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March 2007
Engineer-turner-digital-businessman Philip Maguire has
discovered the secret of how to stem the tide of jobs
outsourced to the Far East, writes John Kennedy.
Although Philip Maguire speaks
sometimes modestly about his business-as well as Ireland,
its economy and its people-don't be fooled. There is a clear
warning in his razorsharp assessment of the country's
industrial future.
Headlines in recent weeks
about job losses at Pfizer and Motorola would convince even
the dogs on the street that Ireland's overseas investment
prowess is waning, that we have priced ourselves out of the
market, and that jobs are going to low-cost locations.
Maguire's company IT
Alliance is bucking this trend. As large IT outsourcing
firms move lower cost jobs to India, many find they must
return to these shores and to IT Alliance to help them
combat declining margins.
The company is what's known
as a "tier 2" outsourcer, and helps large blue-chip firms
such as IBM and Dell with such functions as security,
software testing and project management-functions that can't
be handled in low-cost locations.
In the months ahead Maguire
will have the option of either growing the company
organically, or through potential acquisitions as its
international presence expands. The company he started in
north Dublin when he returned from an engineering career in
the UK currently employs 250 full-time and 250 contract
staff. In recent weeks the privately owned and self-funded
company announced that it is to create 50 additional jobs on
the back of winning new business.
They grew revenues by 40
percent last year, from €24m to €33m, and anticipates growth
of 25 percent both this year and in 2008.
Looking at the threats
facing Ireland, Maguire believes it is time to return to the
fundamentals - to the very essence of what made the Irish
economy perform so well over the past decade. In a sense,
the Kevin Street engineering graduate says, our success has
been our undoing and we need to rediscover zeal, hunger and
edge. "Looking back on the last 20 years, the people coming
out of the colleges today aren't as hungry. They expect
success rather than work for it, and aren't willing to think
outside the box. They are not curious about mastering the
finger points of the business.
"Talking, listening and
being creative - this is what we need to harness again."
Maguire says that in the dotcom days of 2000 some Irish
graduates expected to be paid for just turning up at the
interviews. "While it's not that bad today, you can't shake
the feeling that they want to walk straight into well-paid
managerial jobs. "When you walk out of college the most
important thing is to gain experience - the money will come
when you get that experience. Throughout my career as I
moved jobs I never took a pay increase, but I always got
more in the end.
"The hunger to succeed is
what's been taken away from today's graduates, and that is
the most dangerous thing."
Before returning to Ireland
in 1995 Maguire spent much of his career in the UK in the
engineering business working for companies like Toucanhagen
Process Control and Belequip Process Control a subsidiary of
Silvermines Group PLC. Upon his return he remained in
engineering for a few years before contract work with
Digital Equipment Corporation (bought by Compaq, which in
turn was bought by HP) led to him starting up IT Alliance.
"We began as a very
different business to what we do today. We were initially a
test services company for the first five years. The dotcom
boom and bust made us rethink the entire strategy and cut
back severely. While we held back from the dotcom euphoria,
we were like everyone else impacted by the change in
sentiment in the market."
The business plan was
ripped up and it was back to the drawing board. Maguire and
his colleagues spotted a critical niche in the outsourcing
market, realising that even the big global IT vendors were
coming under the same cost and margin pressures that forced
their business clients to seek them in the first place.
In seeking to combat
declining margins, the world's largest IT outsourcing
vendors would not find the solutions in themselves
outsourcing to low-cost countries such as India and China.
And that's where IT Alliance enters the scene.
"It is a large target
market and the plan is to expand in Ireland and Europe. Our
main concern really is managing our growth. You have to
learn as you go along. Your strategy is your customer and
you learn from your customer.
"A key skill is listening,
spotting new opportunities and building in new services to
your strategy accordingly. Another important aspect is
making sure you've got the right people and that once you
have them they are developing within your organization."
While Maguire insists IT
Alliance will remain self-financed, he adds: "IF we were to
do a major expansion that may change. But whatever we decide
to do I'd rather we did it from a position of strength."
He explains that the
company has signed a deal with a major customer he would not
name but that involves establishing a new operation in
Brussels. He would not rule out overseas acquisitions to
sustain and manage growth.
"If we were to go down the
acquisitions route, it would be driven by the need to
acquire skills in a certain geography, not the need to buy
customer share." Wrapping up the interview, Maguire - who is
married with three children under the age of six - says: "I
don't have a crystal ball - but the business is there, the
growth is there and that's how we're going to continue.
"Managing the growth of the
business is critical. It can be daunting, but life wouldn't
be craic without a challenge."
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