers who are served from two facilities, one in Bromolla in southern Sweden and one in the Liljeholmen area of southern Stockholm.
WM-data reports that key driving factors in its outsourcing business have been EMU and Y2K. Its outsourcing services involve operating and maintaining infrastructure in the form of computers, networks and systems. Its WMnet is one of the Nordic countries’ most extensive computer networks with 55,000 linked workstations.
Electronic trading is another area where WM-data is actively involved. Toppledarforum, a cooperation between State, municipal and county government, has set a target for around 95% of public sector purchasing to be carried out electronically by the turn of the century. In 1996 the Swedish Agency for Administrative Development signed a general agreement with WM-data as one of three suppliers of electronic trading systems and services. The cities of Stockholm and Helsingborg are among its first customers.
