It took Chris Wilkins just over ten years to build his software company, DVT, into a R100 million business. Less than two years later, he has more than doubled that turnover, with R250 million in revenue expected in 2013. Entrepreneur chats to him about how he has focused on growth, increased his profits, and built an industry-leading business.
South African software company DVT, founded by conceptual thinker Chris Wilkins in 1999 and now one of the largest independent software specialists in the country, is set to exceed R250 million in revenues this year, for the first time in the company’s history.
With offices in Cape Town, Johannesburg and India, DVT’s range of medium and large clients have one thing in common — their demand for reliable and predictable delivery, an expectation that Wilkins’ team has met consistently.
Describe the climate when you started the business?
I was fed up with the arrogance of software developers and the prices they were charging. My business partner and I financed the launch of DVT by extending our bonds and making significant salary sacrifices.
For a number of years, we invested the small profits we made back into the business and started getting small returns. The business grew incrementally and today we are a top provider of software and services.
What was your strategy when you started DVT and how has that changed over time?
What we do has not changed but how we do it has. You have to grow a business for it to survive, and despite what MBA students might think, you have to make a lot of it up as you go along. It’s an ‘if needs must’ approach. The needs of a growing business change all the time, and you have to accommodate that growth by making adjustments as you go along.
The most important element for us has been hiring more people, and more senior people. As an entrepreneur, you have to know when it’s time to bring in employees who do what you used to do so that you can occupy your time with developing and evolving the business.
Have your customers changed?
Because we are in the business of professional skills, we do not focus on any particular market sector. We have a potential customer base of 2 500 institutional companies in South Africa, all of which have a fair amount of cash to invest in software and services development. That’s what has enabled us to become experts in a variety of domains, rather than in any vertical sector.
What impact has the economy had on DVT?
We have always managed to sidestep the negative effects of the economy. That is probably because of the serious lack of ICT skills in the country. There is a strong demand for the right level of talent in the software sector because the education system simply is not producing enough of what South Africa needs in this market. That is why finding the right people has always been such a key part of our business.
How has your business model evolved if at all?
There’s nothing magical about a business model. It’s simply the nuts and bolts of how a business plans to generate revenue and profits. It details your long-term strategy and day-to-day operations. DVT has essentially been doing the same thing we have always done — writing software for clients.
But how we do it is changing. There are more people involved. There is a big team of support staff, and an in-house recruitment team that knows how and where to find them. We are now employing around 100 people a year, which means we have to scour South Africa for the right talent.
The key point is that functions in the business have not changed, but the way we do things has changed dramatically. That, I believe, is the difference between an average business and a great business. Our growth is not about systems and process, but about the ability to scale what works.
How are you addressing the skills shortage in the ICT industry?
As part of the company’s long-term drive to grow ICT skills in the country, DVT has a well established internship programme through which interns are managed, mentored and exposed to the right variety of projects. We have made a substantial commitment to this programme because we believe that the return on investment will be significant, given the impact of ICT on the economy and the shortage of local skills in this sector.
DVT is currently providing internships to more than 60 graduates and entry-level professionals, and will continue to increase this number each year. The internship programme is focused on previously disadvantaged individuals and a large proportion of all DVT staff is also drawn from these communities.
We have a level 4 B-BBEE status, and our aggressive internal training and development programme rivals that of corporate organisations many times bigger than ours.
Describe your organisational structure?
When we started the business I looked after the profit and made sure clients were as happy as possible. Those are the two main elements of any successful company. I did that for the first five years of the company’s existence, after which we employed our first business unit head.
Over time, we have simply replicated that model. It’s completely scalable, allowing us to keep on hiring as the need arises and the business expands. Now we have a federal system where business unit managers head their own profit line. We have invested heavily in growing the number of business unit heads.
At this point, we are focusing on intensively building our account management to make sure that clients are taken care of.
Looking back, what would you do differently in the early days?
I would have been more cognisant of building an intelligent organisation. It’s not that we have not done that, but I would have placed more emphasis on it — of course, in the beginning, you are mainly fighting to survive.
As you move forward, from day to day and month to month, it’s critical to accumulate all the knowledge that contributes to a company’s intellectual property for the good of the business as a whole. In South Africa, we tend to be driven by the psychology of the individual — we can do better by focusing on collective effort that leverages all the knowledge in the business.
Today, we are becoming increasingly efficient because we are always learning from what others have done before. We are able to take advantage of all that collective knowledge. That saves time, money and resources because everyone becomes a little more productive.
That’s important for a business as it gets bigger, because more people are being more productive, increasing the linear benefit exponentially.
How do you continue to differentiate the company from other software developers?
There really is no silver bullet. We’ve basically highlighted the 20 activities that need to be executed to perfection and focused intensely on those. Each year, the company gets better at doing something, allowing us to shift our focus slightly onto the next ability that we have to excel at.
How do you ensure profits?
We break responsibility down into smaller parcels. We have 14 profit centres, each headed up by business unit heads. As the leader of the business, I can’t oversee 400 people, but delegating responsibility to other managers makes it easier for me to lead according to our vision. Each team leader manages their own team and focuses all efforts on generating a profit.
How has your management style contributed to DVT’s success?
I’m a big picture person. I see the world in terms of opportunities rather than risks. I will always hand over ownership and responsibility to those who are able to take the business forward, and make it worthwhile for people to give it their all.
I believe in giving people some leeway and always taking into account their personal circumstances because no one works in a vacuum. Having said that, strong leadership is vital. I’m open to change and hearing opinions, but you cannot spend years making decisions.
Our culture is one strongly driven by profit incentives. Each year, a percentage of profit goes back to the staff. The structure of the incentive programme is simple and easy to understand and there are no ambiguities. We never shift the goal posts, nor do we make it increasingly difficult for people to achieve their targets.
How have you exceeded the quarter of a billion mark?
We have experienced record growth for the past two years. Our focus on an ownership-based model, coupled with hiring the right staff has been instrumental in this success.
Margins have been under pressure in the industry as a whole, but we have slowly improved the circumstances within which we operate, negating some of the negative effects of these external market forces. Persistence and perseverance got us here. You have to believe that you can do what you say you do.
- Name: Chris Wilkins
- Company: DVT
- Launched: 1999
- Core business: Net, Java and Mendix constitute the core software development platforms at DVT. Agile development, business analysis, project management and quality assurance and testing complete the additional service offerings.