assignment for hifsa shaukat

Company: Gemcom Australia Size: Medium Industry: Mining Software Business Activity: Information and communication Type of Entity: Private Company Number of Employees: 25 to 500 Country: Australia Headquarters: Vancouver, Canada Yearly Revenue: Greater than $25 million Gender: Male Subject: International Business

Issue：

Andrew_Pyne_Issue_1: Can you describe an important issue that you had to resolve? Hi I am Andrew Pyne and I am the Managing Director of Gemcom Software Australia. In that capacity I look after our business in Australia, in Asia and in Russia. An issue I had to deal with recently was that we had a long standing relationship with a company in Russia that was our agent. It was a very successful agent. It had invested heavily in our business by establishing a team within his business in respectively establishing a team in his company. He was a software developer who had a very successful business in that capacity. He had also established a team in his business that solely focused on representing us and marketing our products. He had been our partner for five or six years. We liked him. We trusted him. He had been very successful for us. The decision that we had to take here was that the team inside his business had left his business and the leader of that team approached us and said she had taken that team and set up her own company. And wanted us to switch out agency from the existing relationship to follow her into a new company. So that was the issue.

Cause：

Andrew_Pyne_Cause_1: What caused the issue and why was it important? It was important for us because with her taking the team, the existing partner had no capacity to continue to successfully represent us. What caused it? I think she saw an opportunity to strike out on her own and start her own company. So it was her personal objectives which actually was the cause of it. There was not dispute between her and the owner. The owner looked after her and had looked after her very well. He had brought her into Russia from Belarus and had supported her. But we were left with a decision with an agent that had not capacity and a very capable team that did have a capacity that had set up in a way that we were very uncomfortable with. At the time the Russian market was not a large business for us in terms of percentage of revenue but it was through was a nice profit stream. It was contributing around 4 to 5 percent of our earnings at that stage. There was no risk at that stage. It was quite stable. We had also just invested in translating two of our products into the Russian language which we thought would be a catalyst for our business growing quite significantly and we did have a long term view that Russia could become quite sizeable and a lot larger after we had made the investment to give them better product to sell into the workplace.

Background:

