I have also read the announcement several times since Friday. The revenue figure aside, which I was also disappointed with as I'm sure the company also was, however, that figure in isolation which is why many have chosen to sell, is largely irrelevant to the long-term success of IAM, just as a figure of $300k would have been.
Up until Boom2 launch, IAM has essentially been a BPO, with a bit of tech built in as far as Boom1. A very good one at that, with very happy customers, but a BPO all the same. However, the processing has been done by their staff OS - so if a practice has 5 Paraplanners in Australia, essentially, they would need at least 5 staff OS to cater for that demand. Boom1 has been able to take the orders, but does little for capacity. Let alone one of our MOUs signed on, I've often thought how could IAM have met the demand, however, I'm sure they were ready, I'm also sure the MOUs maybe thought otherwise. Maybe the current offering hasn't been cost-effective enough to drive planners towards IAM, by way of restructuring their business processes.
The ability to scale has been limited by the number of people that can be hired, trained and fit in the offices. When MF's milestones were set, I'm sure he didn't have offices filled with staff in mind to achieve $40M NPAT. I've said a few times, I'd rather no revenue in this quarter knowing Lilly is close to complete, versus a $500k quarter with Lilly still 12m away.
In my opinion, the success of the company has always been aligned with Lilly's processing powers, and now known as BOOM2, as the integration of Boom1, Lilly and Klip. I couldn't be more excited that trials are starting in November with Boom2, with several groups, and hoping it's our old MOU friends back again, knowing their original concerns were aligned a lot with handling capacity, as mentioned by PC in Brisbane.
The FP industry is under enormous pressure, with just one example being legislation about to kick in reducing the upfront commission on life insurance from on average 120% to 80% (70, and 60 the following years). The urgency to cut costs hasn't hit home yet, but it will after Jan1. If an FP is used to writing $100k of new risk business, their upfront revenue will drop $40k pa, for the same work they have been doing. FPs will have to act.
I don't think we can underestimate the political aspect as well, particularly at the banks. No doubt many have been reluctant to send jobs offshore, however, when this is done via enhancements with technology, it's just what you do.
Perhaps they've paid the price for running the BPO to gain revenue until the software is fully developed, as far as SP concerned. Ironically, I imagine it would be a very different tone with SH, if there had been no work done, no clients and no revenue - yet BOOM2 was 2 weeks away from going into trial phase with clients. The excitement would be huge, compared to what we face now.
Of course these are my opinions only, and like any tech company, there's no guarantees that Boom2 will be a success, and everyone has to make their own investment decisions.
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