Phoenix swims upstream as it draws a line under Servo saga
Services firm puts accounting scandal to bed and claims it is delivering on its plan to crack into the enterprise
A year on from a major restructure and rebrand, Phoenix claims it is beginning to deliver on its aim of making a much bigger splash in the enterprise market. The services heavyweight has also asserted that it has "drawn a line under" the fallout of the recent accounting irregularities saga and maintains it is still well placed to deliver growth next year.
At the start of 2012 the company retired its ICM end-user brand and restructured the company into five divisions focused on hosting, business continuity, telecoms, systems integration (SI) and managed services.
Sales director John Hall told ChannelWeb that the company has now finished revamping a third of its sales force, with more than 30 new heads brought in, about two thirds of which are solely focused on new business. In the first eight months of its fiscal 2013, the opportunity pipeline has grown upwards of 60 per cent, claimed Hall.
The pipeline in the firm's traditional lower mid-market space of sub-£100,000 deals is flat, with £100,000-plus projects showing a 40 per cent rise and opportunities on deals in the £1m-plus bracket up 80 per cent. Large enterprise transformation projects have been won in the past few weeks with car auction firm Manheim and "a division of one of the top five banks". A slew of other big-ticket deals are on the cusp of closing, claimed Hall.
"We conducted a significant amount of [customer] research," said Hall. "We felt that as an organisation [we are one of] very few companies in the UK that can deliver from desktops and networking, hosted in our datacentres right through to business continuity with everything onshore, and we were quite pleased to see that our UK focus was one of the perceived benefits of the business.
"The other thing that came through strongly, while we did not research the lower end of the mid-market, our historic experience in that market was perceived as being a benefit. They felt that an organisation that has built a customer base of 3,000 must have a great degree of flexibility and responsiveness."
All accounted for
Last week Phoenix announced that an external investigation into accounting irregularities at the former Servo business has been concluded. Following the restatement of accounts from 2009 onwards and the incurrence of massive goodwill impairment charge, the company swallowed a £60m-plus operating loss during H1.
"The H1 statement has drawn a line under that event; we conducted a full investigation and that has been concluded," said Hall.
The sales boss didismissed suggestions that the setback could threaten the viability of the Phoenix group in its current form as "idle chatter".
Hall (pictured) claimed that, with one third of the fiscal year remaining, Phoenix is beginning to see the investments of the first half come to fruition. The company has closed 20 per cent more business in the first eight months of FY13 than in the corresponding period of the prior year, according to Hall. And the services firm is committed to remaining a staunchly UK player, he added, with ample opportunity to expand without looking to move into foreign climes.
"I see no need for us as a business to step outside the UK; we represent a small percentage of the UK IT infrastructure spend, so there is plenty of room to grow," he said. "The first six months of the year was about getting the investment in place; we are now looking to deliver on that."