heres what happened. in no specific order.. just typing things out off my scribble.
Thanks to Patrick first and foremost, it was an informative session, and very professional, and thanks to MF and SW who took the time to take the calls.
PC and IPAC have been a client of IAM for 2 years now. they are one of the largest clients of IAM.
KLIP is effectively analytic software for an FP industry that lacks the detail and effectiveness of such software and without the means to be able to otherwise easily create it.
more importantly, it's KLIP of all things that BIG 4 are interested in having, for many reasons detailed by MF. specifically - it gives them instant data / hard facts to allow their CEO's to make well reasoned business decisions.. very easy to understand why this is huge. I was surprised that it's something they don't already have.. its an interesting realization.
LT growth , developing tech (KLIP) and managing the demand are large focuses for the business.
it's already been stated, but there are 9 clients. interestingly.. 1 has it's own license, and 1 is a licensee? (may not be the specific term stated, draw conclusion please)
205k revenue for the quarter. ********
No new customers for the last 6 months to focus on the current licences (Sentry + MOU 2)
Sentry's exclusivity was only to the mid-tier independent space. They are paying for it. (and apparently a shout out to Mark Rantell for that BTW)
They were open to exclusivity entirely, however they can't value it so therefore did not go ahead.
Sentry's contract is for 6 months currently and will be renegotiated / renewed if everything goes well.
on the point of going well, Patrick discussed a very important topic and worth highlighting, from his own personal experience as a client. once you are using IAM's services it's VERY difficult to STOP using their services, as the way the business molds to a more efficient practice, having to hire new people to do what would otherwise be done either cheaper or by software makes going backwards a very difficult step. *** so TLDR, if they get hooked, there's an extremely high chance they will be reeled in.
however, if you are a client and want to stop using the services, it can be done in as soon as one month.
on average they see the uptake of their services from 0 to fully up and running taking about 3 months.
IPAC took about 6 months to integrate as they were one of the first clients and they were still getting things running overseas. so teething issues etc were weeded out and fixed, and also more importantly, they learned a lot about how to streamline the process for future clients. specifically the issues seemed to be communication where by they may ask for something, but not specific enough, and due to not being specific they get a different answer. learning from this, they have fine tuned it and expanded on it realizing the level product could be even higher than what they anticipated based on the skills of the employees overseas. that's not verbatim but i got from it personally.
Sentry as of last week has finally employed someone to work with IAM team. Effectively this means they can start to roll out Sentry. (and get paid for it )
Overseas they are looking into international education for talent acquisition. one thing that was stressed, was that in this space, in regards to competition, it's all about human resources. human resources are the priceless commodity to dominating and eliminating any potential competition. They have received a PISA? ( PESA ) ? something from the Govt for educating their work force in a new industry to effectively earn them a tax break for 6 years. CGT included. read : 0% tax for 6 years.
speaking of competition, there is only a couple real competitors globally, all small, they have actually contacted IAM already... asking for IAM to acquire them....
which brings me to the strategy in that they are looking to acquire any competition in the market.
they want to *dominate* the space, MF stressed this word specifically and unequivocally.
in January the lease for office space is up, they are using the opportunity to possibly relocate or dual locate in Sabu, also due to a 6 month issue where by they must use an intermediary to operate a business in the country who takes a 20% cut on wages, they effectively save 20% by getting over that 6 month period by which they can operate without that middle man. big deal short term in regards to outgoings i guess. no sweat in the scheme of things.
they have out grown their office and need more space. they are hiring at this stage 20-30 employees per month, specifically with sentry rolling out.
i repeat, sentry are paying full retail from the get go which starts as soon as they hire the employee which just happened, so hopefully in the next few weeks.
KLIP is COMPULSORY and cost's 10% on top of their other services. obviously showing it's importance in this space.
Not sure if i mentioned they are absolutely looking to take their services INTERNATIONALLY.
MF's words, to the effect "UK, US, etc ALL face the same issues australia does with rising costs/wages and IAM is the solution" it's my understanding that they have recognized this and created the software and business in such a way that it can be integrated to those markets as well as our own. although they may call them different things, they have advices / statements that broadly match our own and that the idea for IAM is to be able to be deliver a service to other FP/FS markets.
They are not charging for Lilly at the moment.
the new MOU #2 is close, and it's a household name, way bigger than sentry.
MOU #2 issues have basically been in the time it takes going through the hoops getting it to board, they have done all the hurdles, it's just having the board look it over in Decembers meeting. the next meeting is in February.
MF is in india for MOU #2 specifically at the moment.
BIG 4 see it as very advantageous that IAM has a footprint in India, while at the same time not being geographically locked to anywhere. on a personal note, MF is really a genius.
on a not so positive note, questions were asked re: failure of attracting big fish. answer : medium and small fish will still easily achieve M1-4.
profit is expected FY2017. ... boom.
they are supremely confident in MOU #2 going through, if not December due to things out of their control (MOU #2 board) then in Feb when it's looked at. PC stressed on both sides their is significant interest to make it happen.
randomly and on a personal note in regards to MF, be really nice to him, no bad comments allowed, he's given a lot and kinda got the short end of the stick in everything that happened with SRT > IAM and the ordeal with his shares (escrowed).
they are recruiting from the best UNI's
GROWTH THROUGH ACQUISITION OF COMPETITION. i'll state it again.
it's also important to recognize that this is how some big businesses that want in this space also operate, subsequently they are making sure everything is right in the event of a takeover to make sure they get $$$ (not their words, my own)
Human resources being the biggest issue of said big businesses becoming competition, they plan to control it first. they want to be a one stop shop internationally for FP&FS.
big businesses = names stated, WIPRO, GE MONEY, IBM, etc. globally, on the outside and wanting in the space for the last 10 years.
it seems like a good price per head is $2.50 to 3.00 an hour. (not sure if india or otherwise)
MF stressed businesses like JP morgan, goldmans etc, are all driven by data performance efficiency & cost, and there is no service like this in aus yet, KLIP is the solution.
KLIP is proprietary code. boom.
Live, real time data.
no interest in translating software to other industries anytime soon (real estate, legal, etc), want to be FP & FS experts and FP industry is so big theres no point in focusing on it right now.
last but not least...
the red ferrari *was* MW's...
Expand
