Agility in IT - Kelway’s story

Agility isn’t a word you’d usually associate with IT. It conjures up slightly more sporting images in the mind, but when we met up with Phil Doye, CEO and founder of Kelway, and Dan Laws, UK Managing Director, that’s the term that kept cropping up. The idea of making the business flexible enough to meet their customers’ needs is central to their philosophy. We sat down with them to talk about the need for a stable IT infrastructure, the importance of providing a great customer experience and the benefits of cloud computing.

You started Kelway when you were 22. What provided the impetus to set up a business at this point and why the IT sector?

[Phil] “I’d had three or four attempts at careers between the ages of 16 and 20 and had fallen into IT sales. I’d done reasonably well at that and then was presented with an ultimatum by my boss; he told me ‘either you leave’, as they’d heard that I was going to set up on my own, ‘or you stay and we’ll promote you’. So I thought about their proposal and decided there and then to leave – that’s how it all started.

So literally over the next couple of weeks, I just picked up a company off the shelf, chose the name, started to trade and really had no idea what I was doing. I had to get a bank account, buy a car so I could get around and make deliveries, try to learn about accounts – all of those kinds of things.”

Was there a particular gap in the IT market that you thought Kelway could fill?

[Phil] “There was no grand plan to set up in IT. I could have found myself setting up a business selling just about anything. If I were to set up a business now, I’d certainly do much more research. Put simply, I was selling IT, I was reasonably good at it and it seemed like a good idea at the time.”

A large part of the business revolves around creating bespoke hardware and software solutions for your clients. For businesses, what are the advantages of a tailored set-up like this?

[Dan] “Certainly that’s much more what we do now. The business started off as a product reseller – we bought products and sold them on, hopefully at a higher price than we’d bought them for. As the business has developed we’ve developed broader skills in the implementation of those technologies. What we’ve done is blend those areas of skills and technology to create something that’s bespoke for our customer.

A lot of the companies we work with don’t have IT teams with the depth of skill we have. We offer an easier way of consuming higher levels of technical expertise. The mid-market, corporate clients tend to have more of a desire to work with us across a broad range of services. So that could be the provision of products or the integration of solutions for the delivery of a managed service.  For our customers, there’s a real advantage to being able to do that with one organisation.”

[Phil] “The aggregated style of the business and the size of the relationships we hold allow us to be very credible across a range of areas. As consumption of IT changes, it does need suppliers to be able to invest in new technologies and to have much closer working relationships with vendors. All of that makes us a much more credible choice.”

You’ve expanded the business across the whole of the UK, as well as operations in the United Arab Emirates and South Africa. Were there any major challenges in this expansion?

[Phil] “We’re definitely a UK-centric business. Even our international operations are driven out of customer demand from relationships that we have, or want to have, in the UK. We’re looking to create a network which supports our UK customers and those customers might be large, international organisations which are headquartered in the UK for whom we provide services across the globe. The challenge is providing the same level of service that we provide in the UK in some of those other regions.”

[Dan] “We tend to follow the natural investment profiles of our customers in terms of where they’d locate their data centres. That’s the hub of where our opportunities come from. If you look at the Far East, that’s a very natural place for a lot of our customers to set up data centres, so we’re actively looking at that region.”

Do you see many opportunities coming out of emerging markets?

[Phil] “The interesting thing for us is that the opportunities tend to be more centred around customer pain. The organisations we work with often have a disproportionate amount of pain from operations in the more far-flung locations. So if we can solve those issues, we can drive back into the UK market. That’s a good growth message – we’ve been successful in a number of large, established UK organisations by initially solving a specific problem in the Middle East or Africa.”

Acquisitions have played a big part in growing the business? Are there particular challenges when bringing an existing business under the Kelway name?

[Phil] “We’ve made five acquisitions in the last five years, which has contributed to about 50% of our growth. Often people have this idea that Kelway has grown just by acquiring a number of smaller businesses and that the sum of those turnovers adds up to what we sell. But actually it’s only half the story We’ve very successfully taken a business and driven organic growth out of the combined entity, to quite a significant degree.

In the last year we’ve increased our revenue by £100m, from £250m to nearer £350m. Beneath that is a real rigour in quickly integrating the businesses we’ve bought. So very quickly getting the same brand, the same systems and driving it through the way that we do business. The challenges to that are removing those people who were the previous owner/managers in the acquired business. And also making sure you have the right people. Although we’ve been fairly aggressive about removing duplication, without exception, when you look at the combined business a year later the collective group will be employing significantly more people. There’s never less than double digit growth in employee numbers.”

Is there any kind of training around the brand for new employees?

