Financial software company Alfa has reported an increase in the number of customers requesting complex multi-country implementations of its systems and broader demand for cloud services that drive business efficiencies.
While this means customer decision-making is becoming more complex, it also reflects the increasing value placed on trusted software suppliers that can manage complex international requirements as part of a focus on long-term partnerships, according to the company’s CEO Andy Denton.
Changing customer requirements can have a short-term impact on revenues, as contracts take longer to agree, but Alfa prioritises beneficial partnerships with customers ahead of short-term targets, he said.
Key changes the company experienced last year include a potential new customer significantly increasing the geographical and functional scope of a proposed project, which delayed a key project start date as it increased in scale and size.
Denton said: “We have seen a number of single country implementations expand into potential multi-country implementations over the last 24 months. In the long-term, this expansion leads to operational benefits for the customer. For Alfa, while this multi-country expansion increases the value and size of the opportunity, it often also impacts and complicates the decision-making process.
“Our partnerships with customers are based on trust and knowing that we aren’t just going to say yes if we don’t genuinely think something is good for the customer. We can challenge without being challenging, so that customers know they can trust us to put their needs first.”
This focus on trust is particularly important with the increasing use of cloud-based services, where data is stored away from customers’ premises and therefore must always be completely secure and accessible.
Currently half of the projects that are at the implementation stage are cloud-based.
Denton said: “We expected cloud-based services to be important, but there is definitely a tipping point.”
For 2019, he said the priority would be on demonstrating the business possibilities that its open API gives for establishing technology partnerships and building a platform ecosystem which will be available to all customers.
The focus on partnerships extends to Alfa’s own suppliers, as it looks to apply greater resources to supporting software implementations. It now has three approved partners, which are Teamwill Consulting, Genpact and Tellox.
Alfa is negotiating framework agreements with two additional partners and aims to extend the partner network during 2019.
The company is also planning a major update of its systems during the year, which Denton promised would bring a number of “eye-catching” changes as the look of the software is refreshed.
Denton said: “We remain confident in the long-term opportunities for Alfa and are comfortable that the company will perform in line with the board's expectations in the year to come. Notwithstanding the challenges of driving growth, Alfa remains a strongly profitable, cash generative and well capitalised business with outstanding staff and intellectual property."
In its annual results for 2018, Alfa showed the disruptive impact of changing customer schedules, with revenues down 19% to £71 million, although demand accelerated in the second half of the year.