This month, we're pleased to present a conversation with Bruce Ballengee,
CEO of Pariveda Solutions, a Dallas-based information technology services company ranked by Inc. Magazine as the 14th fastest growing IT services firm nationally.
What's your background, and how did you get started?
"I studied economics and finance at the University of Chicago with an eye to a career in banking. While interviewing with a number of banks, I also met with Arthur Andersen for a position in their Management Information Consulting Division. I was skeptical at first, meeting with a technology services company; after all, I trained as a banker. Well, they convinced me that they could teach me everything I needed to know about technology. I was intrigued, and saw this as a phenomenal growth opportunity.
"After ten years with what eventually became Accenture, I left for a short stint and then came back as CTO of a software company that was acquired by Accenture, where I met my better half at work, our co-founder John Humphrey. Later, we were both at a small IT services firm that was acquired by Hitachi Consulting. It was at this time of serial acquisitions by Hitachi that we met many of the people with whom we started Pariveda."
What's been driving your success?
"Our customers are impressed not only with our technical delivery skills, but they also appreciate that we have a good understanding of how business and technology fit together. We have a good track record of relationship selling, tapping into both our existing client base as well as our networks. We tend not to be in the RFP business … we don't do many of these. Because we don't chase RFP's and rely primarily on our network, our rate of business coming in is slower, but it's steadier because it tends to be economic insensitive and it comes with a higher win rate."
What's your outlook for 2009?
"We are cautiously optimistic. We'll end this year up about 60%. For 2009, we're looking for a stretch goal of 50% growth, though if we grow 20%-30% based on what people are saying about the economy in 2009, we'll declare it a good year. We will invest to start the year on the 20%-30% path and then hopefully adjust investment upward based on performance. One thing that has insulated us is that we've done very little work in the financial services and construction industries."
What are the challenges that you see facing your customers, and what does this mean to you?
"I think executives have to worry about the same thing they've been worrying about for the last 35 years, and that is aligning the IT organization with the business. While IT is more and more an integral part of the business process, it's not necessarily helping companies from an alignment perspective. Business technology problems tend to be complex, with the parties taking sides based on their perspectives. We find we can help bridge the gap, often with a different perspective or ‘third way.'
"The other thing businesses have to worry about is that in 2009 they are likely to face pressure to cut IT spending. What we advise clients is that cutting IT spending, which is typically 2%-3% of gross revenue, does less for them than spending their IT money more wisely. They should be thinking, how I can use IT to make my salespeople more effective? Or, in the face of rising fuel costs, how I can use automation to make our field personnel more productive? There are a lot of opportunities out there, and if you understand their cost and revenue drivers, you can make a pretty persuasive case that there are things that they should be spending money on and maybe they need to cut somewhere else to find it or nor at all."
Where are you going with Applications Managed Services?
"I think the long term trend for AMS is good for IT services firms. In recessionary times companies cut IT spending, particularly their permanent IT personnel. The theory is that they can add these people back later, but in the long run they'll just have project managers who will manage outsourced work. Every time they make these cuts it's hard to get IT people back, so the long-term trend to outsource is accelerated. This has been particularly true if you look at IT employment and unemployment data trends since 2000. The demand is still there, which means the work goes to service providers.
"AMS for us right now is about 5% of revenue, but we're getting more calls for this service from our clients, and of course, Revenue Rocket is counseling us to listen to our customers in this regard. We're looking at building our AMS business to 20% over the next few years. The benefits we're seeing are a more predictable revenue stream and a more effective way of developing people. Working inside an organization represents a tremendous opportunity for growth and learning and accelerating the technical capabilities of Pariveda. The end result is that we'll do a better job for our clients and be better evangelists for Pariveda.
"We're finding the keys to making this work is that you have to give AMS the attention it deserves internally. You have to make a serious commitment in terms of money, resources and talent; which is exactly what we are doing."
You can contact Bruce via email, or visit Pariveda Solutions at www.parivedasolutions.com.
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