K3 Business Technology is a business going through a turnaround as it looks to settle its focus and get to a position where it can deliver consistent growth.
Last month, K3 Business Technology Group’s results for the 12 months to 30 November 2021 showed a 3% increase in revenues to £ 45.3m, with recurring revenues holding firm at 75% of turnover, at £ 33.9m. Pre-tax losses from continuing operations were also trimmed from £ 20.8m last year to £ 7.8m this year.
During the year, the firm made a couple of disposals – the Starcom Managed Services unit and Sage business – and welcomed a new CEO, Marco Vergani, who was appointed in March 2021.
Vergani is 14 months into the job of steering the ship, and in a conversation about its progress since he joined and his thoughts about the future, he struck a positive tone.
“Let me start by saying that when I joined last year, I realized that we had a lot of assets in the company, but they were kind of disjointed. In a way, it was not really clear on what ground one asset or one software would actually be setting up or be differentiating enough from whatever else is out there in the market, ”he said.
That led to discussions about a strategy that focused on its key market – retail – and the need to make sure it could serve that customer base. Life has become harder for retailers as they try to make sure they stock products that customers want to buy and their brand is recognized for those things.
“The best way for brands to do that is to be able to create a solution that starts from the data of what’s happening on the ground,” said Vergani. “Whenever sales are occurring, whether they are online, in-store or through marketplaces, they: [need to] use that data to inform what the business needs to do to prepare to meet the trends and the insights that are coming from consumer data, ”he said.
Some of K3’s customers – high street fashion chains – are operating weekly collections that have to appeal to customers, so the pressure to get effective data is significant.
“The speed and the acceleration or the time to the business is incredible. The amount of data, the fragmentation of systems, the longer lead times and getting materials sourced for items or garments is clashing against that, ”he said.
“When reflecting really deeply around what we can do, I realized that we have ERP: [enterprise resource planning] solutions, and within our ERP solution we are managing already what we call ‘concept to consumer’, meaning we are managing the creation of an assortment, the sampling and then the refinement of the collection, the raising of the order, the receipt of the orders into warehouses and from distribution, the pricing policies, and so on, ”he added.
In retail, the key is being able to help manage the omnichannel, covering all the approaches to customers, and Vergani has looked to make sure K3 is also acting as a whole when delivering solutions and services.
“The objective or strategy was to say, ‘Okay, if we want to be true to ourselves and develop a strategy that leverages on the assets we already have, but also create a very clear and distinctive position in the market, then we really need to: [know] what makes a brand successful, its acceleration overall, to be managing processes end to end, ”he said.
Having introduced a tighter focus and pushed the integrated approach, the final part of the strategy involves making sure the business can support customer sustainability goals and give them traceability in their supply chains.
Underlying it all is a greater need from customers for business intelligence and the chance to use technology to support their businesses in a greater way.
“With all of the data you can collect, on a consumer level, a supply level, and so on, there is a lot we can do to instigate the smarter way to interpret the data to suggest ways of operating better,” he said.
As Vergani looks forward, there is an acknowledgment that although a lot of work has been done, the turnaround will continue.
“We are optimistic about the future,” he said. “After the publication of our results, I took the time to sit down with investors and really explain what we stand for, what the needs of the market are, and how we try to address them.”