The Friday Interview: Eugene McGinty

20 Aug 2004668 Views

Connect Global Solutions and its founder Eugene McGinty (pictured) are living proof of the old maxim ‘adapt or die’. The Dublin-based software localisation outfit has only been in existence six years but already it has had more strategic shifts than you can shake a stick at.

The company was established in April 1998 after McGinty spotted a gap in the market for specialist localisation services. “At the time, a lot of US IT companies were doing localisation work themselves but were looking for an outsourced solution, particularly on the engineering and test side,” he recalls. “So we began by offering engineering and test services to the big IT companies here.”

At the time, Ireland was still a relatively low-cost economy but as prices rose fuelled by unprecedented growth levels in the economy, McGinty realised that his company’s business model had a limited shelf-life.

“A lot of localisation work tends to be low- or mid-tech work. You’re not writing programs or designing code. What you’re doing is taking programs and pulling them apart and building them back together again. Someone once described localisation as ‘taking an engine apart, painting all the parts blue and putting it back together again.’

“We made a conscious decision to move up the value chain and add higher value services. The industry is changing that way: it is looking for more of a value-added partner than a vendor and that’s where we want to go,” he explains.

So two years ago Connect’s executive team undertook what McGinty describes as a “complete top-down review of the business”. The starting point was the belief that as an industry localisation would not be entirely commoditised. Yes, there would be low-value areas that would go to the lowest bidder but there would also be plenty of higher-value activities that could deliver a healthy return to the companies providing those services. The objective of the review was to identify where those high-value areas lay and to decide how to handle the other areas.

Today, McGinty doubts whether the company would still be in business if it had not taken stock when it did. “If you look around, the last couple of years have forced every business to do that, and the successful ones, those that you see coming out this side [of the downturn] are those which went back to basics, focused on their core business, figured out what their customers were looking for and provided the value-added services and products that they were looking for.”

One of the conclusions of the review was that the company should exit non-core businesses. The most significant of these was its systems integration unit: the company was an IBM business partner, selling IBM technology into the financial and public sectors. It sold this business last year to IT services firm System Dynamics.

At the same time, a decision was taken to branch into new areas, notably internationalisation services. The premise here is that the ease with which software can be localised into different languages is related to how it is engineered in the first place. “You need to code it properly to allow it to support different locales,” explains McGinty. “There’s a whole lot of very complex engineering processes that need to be put in place in order to let you do that.”

Connect has set up a consultancy in internationalisation whereby it will analyse a product to gauge how internationally friendly it is and write a report on its findings. The company can then of course do the localisation itself if required.

Another important decision that was made was to use technology to enhance services offered to customers. Specifically, a portal called called Simship.com has been developed that allows Connect, its customers and its translation partners to work together much more closely on projects via the internet. “It gives us a lot of control and eliminates a lot of errors that were introduced because of manual entry in the past and ultimately creates an environment that allows us to do our business much more efficiently,” enthuses McGinty.

At the same time, the whole focus of the business has become much more international. As well as aggressively targeting markets such as the US where it built up sales forces in Boston, Chicago and San Francisco, Connect has built up a network of partners across the globe to which it can outsource low-value parts of its business and keep costs down. While the company currently has a production centre in Blanchardstown, it plans to establish a similar facility in Beijing, where costs are a fraction of what they are in Ireland, although McGinty stresses that the Blanchardstown site will remain the operational hub.

As a result of the strategic review, Connect GBS is a very different business compared to two years ago, but managing the change has been anything but easy, McGinty admits. “We didn’t have a lot of the skills in house that we needed so we had to get those in place. From a management viewpoint, we had to structure the business to better reflect the outsourcing model we were looking at. Our culture had to change too. We had to change from being a vendor to being a company that could help our customers solve their technical challenges.”

But the pain has been worth it. The business now has 60 permanent employees and a further 25 temporary staff and turnover in the current financial year is expected to reach €9m. Customers are large and blue chip and include Sun, AOL, IBM and Apple. The company’s strong performance propelled it to thirteenth position in last year’s Deloitte Fast 50 Awards and McGinty himself was shortlisted for the Ernst & Young Entrepreneur of the Year Award 2003.

While doomsayers have been writing the obituary for the Irish localisation industry for several years now, McGinty begs to differ, believing that the industry’s fate is still very much in its own hands.

“I think the industry is far from under threat as an industry but I think we have to re-invent ourselves,” he concludes. “We need to position ourselves as the people who understand the business very well; who can project manage large, complex localisation processes; who have the engineering capability to design the customer’s product and who have the networks to be able to outsource some of the work to where it can be done most cost-effectively.”

By Brian Skelly

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