BCE Emergis‘ business plan for 2003 borrows a page from the KISS school of management: keep it simple, stupid.
Montreal-based Emergis unveiled its business plan and financial guidance on Wednesday in Toronto. CEO Pierre Blouin
said much of the company will attack two verticals and focus on what it akready has in its portfolio, not what’s out there.
Health and financial services are the twin poles supporting the revenue tent. Blouin said there are plenty of revenue opportunities left in both markets — in Canada and the United States. By developing an expertise, he said it will be a more agile company and better able to respond to customer needs.
While much of his speech focused on the future, Blouin also addressed the past. In early 2000 Emergis stock was trading at more than $140. At the start of the year it was still worth more than $40, but has been fluctuating between $5 and $10 for six months. Blouin called 2002 a year of adjustment for the company and blamed its troubles on external (the market crashed) and internal (lack of focus) factors.
“”The adoption rate for e-business products has been reset. They haven’t been reset to zero, though. They’ve been reset to rates of 20 to 40 per cent growth, not the astronomical rates (of the dot.com craze),”” Blouin said.
“”In terms of operation, Emergis, indeed, had multiple products — way too many to customize,”” he said. “”The focus was on acquisitions, not on recurring organic growth. The expense were not in line with the lower revenues.””
Blouin cited decisions in 2002 (killing off 17 product lines and laying off more than 20 per cent of its workforce) as evidence it was on the right track.
Yankee Group of Canada analyst Mark Quigley said the decision to focus on the health and financial services markets is sound.
“”Financial services markets tend to be fairly lucrative regardless of what point in the economy we find ourselves, and given what’s gone on health care wise — particularly in the Canadian marketplace — and the notion we’re in the midst of crisis, we are starting to see more money being loosened from the purse strings.””
Growth south of the border, however, may decide the company’s future. Quigley said Emergis has made a number of acquisitions and is probably getting a significant portion of its revenue from the U.S., but more will be needed. From a population and economy perspective, he said, Canada is the equivalent of California.
That growth is already underway to a degree. Blouin said it has signed deal with mortgage company Freddie Mac and Visa.