Dealer Profile: The Compleat Anglia

Drew Cullen talks to David Hurley, the driving force behind Cambridge dealership Anglia Business Computers, who believes that comprehensive customer care is key to success

David Hurley is the managing director of Anglia Business Computers, the veteran #3 million Cambridge-based reseller. He is 49 years old, and divorced with three children.

Anglia is a regional dealer and proud of it. We aim to be the definitive systems centre for East Anglia.

In the beginning, there were four of us. We were all working in Cambridge in 1979 for a computer bureau owned by Geest, the banana company. But the writing was on the wall.

Geest Computer Services handled large payroll runs for a few big customers, but its core business, running accountancy services for small and medium firms, looked under increasing threat. The arrival of PCs meant that more companies could afford to run these applications themselves. We thought there was an opportunity but Geest wasn?t interested.

Before striking out on our own, we carefully researched available technologies before choosing a Texas Instruments multi- user system. This ran ACT software, which was by far the best accountancy software package on the market.

By 1981 we were ready to set up our own company, Anglia Business Computers. We went out and worked on an overdraft. Getting finance was no problem ? the Cambridge phenomenon was in full swing and two banks competed to lend us the money.

My background was in sales. Before joining Geest as sales manager, I was a salesman at ICL, so it was natural for me to be Anglia?s sales manager ? even though I had no staff to manage.

We targeted local organisations with an accountancy software sales story based around multi-user systems. Our first client had climbed on board by November 1981.

In the meantime, ACT had changed its hardware platform to the Sirius, a single-user machine. But we decided to stick with it. By 1984, it was clear the Sirius was going nowhere. ACT ported its software across to its own machine, the Apricot. This was a very strong technical achievement, and the company continued to sell in volume throughout 1984 and 1985. But in 1986, Apricot was forced to change tack, and it ported over to the IBM PC platform.

Technically, this was a retrograde step ? the IBM PC was nowhere near as advanced as the Apricot. But there was an express train in front of IBM, and the software companies would just have pulled the plug on Apricot.

In our first year, Anglia hit #180,000 and in our second year we did #500,000. We were quite a healthy little company, but there was no smooth ride. Ups and downs came along regularly. We have been through hard times but we always picked ourselves up and kept going.

At times we have had to realign the firm ? but we are no different in that respect from any other reseller. At least the margins were there to support change. In the early days, you could afford to make the odd mistake. It?s very different today.

There used to be plenty of local dealers in Cambridge ? there are still some strong regional players, but we come across them surprisingly rarely. From time to time we come across The Computer Centre (now part of Servo). It is very good at shifting tin and appears to have a strong presence in selling Compaq hardware to corporates. There is Foundation Systems in Norwich. It is a Systems Union and Multisoft CS dealer and we don?t come up head-to-head against it too often.

We have seen many more dealers come and go. Some resellers had big money behind them and they seemed a threat at the time, but there has been a huge attrition rate.

East Anglia is one of the fastest growth areas in the UK, but it suffered very badly in the recession ? there were many mushroom businesses with very little history ? and they went bust quicker than most.

Strong credit control helped us through this period. Even more important was the time we had spent in building relationships with our customers.

Over the years, we have evolved into a fully rounded services company. Anglia supplies information systems that really improve the way the way our customers do business. The key delivery mechanism is our staff. They are the difference between winning and losing. We have built up a great amount of business and technical skills within the company and some of the best people in the region have come to work for us.

Our focus is on the network and services include advice, training, installation, integration and support. To this end, Anglia has become a Microsoft solutions partner. Windows NT is becoming the dominant OS and it brings many administrative and technical benefits. But the NT environment is complex and customers need resellers that can understand the infrastructure.

We are still active in accountancy software. Anglia has been a Tetra reseller for many years and has built up a sizeable customer base. But Tetra risks losing the middle ground ? not everyone can afford #3,500 for each software module.

Recently we took on Navision. This is one of the most exciting products I have seen for years. It is a very powerful object-oriented financial application which sits in seamlessly with Windows NT. Clients are gobsmacked by what it can do.

Anglia is all things to some people. A few big customers want a womb-to-tomb service, but most of our clients will buy their desktops on the open market. They come to us to sort it out for them.

We never hold stock and we have never been prepared to shift tin. I tell my sales people they might as well stick #100 on the side of a box when it goes out the door. The cost of quoting, delivering, collecting cash and banking is just not worth it.

