RE: PP will be spent on what?My two pennies worth on current situation;
SP is based on percieved future value, analysts usually use two years out. For a company with relatively new product to market (TT/SB), past financials are little guide, though many of us look forward to 2nd and 3rd quarter this year for indication TT/SB potential.
So why is the SP so low?
18 months ago, we were in the process of buying Tech7 and SCS was predicting at least 20 of their customers would be transfered to TT/SB by end of q1 2003!! So far none have been converted, and although several tech7 staff have completed Oracle training, none are up to speed on TT/SB yet. So Tech7 is still operating as an independent company with a separate product line (Speedres) turning over around 1m and making aroung 50K.
In 2002 we were told SRM< live soon and we would see 4 Openfares customers a month hooked into it. 18 months later I think we have is it 2 or 5 live? can't remember, at best 5% of what was predicted.
Q4 2003, SCS predicted 6 live TT/SB by end of year ie withing 3 months.
End of Q2 2004, we have still heard of only 5 live, that's after 9 months and still seem to be working on the original 6!! How could management be so far out is one question that comes to mind? Given theat work has and is continuing on several of the origianl 6 I have concerns about the Q2/Q3 financials as it is not clear exactly when each compnay moved all of their bookings accross to TT/SB.
We have had no update to say when they now they predict the 6 to be complete, or when work will start on new customers, or what future targets are.
SP depends on future income, which depends on increasing number of customers using TT/SB and SRM and Solarnet. TT/SB in particular.
Implementation rates are proving to be orders of magnitude slower than many of managements predictions. Breakeven we beleive is about 10 companies live on TT/SB, ie doing ALL of their bookings through TT/SB. At current rates this is already looking like NEXT year.
The problem IMO is quite simply a huge shortage of technical people in Markham. The bottleneck means;
:- We don't have staff to start new implemenations.
:- We don't have enough staff to finish existing implementations in timely fashion
:- We don't have staff to train Tech7 or other protential TT/SB hosts.
:- We don't have staff to do web front end of TT/SB, so this is left to 3rd parties (such as blue dymension). Having several compnaies supply components of a key system (SCS, Openfares and web developers) means that compnay is at risk of any of these compnaies either failing technically or finacially. Compnaies much prefer one stop shopping, less risk, and if there is a problme, only one compnay to shout at.
:- We have so few technical staff that if one or two key people left the compnay would be exposed and it's ability to support customers would be compromised.
:- We have few if any reference sites that use TT/SB, have web front end and hooked into SRM. Carribeince were the first to add the web front end, Stanard Tours is likely to be the first to do the whole thing. And we have still to convert any of our own (Tech7) customers). It's all still very new, which to potential customer adds percieved risk.
* The recent PP has helped the balance sheet (another issue re sales).
* Tech7 has made SCS look much more substansial (more customers, techies, and turnover, but until they are trained and converting customers to Tech7 this is merely window dressing).
* IMO we should be looking to increase technical staff in Markam with money from PP, if we don't take on the extra financial cost now as increased burn rate, then we will simply take longer and burn more money getting to profitability. Saving money on relevant technical staff has proved to be a HUGE FALSE ECONOMY. If we don't tackle this issue and continue to drag our feet, investors will lose faith and PP's will become much more difficult as investors lose faith with maangements ability to see what are undoubtedly fine business plans through. It is crucial to be seen to be able to identify and tackle the key problems.
Switching focus from TT/SB to SRM, to Solarnet, then back to TT/SB looking for the short term win will kill us. Got to pick the core products and focus on them.
It is evident from maangements predictions of how quickly they think they can roll out systems that they don't have a good handle or understanding of development of their products, even Rick, though I still think strategically he is a huge asset to the company.
We need more people in development, and the right kind of people. We need to be able to predict how long something will take and deliver on those predictions. We need to be able to demonstrate to a potential new customer they can be up and running in three months instead of 9 months to a year.
* If we are in aqquisitions or merger market, then Blue Dymension are attractive. They immediatley impact TT/SB development (they do web front ends to TT/SB) and by being part of same company, it's a simpler sell for both companies. The attraction for them, is that if they don't join us, if/when we are successful, we will establish or own web development team and they will find it harder to make sales to TT/SB customers.
This is all jmo, I could go on, but I know I skip over long posts so, bye for now
Idle