Innovate, or wither

Feb 19, 2018
Soft-ex CEO, Ian Sparling FCA, explains his proactive approach to innovation as a non-tech guy leading a tech company.

Innovation looms large in Ian Sparling’s lexicon. The Soft-ex CEO is a firm believer in the absolute need for constant innovation not just for a company’s success, but for its very survival. “I look at who our competitors were 10 years ago and I can’t see any of them now. They have either died, morphed into something else or were acquired,” he says.

10 years ago, Soft-ex was predominantly selling on-premises software applications to customers. “Now, over 75% of our revenue is from software as a service (SaaS) and we are selling directly to telcos rather than selling enterprise solutions through channel partners,” adds Sparling. “We now have a completely different business model and if we had stuck to the original model, we would be dead.”

Closer to the coalface

Sparling took a traditional route to Chartered Accountancy, qualifying with a B.Comm from University College Dublin in 1987. He followed that with the UCD Diploma in Professional Accounting before training and qualifying with PwC in Dublin and Hong Kong.

On his return to Ireland in 1993, Sparling joined the Tony O’Reilly-led Fitzwilton Group as Group Financial Controller. “It was a very exciting and high profile place to be,” he recalls. “As a Plc it had an annual turnover of €1 billion, was heavily focused on M&A and I was fortunate to have worked at Group level in the midst of the action.”

Having spent his entire career to that point either in practice or at corporate headquarters level, Sparling felt the need to get closer to the coalface and gain a different and more direct type of business experience. “The opportunity in Soft-ex came up and I really liked it. I had no idea about, or experience of, the software business and this was a great place to start learning about it.”

Crisis management

That was 2001 and three international venture capital investors had just come on board. The company had offices in seven countries and was “quite buzzy at the time”, as Sparling recalls.

“Then a whole range of things went wrong in the business, as they did for a whole range of businesses in the early 2000s. It became a massive rebuild and restructuring job. It took us until 2006 to stabilise the business.”

That was the year when Sparling became CEO, having joined as CFO in 2003. He describes the dozen years since as a “rollercoaster of innovation. I refer to innovation in its broadest definition – a software company might see it as technological, but I don’t. I see it as taking a holistic view of the whole business.”

“My grandfather used to say: ‘to live is to change, to live long is to change often’. As a small, internationally-trading company that builds sophisticated and complex software platforms for telcos, we need to constantly innovate across all aspects of our business. If you fail to innovate and differentiate you will, over time, wither away.”

Sources of inspiration

That innovation has manifested itself both in the evolution of the business and in the solution set itself. “We look at what our customers want,” says Sparling. “But we have to be mindful that they can lead you in the wrong direction.

“We continually look at what our competitors are doing, both near-side and those outside our broad industry sector, and we marry this with our own market vision,” he adds. “We adopt the overlap as the baseline for our strategic planning. But we have to be careful because a small company, with limited resources, can’t afford to get it wrong too often.”

In 2014, Sparling sold the business to a US group and this has presented a range of potential opportunities to further grow and develop. 

“While our focus for growth is very much on the US market, we are also constrained by the specialised nature of our offering and the narrow global addressable market, i.e. telcos. As a result we are now integrating our solution set with our parent company’s portfolio offering in a bid to open opportunities within the large enterprise space. It’s a somewhat risky and an unproven model but if we get it right, we will substantially change the profile of our revenue model.”

The lack of growth by acquisition has frustrated Sparling, and this continues to be on his agenda, “I’m optimistic that within the next 18 months, there will be progress on this front,” he concludes.

Ian Sparkling FCA is the CEO of Soft-ex.

This article was originally published in Vision, the e-zine for members in business. Download your copy now.