Andrew_Pyne_Q2: Can you describe a typical workday for yourself I have a team of about sixty people and I guess a lot of my day is reactive to the requirements of my team. I try to stay off e-mail at the start of the day because it can really disrupt the plans that I have for the day. Typically, I will have some key tasks that I will document the day before and I try to start with those tasks. Then I will make myself available to the other staff as they have requirements of me when they turn up to work. I typically get here before most of my team. Andrew_Pyne_Q1: Can you tell us a bit about your self and your career path to date? My name is Andrew Pyne. Currently, I am working in the role with Gemcom as Senior Vice President. In the role I head up the business for the company in Australia and Asia; I am the managing director of the subsidiary company located in this part of the world. Andrew_Pyne_Q3: What is your role in the company? My formal role is to make this part of the business profitable. I am judged on how this particular company that I head up in the Australasia region, performs against some key targets and they are predominately around financial performance, but also around staff retention and those sorts of things. Andrew_Pyne_Q4: Can you describe your leadership style? I like to be a leader by example; things like turning up to work early, presenting myself well but also empowering people that are capable. I have said many times to leaders within my team that it is sometimes better to let your staff make mistakes and learn from that than try and protect them from that. I am very much about empowering people that are capable. Andrew_Pyne_Q5: What does good performance mean for you in your position? The financial metrics are probably the easiest way to assess that in a tangible way, however, I think it is as important, the happiness of the team. Now that might sound a little bit corny but it is actually not, especially in our industry where staff turnover is a big issue and the scarcity of technical labour in particular, and in technical I mean geologists and mining engineers. Building a happy environment here, where we do not have a lot of staff turnover, that is pretty important. Andrew_Pyne_Q7: How is your company organized? We are set up in a series of regional business units; I head up the bridge in here as I have already mentioned previously. Then we have four peers that run the other regions which are European, North Africa, African, North American and Latin American business units. Each of those heads of those companies report through to Rick Moignard, who is the group’s CEO. In the regions we perform technical services, sales of the product, and we have finance and admin functions as well. All of our corporate resources, like research and development, product management, and corporate marketing, are under the corporate umbrella so they are corporate resources. The rest of us are regional resources who are employed by those five different companies Andrew_Pyne_Q6: What does your company do and how is it different? Gemcom is the largest company in our space. We have, perhaps, four or five companies that we would see as direct head to head competitors. We are different in that few of those companies can truly claim to have an end to end technology suite which covers software that would be used by geologists right through to a lot of strategic mine planning engineers. We are different in that we were listed as a company; we are now owned by private equity out of the US and also one out of Switzerland whereas a lot of our competitors are still owned by the founders, so you have really got a powerful individual running the company, still, in most cases. Ourselves, we are a bit different and I guess we have matured beyond that stage of our evolution. Andrew_Pyne_Q9: How does your organization make money or sustain itself financially? We have three main revenue streams; we sell licenses of our software products. Now, those licenses are perennial licenses so when a customer buys it they buy that version of the software. If they choose to enter our maintenance program they also get software upgrades; they pay an annual fee for that and we also provide technical services. So, sales, tech services, and support contracts are the three main ways we make our money. Andrew_Pyne_Q10: Can you describe the customers of your company and why they purchase your products or services? The typical profile of a customer of ours would be a mining company that is either already in production or is planning to go into production. The people we typically deal with at the organization does depend somewhat on the size of the company we are dealing with. Smaller miners we would typically deal at a senior level, maybe the CEO or Chief Operating Officer. As the companies get larger we tend to deal more with group mining engineers or mining managers and they are, typically, who our customers are. Andrew_Pyne_Q8: Are there any key events that were critical to success over time? In 2006, Surpac Minnex Group was acquired by the Gemcom software company. I was actually employed by the Surpac Minnex Group and, as part of the acquiree, it was quite a different experience for us than it would have been for the Gemcom folk; that was critical for us. I think that what we recognized, within twelve months of the acquisition, was that, at the time, Gemcom was a public company and I would say that it had a very professional corporate management of the entity, in the technology that Surpac had. Surpac Minnex had some very good technology; perhaps we were not getting the value from it that we could and, certainly, over the 12-24 months after the acquisition that positive corporate management reflected in the results of the company, really hitting all-time highs in terms of revenue growths so it was a very productive change. Albeit at the time, from a personal perspective, I was a little concerned by that, not knowing what that was going to mean but, I would say, within a very brief period of time after that acquisition it was clearly a very positive thing for the staff and also our customers Andrew_Pyne_Q11: In what ways is your organization dependent on others for its success and how do you attempt to reduce these dependencies? In the past we have used a lot of resellers and agents, particularly in new developing markets; that was very common for us in Asia in years gone by, in South America, and also in parts of Africa other than South Africa. Over the last couple of years we have replaced a lot of those resellers with direct staff, selling and supporting in those regions, and that is probably a dependency that we had that is much less important to us now and in terms of revenue coming through agents. I would guess it is somewhere in the order of ten percent whereas it might have been three times that five years ago Andrew_Pyne_Q12: Can you comment on whether or not your organization makes use of social media (e.g. Facebook, Twitter, etc.) to promote itself? We do actually. We have a Facebook page for the corporation; we also have a Facebook page here for our region and, in fact, it was the marketing person here that was the first person to create a Gemcom page and then corporate marketing took that on, that initiative, and we are very active in that space. When I say we I mean people a