Asking the average Stock Exchange broker’s analyst to put a value on the shares of the rather esoteric Learmonth and Burchett Management Systems Plc is a little like asking a PC spreadsheet to run a bill of materials. It can probably manage it with a bit of rejigging, but it wasn’t designed to do it. So questions at Learmonth’s announcement of its first year’s figures as a public company last week (CI No 947) centred mostly on what it was going to do this year, how much money it had in the bank and what it was going to spend it on. The answers were that it would continue to do well; that shareholder’s funds had reached UKP2.8m, that it had no debt; and that it would augment its organic growth this year with the search for the right kind of acquisition – and had spent UKP1.1m on research and development last year, an increase of 67% over the previous year. It was not itself seeking to be acquired: its principals genuinely feel that it can achieve the super-league status of the major US software firms. Cognoscenti For the cognoscenti of software development methodologies, the meeting would have proved a little more enlightening. It demonstrated that a small British company, which has ostensibly cracked a tiny, but extremely high level, section of the computer-aided software engineering market, can grow beyond the obvious limitations of running training courses, which is constrained by the number of quality trainers the company can generate. Three years ago Learmonth & Burchett went through the painful process of putting the methodology that brought it to prominence when the UK government decided to standardise on it, into software. This meant developing a tool for software designers which runs on a personal computer under MS-DOS and through the use of graphics and windows will lead the designer by the nose through the step-by-step production of a rigorous program specification. That tool was Automate Plus, which will come out in a major re-written form late this year. The programs that it helps to design are targetted at IBM and DEC machines (and to a lesser extent any of the mainframe and minicomputer architectures) and Learmonth has now sold 2,500 copies of the thing, at between UKP5,000 and UKP6,000 a time. The company still trades heavily on training and consultancy, but now many of its leads and pass-on work comes from the software sales. It has built a $3.3m-a-year business in the US, and increased overall turnover last year by 42% to UKP10.76m and pre-tax profits by 31% to UKP1.9m. The problem that be-devils the financial analysis of Learmonth is putting a figure on its potential for growth. It does not as a rule charge for upgrades of its Automate software, although the next version will run as a multi-user system on local area networks, and will come as a premium over the single-user version. But existing customers can only be expected to give Learmonth business through a handful of repeat sales and the continuing process of training and consultancy. The key to growth is therefore in its software products, where it won’t be constrained by looking for staff. And this growth should come in two ways, firstly from alliances with bigger software and hardware firms in the sector, and secondly with extensions to Automate that take Learmonth out of the one-product-company category. It already has interfaces between Automate Plus and IBM’s DB2 relational database management system; Software AG’s Adabas; and Cullinet’s IDMS, and new relationships with MSP and its Data Dictionary; Pansophic, where it acts as a program specifier for Telon, and with Philips in conjunction with Maestro. All this points at Automate Plus doing a lot more than simply specifying a program, diversifying into both generating code and interfacing directly into applications generators like Telon. To many people this is the final link in the software development chain, while to others the tenacity with which Cobol users have clung to old development methods still makes this type of approach a hard sale. Another recent extension to Automate Plus has been
Supermate. If Automate was a systems analyst expert system, then Surpermate is his boss, an expert system data processing manager. It’s an odd concept, and relies on a company having a corporate plan that can be fed into the system, which will then in return give advice on which information technology projects the company might undertake are likely to give it the most competitive advantage. Learmonth & Burchett modestly admits that all it has done is to take the work on competitive advantage done by a Harvard University professor and program it. Supermate version 1 has been installed at under 100 sites, compared with 2,500 for Automate Plus, and reading between the lines, experience with version 1 sent the designers back to the drawing board to come up with a second version that will come out later this year, and they think they’ve got right this time. Planning for 1992 Automate Plus has only about two competitors, James Martin’s IEE, and Arthur Young’s IEF, both of which are significantly more expensive; but it is unlikely that Supermate will have a competitor for some time. Its fate is in the hands of the company and the market: it will either take off or it will be a commercial failure, but it will not be beaten to the post by another product. A more straightforward project is to automate the Prompt project management method in a software product, and both products will of course interface to Automate Plus. Automate Plus itself will be extended to help in the building of real-time systems, where again it should be in a field by itself, with only extremely expensive tools from Software Sciences and SD-Scicon doing anything similar.
Learmonth & Burchett, like many others forward-looking companies, is already planning for 1992 and an open Europe, and with just the Danish and French governments working to standard methodologies, that leaves a lot of Europe left to grab. It has also spent 1987 recruiting a series of continental distributors and is looking for at least UKP500,000 in business from them this year.
