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Melbourne minnow takes on the sharks

Below is the article featured in the The Age.

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July 20, 2010

 

Pete Hannan aims to show the IT multinationals how it should be done, writes Garry Barker.

HIS name is Peter, but his friends and associates see him as a David stepping bravely out to do battle with the giants - the multibillion-dollar corporations of the world's information technology industry.

Peter Hannan, founder and owner of Hannan IT, a Melbourne-based software and computer infrastructure outfit, at the age of 50 and with three children under 10, is in the process of realising his dream of "going out on my own and showing the big boys how it should be done".

He started in 2007 with only $50,000, raised from the mortgage on his house, and a staff of five. Nearly four years on, Hannan IT now employs 40 programmers, infrastructure experts and sales staff. Last year, its turnover was $5 million, with all the profit ploughed back into the business

Hannan said his decision to tackle the multinationals that dominate IT in Australia did not come from bravado or a midlife crisis.

He is well aware of the challenges, but he knows the giants, having worked for several of them after leaving the Victorian public service in 1997, where his last post was second in charge of state development.

"I had been through Jeff Kennett's downsizing of government departments; 20 departments became nine. I was chief information officer at Transport and Tourism when nine became eight. Transport and Tourism was gone and I went to State Development.

"Outsourcing had just become the flavour in favour. Fujitsu was in our department and Unisys in Premier and Cabinet.

"I saw what they were doing and I thought I would give it a go. I went to Unisys at the end of 1997 and a bit later was headhunted to Fujitsu. And then I got caught up in Advantra (a consortium formed by IBM, Lend Lease and Telstra).''

Advantra aimed to be the biggest IT corporation in Australia and won some big deals with companies such as Qantas and National Australia Bank but was ultimately absorbed by Telstra, with its critics calling it a failure.

Hannan worked there as an account manager "but for someone like me, trying to do $20 million deals … well, they just couldn't get the delivery model right," he said.

"I have been in IT since I was 21 - programmer, analyst, system administrator; pretty much every role you can think of - but I had this urge to be by myself, have my own vision, live out my own strategy and have my own IT company. We would like to be the largest Australian-owned and locally run IT services company.

"Most of our competitors are multinationals, but I believe they are not focused enough on their customers. They trade mostly on reputation - you know: 'nobody ever got fired for buying IBM'."

But in these fast-changing days in IT, with activity centred on the internet "cloud" and virtualisation and mobility, small, flexible companies can do well if they share their customers' passion.

"For me it is all about customers,'' Hannan says. ''That's why working for big multinationals drove me nuts. Their concentration was all internal. That kind of thinking gets in the way of what needs to be done.

''You have to win a customer and be more responsive to the customer than the big boys. It's all about value. If people want to buy IBM, that's down to them, but then it is a matter of how satisfactory that relationship is, and how responsive the big company is to their needs.''

Hannan IT's customer base is mainly small and medium enterprises turning over $8 million to $10 million, with some in the $2 million category, but it also includes Optus, Iveco and the Victorian Fruit and Vegetable Market. One of its first jobs was writing management software for the Melbourne Commonwealth Games in 2006.

"A CIO [chief information officer] will take a risk with a smaller IT company, but he has to like them," Hannan says. "A lot of people stuff is involved in the relationship. They get interested in what we are doing and we tell them what we are doing.

"But in order to give them something different and meet their needs, you must have really good, committed people who think outside the square. Companies, particularly smaller companies, will buy from people they trust.

"When you deal with a smaller company, you don't have a 97-page contract, you have a handshake and three pages of agreement and that means you are both fully committed to achieving the outcome … it is people working with people instead of managing a contract. It means we are very involved."