Beat your own drum

Specialist public relations is a valuable weapon in the arsenal of any organisation, but it is part of wider mix and other tools should be considered. The use of a general PR-cum-marketing communications supplier to advise on other marketing techniques and print could have limitations.

If “lead generation” and “increasing market awareness” are priorities for Pasporte then it should seek assistance from an specialised agency or individual with a clear focus on these areas.

The employment of a marketing director, preferably CIM qualified, with broad experience of all elements of the marketing mix could provide the balance that is required, while an interim marketing manager or reputable consultancy could enable the company to tap into a high level of expertise on a more flexible basis.

Mr Woodward needs to define his marketing objectives more precisely and define his target customers before he can set the appropriate budget. But as a guide he should consider 3 per cent of revenues.

If he decides to generate a set number of new leads, then he can calculate how many times he needs to run a particular communication or repeat a direct mail campaign. If he is not certain what each activity will achieve, running a test (such as a telesales campaign to a small sample) would enable him to make a more accurate prediction.

Caution merging traffic

The accountant: Philip Atkinson, partner at PKF, says that Pasporte is in a strong position but should be cautious about mergers

Historically, in common with many smaller IT providers, large corporate customers have been out of reach unless the company has partnered with one of the major IT providers.

Not only has Pasporte survived the fall-out from the end of the dot.com bubble but it has prospered and proved its business model. Its real challenge is to now build upon that success.

Given Pasporte’s success in attracting a blue-chip portfolio of clients, opportunities for direct client relationships should open up.

Industry commentators expect within a decade all businesses will outsource the bulk of their technology services. Return on investment is just over 300 per cent and payback on investment is just 121 days. While timing of any sale is crucial, there is clearly still plenty of growth in the market, giving management time to build further value in the company and demonstrate sustainability of the model and profits.

Management may need strengthening to enable Mr Woodward to realise his ambition of standing back, to ease the pressure on the other directors and to enable a cohesive strategy of managed growth to be developed and implemented.

Whilst it is tempting to grow quickly, and Pasporte have felt the need to partner with leading IT providers to access large corporate accounts. Study after study of mergers, has shown that two out of three deals have not worked; the only winners are the shareholders of the acquired firm who sell their company for more than it is really worth.

The difficulties are often attributed to cultural and motivational problems among key personnel. However, mergers can and do work. Pasporte’s management need to have a clear vision of what the ideal target would deliver and a strong project team to handle the integration.

Things to remember include: Mergers are likely to be more successful when management seek targets in their core markets; The more both companies know about each other, the higher the probability of success; Consider joint ventures or working together on a series of projects before cementing the relationship.

Pasporte should get as much information on the other organisation and should not rush into a deal. It should consider how the deal will be financed. Share-for-share exchanges spread the risk across two shareholder bases.

Also consider aligning senior managers’ interests with those of the company through share incentive schemes.

Pasporte does not have a history of acquisition and integration. An already busy management team will almost certainly require strengthening if it is to make a success of acquisitions. However, they do understand partnering and this may provide the perfect short to medium-term solution to delivering growth but not jeopardising their hard-earned position.

Standing on the shoulders of giants

The technology business guru: Danny Chapchal, the chairman of Camcon Technology, TSSI and Trace Group, is known for bringing early stage technology companies to market. He says that Pasporte should leverage its relationship with IBM and France Telecom’s Equant to build its own brand.

First of all I think Pasporte should think very carefully before embarking on a possible acquisition. They appear to be quite successful at present and acquisitions have a tendency to distract both the buyer and the seller.

In their relationship with IBM and France Telecom they need to “punch above their weight” and the way to do this is to ensure that their name becomes well known in its own right.

This is where good PR comes into place, however they should never mistake PR for adequate internal marketing - PR companies are not there to generate leads.

My first move would be to try to get better terms with IBM and France Telecom and these terms should not be limited to finance but should also relate to recognition by IBM and France Telecom of their involvement with Pasporte.

I would be tough in negotiations and would always bear in mind the maxim that you should never enter into negotiations unless you are prepared to walk away from the deal. Large companies are very good at sensing weakness in a smaller partner.