Sustainable growth for Saratoga

Insights from our CEO

An interview with CEO Mark Gebhardt on what sustainable growth looks like for Saratoga in 2015.

By Rebecca Maserow

In April of 2014, Mark Gebhardt took on the role of CEO at Saratoga. Previously the COO and head of Software Engineering, Gebhardt has been party to the expansion and changes in the organisation over the years. Saratoga is seeing changes under his leadership, and looks forward to exciting opportunities for a versatile and sustainable business. Saratoga is a business analysis, software development, business intelligence as well as product company that strives for excellence with its suite of expertise and service offerings, along with its subsidiaries World Wide Creative, Afrozaar, Digital Matter and Emergent Energy.

Q: In terms of your new role as CEO, what is the vision for tackling challenges, and your excitement for opportunities?

A: The key thing is Saratoga’s growth trajectory. I have been at Saratoga for 12 years, and we’ve grown at a steady pace. The challenges are on how we keep going. We must continue to diversify our customer base, and our combined approach of organic growth within the business, as well as acquiring businesses that complement the bundle of services that we offer. In the two years ahead, we will be working towards a national footprint; we have some presence outside of Cape Town, but we are going to be expanding that with a stronger Saratoga brand.

We have never looked for a meteoric rise; that has never been our approach. Our goal is sustainable growth.

Q: So, do you think the time is ripe to expand at a national level?

A: Yes, it’s perfectly in time with our level of growth. To mature in the Western Cape, we would need to add a whole bunch of additional services. That’s what we started doing about four or five years ago, before which we were a custom development shop, and there is more that we can do, but we feel that the focus should also be on a national growth now.

Q: How is Saratoga adapting to changing market needs?

A: The core of our business has always been building custom business solutions – there’s a noticeable decrease in requests for pure custom development. We’re seeing that more of the large corporates are investing in platforms rather than custom-built solutions. Another change is that there is an increase in the offshoring/outsourcing approach that’s happening in pockets. With those two things happening, our role is changing. Saratoga’s original role doesn’t go away, but there is additional opportunity around integration, helping those corporates get their new platform to actually work with all of the complexity built up over the years. They have a legacy, complex IT estate, but it needs a whole lot of work to be able to allow the new platform to hook into it.

Q: Do you feel that corporates often undervalue that integration?

A: From a business perspective it’s plumbing and fairly intangible, meaning it’s tricky to justify. That said, many mature organisations understand that effective IT integration is an imperative. Businesses want to play in the new world, to do e-commerce and all of these cool new things, but they know that it’ll remain a pipe dream unless they future-fit the back-end. Generally, you have two options; replace the whole thing, or you put a layer of stuff in place that will hide a whole lot of deficiencies in the back-end. There does tend to be buy-in for that because they have realised that they need to do it. So no, it’s not completely undervalued.

The other element of offshoring is that there are limits to what corporates can achieve and they often only see it when they begin to unpack their complex IT systems. Quite quickly, they begin to realise that in reality they can’t outsource or offshore. Things have to be well packaged to work together, to translate between the current state and aspirations. This is a role that fits very nicely within our professional services ability – we have really good business analysts that help businesses to discover and package their requirements. In terms of managing that delivery, our BAs can come in, do some prototyping, solve a problem and make sure the shape of the solution is understood before they get passed on to the architects and engineers.

There are two other key market changes happening that directly impact our business. The one is the move to “digital”, which is a very overloaded and overused term, but generally it speaks to the more Web-facing business-to-customer user experience, mobile first or responsive Web development. The other element is the cloud beginning to be used by larger corporate customers. Through our subsidiaries like Afrozaar, we are now able to offer a service where we can move their existing systems and information into the cloud to save a whole lot of time and money.

From a digital side, we’re seeing an increased demand for great user experience (UX). Saratoga is well positioned to incorporate the mindset, and for larger UX projects, our digital marketing agency, World Wide Creative, is well positioned for that emerging requirement from a lot of our customers.

Q: What is Saratoga’s diversification strategy?

A: From a customer and market segment perspective, we have branched into more retail-oriented work. Financial services will always be a mainstay for us; we’ve started to expand into the more asset management side of financial services rather than just pure life insurance, where we’ve been operating for some time. The other diversification element for us is media. Afrozaar, which we acquired last year, is focused on media and content distribution on mobile platforms, and that includes two newspaper groups in the UK and one in South Africa. Our acquisition strategy is to bring on complementary skills that translate into additional service offerings.

Q: The Saratoga Group companies (Digital Matter, Emergent Energy, World Wide Creative, Afrozaar)… how do they fit into this thinking?

A: Our approach to acquisition has always been far more Berkshire Hathaway than Sungard. For Saratoga, it’s not about going in and rebranding, it’s about finding a business that’s doing really well and we think we can assist it to do even better and put the right kind of support and governance in place. Especially in our industry, the reason that our businesses do well is because they have a culture, they have a commonality of purpose, they exist as an organisation and we don’t want to mess with that. Our job is to find a number of such entities that can sit alongside and grow together. A good illustration of such synergy is Saratoga’s relationship with World Wide Creative – with the popularity of e-commerce, we work well together; Saratoga doing the back-end and World Wide Creative the front-end, covering all of the customer needs.

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