For many years, Amdocs shrouded itself in mystery. The reason it shed some of this cloak was the infectious need experienced by the company's owners and senior executives to cash in on its phenomenal success, for which they bear the responsibility. There is no cause to reproach them for this. It is they who, day by day, with their own hands, and together with the company's thousands of employees, are generating this money.
Apart from that, Amdocs has a problem. Ah, the troubles of the rich! If you don't distribute the money to your top executives, what do you do with it? This is not a high tech firm, constantly in need of investment in equipment and development. Eight-five percent of Amdocs' constantly increasing revenue derives from the services it supplies to customers, the man-years it prices, and not from the sale of products. What Amdocs does purchase, in tremendous quantity, is mainly flight tickets for its employees to all parts of the world.
Development hardly calls for any investment, either. The basic software products work, undergo adaptation to each customer, and if the customer's requirements call for something new to be developed - no problem. The customer usually doesn't know it, but he also finances development.
Thus, in the past two years, Amdocs has specialised mainly in billing products and customer care to communications companies, and in creative financial solutions that will enable it to convert its accumulating revenues and profits into benefits for its executives. Amdocs, as usual, is way out front in both fields.
Spirit of Boaz Dotan
The history of Amdocs is that of company founder and guru Boaz Dotan, who last year, evidently due to a financial dispute with owner Maurice Kahan, found himself on his way out. Dotan was in charge of the 144 (telephone inquiries) service of the Ministry of Communications, in what is now known as Bezeq. Later, he became information systems manager for Golden Pages, of the Aurec group, and was also responsible for developing the first commercial billing system for that company.
Aurec Information and Directory Systems(AIDS - in short), was founded in 1982. This was when AIDS was a company rather than a horrific disease. In 1985, the name was changed and abbreviated to Aurec Information. The company's first external customer was TTI, which initially partnered Maurice Kahan in Golden Pages.
In 1984, AT&T of the United States split into eight companies (itself and seven Baby Bells), and in 1985, one of them, namely South-Western Bell (SBC), acquired 50% of the Aurec group, mainly by virtue of Aurec Information's billing system for Golden Pages. That year, Amdocs was founded, in order to assimilate the software in the US company, and the rest is history: the billing and customer service software was developed for telephony, and later for cellular telephony, and all the Baby Bells became Amdocs customers, as did more than fifty other companies worldwide.
Amdocs, of course, has its special modus operandi, the money pump that keeps the cash flowing in. Conceived by Dotan, it consists of a basic product which is adapted to the needs of the individual customer by means of many man-years. Dotan may be leaving the company, discreetly and on the quiet, in his own inimitable style, but the company will bear his mark for many years to come.
Seven High-Fliers
What does Amdocs look like today, on the inside? Avinoam (Avi) Naor is general manager and, together with Dotan, a company founder. In the inner hierarchy, he and Dotan alone share the solitary splendour of the summit. Naor is upholding Dotan's tradition of business conservatism, viewing things from the customer's standpoint, and focusing on billing rather than on other software systems. Naor is known as both highly professional and a modest sort, despite his snobbishly high living standard in the working framework. Everything, it seems, is relative.
The three men in the next tier of the pyramid are:
- Mario Segal, currently considered #2, and defined as COO, in charge of ongoing operations and personnel on the global level. He is considered an excellent executive, a very centralised manager and "not an easy man", as a former Amdocs executive puts it.
- Nehemia Limelbaum, supra-level leader of the field of products, development and technologies. He joined the company in 1985, and had charge of US activity and of graphics development for Golden Pages. Before that, he was Contahal general manager.
- Amdocs' redheaded Dov Bahrav joined the company in 1991, and served as Amdocs president in the United States until 1995. Bahrav is the executive finance officer, the brain behind the financial acrobatics that have lately characterised Amdocs: issues, tender offers and so forth.
The third tier features another four executives:
- The first is Eli Gelman, Amdocs' rising star, marked out as next general manager, to succeed Avi Naor. He is the first in many years to have risen to the top, and "climbed over the backs", so they say, of Nathan Raflovitz and Shuki Erlich. Gelman has been with the company since 1988, and, until not long ago, managed the large cellular division, before it split into four "small" divisions. Now, for the first time in Amdocs, a marketing and business development division is being set up for him. He is already in charge of these matters as a senior management member, although still without an official division.
- Nathan Raflovitz is in charge of sales. One of the original members of the company, who spearheaded Amdocs' entry into the global market, he is seen as a professional door-opener. Today, his star is on the wane and most of his responsibilities are passing to Eli Gelman. Yehoshua (Shuki) Erlich is also considered to be on his way down. In the past, he managed Amdocs
Washington, but currently has no definite responsibility.
- Last of the seven high-fliers, not residing in Israel, is Shimon Kassif, President of Amdocs Britain and i/c Europe. Kassif was deputy general manager of computerisation in Bezeq, one of that company's group of effendis who obtained severance conditions far more generous than those permitted by the Ministry of Finance. He resigned in 1994 to join Amdocs, and since that time, Bezeq's generous terms have become small change for him.
These seven high-fliers, ranged in their three tiers, effectually constitute the company's active board. All have shares in Amdocs International.
Published by Israel's Business Arena June 10, 1999