A market-entry flop in Australia in the early 1990s prompted a Sydney software company to try again elsewhere. Now it has a thriving business in Malaysia.
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Entrepreneur: Charles Fox, Managing Director
Company: Century Software
Business type: Retail/financial software developer
Founded: 1986
Employees: 55 staff (Sydney: 20; Kuala Lumpur, Malaysia: 35)
Turnover: (2002 - 2003) $6.5M
Head office: Sydney, New South Wales
Contact details: +61 2 9460 1422
The Century Software Story
For nimble businesses, failure is often a beginning not an ending. As Sydney-based company, Century Software has learnt, failure in one market can be the basis of success elsewhere. In the early 1990s, Century tried to enter the lucrative market of supplying government accounting software. It customised its software to suit the specific needs of government clients. But the attempt ended in frustration, with fewer than expected sales.
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Key learning points:
- Market flexibility - Product development is expensive. If the product does not sell in the intended market, try somewhere else.
- Partnering - Look for organisations that have similar backgrounds and use similar products.
- Opportunities - If a product or market is doing well, pour in the resources necessary to capitalise on the success.
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Century’s managing director, Charles Fox, says: “We were only marginally successful simply because state government tender boards chose products that were much better known from multi-national players. That is part of growing up in Australia and being part of a colony of another country for a long time. We have this outward-looking mentality that often favors imported products.
“So we were faced with a decision. It was clear that we weren’t going to get into the government market in Australia but we had all this government functionality that we had built. Rather than complain about it, we moved to another jurisdiction.”
The company had a fledgling operation in Malaysia, centred on a reseller who had been appointed in 1993. Fox and his team took their government accounting software to Malaysia and promptly won contracts. Century Software now has a strong presence in Malaysia and has performed more than 30 software installations for government clients.
The reseller and his network of contacts were central to the company’s early success in Malaysia. However, clients there wanted the option of dealing directly with Century. In 1995, Century established a subsidiary in Kuala Lumpur, which operated alongside the reseller for the next two years (he subsequently moved on to pursue other interests). Australian software modules are sent from Century’s Sydney office and adapted by staff at the Malaysian office for their market.
Fox says: “If there is a single message that I can give anyone, it is: you don’t have to go it alone. You can find business partners in other areas and you can work with those business partners to help you build. That is the story of Malaysia for us.”
There is more to the story. Century had to adapt to cultural differences between Australia and Malaysia, which has many religious and ethnic groups. Fox says: “You’ve got to learn to trust. It’s very much about no one getting their nose out of joint. Malaysia is a very different culture to Australia. A good example is that when they say ‘yes’, it means that they heard you; it doesn’t mean that they agree with you.”
A good local staff in Malaysia helps Century to hurdle the cultural barriers. Of the 35 employees in Kuala Lumpur, only one is an expatriate Australian and - Fox says - he is a programmer who wished to stay on in Malaysia, not a senior manager.
In Australia, Century’s main market is retail merchandising. Retailers use its software to match the product mix in their stores with local demand. Fox says: “The colors and styles that sell in country New South Wales are completely different to those that sell in Darlinghurst.” On P&O’s cruise ships, Century software monitors sales at onboard shops and transmits the data back to Sydney by satellite each day. When ships return to port, their retail outlets can be rapidly restocked with the right product lines. Century has also found niche markets for its financials software.
Fox says that Century’s biggest mistake has been failing to capitalise on market opportunities, especially during its early years in Malaysia. “We didn’t put in enough resources and effort. It might have been ten times bigger if we had.” The company plans to sell its government accounting software at local government level in Malaysia and to expand into Indonesia.