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Business Solutions to over 7,500
Professional
services firms and project-based companies Worldwide.
Technology
Software & Programming
NASD:
DLTK
Deltek
Systems Inc.
Deltek
Systems Inc.
8280 Greenboro Drive
McLean,
Va 22102
www.deltek.com
800-456-2009
in the
United States
+44
(0) 20 7518 5010 in the
United Kingdom
Kenneth
E. deLaski,
Chairman,
President, and
Chief Executive Officer
Interviewer
conducted by:
Diane
Reynolds,
Co-Publisher
Brief History and Background of Chairman/CEO
I
am one of the co-founders of Deltek from way back in 1983.
My father and I started the company.
We had an interest with government contractors and those are the
kind of companies that we worked with and we decided to go into the
software business. I've
been doing this for a long time. Prior
to that I was with Arthur Anderson and before that position I attended
Duke University.
CEOCFOinterviews: Please explain briefly, what is Deltek and what does your
company offer my readers?
Kenneth E. deLaski:
"Deltek provides a whole
range of business applications software, solutions and consulting
specifically designed for companies that are project oriented, or what we
call project businesses. This includes professional services firms and
project businesses specializing in architecture, engineering,
construction, computer technology and IT services, systems integration,
government contracting, biotechnology/pharmaceutical, and research and
development among others.
The
business solutions we deliver encompass project and financial accounting,
client relationship management, time collection and employee expense,
proposal automation, project and resource management and planning, human
resources and payroll, business intelligence, and e-Business. To date we
have over 7,500 professional services firms and project-based companies
worldwide, and more than 700 dedicated professionals with extensive
insight, knowledge and experience in designing, providing and implementing
these systems."
CEOCFOinterviews: Do you develop all of your software in-house?
Kenneth E. deLaski: "Absolutely.
Of the 700 people in our company, about 25 percent are in research
and development. We build
virtually all of our applications ourselves, except for some areas where
we’ve developed products in partnership with other companies."
CEOCFOinterviews: Explain to my readers how Deltek defines the terms “front
office” and “back office”?
Kenneth E. deLaski: "The
back office, in the way we define it, is basically accounting functions,
such as general ledger, payroll, payables, the centralized billing
activities and related business processes.
We define the front office functions of a professional services and
project-driven organization as including everything from client
relationship management, proposal generation, marketing and business
development to related situations in which employees interact on a daily
basis with their clients and partners, and, of course, each other
individually and as part of project teams."
CEOCFOinterviews: Do you offer both front and back office solutions to your
customers or do you see your customers preferring the front office and
leaving the back office to an outside contractor?
Kenneth E. deLaski: "Well everyone has to
have accounting systems. We have been providing back office solutions for
a long time and actually that market is now fairly saturated.
Now that more and more companies are beginning to understand how
important client relationship management is to their business, the market
for front office applications has really taken off. To have a company
system that can keep tract of all of the client’s business is important.
Even though accounting is our staple in what we do, the CRM and
other front office applications are driving real growth in our business."
CEOCFOinterviews: What new products or solutions do you have planned for the
coming year?
Kenneth E. deLaski: "We have several products
coming out this year, one of which is an employee self-service product.
This will allow employees to go in and keep track of their payroll
deductions and look up their pay history and do things like open
enrollment. Also later this
year we will be introducing resource scheduling. This is basically for our
customers who are manage multiple labor-intensive projects where they have
to schedule their employees over a large number of projects and keep track
of how they’re being utilized. One
issue we’re addressing is the fact that our offerings are not 100%
web-based. So that's a big
priority for Deltek right now, to get to the point where we are offering
100% web software."
CEOCFOinterviews: Do you also provide consulting services to help clients
implement your solutions?
Kenneth E. deLaski:
"Absolutely.
We consider the fact that Deltek can provide an integrated
implementation approach to be one of the differentiators for Deltek.
A lot of the competors will sell the software, but typically you go
to a big accounting firm to really get a complete implementation. We do
have a complete staff of very qualified and experienced consultants who
come in and will help companies get the whole thing implemented.
We can do that very cost effectively.
But most of all, the people that we do have are very, very
knowledgeable in the types of industry that we sell to.
You're not just getting the software, but you are getting the
expertise and experience to go along with it."
