“Just about every rail operator in the UK uses the scheduling software we developed,” says John McArthur, CEO of technology company, Tracsis, which specialises in resource optimisation and data capture within the transport industry. “Prior to the software coming to market, the preferred method for resource planning was pen and paper. The step change for the rail industry was quite dramatic.”
Point of departure
Tracsis began life at the University of Leeds’ School of Computing. It was established as a commercial entity in 2005, with John as the first and only employee working hand-in-glove with the founding academic from the University of Leeds. From these humble beginnings, the company has grown to employ over 170 staff and is on track to deliver north of £21 million turnover this year, and counts Network Rail, and all of the major owning groups such as Virgin, First and National Express among its clients. John believes that winning the Smarta Breakthrough 50 Award in June 2014 will help the organisation to continue its rise and break into overseas markets.
“When we start to make calls overseas most businesses won’t know us from Adam, but I’m pretty sure they will know Santander. Winning the Award is a great endorsement and will really help with our next phase of growth beyond the UK,” says John.
Today Tracsis has three strands – a software division, designed to help transport clients such as local authorities save time, improve performance and reduce delays; a remote condition monitoring division, which provides hardware and software to rail infrastructure companies, enabling them to remotely monitor their assets and adopt preventative maintenance; and a professional services division, which specialises in capturing data pertaining to both traffic and pedestrian environments.
“We don’t have massively disruptive technology, but we do have a number of silver-bullet solutions to very specific and complicated resource management problems,” says John.
Strategic growth
Since spotting a gap in the market – and filling it with its first software package in 2005 – Tracsis’ growth has been based on manageable organic growth combined with an aggregation model. “Although everything we were doing was very profitable, we wanted to grow faster, and the way we did that was to buy technology and solutions that we could brand under our company name and were naturally complementary to what our clients were trying to achieve.” The company floated on AIM in 2007, which raised its profile and strengthened its ability to make strategic acquisitions. “In addition, a lot of big transport companies want the confidence of a big PLC supplier,” says John.
The company has achieved more than 50% growth every year for the past six years and has made six acquisitions – the most recent of which was Manchester-based software company, Datasys. This is a strategy that is often viewed as being fraught with risk, but John shares some advice that has held him in good stead.
“When we start to make calls overseas most businesses won’t know us from Adam, but I’m pretty sure they will know Santander. Winning the Award is a great endorsement" John McArthur, CEO of Tracsis“Patience is a virtue,” he says. “We usually know the companies we acquire very well – we had been speaking to Datasys for seven years.” Discernment is another important attribute. “The bar should be set very high for both parties. We also try to be as open and honest with potential acquisitions as possible – due diligence is a two-way matter and everyone should be in it to achieve a genuine win/win outcome.” Learning curve Managing such rapid growth has also demanded certain skills, not least when it comes to being realistic with shareholders. “Don’t be a victim of happy ears and happy eyes,” warns John. “Tell them what you think you can do and not what they want to hear. Too many tech companies over-promise and under-deliver.” Many of Tracsis’ growing pains have been rooted in personnel. The company began with an informal, ‘small company’ culture based on meritocracy, an approach that has been difficult to maintain as it has expanded. “You have to put in tiers of management at some point,” says John. To address the challenge of communicating with nearly 200 employees, Tracsis has appointed an HR manager, while an MD now heads up each of the company’s three divisions. “You have to look at your organisational structure and work out how your reporting lines work. It’s a completely different environment.” Overseas travel John acknowledges that such change goes with the territory of being a fast growing company, and he doesn’t see this slowing any time soon. Tracsis has plans to expand overseas, an area that Santander will be able to support. “As winners of the Award we are given a graduate intern for three months. My intention is that they will help us carry out overseas market mapping, so we can identify which markets to choose. One of the big litmus tests is whether we can grow outside of the UK.” Tracsis will also benefit from a global trade mission with Santander, as well as a mentoring session with one of the esteemed judging panel. But John believes external recognition is one of the biggest boons of winning the Smarta Breakthrough 50 Award. “It reinforces what I am telling both staff and customers, and that is really valuable.”