Asia vs Headquarters: The View From the West

by Cesar Bacani, 05 February 2010

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topics:
Management

tags:
acquisitions finance function integration Micro Focus Nick Bray transaction services value-added services

It’s not easy being Nick Bray these days. The UK-based CFO of global business software company Micro Focus has helped oversee the acquisition of seven companies in the past four years – five of them in the past 12 months, including Borland Software and Compuware. In the middle of it, CEO Stephen Kelly resigned and a replacement has yet to be named. “I’m wearing two hats,” says Bray. “I’m effectively chief financial officer and executive leader of the team.”

Are the acquisitions and the company’s robust growth targets causing friction between the central office and the regions, specifically in Asia? No, says Bray. “We have a planning process where we get together to look at what we think is reasonable for each of our product line in each of our countries and there’s always some conversations around what be done and what can’t be done.”

In Singapore recently, Bray spoke with CFO Innovation’s Cesar Bacani about the challenges and rewards of integrating the various acquisitions, his plans for the finance function, the relationship between Asia and headquarters in the UK, and other issues.

There's a huge number of things going on at Micro Focus.

You can imagine as a team how busy we have been, not just in getting the deals done. In all five acquisitions [over the past year], we’ve effectively removed the back office function from the acquired company. We’ve closed their systems down, we transferred their data across to Micro Focus.

We’ve now reached the stage where we’ve got an internal programme running throughout the entire company, called strengthening the foundations. We’ve seen tremendous growth in both revenues and profits. We have taken the company from US$143 million in revenues four years ago to significantly in excess of US$400 million now. We had profits of US$25 million four years ago; now the market consensus is it would be more than US$160 million. We’ve also taken our margins from mid 20% up to 40%.

Now it’s time to just look at the whole company and ask, how do we improve this even further? Because whilst we have individually integrated seven acquisitions, what we’re now doing is look at the whole thing and work out how we improve the whole company once again. It’s always a continual process of continually looking at what we have in the company and working out how do we improve it further.

How is the integration process coming along?

We very much look to make sure that, as we go from 400 people to 1,500 people, everyone feels part of the same team, works the same way, has shared principles, shared cultural values. We very much look to get everyone within the Micro Focus culture. When we make an acquisition, we bring all the people into the Micro Focus contracts. We brand the acquired company Micro Focus. We have something internally we call cultural values, which is how we operate. So that’s a very important part of what we do.

One of the key things at Micro Focus is our focus on leadership. We find that if you get the right people with the right leadership skills, if you foster and train them in the right leadership skills, if you get the leadership right, typically you’ll get a very good company. So we spend a lot of time and effort and investment on leadership training and cultural values, on what it means to be with Micro Focus. That’s a very important part of what we do as we build a strong company.

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