bit younger than me are active in the space, that work for me and you know it is proving to be a really good forum for us to communicate with our clients, ex-staff, and current staff as well Andrew_Pyne_Q13: What big issues do you think your organization will be dealing with over the next five years? The scarcity of technical labour in engineering and geology is certainly a constraint the whole industry is facing and that is no different to us. Even now we have trouble finding or identifying talent with those disciplines. We are proactive in that we are partnering with universities; we do that in a number of different areas. Something we have done quite recently in this part of the world was with the Mongolian University of Science and Technology, which is a very hot market now for mining and exploration. We have provided a scholarship program through that university and that is a university where they are still turning out many graduates every year and we are also talking to universities in places like Kazakhstan. Only yesterday I was talking with another Canadian company in between Ivanhoe and ourselves. We are looking at some sort of collaboration to put software in the hands of the hundred or so graduates they have every year to provide them with that sort of access to our technologies so when they do graduate they are more industry ready to be employed. Andrew_Pyne_Q14: Can you describe the industry within which your company operates? We are in the mining technology space; we provide technical mine planning and geological software products to the industry and we provide technical services to the industry around those products. We do not compete with the consulting companies that are providing bankable feasibility studies or doing resource models or that sort of thing. We are really focusing on providing tech services around the products so it is mainly technical software used by geologists and engineers. We sell solutions to those types of professions. Andrew_Pyne_Q16: How and why is this industry changing? There is consolidation certainly. I think some of the major events over the last couple of years has been the money that we have seen coming into the industry from areas like India and China where, particularly here in Australia, we have seen a lot of money being funded or being sourced from China, particularly in the development of the lower grade iron ore deposits here in WA. The really good resources have been exploited by, or are being exploited by, companies like BHP or Rio Tinto; a lot of the lesser quality iron ore deposits are now being exploited by smaller companies that are receiving a lot of the funding from places like China and, so, you see joint ventures accessing those resources. It is local technical labour. Companies here that may be listed in either Toronto or Australia with the tenements on those properties and they are being financed by the steel mills or other mining companies out of China. Andrew_Pyne_Q17: What is the role of regulators or government in this industry? It is very much environmentally focused. The environmental arm of the government is like in all parts of the world; they are all very aware that the mining industry has the potential to damage the environment. There are very strict laws and rules around rehabilitation of mining areas. In that respect the government is very active and also considers occupational health and safety; the department of mines takes occupational health and safety extremely seriously here so I would say mining safety and rehabilitation through the department of mines and the environmental arm of the government. Andrew_Pyne_Q15: How do firms compete within this industry? I think it does vary. Some of our competitors, I would say, are reaching the desperation stage in their evolution and we have seen that with our smaller competitors, really focusing on price particularly where, perhaps, we have got a technological advantage and particularly in less sophisticated markets. To give you an example, when we are looking at a new area like Mongolia we will compete with companies that are going in there to try and buy market share. They are going in there with a very low price and what we are trying to do is educate the market about the difference between our technology and some of our competitors, but price is something that we have seen quite a bit. Also, what we are seeing is that as the mining industry is finding it more difficult to attract technical staff, they are looking for companies that can provide more than just technology. So, for example, three years ago as a company we had a very small tech services business and now we have a much larger tech services business because our customers are asking us to do more for them than just sell them software. Companies are actually doing that and we are competing with those companies that are providing similar technologies; we are also trying to provide good quality after sales support and tech services and some companies have followed the same strategy. Andrew_Pyne_Q18: What are some of the important opportunities facing the industry? I think that what we are seeing is that companies will have to rely more on technology to extract the resources. An example: we are seeing companies like Sandvik out of Finland that are getting much interest in their underground automated mining systems, and we are seeing here in Western Australia that Rio Tinto are evaluating that for their underground argyle diamond mine up in the Kimberly region of Western Australia. What that basically is, is that we are now seeing automated machines going underground and mining these underground and relatively dangerous areas. The reason for that is that there is a lack of labour to do that work. The labour is very expensive and after you have made the initial upfront capital investment in those sorts of systems you do not have ongoing labour costs. Another example would be Fortescue Metals Group, which is a very innovative company in the way that they are exploiting their iron ore resources and from the loading facility they are mined to the loading facility at their port; there is one involved in that process. Everything else is automated, now again it is for the same reason so I think the technology will play a larger part to deal with some of the issues the industry is facing around the constraint of labour. Andrew_Pyne_Q24: How do you address and resolve conflict within your organization in a work team setting? We actually do not have a lot of conflict. The culture we have, especially in this office, is quite a fun culture and we have just employed a new HR manager here and her first impression after a week is how much of a fun culture it is. If there is conflict, I like to deal with those things very directly. If it is between two staff I typically pull them out of the office environment and I would have them talk it through. If we have completely inappropriate behaviour we would follow the legislative requirements. In the past we have had, many years ago, a few quite serious indiscretions and we basically followed the legal process because it was quite serious. If it is just interpersonal conflict that might have been brought about by stress or whatever, I would typically expect the manager or myself to take those people out of the environment and work through the issue.