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Archive - Tuesday, 7 June 2005
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Sage founder's next success looks like a racing certainty
The co-founder of software giant Sage is once again making waves in the IT market. Deputy Business Editor Dan Jenkins talks to one of the region's most successful businessmen, Graham Wylie.
FOLLOWING the phenomenal success of software group Sage, Graham Wylie could have been forgiven for taking his millions and disappearing off into the sunset.
But five months after retiring from the Newcastle plc, the miner's son was back in business, launching the Technology Services Group (TSG).
"When you leave a big business like that, you cannot stop completely," he said.
"There are only so many games of golf you can play and horses you can go and watch race."
The 45-year-old is clearly relishing the challenge.
"It is like going back to the beginning, to start a small business and grow it.
"But this time around, I am fortunate in that I have the capital resources to do it a different way to Sage.
Mr Wylie's rise to prominence began while he was studying computer science at Newcastle University.
His talent led to Tyneside businessman David Goldman commissioning him to design an accountancy programme.
It worked so well that Mr Goldman invited him to establish his own business, and Sage was born.
It was floated on the stockmarket in 1985 and has never looked back.
But by 2003, after 22 years with the company, Mr Wylie had spotted a gap between the service Sage offered and the service offered by IT support companies, such as software re-sellers.
"What Sage was brilliant at was developing good software and selling it, then servicing it over the telephone," he said. "What we didn't do was visit a customer on site.
"TSG essentially is a re-seller that visits on-site. It was something I had been trying to get Sage re-sellers to do for about four or five years before I retired. They didn't have the cash resource to do it.
"Once I had moved on, I saw there was an opportunity to build a national brand, as a re-seller with local service."
TSG began in October 2003, when Mr Wylie bought Joynson Limited, a family company based on Gateshead's Team Valley industrial estate, run by brothers Mark and Peter Joynson.
Four months later, he added Stockton-based CPA systems, creating TSG North East.
This was followed by further acquisitions totalling about £25m, establishing four more TSG divisions in the North-West, North, Midlands and Scotland.
The purchases have been carefully selected to ensure they are successful businesses with a good service ethic, meaning the staff can be absorbed along with the customer book.
One man who has prospered is Peter Joynson, who runs TSG North East.
Under his guidance, it has grown to employ 100 staff and turnover has doubled to £9m.
Mr Joynson plans to double that again and take on 100 more staff.
"Team Valley is the model for TSG," said Mr Wylie.
"Peter Joynson and his team are quite close to getting that model right.
"He is about halfway there. The processes he is using for customer service, marketing and sales are working very well."
Mr Joynson recently remarked how, as he shook hands on the deal for his family firm, Mr Wylie said he would teach him the meaning of hard work.
He didn't believe his new boss at the time, but feels he works harder now than as an owner-manager.
"Well, he has a much bigger business to run now," said Mr Wylie.
"It is very different to running a business of ten staff. Peter has adapted very well - sometimes, some don't."
While Mr Wylie's early days at Sage involved long hours, this lessened as he learnt to rely on those around him.
"You cannot do everything by yourself," he said.
"I learned the art of delegation at a fairly early stage at Sage. I had a great team around me, which allowed me more time to think about the future and drive the business forward, rather than think about day-to-day issues."
One of his former Sage lieutenants, Nigel Hudson, left the software business to follow Mr Wylie into TSG as business development director.
"Nigel and myself understand how re-sellers work and what they should be doing to deliver very good customer service," he said.
"Re-sellers were never proactive, they were always reactive, which is never good service.
"TSG is more about a preventative role, rather than waiting for a problem to arise."
Last month, it launched System Care, a service that aims to do just that - monitor a company's IT network and deal with problems before they actually happen.
Mr Joynson's TSG North East team will trial the £2.5m scheme, before it is extended to the rest of the group.
It is part of Mr Wylie's vision to create a TSG division in every region of the UK, each generating £20m a year.
It already employs about 450 people and last year had a turnover of £36m.
"We have ambitious plans for TSG and they are going very well," he said.
"There is no reason why we can't grow it into a much bigger business and employ more people."
But he is in no rush to reach the South-East.
"We don't want to expand too fast," he said.
"There is plenty of business in the North to see out our current growth plans.
"We do want to have nationwide coverage in five years, but it might not take five years. It might take three years, or eight years. Eventually, we will get to London and Bristol and cover the whole of the UK."
TSG is the biggest example of how he has planted his flag in the region, but Mr Wylie has other North-East investments.
He bought Gosforth shopping centre as a wedding present for his wife, Amanda, who he married in 2003, and also owns property in Hexham, Northumberland.
He bought Newcastle University's student golf club, Close House, at Heddon-on-the-Wall, last August.
He has ploughed hundreds of thousands of pounds into the property to turn it into a country club, and is now redesigning the golf course.
"I am re-investing quite a lot of my wealth here," he said.
"I would much rather do that than hand it over to a stockbroker in London."
A significant amount of money has gone on his pride and joy, a string of racehorses, trained by Howard Johnson at stables in Crook, County Durham.
"My horses are raising the profile of northern racing," he said proudly. A successful National Hunt season saw him take more than £750,000 in prize money - just enough, he said, to cover the operating costs.
It was capped off with a trio of victories at Cheltenham.
Despite investing in a string of promising young horses for this summer's flat season, he is in no hurry to take on the industry's big players.
He dismisses speculation over his future with a shrug.
"If you had asked me three years ago, would I own 96 racehorses or a country house and golf club, I would have said no.
"There is enough on the plate to focus on TSG and build that into a national brand with very high service standards.
"I don't want to focus beyond that."