Tech business in focus: Roc Technologies
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We caught up with CEO and founding director Matt Franklin to discuss his remarkable trajectory to Roc Technologies, the company’s impressive success, and the key to managing setbacks in the development of a successful tech business.
Tell us about your path to becoming the founding director of Roc Technologies.
I wanted to go into corporate law, originally, which I found interesting because of my business degree. I planned to do a ski season but by chance, I bumped into a friend in the pub, and he told me he was working for a technology company called Cabletron doing networking, or as he put it, “joining PCs together”.
I initially joined as part of the customer service team, and then was invited to go into sales. It was a time when it was a common issue that 20,000 PCs in a company were not joined on a network, but instead people just passed floppy discs around – that was 1992! As customer demand grew for servers, operating systems, end devices and viability as a base of service, I left with two colleagues to set up Prime Business Solutions.
That’s a brave move, considering your experience at the time. Did you feel confident you had the skills to make it work?
We set up when we were 26. We had well-paid jobs, and didn’t have any mortgages or children, but still, we took a massive risk. Maybe you could say we were a bit naïve! Now, with the benefit of hindsight, you take more considered and calculated risks. Then, we applied the “succeed or go bust” mentality.
We thought: “We’ve built this amount of revenue and profits, what do we do with it?” We put it all back into the business. We doubled our sales team and our consultancy team. We smashed the next glass ceiling. We were quite bold in those decisions, which could have backfired if they hadn’t worked out. However, we made sure we did it in a way that felt like an informed decision, and the business began to scale and grow as a result.
"We also focused on bringing in people who had the capacity to stretch and grow, and take the business forward to the next level. Identifying the functional requirements early, and being ahead of the curve with those employments, meant that we built an organisation capability that could grow into a bigger footprint. That’s always a dilemma – it’s a big cost, and you can always try to maximise profit in the short term, but we tried to take the long term view."
After just seven years, Prime Business Solutions grew from almost nothing to turning over £35m. How?
After offering solely networking at first, we heard from an analyst that voice [technology] and data were going to converge, despite being two very different domains. We started a separate voice business, and as the technology came together, we started connecting our voice networks and our data networks to begin offering Voice over IP (VoIP).
We then identified an opportunity in a software company over in the US called Celsius. It was the first soft PBX (Private Branch Exchange), and we did some of the first global implementations, including the first over-IP telephony solution for the United Arab Emirates, where we had to get dispensation from the UAE government to go ahead. Celsius was then acquired by Cisco, and we became the go-to partner for integrating legacy voice systems, legacy protocols and signalling, or as they referred to it, developing the architecture of voice, video and integrated data. We won large global deals for British Airways, GlaxoSmithKline, Deutsche Bank – big FTSE 100, Fortune 500 organisations. We won CISCO UK Partner of the Year, EMEA Partner of the Year, and we became quite notable for that. We grew that business up to about £30m, and managed 250 people.
We ran a successful process to exit that business in 2004, and I took some time out, to do charity and to sail around the world, open a bar and restaurant, property development, and spend some time with my family. I then met with the people I’d sold the company to, and they persuaded me to reinvest most of my money back into it. They bought 14 companies, and I was responsible for doing the integration of sales and marketing propositions. It culminated in winning our last ever deal, which was £75m from a major retailer, which was one of our longstanding customers. But it wasn’t to last.
So what happened?
The company grew to approximately £550m, with 2,500 people. Dell came in with an offer to buy the business out, but through the due diligence process, it became apparent that the business was over trading, the profits had been misstated, and the company was put into administration. It was a harrowing experience for me, as it destroyed the value of the relationships I’d built up over 20 years. It was a difficult thing to come to terms with, because it ruined the integrity of our previous business. We made sure our 13 largest customers weren’t impacted by setting up Roc Technologies.
And Roc emerged from a wish to protect customers from that kind of experience?
Yes. We wanted to protect them from critical service exposure, and to ensure that our personal brand and integrity was preserved. We also wanted to protect colleagues. It gave me the opportunity to focus on the things that matter to me personally, such as being customer-centric, being really focused on making a difference and continually innovating.
We have always focused on innovation, in both a commercial sense and for technical creativity. The key idea was to run a business that was less concerned about using financial results as a leading factor in decision making.
Looking at Roc Technologies now, how would you describe Roc’s point of difference?
Technology products don’t really exist now without a business initiative. What we saw was that business and technology were becoming much more symbiotic, and businesses were recognising that technology was a real enabler. We recognised that technology was shifting to the online space, and we felt if we could get more into the business side of things, that would enable us to have a really complementary approach. Much like voice and data coming together, we thought business and technology coming together was the next big shift.
One of the things that differentiates us from a lot of businesses is that we’ve got business process capability. We feel that with digital transformation, you need to really understand the business processes you want to transform, and then optimise them and ultimately automate them to drive change. We call the pillars of our approach our “P3 Architecture”: Programme, Process and Platform. The process is the business side of things, the platform is our technology heritage, and then managing the successful execution of the programme is the third part of the puzzle. With IT projects being notorious for running over time and over budget, project management change becomes particularly relevant. We enhance business capability.
Industry: Information Technology and services
Company size: 500-1000 employees
HQ: Newbury, Berkshire
Ownership: Privately held
Sub-sector: IT Consultancy & Integreation
What is at the heart of successful transformation?
