Laurence Baynham (Data#3)
Data#3 has completed a major overhaul of its enterprise resource planning (ERP) system as part of a wider internal digital transformation drive.
The publicly listed IT service provider spent $6 million in capital costs on Microsoft's Dynamics 365 cloud platform to enhance its “operational efficiency” and to “gain greater leverage from [its] cost base”.
According to Data#3’s annual report to shareholders, the ERP overhaul will be complemented by a number of other internal digital transformation projects that will “further enhance [its] scalability, security and productivity”.
Data#3 also told shareholders that the “considerable” ERP cost would be amortised over a five-year period and that expense would be offset by savings from the closure of the old ERP system.
No further capital costs are expected on the ERP system in 2023, but there will be ongoing costs as Data#3 continues to enhance the new platform, the report added.
“We expect [the Dynamics 365 platform] to generate a solid return on investment over time with longer-term productivity improvements,” Data#3 said.
The update follows Data#3 announcing its revenue had hit $2.2 billion for the financial year ended 30 June 2022.
Public cloud revenue shot up 31.3 per cent, to $1 billion, due to organisations and government departments migrating to cloud-based infrastructure.
Within its services portfolio, consulting revenue rose 50 per cent to $26.6 million, project services were up 5 per cent to $66.6 million, support services were up 66.6 per cent to $160.1 million and people solutions rose by 8.7 per cent to $62.3 million.
Meanwhile, consolidated net profit after tax reached $30.3 million, an increase of 19.1 per cent.
Data#3 also told shareholders that 66 per cent of its total revenue was recurring, derived from contracts with government bodies and large corporate customers to fulfil their essential IT requirements.
“The longer the customer relationships, the more revenue and gross profit they generate, which is why we continue to focus on driving our recurring revenue base,” the company added.
