Hi
@neutralopinions. I'm gonna blast this out so I hope it hangs together okay by the time I hit send and go off to enjoy my weekend. Totally agree that their usp is currently BPO, but Lilly will be just as important soon enough as it starts automating more and more types of SOA's.
Revenue streams will be as follows:
#1. BPO is their breadwinner currently billed at $x per transaction/SOA prepared, priced based on time/complexity.
#2. KLIP is a compulsory addon billed at 10% of #1, kind of like GST. The more BPO work they do, the more they make from from KLIP. In short, they don't need to sell KLIP, they need to sell more BPO work to maximise profits from #2.
#3. Lilly will be billed at $x per transaction/SOA prepared. Pricing hasn't been locked down as far as I am aware, but again it will be priced based on time/complexity. The more labour and heartache it saves, the more money IAM could charge.
You are right that BPO is not sexy...The work that the BPO teams will do (that Australian planners current have to do) is not sexy and is in fact very boring and time consuming, meaning less client engagement. That's why BPO, while boring, is their main selling point.
I also saw a demo of Lilly and it also generates SOAs on demand with the click of a button (with some inputs about the client from a planner of course). Very impressive. They will keep automating different types of SOAs in order of popularity.
On your point of scalability, I think it is very scalable, but it requires ~3 months lead time to model the outsourced work, recruit, train and onboard. The biggest limitation is that each FP client will have their own dedicated offshore workforce. What this means is that IAM will have to recruit the right number of staff per client. It is hard to get right because if you have too much staff, you will have a lot of staff sitting around doing nothing and you still have to pay them. On the other hand, when it gets really busy, turnaround times may blow out because all of their staff are occupied. So, because each client has their own dedicated workforce, there will be some wasted $ unless they can created a really flexible workforce using part-time/casual staff. Just something to think about.
The only other thing I'll touch on is revenue projections. Most people here are betting on Milestones 1-4 being hit by 2019 based on confident comments made by PC and MF at the seminars. MF basically sold Integer to IAM for performance shares, so if the company doesn't perform then he is stuffed and has given his livelihood away. In summary, noone here really can say with any confidence what NPAT will be this FY or next. Noone even knows basic inputs like how many SOA's IAM will process so how can we? BUT many here including myself are betting on the man himself MF, not on any forecast figures provided.
