Good morning, and welcome to TechnologyOne. I am Stephen Kennedy, the Group Company Secretary. The presentation slides you are about to view today have been released to the market this morning via the ASX announcements platform, and a recording of this will be available on our website tomorrow. Without further ado, I'd like to introduce our MD and CEO, Ed Chung.
Thanks so much, folks. Good morning. Welcome to our first ever TechOne Investor Day, Investor Day 2024. There's about, looks like 70 or 80 guests in the room here today in our TechOne headquarters, and you would have done a tour around the R&D labs just before you came. It's so exciting for us. You'll see later that we're going to show off our innovative software, our growth opportunities, and our ambitious strategies, and most importantly, how we make life simple for our community, and we're lucky enough to have one of our guests here today. I'd like to introduce you firstly to some of our senior leadership team. They're on the right, to my right over here. Many of you will know Cale Bennett, our CFO, and Stuart McDonald, our COO.
I'd also like to introduce some of our exec team that could be here today. We've got Chandan Potukuchi. Where are you, Chandan? Our CTO, and three of our EVPs. I can see David Cope, Brock Douglas, and Leo Hanna. So welcome, everyone, and ask them as many questions as you like in the breaks. A little bit of housekeeping. You can see our agenda up here on the screen. Firstly, I'm going to take some time to go through what makes TechOne unique, what makes us special, and how we grow. And I'm going to get fairly deep into our platforms for growth that helps us to deliver continuing strong growth and doubling in size every five years. Then we're going to have a customer come up, thank you, Michael, for coming, and describe the problem that we're solving for our customers.
Stuart will take you through our TAM, product by product and by vertical, and the opportunities that that provides for us. You're going to see an awesome day-in-the-life-of demonstration of our software from our pre-sales team. And then we're going to wrap it all up with SaaS Plus, how we're changing the ERP world with SaaS Plus, get deep into the financials so you can understand the profile of SaaS Plus, and then wrap up with questions and answers at the end of the day. So let's jump into the first section, which is making life simple for our community and what makes TechOne very special and very unique and therefore very successful. When we look back at the last 37 years, we're now 37 years old, we've been successful on pretty much every measure imaginable.
And, I look around the room, and it's actually one or two of our investors here in the room have told us that we're probably one of the best-performing stocks on the ASX of all time, based on our total shareholder return over the last 25 years. Now, to us, that's just quite flattering and humbling, but importantly, it got us thinking about what makes us special, what makes us unique, and our recent achievements. Because when we understand that uniqueness and continue it, it puts us in a very strong position to continue to double in size every five years and continue that track record of innovating and delivering growth for our shareholders. Now, the strategies that we're going to show you, they've been the same for 37 years. They haven't changed.
It was, you know, right back to the foundations with our founder, that Adrian put in place. And, when we think about it, over the last 24, maybe 36 months, we've refreshed what we call our purpose, our mission, our values, our core beliefs, our compelling customer experience, and we haven't changed one of them. What we've done is we've refreshed them to codify them so that we can inspire our team members, and so that we can pass down these stories about what makes TechOne special through the generations, just like, you know, tribal elders pass it down through the generations. And our vision is here. Our vision is simple: It's making life simple for our community. And over the years, it's been our vision and our ambitious goals and relentless focus that has been key to our success.
We always start with a vision rather than bottom-up detailed plans. After the vision, we've got the most innovative staff. You would have seen them coding away and creating the products and solutions we're all proud of. That staff are innovative, they've got grit, they've got perseverance, relentless focus, and relentless discipline. 'Cause once we have that vision, all those really ambitious goals, and we're going to show you some of those, they are the ones that figure out the details. They are the ones that create the plans, and they are the ones that make the impossible possible. In doing so, in doing so, you know, we solve complex business problems for our customers. So our purpose, our passion, is to solve the complex.
You'll hear me say this all the time to our teams and to anyone that wants to listen, is that we don't do easy. ERP, by its nature, is very, very hard. Otherwise, there'll be heaps of companies in the world doing it. And then our ERP is very special. We go to local government, and you Property and Rating, it's mission-critical software. It runs a local government. It calculates and charges the rates that we all get charged every quarter. You register your pet in the software. If you're starting a café, you apply for your health certificate through our software. And if you're going to build a pool or a house, your development application is applied for and approved in our software. So it's very mission critical.
And in Australia and New Zealand, there's two, maybe only three, companies of size and scale that provides that deep functionality for local governments. And then when you look at Student Management, it's also mission critical. It runs a uni or runs a TAFE. You apply in our software, you select your courses, pay your fees. If you're like me, you got sanctioned a few times. The letters come from our software, and eventually, you graduate, and you get your degree or certificate from our software. There's only two to three players globally that create that software. It's very difficult. And of course, payroll is hard. All of our 16 products, it's hard to deliver on their own, let alone in a massively broad ERP. So we tackle the complex, right? And we. Along the way, we make mistakes.
We call it scar tissue, but we evolve very, very quickly, and the result is software that our customers can't live without. They're mission-critical products, powering local governments, powering unis and TAFEs, powering governments, massive infrastructure providers, hospitals, health cares. You would have seen a lot of the logos on the wall on level 10 if you did the tour. It's quite amazing, the logos that TechOne has. And the community is our customers. You know, we live, work, and play in the community in which we operate. We're doing something very meaningful, very meaningful for councils, for our families, for you, because we all live in the councils that we work in, for our kids that are going to universities or TAFE, and for our parents in hospitals and aged care providers. That's the software we provide. It's mission-critical. It runs each one of those organizations.