But we do sell servers. This fits in with our network business, and there is still some margin. My main server line is Apricot ? or Mitsubishi Electric PC Division. Our second range used to be Dell, but the firm kept pissing on us. It promised it wouldn?t try to poach our customers, but I told them to sod off after they had gone behind our back for the third time.

Now we work with ASI, which supplies a range of Fujitsu kit. ASI is run by ex-Apricot people. It is not too difficult to spot the connection. We work with companies we can trust. Relationships are much more im- portant than product and Mitsubishi never lets me down.

Whenever there is an issue, Mitsubishi throws in the troops and, if necessary, sorts out the customer?s problem at its own expense. Sometimes I lose the odd deal to a Compaq reseller, but I value my relationship with Mitusbishi much more than the occasional loss. Besides, there is no margin in Compaq product and we have no relationship with the company.

It is essential to link in partnerships with suppliers. Anglia used to have a branch in Norwich, which we sold to the management team during the recession in 1991. That company, now called EISE, had started building clone PCs, but I never saw this as a viable long-term strategy. The risks were not worth the rewards.

I am the chairman of the Apricot dealer group ? now called the Mitsubishi Electric Partners Council. Currently we have 15 members, but we aim to expand to 20 over the next three or four months.

We meet three times a year and have contact with senior Mitsubishi directors on a regular formal basis. And these guys make the decisions ? they don?t have to wait on any bosses in America. At every meeting we will focus on a business topic, such as commission schemes or telephone systems. There is a genuine spirit of co-operation between members.

Anglia?s customer base is strongly localised and is split 50:50 between the public and private sector. The public sector is very loyal. Once you are in an account, you can stay there for years. We have some central government business ? including a fair proportion of MAFF.

We have a lot of local authority business. But this sector is effectively stymied ? they are not sure whether they will be managing their own IT or whether they will be outsourced. Their information systems are not up to the job and a lot feel pressure.

We have also dabbled in the health service market, but money is extraordinarily tight. They do not have the wherewithal to pay for leading-edge technology.

A couple of our customers are under pressure to buy their products from the GCAT catalogue (operated by Tplc), but they resent this very strongly.

GCAT represents very poor value for money. There may be a saving of four or five per cent on product prices, there is no money left for integration. One client reckons he will have to take on at least three extra support people if he is forced to use GCAT instead of us, but he just doesn?t have the budget. That?s what happens when you get accountants running the show. They understand prices but do not understand value.

The commercial market is more uncertain. It operates on a different sales cycle. This is quicker but there are more ups and downs. We qualify our customers hard and we have got rid of accounts where there is no value add.

Anglia has been in business for 16 years and has built up a very solid reputation in the area. IT is a very localised thing. And anyone coming here would find it very difficult to crack the market.

We are set to be nicely profitable over the next two or three years. Many of the best firms in the region use our services. In the long term, we will work with larger and larger clients, and we will grow organically.

I have no plans to open any other branches. Operating from more than one location dissipates energy, you lose focus. We will grow from one information hub, one centre.

Today, Anglia has 35 staff and a turnover of just under #3 million. Most of this comes from services such as consulting and support.

It takes a long time and large chunks of money to build a services business and get the revenue pull through. We spent five years making the transition to a services company. But we turned the corner last year and we are profitable. In the past we were getting pushed from pillar to post, always chasing turnover. Now we are getting a more relaxed professional style.

Anglia has always adopted a very prudent financial strategy. I have paid off my original partners ? all of whom have retired ? and I have achieved this without outside finance.

I would consider buying another company which could add real value to what we do, but I have not looked seriously. I managed to get acquisitions out of my system years ago, when I bought a distressed software company, which had written an application for the housing market, but I had been oversold. The company was underfunded and the package was not as integrated as it first appeared. More development was needed and even though I revised the budgets twice, the company failed to turn around. So I closed it down before it could impinge on the rest of the business.

into the ethos

Over the years, I have had a number of approaches from companies in buying mode. Most of these have been opportunists assuming they can buy us on the cheap. But any buy-out would affect the ethos of the organisation.

I consider myself a good businessman who is able to spot an opportunity, but I am not a natural entrepreneur ? I am much more of a corporate animal. I am concerned with structures and I always want to make sure we are doing things the right way.

I am also keen to run an ethical organisation ? which does not necessarily lend itself to making a lot of money. But then, the money doesn?t always turn me on. I enjoy seeing staff grow and taking on more responsibilities and doing a good job for customers gives me the best motivation of all.