[Dan] “What we do is probably less formal. We spend a long time trying to infuse Kelway people into any new businesses, so they’re very quickly interfaced into the culture. We don’t do specific brand training sessions; it’s more a case of people sharing working practices and really trying to embed that as soon as possible. We plan most of the integration before we’ve even bought the organisation.”

[Phil] “The one formal thing we do is around the actual working environment. With all the businesses we’ve bought, we’ve relocated them into a new office or one of our existing offices. As much as anything else, that gives new people a real understanding of what Kelway are about from a cultural perspective.”

According to PwC’s recent CEO survey, many CEO’s are saying they can’t pursue market opportunities because of a lack of the right talent. Have you had any issues in sourcing the right skilled people?

[Phil] “There’s always a dearth of good people: they’re always hard to find. Our particular challenge is creating the right environment where you become attractive to those talents. From a sales perspective, we’ve become known as a great home for talented salespeople. What we’re now doing is creating an environment where we’re a great home for technical people. Over a third of the people working for us are now in technical roles and service delivery roles. As the business has transformed from being product driven to more service driven, we’ve had to adjust how we appeal to various parts of the organisation.

It comes down to investment in some high-quality people at the top. One of the things about our business is that we regularly bring in fresh talent at the top.”

Your strapline is ‘Kelway – Beyond technology’. Do the human elements and the quality of your customer service really set you apart in the IT marketplace?

[Dan] “The meaning of that strapline is twofold: firstly, it focuses on customer service and, secondly, it describes how we’ve gone beyond just providing the technology to providing all the associated software and services that go with that. When you get to the point where you’re selling a services business, your people then become your product, and the quality of your people define your service.”

[Phil] “In simple terms, our customers expect us less and less to find a technical fix to a technical problem. They just want us to help them overcome the challenges around their business issues. We might use technology to do that, but it’s how we address the challenge which is important. I think that’s particularly relevant to cloud computing, which we see as a pretty big opportunity, and around managed services as they both get to the heart of the business issues.”

Has it been a logical progression to incorporate the cloud into the bespoke solutions you create for your clients?

[Dan] “What cloud represents for us is an opportunity to marry our historical skill around infrastructure solutions, bringing myriad technologies together and delivering that with our services capability. So we’re creating a managed service which allows the customer to focus on their core business activity and gives us repeatable, annualised revenue.

Equally, customers have to place a lot of faith in any managed service. They have to trust the processes and the businesses they engage with to deliver those services. So you need the right infrastructure, the right security practices and the right processes.”

What are the main benefits of the cloud for businesses?

[Dan] “Cloud is a very broad term. You need to think of cloud computing in its purest form, which is the ability to consume infrastructure and technology in the same way that you consume water or gas. So you turn it on when you need it and turn it off when you don’t. For certain low-risk applications, it does provide a far more scaleable and flexible cost model to deliver technologies."

[Phil] “I think the one word I would use to describe what cloud offers us is ‘agility’. That’s why it’s interesting. It allows you to be agile in the way you grow; you can scale down, you can scale up. It’s so much more flexible.”

Technology has been through a period of immense change in the last decade. Are businesses embracing new technologies such as tablet PCs, mobile computing, smartphones etc?

[Phil] “If you take three-year gaps, it always appears that there’s been a massive jump between what you used to do with technology and what you do now. But in reality there aren’t these step changes, it’s just constant change and evolution and I don’t see that slowing down. There will always be certain customers who are at the cutting edge and those that are followers. There’s a balance.”

[Dan] “The consumerisation of IT is very relevant. The concept of a staff member bringing their own device to the office and wanting to connect it to the corporate network fundamentally changes how that organisation has to think about delivering technology. And we see different customers at different stages of how they address that. Some of them really lock down their network and others will give their staff money to buy a tablet device so they can connect to their network.”

[Phil] “Ten years ago, people in the workplace would have had the best IT experience. They’d have had the best laptops and the best PCs. But suddenly, the best experience of IT is held by the consumer and that’s the challenge for IT departments – their users aren’t prepared to put up with the poor quality of IT which exists in the corporate world.”

Where do you see Kelway moving over the next few years?

[Phil] “With the business having grown so much over the past five years, I don’t see that growth suddenly coming to a stop. There’s no possibility that this business will stand still, even if we wanted it to. The organisation really does have that energy. As we’ve grown, particularly our services, we move into new areas and into adjacent markets that become interesting. So we see growth over the new few years, both organic and through more acquisitions. Data centres are a big focus for us, along with managed services and the cloud. It’s really about meeting the market demand for a more agile way of consuming IT: it’s that idea of agility again.”

---

You can read more entrepreneurial interviews from our Spotlight on... series here

---