Transformation involves what I would call organisational psychology, and looking at the culture and the underlying drivers of the business, and then considering how automation is applied to that.
To make sure we could follow that formula, we formed a joint venture with Oxford Business School’s department of projects and programmes, which has done the world’s most extensive research into IT projects. We took their learning and data points to create some project services to provide certainty of outcome. We also combined that with our first acquisition, that of City Change Management, the largest independent projects and program management business in the UK.
That allowed us to create accelerators, so we can transform businesses much more quickly and more cost-effectively than traditional players in this space. We’ve got a recognised project and programme capability, with a very mature methodology that’s proven to deliver complex digital transformation projects that meet time, quality and budget specifications.
Do you look beyond functionality to the culture of the business too?
The cultural side is important, and it really informs that change initiative, and the communications around that. You have to bring people on the journey, and make sure that the culture is accepting of the changes and benefits to absolutely embed the change management. We do formal sessions for communications, as well as online and practical sessions. We’re reaching end users, moving away from the traditional managed services into blended models, where we’re using a combination of our resources and client resources.
We embed business outcomes in both our service metrics and within our managed service contracts, so we’re focusing on driving business outcomes and aligning them to the customer’s business objectives. That’s part of our project practice as well. Projects tend to fail because the lead will leave it too late to deliver bad news. We’ve got an app that enables you to test the sentiment across all your stakeholders, so you get early warning signals. This also helps with the company’s cultural alignment.
What processes do you think make the biggest impact, in terms of automation?
There are a number of areas in which automation makes an impact. We embed it within the delivery of our managed services, where you can automate certain tasks and processes to make them more reliable and more consistent. It drives down the cost, and also frees up valuable staff time, so employees can focus on strategy and proactively driving forward in their service operations.
Within our business, we focus on driving out what we call “swivel chair” activities, or highly repetitive, paper-based tasks. We outline those processes using our process mapping capability and then automate them. This could cover administrative, back office, quote to cash, finance, some reporting functions, some sales and front end, and data and analytics.
We have what we call our “Roc DNA”, which is how we operate our business. Effectively, we have a landing page, which people can use to view their processes and other adjacent processes, so the whole team understands where they fit. Everyone is encouraged to drive and optimise those processes. Optimising internally is how we scale, whilst not diluting the services we deliver. We demonstrate that we implement the very things we recommend.
How do you make sure that Roc stays innovative?
Innovation is driven by the office of our CTO. We do desk-based research, attend seminars, align with our customers, listen to our analysts and talk to our client CIO’s. We have a CIO advisory group that works with our clients to share best practice, both from us to them, but also to see what they’re witnessing in their industry to help us to become more specific. We also have “blue sky thinking” sessions, where we take time out to brainstorm. Our Chief Digital Officer, who I’ve worked with for over 20 years, has worked across the globe doing big IoT projects, so he has a good visionary view on where things are going. He hosts these workshops where we think about potential avenues. We encourage our technical guys to take time out to look at new technologies or new applications, and then we create “playpens” for them to test their ideas in a safe environment before we consider taking them out to market.
We try to provide consistent services, but sometimes a customer may come up with something that we think could be relevant for others, and we’ll invest in that and form solutions based on that engagement. A great example of this is from a recent client in the higher education sector. We are using technology, not just to automate upgrades, patch fixes and manage infrastructure, but also to look after things such as student welfare. If a student usually takes 10 minutes to get home, they can set the app running, and if the student isn’t home in 30 minutes, an alarm on campus is triggered. Campus security and student welfare is a big concern for potential higher education attendees, but we also thought of how we could use that for other things, such as social care, or mental healthcare. The latter is something that is dear to all of us, and we’re looking at how we can improve it with innovation.
"We constantly try to innovate and push boundaries, and get under the skin of what the customer wants. We really try to use the combination of our technology and our processes to keep us relevant, and we’ve had great feedback. I think the reason we’ve won such great contracts is because we really understand the technological requirement, and we create business strategy to align solutions to specific deliverables."
What’s the trickiest thing about scaling a business?
Mitigating loss of flexibility and agility as you scale is the hardest thing. You have to attract and retain top talent, which is always a challenge. It can be difficult as a small entrepreneur to encourage people to join what’s perceived as a high-risk business, so founders have to make sure employees are comfortable. As you grow, people who suit the smaller business environment might not necessarily be suited to a larger corporate environment, so you have to evaluate how to retain talent whilst also driving things forward.
There are also the more technical aspects, such as making sure you have the cash flow and working capital to fuel that growth and scale. You can’t get too distracted, and you have to keep a relentless focus on the mission, because there is always something that can pull you in a different direction, such as a new customer, a new market or a new opportunity. You have to consider them, but not dilute your service. Roc scales, but we want to maintain a personal service with customers and build on our relationships. It's something that we're really focused on.
Do you have any advice for any tech founders at the start of their journey?
Don’t do it! No, seriously I’d say go for it. If you think you’ve got a great idea, you’ve got to go for it, as there’s no point regretting what you didn’t do. Now is the time to be ambitious, as there are lots of opportunities for funding and for appointing experienced non-execs. Surround yourself with good people, get funding early, look for resources to accelerate your growth, but don’t dilute your equity, which is hard to rebuild. There are other ways of financing without diluting your position. Maximise your returns, but don’t forget what you’re doing it for.