By Philip Hopkins
PRONTO Software managing director David Jackman knows one of the keys to success: investment in research and development.
"In the technology space, you must make sure your product continues to evolve we invest about 20% of revenue in R&D," he said.
In turn, this creates a higher financial performance, which leads to further innovation.
"We have tended to grow by 15% compound and in most years, a 15% return on sales," he said. "Those two magical 15% figures have been continuing, and that trend has been going on for six years."
This record of success was rewarded this week when Pronto Software won The Age/D&B Business Award in the information technology category.
The company will be able to hang the plaque next to those already on the wall; Pronto won the same IT award in 2006 and even took out the overall Age/D&B winner's prize in the same year.
The awards, which began in 1993, are based on criteria such as businesss growth, promptness in paying debts, and research and development. The awards are in six categories: manufacturing, country/rural, building and allied services, retailing, IT, and exporter/wholesale, and an overall winner.
In the past two years, Pronto's sales have risen from $37.5 million to between $41.9 million and $48.2 million.
Profit has risen accordingly and staff is up from 224 to 270.
Basically, Pronto's software runs someone's business, such as the accounts system. "If you have a warehouse, we manage the stock the goods coming in and out," Mr Jackman said.
"Manufacturing needs to manage a production line and the work in progress. Building a motor vehicle it's basically a big recipe, and the computer decides how the recipe gets put together."
Mr Jackman said that in the past two years the company had added new technology to its products. "Now, the data talks to the operator or manager and tells them when something is going wrong," he said. "That's a big change."
The company has also won new contracts in the same period, mainly in North America and Asia. Mr Jackman said overseas sales made up about 15-20% of revenue.
"We usually sell overseas through partners. Canadians should sell to Canadians," he said. "We're also big in Papua New Guinea, where we are market leader. It's a beautiful country, although there are some security concerns."
The roller-coaster ride in sharemarket and economic sentiment created by the financial crisis is potentially creating openings for Pronto.
"We are always looking at acquisitions, but up until now, acquisitions have been too expensive for us," Mr Jackman said. "With this global thing going on, there could be fallouts from us that are good to acquire, but nothing is on the horizon.
"Being a company with no borrowings and cashed up, puts us in a very powerful position to take opportunities."