Government aid helps further the expansion of Synergy

Friday 17th August 2001

IN THE MONEY: 'We compete very well on value,' says David Irving

By Stephen Ballantyne

A major deal between local IT management and technology business Synergy and Swedish telecommunications giant Ericsson has created a New Zealand-based joint venture, Ericsson Synergy Limited (ESL) employing 32 staff and selling New Zealand-developed mobile internet solutions overseas.

Now the government has come to the party with the announcement last week of an allocation of $750,000 to ESL from Industry New Zealand's Major Investment Fund and the possibility of a further $850,000 being made available from the Foundation for Research, Science and Technology.

The grant to ESL is the first from the Major Investment Fund, which is intended to support new investment in New Zealand by working with local and overseas investors to reduce the costs of business expansion and setting up in New Zealand. The funding is dependent on ESL achieving a number of goals, including employment levels.

Since it was set at the beginning of this year, ESL has worked for clients in Australia, Thailand, Taiwan, the Philippines, Canada and Sweden.

The deal is certainly a feather in the cap for one of two ESL's parent companies, Wellington-based Synergy. Originally a speculative venture by a couple of IT professionals, Synergy has made careful progress over its first nine years. It now has around 200 employees. According to chief executive and co-founder David Irving, "We spent the first few years learning how to do business - but in the last three or four years we've really got the hang of it!"

"We [Mr Irving and Synergy chairman Chris Comber] originally worked for another consultancy which regarded itself as being at the high end, and wouldn't consider PC software development. We found ourselves analysing business problems and suggesting solutions, but not able to play a part in delivering those solutions. It was quite frustrating but we realised that there was a gap in the market for an organisation that could do the whole thing.

"We started with no customers; we had enough money saved to run for three months, and in that time we managed to get things moving, with enough sales and cash flow to survive. We built the company entirely out of cashflow for the first six years - towards the end of the first year we felt confident enough to take on employees."

"Eventually we realised that it was silly to keep running that way, so we took on some outside finance. The ANZ was one of our customers, having originally sought us out for our banking software expertise, and they eventually bought a 10% share in the company; we now have around 200 shareholders, about half of whom are Synergy employees."

Apart from the ESL joint venture, Synergy has been looking outward in other directions. It already has offices in Sydney, Singapore and London and has worked to establish a multi-site development working process that sees the company collaborating globally on projects - work for overseas clients is analysed on site, then New Zealand coders produce the required software.

"Our business processes enable the day-to-day changes in requirements to be reflected in the software. By the time we deliver it, it's exactly what they want ... There's a huge advantage between what it costs to develop in London, for example, and what it costs to develop in New Zealand. We compete very well on value."

Comments from our readers

No comments yet