Far-off fields only look greener

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."