WESTERGAARD Y2K CONFERENCE -continued-
That to us is effective marketing. My being on the phone and making cold calls is
not good marketing. But, we will continue. There are still Fortune 500 companies
and others who don't wish to have a third party of system integrater involve, who
want to actually deal directly with us. That's fine, but we are not pushing the
marketing. We rely on our partners for that and also for their project participation
leadership. We will deliver our services to them. They will wrap around their
services. You heard Dick indications of how his process might work, we might take
some portion of those figures that he mentioned, but he will basically be
responsible for the time and materials and for the other services they bring forward.
That's where he gets his value added.
We will concentrate on projects where we are already handling those processing
environments. We will now go out and hopefully will turn this into a cookie cutter
which is what I want. At the same time, we will also the last item, unextend the tool
set processing environment as new projects arise. One of the interesting things
about IBM is they have so many diverse envrionments that you can
address. Nice thing about UNisys and Bull and Sony is they're almost the same.
IBM all over the shop, so many utilities, so many features in there and the tool will
have to be continually extende, but that's a realtive straight forward operation. The
one that I put second to last that I think is the underlining here. No new
non-revenue projects, I have it. I've done enough. We basically have proven
ourselves. We're currently running 6 projects, 4 of which are non- revenue, pilot
projects and by the end of that exercise I hope that we've proven ourselves and we
will not undetake any new non-revenue projects.
Where will be in the future. We will continue with additional projects and existing
environments. We'll start first project in new environments. We'e going to go out
data general. GOing to go after the various IBM environments, variations on IBM.
DIgital, they're waiting to see the success of the project we're about to undertake for
digital. We will grow our capicity. The question will be raised about can we handle
many more projects, yes we can. Because, we are absolutely free from adding
bodies. Our functino approach is in the hradware that we use to run the tool set. We
are only slightly impacted by the need to add new people to manage the projects
and they can recycle after a relative short time. So, we will extend our processing
capacity. We'll control the expansion of our operational staff and oour client/server
staff and we believe we will geenrate revenues as '97-'98 budget becomes available.
Soebody said earlier that the we had not yet seen the growth in business in this
area and I think it surprised most of us who stood close to it over time, w've been
prodicting what would happen. After a certian period of time, these budgets will
suddenly be there. We'll be doing hundreds of millions dollars worth of business.
It's not really happening yet and part of it is I believe is because, management is still
going through sticker shock. Management is still going through denial. I've sat in
the Senate Hearings of a state that will be remain nameless and they were being
asked for $60 million to put to solving the problem of 15 of their state agencies as
sort of a fund from which these angencies would draw and one of the senators
asked the question, "well, why are bothering the $60 million, why don't just go an
find the programs or the problems and fix it". And we said, "well, Senator we just
spent a half an hour explaining why that's so hard". And the second senator,"Oh,
I've got the answer. Why don't we buy a new chip?" And I felt like saying, "That's
right. I never thought of that." That's the thing we should really be doing. What's
going to happen I belive is there's going to be a balloning, a birthing of the
expenditures are planned.
Forget the $600 billion. I think that is nonsense. One point odd trillion, I think that is
nonsense as well. I really don't know what the figure is. But the lot will be left on the
table. A lot will be done internally and you will never have reporting of how much
was spent.
A lot will be done in new packages. The problem with new packages is it is too late
to start putting SAP in place. You can't do it. It is a five-year project. So, forget
replacing your financials and your fixed assets and your AP and AR. With SAP or
Oracle, you can't do it in time.
And if you do put something like that in place, you are going to have to change all
your organizational standards because in the old days we had the luxury of saying,
"Hey, Mr. Supplier, you are only 56 percent compliant with what I want. I want you
to change the other 35 percent to conform to my processes." And they would. Not
anymore. Not anymore.
They will say you will do what we do and you will perform the way the systems
performs and you will change your internal processes and procedures to conform
with us. And we will continue to concentrate on some of he Fortune 500 companies
who do not believe they need a system integrator. We already talking with several
of those. That process will continue.
But by an large, we continue to concentrate on our alliance partners and we believe
we will be profitable. We expect to break even in the latter part of the year. That's
where we are. John.
QUESTION: Let me pick up on that last statement. Break even in the latter part of
the year. What kind of numbers are we talking? If you have an idea as to when you
are going break even then you probably have an idea as to what your revenue is
going to be.
RICHARDS: In the business information that we issued, I put a page in there
explaining the difficulty of estimating that's been eluded to already. You could have
a five or $50 million contract come good at any point in time. One of the difficulties
is the extraordinary variability on this. But even based on the normal sizing that we
are estimating now, we have about $15 million in our pipeline as -- about $15 million
in our pipeline right now if those projects should come to past.
I am not saying they will because they depend obviously on a lot of things --
competitive bidding and so on. But I see ourselves as seriously contending for
those -- for that amount. |
