Cloud tech is rocket fuel for high-growth businesses
Connecting the demand and supply sides of high-growth businesses is essential to helping them avoid a potentially devastating spiral, according to the CEO of Foresite.
Brian Hawkes has overseen the development of the company's SaaS tool, which connects demand planning with sales forecasting and management.
However he had to be patient in waiting for cloud technology to become powerful enough to realise Foresite's true potential.
The business has been 100 per cent funded from within parent company Fortek, which provides business transformation services, and developed alongside a string of enterprise partners.
"The last company we developed our prototype with was a US business, the Smithfield Foods Corporation, which held a monopoly in their market within the United States," Hawkes told BusinessCloud.
"They came to Europe, investing $2.5 billion in acquiring businesses to replicate their business model which was very vertically integrated into Europe.
"The agile, efficient and productive competitive performance in new markets has always been a key fundamental piece of the chemistry of high-growth businesses."
Foresite helps businesses to predict demand for their products in new markets, driving efficiency and ensuring they are able to satisfy customer orders.
"We work a lot with £5-50m [turnover] companies which are investor-led and are therefore looking to grow rapidly," explained Hawkes. "They have limited resources because they're SMEs and, where there is variability of demand, they need to be able to manage that growth in a way that they can always fulfil it.
"We worked with a premium biscuit manufacturer which were supplying to top-end retail – the Fortnums and the Harrods. Their product was extremely popular and they were very successful at selling their product. But it's very, very seasonal – which meant they had to manage their supply side very well.
"When you've got a product or a business that is operating at the edge of its capacity, it becomes incredibly inefficient. The more labour-intensive it is – or less mechanised – it's much more susceptible to making a loss.
"You can get to a situation very quickly where the more you sell, the more money you lose. And you're letting down customers because you can't fulfil their peak demands."
Hawkes says Foresite is more aligned with ERP (enterprise resource planning) than traditional CRM (customer relationship management) systems.
"There is a lot of hard data around your demand that back-office systems like CRM don't really tap into. ERP systems deal with the business processes and value chain,” he said.
"They and external investors are realising is that you need to integrate your processes, both your demand-side and supply-side, so you become much more efficient and productive and profitable and give a better customer fulfilment and service – ultimately becoming competitive.
"We make it incredibly easy for people to capture that data and build it into their process management."
Hawkes says that Foresite was "10 years too early" but he never considered building an on-site version of the product.
"ERP is traditionally a very expensive piece of enterprise software, but the market is now moving very strongly towards the emerging trends of cloud-based products," he said.
"We were one of the early cloud companies and we've always been 100 per cent cloud and optimised for it so it performed at least as well as installed software.
"Salesforce did a great job because they broke the resistance there initially was to SaaS and to cloud-hosted software. Now everybody wants it – it's almost a pre-requisite."
Foresite connects into businesses' existing systems through what Hawkes terms 'push-pull' two-way API connectivity. "Everyone can see what everyone else is doing on a project, customer, sector or territory. It gives you massive connectivity between all your business functions," said Hawkes.
The business employs six people and has sold its subscription services into the UK, European and Scandinavian markets so far. The sectors it serves are mainly in manufacturing and engineering.
As it turns its attention to the UK's food and beverage manufacturing market, Hawkes is considering taking on private equity investment down the line.
"Because we've done the development and are marketing the product, and our business model is very good, it's unlikely that we'll need PE funding except for a massive market push – and that's what we're debating now," he said.
"At the moment we're focused on growing sales ourselves with a view that, at some point, there will be an event that will require funding to take the business further forward.
"Telecoms is an area which is rapidly getting into this technology through the increased use of mobile devices for accessing systems and data as well as emerging cloud applications. That is an area we haven't gone into, nor one we have experience of, and we'd need to partner or get investment to get into that space.
"PE houses are good at connecting you with the right people to get your business to where you want it to go – not just connecting you with cash."