When Alan Hyde was appointed managing director of NEC Australia and New Zealand in October 2010 he became the first non-Japanese leader for NEC in the region. Hyde has since taken NEC’s local operation from a flagging technology retailer to a leading service provider of information and communications technology (ICT) business solutions.
NEC has been in Australia more than 40 years, designing and implementing advanced systems in multi-vendor environments such as mobile communications for vehicle fleets and field and emergency workers, video conference systems, digital signage and display solutions, fingerprint and surveillance technology and more.
On 31 May this year, Hyde – who, over the past 20 years, has held senior management roles in the ICT industry in Australia and the UK with enterprises such as IBM, SSA, PeopleSoft and SAP – announced NEC’s A$227 million acquisition of Australian ICT company CSG Limited’s Technology Solutions business. The investment positions NEC as one of the top-tier ICT companies in Australia by revenue (more than A$400 million) and employees (about 1550).
The acquisition is another step towards realising Hyde’s vision of NEC becoming Australia’s leading communications systems integrator by 2014. It certainly bolsters its capability set in high-growth services such as enterprise resource planning (ERP), customer relationship management (CRM), business intelligence, managed services and cloud-based solutions.
“It’s a key milestone for us,” Hyde acknowledges. “We set our strategy when I joined [in 2010] and the strategy for this acquisition was driven from our local business with great support in Japan.”
Integral to transforming a company the size of NEC was communicating the need for change and engendering staff buy-in.
“We explained to our people how other successful businesses were growing in Australia and what they were doing and compared that to our performance, which had not been tracking at the same levels,” Hyde says. “I also painted a very optimistic picture of the IT industry, which I said was entering another phase of accelerated growth.
“There is a perfect storm happening and technology is creating real opportunity for business and government to innovate. We need to make sure we are positioned to exploit that opportunity and unless the company as a whole saw the need for change, to do things differently rather than just stand still, we were not going to get the buy-in we needed to get where we wanted to be.”
This is not to say that NEC was bereft of innovation. Hyde says there were pockets within the organisation that were doing exciting things and what he needed to do was “pour petrol on those fires that were already burning, lay out a new vision and raise people’s expectations about what was achievable”.
As is always the case, there were also pockets of scepticism about Hyde’s approach – but, accepting that he would be judged on his ability to lead, he set about reinforcing his vision for a changed company in his day-to-day actions: “You have to follow your vision through with what you do every day.”
Despite his obvious intent to expand through acquisition, Hyde has also focused on organic growth. During his town hall meeting to announce the acquisition of Technology Solutions, he emphasised that the company’s strategy was not about one path or the other.
“It’s about being proactive on both fronts,” he says. “We are now in a unique position because we have followed through on our organic growth initiatives and have a significant IT arm as well. That amounts to a very broad offering we can now take to market.”
Following the successful completion of approvals for the sale, the Technology Solutions business, comprising the subsidiaries CSG Services and CSG Solutions, will operate as an independent business unit of NEC Australia with senior executives reporting to Hyde. Reflecting on this, NEC Corporation president Dr Nobuhiro Endo says the new organisation will have the capabilities and scale to compete for some of Australia’s largest ICT contracts.
“It also provides a comprehensive solution and services platform to strategically extend Asia Pacific business development opportunities for communication and IT solutions and services growth,” he says.
According to Hyde, it represents a great opportunity for all staff and stakeholders with regards to growth and expansion.
“We have acquired a profitable division of a well-regarded national IT services organisation with a proven business model, management expertise and strong sales pipeline,” he says. “The two businesses are complementary – we are adding significant IT consulting, application development, business process solution management and desktop and infrastructure management expertise to NEC Australia and the capabilities of the Technology Solutions business will be bolstered with access to NEC’s international experience, advanced technology products, corporate size and global brand.”
Hyde adds that the two companies’ customer bases are highly compatible. “The Technology Solutions group has a strong government, large- and medium-sized customer base. Our ability to offer customers an end-to-end solution, encompassing business applications infrastructure and support as a managed service leveraging cloud technology, will be unique.”
However, given present economic uncertainties, are customers becoming reluctant to commit to technological innovation that’s often complex and costly?
“Because of the economic challenges we’re facing and the global competition many industries have to contend with, the need for Australian businesses and governments to innovate is greater now than it has ever been in my time in the industry,” Hyde says. “And the opportunity to innovate is also greater. It used to be that some technologies had not matured enough – there wasn’t the bandwidth, computers weren’t fast enough or we didn’t have the right software. Many of these issues are no longer barriers to innovation.