CEOCFOinterviews: Do you operate on a global basis?
Kenneth E. deLaski: "About
95% of our business is from the US and about 5% of our business is
international. We would like
to see the international percentage continue to grow to about 10 or 15%. We
have an office over in London, UK and primarily we are working with
English speaking opportunities and customers.
The software applications that we provide are basically supporting
multiple currencies and all the foreign taxes."
CEOCFOinterviews: Companies grow their business in different ways, such as from
partnerships, acquisitions, or internal operations. What are the drivers behind Deltek’s growth?
Kenneth E. deLaski: "We were a $35 million
dollar company about over four years ago and now we are $100 million
dollar company. Some of that
growth has come through acquisitions.
Roughly 30-40% of that 60-70% has grown organically.
To continue to grow is Deltek's most important goal right now.
The way we expect to do that is to focus more on these front office
applications. We have about
7,500 active customers right now that are a large number of our sales
customers. Our effort is to
go back to those customers and help them with the types of things that we
can do. That is a big part of
our growth story. We are also
growing our sales and marketing efforts both here domestically and
internationally, and are continuing to add to our sales staff.
So growth is definitely what it is all about and what we are trying
to make happen here."
CEOCFOinterviews: Beyond the software implementation and training services,
what other types of customer support services do you provide?
Kenny E. deLaski:
"We think this is a big
differential for Deltek in that we continue to provide exceptional
customer service beyond the initial efforts to implement the software and
train their staff. We take pride in the fact that almost all of our
customers are life long customers. We
very rarely have customers leave our products and our maintenance. We offer all the phone support they need and are very
responsive to their phone calls and problems that customers may have
during their day-to-day operations."
CEOCFOinterviews: What is the purpose of your website? Can people order products through your website or is it
strictly informational purposes only?
Kenny E. deLaski:
"Our website serves two
functions. One is to be a
source of information about the products and services that we provide. Secondly, customers use it to register for training classes
and other events. Very soon,
customers will also be able to go online for customer service and
technical support."
CEOCFOinterviews: What is Deltek’s current financial status?
Kenny E. deLaski: "We have very strong
financials. The company has grown every year for the past 18 years, and
has been very profitable every year for the past 17 years.
Recently, as is the case with many software providers, growth has
slowed significantly and our stock price reflects that slowdown. Going
forward, it’s imperative for Deltek to get that growth back up again."
CEOCFOinterviews: What caused your growth to go down?
Kenny E. deLaski: "Mostly
because of the Y2K situation, where firms were rushing to buy software
systems to take care of their Y2K problems, and in the aftermath of Y2K
most of the ERP software business has really slowed down.
It wasn't just Deltek, it was the whole ERP software area."
CEOCFOinterviews: How difficult has it been for Deltek to recruit the highly
qualified IT staff the firm needs?
Kenny E. deLaski: "We have about ten
different offices around the country and the difficulty depends on the
types of employees we need and in which location we need them. For
example, in Washington, DC it is very difficult to find top systems
developers. In terms of keeping people, our turnover rate has been very
good. I attribute that to the
way in which we treat our people with respect, compensating them well and
giving them work that challenges them."
CEOCFOinterviews: Is there anything that I may have missed that you would like
to add?
Kenneth E. deLaski: "I would just point
people to our website at www.deltek.com,
in case they want to find out more about us whether it's for an investment
purpose or customer purpose. There’s
plenty of information available on the site that provides information on
our products and services as well as guidance on our earnings and growth
potential."
CEOCFOinterviews: You’re face to face with your investors.
What would you say to them?
Kenneth E. deLaski: "I think with any
investment they should look at the company, the
current stock price, and earnings over the past four years.
With no debt and solid finances, Deltek is a strong, profitable
company that offers a compelling investment opportunity for the long term."
CEOCFOinterviews: What motivates you personally?
Kenneth E.
deLaski: "I don't know if it was as much of a motivation as
it was an enjoyment of the process. I
think that enough people around here know that I have made enough money a
long time ago with enough to retire probably. So if I weren’t enjoying what I'm doing then I wouldn't do
it. I personally find this to
be a very enjoyable position. Yes,
you are absolutely right, there are some days that it does get a little
bit wild and wacky, but for the most part I enjoy it very much."
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