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How Offshore Stays On Track
Offshore Electronics' turnover has risen 500 per cent in seven years - and the firm believes a lot of its success is down to the way its IT system takes care of business.
Paddy Baker paid a visit
Contract manufacturer Offshore Electronics was formed in 1990, following a management buyout from Eurotherm. Managing director Steve Marshall and six other directors put in their own capital, leased the St Peter Port factory back from Eurotherm (later buying it), and offered jobs to half the 140 workforce. They also took over some of the order book - work for both Eurotherm and for third parties - and so hit the ground running with a £1 million turnover. Today the company's sales are six times that amount, but the number of employees is still just 70. " The numbers haven't changed, but our profile has - we've become more high-tech'". comments Marshall. He believes that a key factor in his company's success has been the manufacturing IT system, WinMan from TTW.
"It's an absolutely brilliant system - it gives us a real edge," he says. "We've grown by 20 per cent a year, but our overheads haven't." Marshall takes pride in the fact that he doesn't need an accountant for the daily and monthly figures - "the nuts and bolts of it go on in the background" - although he does use a well known firm for auditing and for tax matter.
"The system basically runs the whole operation," he says. "It touches everyone. I had to push its adoption through the company - no-one else could have done it. If it had been driven by the IT people it would have been the tail wagging the dog." He is similarly critical of IT projects driven by finance departments. "Too many companies are ruled by accountants, so the accounts package always comes first, regardless of what is best for the business as a whole."
When Offshore was founded, it inherited some IT hardware and software, though the system was quite fragmented. "We used a lot of Post-it-notes," says Marshall. In 1992, he started looking for another system. He went "a fair way down the road" with upgrading the existing manufacturing system, but at the time it was still DOS based.
WinMan was in its early days, but it was then the only program written specifically for windows, though others would run under it. We went live in October 1993, and junked everything else. We put in a new network for it to run on, and TTW helped us with converting the data.
"People familiar with the Windows environment didn't have a problem with WinMan from day one. If you need more information on anything, just click on it."
Marshall appreciates the system's scalability. "we're going to grow to a £10 million company. I'm not going to change my software or administration to achieve that." He also likes the relative ease with which the system can be customised, though he has some caveats. "The system is very easy, and relatively inexpensive, to customise, but there are dangers, especially at implementation. Influential people will always want to customise it to look like the old system.
Marshall says that WinMan has helped Offshore to keep it' administration costs low.
"We've got seven working directors - all hands on engineers, and a small number of other administrative staff. We have a large purchase ledger, with 600 suppliers on our books, 150 of them active. Our sales ledger is smaller - 15 clients predominate out of a total of 30. Two people using the system, and another two do all the invoicing - 2000 invoices per a month.
All components and materials are sourced off the island. "We have over 20,000 parts on our books, and we buy in different currencies all over the world. The system handles all the currency conversions," says Marshall.
"The only real paper chase is with the invoices from suppliers," he continues.
At the moment we can't get away from paper, but XML is coming - it's maybe 18 months away in reality. I see it as HTML for the thinking man. You can read it and read data off it.
It's going to transform the way we do business.
Currently, the company is getting ready to roll out WinMan version 6, which is XML compliant, towards the end of the year. "This version will be the biggest change we've seen yet "says Marshall. " It's bringing the full weight of e-commerce. We've seen a shift in the way our customers do business - -mail dominates now. We'll be able to fire emailed information straight the new system.
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