Companies recognise that maturing technologies and the prevailing economic conditions have combined to create a perfect storm.
“What they are struggling with is how to best go about it. In other words, how should they prioritise their investment? What that means is that we have to be very clear about return on investment [ROI] and ensure we can deliver quick wins for companies. It is not about large, multi-year and highly expensive projects. It is about deliverables that are quicker to market and have good ROI, then building on them.
“If you can do that you can break through what seems, on the surface, a trend towards battening down the hatches, because companies know they are going to have to reinvent their businesses in many different ways.”
Even so, in relation to their counterparts in Australia’s major trading partners, Hyde believes locally based corporates are a little behind the curve in transitioning to the latest technologies.
“Some companies are right on the leading edge, but broadly speaking there is a lot of untapped opportunity in business and government to build on those technologies,” he says. “I was recently speaking to Infrastructure NSW about the amount of money we spend on transport infrastructure just to move people during rush hour in the capital cities.
“Imagine the benefits a unified communications solution could deliver in terms of employee productivity by being able to telecommute from home and hook up via video with their companies. The IT platform supporting that mode of working has massive economic benefits and it is something we can help implement.”
But while investing in the latest communications technologies is in itself all well and good, it is of little use if end users in the workplace don’t fully understand how to use it.
“And that is a key part in all of the projects we deliver,” Hyde says. “It is also an area in which Technology Solutions has expertise, delivering project and change management, training and everything that goes with it.
“What it’s about for us is making sure that when a company wants to achieve a business outcome, we can bring all the capabilities needed to realise that, be it training, business applications or software, and we do that in partnership with other providers as well.
“This de-risks the project for customers, helps to contain costs and reduces the complexity of having multiple people involved.”
Another area in which NEC Australia is increasingly proactive is helping chief information officers (CIOs) protect the security of their systems.
“It has become a key consideration and one in which we are continually building our skill set,” Hyde says.
“We are currently putting a telephony solution in the cloud for SMEs, but across-the-board security is top-of-mind and it is important that we are able to build that into our systems and cover it off for clients. Again, with the Technology Solutions acquisition we are growing our cloud skills with the competencies they have, so it is very complementary in that way.”
We have leading-edge technology in terms of a green footprint. We are doing a lot of work around smart energy grids and the concept of smart cities using energy more efficiently.– Alan Hyde
It has now been a couple of years since then prime minister Kevin Rudd committed to every child having access to a computer. In 2008 NEC launched a new interactive whiteboard for the classroom, but despite NEC’s presence in the education sector, Hyde is reluctant to buy into the argument that government needs to invest more to guarantee Australia’s computer literacy.
“I’m very optimistic about the future and I think as a society we need to embrace technologies, but they’re not the be all and end all,” he declares. “There are opportunities if we leverage them in the right way, not only in education but in terms of business and general social outcomes.
“A lot of benefit and value is still to be unlocked, and there is a role for government to play, but there is also a role for all of us when it comes to helping children understand the potential technology offers. I’m reluctant to always put the responsibility back on to government because I think we do that too much.”
An issue that is rapidly becoming the be-all and end-all is sustainability, with the IT sector often targeted over the environmental impact of outmoded and discarded technologies.
“NEC is a Japanese company and Japan is facing significant energy challenges [see Japan's Road to Recovery],” Hyde says. “We have leading-edge technology in terms of a green footprint. We are doing a lot of work around smart energy grids and the concept of smart cities using energy more efficiently. We are looking at launching battery packs that will power your home during the day and recharge overnight, when electricity costs are lowest.
“We are a leading innovator in battery technology and a lot of the electrical vehicles coming out of Japan use that technology.”
From a personal viewpoint, although there are parallels with positions he has held in the past, the managing directorship of NEC Australia has also entailed some significant differences.
“In some respects it is a very different role here,” Hyde says. “I’ve had a lot of autonomy to develop a strategy for the business that is very in tune with the needs of Australia, compared to working with other multinationals where the tendency is to see the world in a more homogeneous fashion. There has been much more empowerment to work locally with our customers and partners, while leveraging a global capability.
“There is also a strong ethic of doing what it takes to make a customer successful, which derives from a Japanese commitment to quality. I’ve enjoyed being able to leverage that to help the team here use it to grow the business.”
This article is from the July 2012 issue of INTHEBLACK magazine.
