SBA

Are You On Their Payroll?

If I asked you to name a software supplier used by six hundred employers on the island you’d probably reply “Microsoft”. If I asked you for another you would probably struggle. Oracle? Their software is largely used by much bigger companies than those on the IoM. Canonical? Probably not. Sage? Hmmm, maybe. DPN? Who?

From their offices in Victoria Street one of the oldest IT companies on the island touches a huge proportion of the working population, their software is used to issue 27,000 payslips each month for 600 of the island’s employers yet the vast majority of people who receive those payslips will never have heard of the company.

DPN was, in 1982, the IT department for the Palace Group, an Isle of Man group of companies, but was hived off in 1989 to become “Data Processing Network 1989 Limited”, and is now trading as  DPN Software. One of the first diversifications of the newly independent technology company was the development of a dedicated Isle of Man payroll package - Paymaster Manx, which progressively captured market share in parallel with the rise of microcomputers in business to become the clear market leader and de-facto standard payroll package for Isle of Man employers. The chances are that if you get a payslip it was calculated and printed using DPN software, and their package also prepared the BACS file that transferred your pay to your bank account.

Following the success of their IoM specific employment software packages, which have assured DPN’s stability over many years, Managing Director Mark Broderick who joined the company as Sales Manager in 1999  and decided to buy it in 2006, has not rested on his laurels. The company now also provides packaged software for CSP company and trust administration, time recording for professional billing, yacht management and payroll, personnel management, and the company’s rent and rates software is used by most of the local authorities on the island. Clearly DPN has repeated the skill of exploiting local niches whilst the core payroll expertise has seen their services in use in Ireland, Guernsey, Jersey, South Africa, Gibraltar, Malta, France, Italy and Russia. The company has had some interesting clients along the way, they used to do the payroll for the QE2, and also provided the scoring system for PGA Golf tournaments.

The latter points to a willingness to develop one-off or bespoke software solutions. The security of the payroll customer base means that DPN are always busy, but they also develop bespoke software and customers can generally be confident that they will still be around next year and the year after, and the year after that… Small software companies are notoriously unstable, here today gone tomorrow, but the prospect of DPN disappearing anytime soon is unlikely; if they did we would probably be facing a national crisis with riots on Prospect Hill.

Such longevity brings its own problems in the constantly changing world of IT, software evolves rapidly and one of the major struggles of being a software supplier is keeping up with the new skills required. Approaches to this vary, many companies seem to want to recruit rather than investing in IT training, but as a long standing Microsoft partner the company is committed to developing its own staff and the average tenure of over a decade means that the company has a deeply skilled and efficient team. Recruitment is nevertheless a major challenge, the market for competent software people on the island is very competitive and DPN are on the lookout for additional support and sales staff. With workforce numbers hovering around ten, primarily split between product development and customer support, the company exemplifies how a small local IT enterprise can achieve stability and security and create durable high-value employment in a fiercely competitive sector.

Talking of the rapid pace of technology, I asked Mark if he had any plans to follow the popular trend of providing cloud-based software. It turns out that DPN have already mastered the cloud, and have a cloud-based version of their payroll solution. Uptake to date has not been spectacular, perhaps unsurprisingly because despite the general enthusiasm for cloud solutions firms want to keep their payroll databases in house, but more importantly the exercise of developing the cloud product means that DPN has acquired the skills necessary for the future as cloud becomes increasingly common and important.

In any final analysis nobody is going to claim that payroll or time recording software will set the world alight, it’s not glamorous or sexy, a new personnel package is not going to sweep the world like Twitter or Periscope, but the chances are that we will still be using payroll software long after Facebook has switched off its last server.

DPN as an exemplar demonstrates two lessons which the island’s businesses and government need to heed. The first is the relevance of scale in the software industry. Many of us when procuring IT systems prefer the supposed assurance of choosing a large supplier, a company which has delivered to many clients and is “too big to fail”. The history of the IT industry is littered with big failures demonstrating that scale is an unreliable indicator of future dependability. Smaller companies which demonstrate sound management and a sustainable business model are often a “safer bet”.

The other lesson is about ambition; many IT entrepreneurs are looking for “the next big thing” and the fortunes that accompany global success, but very few of them will succeed. Companies like DPN point the way to the future of the Manx IT industry if it is to succeed; much of the ICT sector growth anticipated by the island’s national economic strategy Vision 2020 will be achieved by relatively modest software businesses producing niche “vertical” applications that deliver sustainable value for specific needs.