From strength to strength

A start-up company just over two years ago, Vizual Business Tools is now
worth £12m and boasts an impressive list of blue-chip clients. But that is just
the start, as partners Frank Beechinor and Peter Sedman explain to Katherine
Burke

It’s hard to believe that an HR software company with only 38 staff has
attracted 13,100 customers across 35 countries within three years of its first
product launch.

Vizual Business Tools’s success story sounds almost too good to be true –
profitable since it was set up in 1996 by partners Frank Beechinor and Peter
Sedman, the business is now valued at £12m.

With Vizual Personnel, their first product launched in June 1997, Sedman and
Beechinor brought professional manpower planning, salary projections and absence
management within the grasp of small and medium sized companies.

The starting price was an unbelievable £199 was less than a twentieth of the
cost of the next nearest rival. The software’s ease of use has brought it loyal
followers including Demon Internet, engineering group ABB and Hilton Hotels.

But Beechinor and Sedman have yet more ambitious goals in sight. They want
to build on their impressive list of multinational clients, and take payroll,
training and occupational health hassles off the hands of busy HR managers.

The latest product, Personnel Manager still only costs £399. Cynics may be
forgiven for expecting hidden extras – but none are in sight. Vizual offers a
30-day money back guarantee on all products, demonstration versions are downloadable
from the website, or available on disk. There’s also 30 days free technical
support, and instead of charging per user or employee, plus each package has an
unlimited multi-user version.

"The biggest problem we face is price scepticism – people think these
guys are offering me something for £100 – what’s the catch?" says
Beechinor, .

The answer is the company keeps overheads punishingly low. No-one, including
Beechinor and Sedman, has a company car. Logistics and manufacturing are
outsourced rather than increase staffing overheads. Vizual has two field sales
staff, with the bulk of the products being sold through about 40 dealers across
the UK, including PC World.

Staff are paid well, but most of their wages are performance based, says
Beechinor. And the London headquarters are based in Beckenham, on the outskirts
of the capital, to save on rent.

User guides are written by a company in Canada, because technical authors
there charge a quarter to a third of the going rate in the UK. Authors can also
be emailed a specification at 5pm and have the chapter completed by 9am the
next day.

To minimise the need for storing products, the firm uses the latest in
just-in-time production. On the same day a client orders a product on, a firm
in Ireland cuts the CD, boxes it up and dispatched it via Shannon airport to
reach the client the next morning. 90 per cent of customers get their order
before 11 am. says Beechinor.

Overheads may be low but there’s no stinting on technical support or
development. As the number of customers is growing so fast, Beechinor and
Sedman have doubled the customer support team over the past year from three to
eight. The team receives 100 calls a day.

"Most people think we just sell products out of a box but a high
proportion of our clients ask for technical support and training too,"
says Beechinor.

Sedman’s and Beechinor’s hatred of bureaucracy, meetings and memos may be
one reason it only takes on average one month to develop a product, from the
initial idea. This seems all the more surprising when you consider that all
products including upgrades are rewritten from scratch, using the latest
version of the programming language.

"It would normally take a company six months or more to launch a
product because it takes ages to get an idea OKed. Software products are
notorious for running over budget and late," says Sedman, who is technical
director.

"Some personnel software is built on foundations that are 10 years old.
Instead of starting from scratch they’re modifying and enhancing their old
systems but they end up modifying and enhancing their problems – they’re trying
to get the software to do something it wasn’t originally designed to do."

In the past six months or so, the six strong software development team have
launched 16 products ranging from the top of the range Personnel Director, a
full client server HR solution selling at less than £4,000. Other products
include Recruitment Manager, Payroll Manager, Pay Reviewer, Fleet Manager for
keeping track of company vehicles, kwik ID for creating security cards and
health and safety training modules.

This month, the company launches a virtual HR service, including a payroll
bureau, psychometric testing service, legal advice, on line training and
occupational health advice and assessment.

"We have 13,000 users and the majority are saying can you help us with
pay roll, occupational health, employment law advice, so we’re evolving to
become a general HR services business," says Beechinor. "The beauty
of the internet is it enables all this to happen much more easily."

The portfolio of 31 services is split into eight categories. Employers who
don’t want the hassle of a payroll department will send their staff details
over the internet to oneclickHR.com, and pay slips will be returned to
employers within 12 hours.

Under the testing service, an employee or prospective recruit will complete
a psychometric analysis over the internet, and the results will be emailed to
the employer – costing £20 per test. There will be four tests to choose from
including a Jung Type Indicator, and classical reasoning.

The health screening service should be particularly useful since the working
time directive means all staff who work nights have to get their health checked
first.

Under the occupational health service, individuals will complete a health
questionnaire, which will be assessed by an OH expert who specialises in this
area. They will tell the employer their opinion of the person’s fitness to do
the job, but will not go into details about why.

Occupational health specialists will also advise employers worried about how
to tackle problems including sickness absence. The employee and manager will
complete a questionnaire, from which an OH specialist will recommend a course
of action.

"Occupational health advice was the preserve of large companies but
there’s 3.2m businesses out there and they wouldn’t even know where to go for
OH advice," explains Beechinor.

The company already has a training division to cover its own products but
Beechinor want to extend this to general management- and personal development.

"We’re after customers who know our name – we already get a phenomenal
amount of repeat business," says Beechinor.

The pair are getting expert advice from business leaders who liked the
company so much they’ve bought shares in it. In May 1999, Vizual Business Tools
was independently valued at £5m, a group of powerful City investors invested
£1m between them. Lord Allan Sheppard, chairman of car-components firm Unipart,
has also been recruited as an non executive chairman.

Beechinor and Sedman are quick to stress they’re not out to make a quick
buck – all the profits are being pumped back into new products and development,
and they’ve already rejected overtures to sell off the business. Selling up to
retire to the Bahamas is not an option.

"We’re after long-term good customer relationships," says
Beechinor. "We still want to be here in ten years time."

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