Operating Review

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In this “question and answer”-based Operating Review, Jonathan Hunter, our Chief Operating Officer, outlines what he believes sets Elecosoft apart from the competition and describes some of the opportunities for the Group.

Elecosoft’s ambition is to be a leading international provider of software solutions that service the full lifecycle of a building from conception and design to facility management. As an integrated software business Elecosoft continues to evolve and expand ensuring it builds a team that best supports its ambitions and in turn creates opportunities for career development at all levels in the Group.

What milestones has Elecosoft achieved in the year?

In 2018 we continued to transform our vision into reality by executing on our three strategic priorities of innovation, growth and stability. A number of new SaaS applications were released to market in addition to updates of our existing applications. We won Project Planning/Management Product of the Year for the fifth consecutive year at the UK Construction Computing Awards and at the UK Construction Manager of the Year Awards, all winners were Elecosoft customers.

We were also nominated, with Prosper architects, for the prestigious Architects’ Journal Technology Award for our IconSystem design specification and property management solution for Primark stores.

We monitored our retail customer base who, despite experiencing a challenging trading year, increased their investment and usage of our property management software.

My marketing colleagues worked exceptionally hard to strengthen our portfolio branding as part of our move towards greater co-ordination and collaboration and positioning Elecosoft’s identity in the industries in which we operate. This feeds into our strategic objective of offering a full solution for businesses.

Our investment in research and development in 2018 was geared towards SaaS applications and strengthening our core portfolio. While our Powerproject roadmap over the past four years has been focused on BIM and international markets, the anticipated release of Powerproject XV in April 2019 will excite our core construction planning community with the addition of new features and improvements.

Advancements in our Swedish Climate Impact Calculation module for Bidcon introduced climate impact on machine resources which enabled the capture of Life Cycle Analysis (“LCA”) now covering stages Raw materials supply (A1), Transportation (A2), Manufacturing (A3), Transportation to construction site (A4) and Construction process (A5).

The awards and recognition we receive are commonly related to our well-regarded technology, however our support and client services teams must be recognised for providing first class service which plays an important role in maintaining our support renewals and longevity of customer relationships.

While the Board’s reseller strategy has been focused on growing Elecosoft’s geographical presence through controlled investment and risk, we continued to see encouraging sales in Australia, where our stair manufacturing software has been sold directly from Europe. We also acquired a number of new US customers now making up 23 per cent of the Engineering News-Record top 100.

What synergies will be created for Elecosoft following the acquisitions?

The acquisition of ShireSystem and ActiveOnline in 2018 was another significant advancement in Elecosoft’s successful strategy to extend its software portfolio beyond early stage project planning, design and construction applications, to asset and facility maintenance and management.

When we consider the life of a building, it was identified that as little as 10 per cent of a building’s cost relate to construction, with circa 90 per cent being related to ongoing maintenance. By servicing the post‑construction life of a building, we experience lengthier customer relationships and open up new sales opportunities for Elecosoft.

ShireSystem’s asset maintenance and management expertise, together with Elecosoft’s BIM industry expertise and construction data storage capability will provide significant opportunities for the development of new software applications and opportunities in the post-construction phase of the life of a building.

ActiveOnline, a significant competitor to our ESIGN visualisation operation, provides expert knowledge and expertise in photorealistic product digitisation; the development of unique virtual rendering techniques for internet applications and efficient data-cloud management techniques.

ESIGN is a flooring internet visualisation business and ActiveOnline’s soft furnishing visualisation will provide the opportunity to create a unique online interior platform for visualising all types and designs of interior coverings and flooring with the capability to transfer product data related to products included in the visualisation along the whole supply chain.

ActiveOnline has already made considerable capital investment in areas including scanning facilities and their database of materials, in addition to virtual reality and augmented reality (“VR/AR”) technologies, elements which Elecosoft’s ESIGN business does not yet have and currently outsources.

What differentiates Elecosoft from its competition?

Elecosoft’s enviable track record and long-standing reputation means that it holds a robust position in the markets it serves. Its portfolio of well established applications are used by a large number of high-profile companies across the many sectors we operate in including manufacturers, engineers, building contractors, housebuilders and building owners.

Our strategy is underpinned by the continued digitisation of the building industry. The use and process of Building Information Modelling (“BIM”) has been mandated during design and construction and is beginning to be used to gain efficiencies in the maintenance of a building further influencing design decisions on future building projects.

While information handover of a client’s asset is provided it remains uncommon for handover information to be checked for completeness, accuracy and appropriateness at the point of receipt. Information is normally delivered in different formats, some scanned information, paper, USB or other digital media. To complicate matters further, the virtual BIM information risks being lost during handover; and when a Facilities Manager notices that there is information missing, they will need to spend unwanted time tracking it down.

We work with asset owners who see real returns from the processes and systems we offer. They gain more certainty of costs in building maintenance, refurbishment and in making future purchasing decisions that improve the maintenance costs.

How does Elecosoft engage and invest in its people?

Elecosoft’s medium and long-term success is underpinned by the Group’s employees and its corporate culture. Our reputation is key to driving success and Elecosoft promotes ethical behaviours to maintain its reputation within the industry.

We strive to be the best, and to be the best our colleagues are encouraged to collaborate and work as a team. To effectively work in teams, we cultivate a culture of trust. Processes and teams are evaluated and measured for effectiveness and efficiency on a regular basis and proactively supported to change in line with overall strategy.

Teamwork and collaboration is supported by the investment in Group-wide communication systems coupled with the flat operational structure which allows colleagues across the Group to discuss matters with their managers and senior directors. Furthermore the management teams meet monthly to promote communication, teamwork and agility.

What is the Group’s vision and progress in achieving this?

Our ambition remains to become a leading international provider of software solutions serving the full lifecycle of a building from conception and design to facility management.

Significant progress was made in 2018 towards our vision with the acquisition of ShireSystem and ActiveOnline further extending our portfolio and addressable market into the design and maintenance phases of a building life.

Companies that operate in the architectural, engineering, construction, manufacturing and asset owner/operator industries continue to embrace technology, not only to build efficiencies, but as part of their strategic roadmaps.

It is therefore important that Elecosoft is recognised as a portfolio provider where any single user can be a customer but also a group of users working for a company can also be customers.

Download the 2018 annual report

The Elecosoft annual accounts for the period ended 31st December 2018 are now available to download.

Shareholders can elect to receive hard copy shareholder documents at any time by informing Link Asset Services at The Registry, 34 Beckenham Rd, Kent, BR3 4TU.