Thirteen years ago, three Israelis, Yoav, Yaron and their father Yoel Sholev, sat in their temporary home in Australia, searching for a name for the new computer company they had just decided to establish. Just then, a truck from the Australian moving company Ipek drove by, the famous name painted in huge letters on the side. The decision was made that instant. The future company would be called Ipex, and if the first customers thought there was some connection to Ipek, it couldn’t hurt.
Thus, one of the largest computer companies in Australia was born. The company operates today from headquarters in Melbourne, employing 540 people, 180 of whom work outside of Australia in eleven global branches located in Taiwan, Hong Kong, the US, Germany, Belgium, New Zealand, and an office to open within two months in Holland. IDC ranked the company fifth in Australia in PC deliveries, behind Compaq, Apple, IBM and Digital. This is a respectable position in a market that will purchase 1.4 million PC’s in 1996.
Another important branch of the company is presently operating in Israel, designated to serve as Ipex’s launching pad in the European market. Last year, Ipex and Clal Computers and Technologies founded a joint company, Clal Ipex, which began operations in the integration field. Ronen Tzadok, Clal Ipex General Manager, estimates the integration market’s volume in Israel reaches NIS 100 million annually, adding the company’s plan is to take 5% of the integration market in Israel.
In order to put together a group capable of implementing entire projects, Ipex established a software company in Israel, ISI, specializing in development of information systems for large- and medium-size organizations. ISI is based on activity and a development staff acquired from Yahav Computing and Projects. It is located in Beer Sheva and specializes in developing projects with client server technologies using Microsoft tools.
ISI was joined by Winsite, which changed its name to Winsite-Ipex when it was purchased from the Rekach family. This company will be in carge of instruction, assimilation and support services through a Help Desk.
"We live in the PC world and everything that sits on it or connects to it," Yoav Sholev explained during a recent working visit to Israel. About 55% of Ipex’ revenues in the world come from government concerns and ministries, while the other 45% come from large companies in the business sector. In the fiscal year ending June 1996, the company’s sales amounted to $200 million. The company estimates it will post 17% growth in sales in the current fiscal year, reaching $230 million.
Your activity in Israel is connected to your attempt to penetrate the European market. Why are you trying to penetrate such a crowded, competitive market?
- Yoav Sholev: We want to be a company whose business activity is equally distributed between the Pacific Basin, Europe and the US. This ensures that local business changes won’t damage the business as a whole.
How is the launch in Europe being carried out?
- We will begin by marketing a catalogue of electronic spare parts we have developed, currently in use at Mazda. It has also been sold in the US, marketed at a price which includes instruction and ongoing maintenance.
In addition, we have entered the video conferencing field with a product we developed known as Convergence 2000. We entered this field relatively early, after reaching the conclusion that few companies provide effective, inexpensive solutions, or provide smart solutions to the issue of application sharing. We signed a joint marketing agreement a month and a half ago with Intel. We will offer a video conferencing room including all the solutions with many expansions based on Intel technology.
In addition, we are trying to penetrate Europe in the filed of large computing and integration projects. We are currently carrying out two flagship projects in Europe, the Intersoft network project and another project in Sweden, which we are just beginning. The $3 million project will computerize a retail chain with 400 points of sale.
What is Israel’s role in penetrating Europe?
- In our business there are two principal problems, reliability and personnel. In principle, it is impossible to carry out a staff-intensive short-term project without local staff who can provide support after completion of the project. The idea is to focus the peak of the project where the staff is located, and Israel should provide that solution for Europe.
How do you manage a multi-national company?
- Our organization is built around a very thin managerial layer and this is our strength. Any problem or possibility is weighed only once by the decision makers and decisions are quickly implemented.
Our business is run according to Larson's principals, the legendary manager of the SAS airline. The idea is simple, the manager declares the company’s goals, and once they have been defined, all managers are authorized to use all the tools at their disposal to achieve them.
For instance?
- We have declared in the past that any client who encounters a problem, must receive a solution which allows the client to continue to work within 48 hours. Managers are authorized to use any means; to fly in technicians, to purchase equipment from foreign companies, and do whatever they have to to meet the goal.
In light of this, the manager of our Brisbane branch began employing subcontractors on some of our most sensitive projects. We saw that his profits were eroded due to a twenty-fold increase in expenses for subcontractors and a ten-fold increase in flight expenses. As the point is to define goals which allow people to take responsibility and sometimes make mistakes, we reached the conclusion the goal must be redefined, so we increased the time range to 72 hours.
How is it to work in Israel?
- I think the Australians can teach us a lot about how to work according to strict regulations and persist over time. My challenge in Israel is to manage our approximately 110 employees here as 110 employees and not 110 entrepreneurs. That is my main challenge.