We say to our team in O- Week, we actually sit in this room once a quarter, and wherever you started around the world, we fly you all in here, and you get indoctrinated like a university for O- Week. And we say, "You don't work for a betting company that's around, just around the corner here. You don't work for a social media company that's just up the road. You don't work for one of the hyperscalers that has an R&D center down the road. Our products, our solutions, are doing something very special for the community in which you work, live, and play in." When you look inside of our business, everything we're doing, absolutely everything, is about scaling our business for our customers, for our staff, and, of course, for our bottom line.
It's to ensure the success we've had in our first 37 years continues for the next 37 years and beyond. As I said a moment ago, we've codified that. We've codified it in what we call our core beliefs, our vision, our mission, our purpose. That's what makes us special. Our job is to pass that down, like tribal elders do, pass it down through the generations so that success continues for the next 37 years and beyond. Now, the final piece, the final piece is here, the core beliefs. We just refreshed those, and they're very important for TechOne. They're the ones that make us absolutely special, absolutely unique, and they're non-negotiable. So if you join TechOne, you learn that these are non-negotiable.
These guide all of our strategies, all of our initiatives, all of our investments, and it's what separates us from our competitors. As I said, it's what makes us unique and very successful, and it results in what we call the Blue Ocean Strategy. You know, it's vast, it's deep, it's powerful in terms of growth, as opposed to the cutthroat competition in a bloody Red Ocean Strategy. So we're going to take you through this now, and the first core belief is ERP. So we provide a totally integrated global SaaS ERP. It's very broad. It's extremely broad, and each one of these products has lots of modules, 20-30. And when you think back to 2008, just use that as a benchmark, we had 11 products, but through our R&D investments over time, in 2016, we've got 16 products.
And because each product has 20-30 modules, there's over 500 modules now, and we continue to invest in R&D for more modules and more functionalities to make life simple for our customers. And, we're so proud of all of the products. Each one of those 16 products competes against what we call best of breed competitors in a standalone shootout, and we win. And importantly, they're fully integrated into our ERP. It's so seamless you won't even know what product we're using. And I called out this one here, Spatial. I could have called out any, but this Spatial product we acquired in 2015, and since then, we've reengineered the whole product, like we always do, and it's part of a single global code line. And it was necessary for a couple of reasons.
It was the IP, the product, that made us, you know, deeper into local government, higher education, and all our vertical markets, but it was also needed for our SaaS offering. So we found this little company based out of Melbourne, and we acquired it in 2015, and it's very, very special. It's so good, you're going to see it in the demo. We compete day in, day out with Esri, day in, day out. It's better than Esri, hands down. It's fully embedded into the whole ERP, fully embedded. So you can be in Enterprise Asset Management and standing on the road outside and look down and see under the roads and see the pipes and see the sewers. That's how embedded it is. It's so fantastic. You can be in our building and trying to locate any asset, and it's 3D.
It can not only find the building, it'll find every single floor, and you can keep drilling. That's called 3D mapping. It's quite groundbreaking, and it's in our ERP, and you're going to see that today. You can Property and Rating, and this is how embedded it is. You're in a Property and Rating, and you can click and drag a whole area and then search for property attributes, who has a pool, who has whatever, and it'll just pop out the answer for you straight away. It's so hard to explain how integrated and how special and magic the whole ERP is, and I'm just picking on one great product right now, Spatial, but you're going to see a demo to show you all of that. The next core belief is one experience for our customers, so one global code line.
We have a deep understanding for the markets we serve. It's mission-critical. It's streamlined. You're going to see it. The demo is going to show you. You won't know what product you're in, what module you're in, how connected it is, and you're going to see Poppy, the CEO of a council, be in a dashboard, and she can drill and drill and drill and drill and drill and go right down to transactions. That's quite magic. You can't see that in Best of Breed. You won't see that anywhere else.... The third is market focus and commitment. We say this a lot. We're not all things to all people. We've got deep knowledge of our chosen sectors, and we've got local presence and local access. We're members of the community, we're ratepayers, we're students. You know, it's why we have such a deep connection.
I'm going to tell you two stories. A few years back, I can't remember how many years, maybe four or five years, Workday came. Workday came with Student Management and a lot of glitz, right? A marketing budget, probably bigger than our entire, R&D, our whole budget. And, we say this now, we were a little bit scared at that time. But it was all marketing, right? So they came, they found a couple of universities and said, "We're going to work with them to create a Student Management product." And in fact, a little bit off script, Stuart and I were invited down to one of the big banks, and the only reason we went to meet one of the big banks, because their global head of, SaaS, she was an executive of Workday, so we wanted to meet her.
She said to us, "You know what, Ed? Workday has pulled out of Student Management globally. Yes, we got 10 customers in the U.S., and we'll see them through, but it's hard." So not in the U.K., not in Australia, not in the U.S. So that's unlike us. We have deep focus and commitment to the verticals we serve. The second story I want to tell you is, every four or five years, Oracle or one of the Big Four, they say, "We're going to take over local government Australia." Happened five years ago. So KPMG and Oracle in Victoria went and bought the business. Crazy terms, fixed price, liquidated damages, you know, consequential loss, all that stuff. We said, "You know what? We're not going to do that. That's not what we do.
It's not our sweet spot." And so they went and tried and have failed. Guess what? All of them, all but one, I think, and that last one, it will come back to TechOne and take the whole suite, because it takes blood, sweat, and tears, grit and determination, innovation to make a product last for the verticals we serve, and they don't have it. Now, we've got the deepest functionality for the verticals that we focus on. It's mission-critical software. As I said, it powers a local government, a uni, a TAFE, a hospital, infrastructure providers. Stuart's going to come up later with the team, and they're going to show you the breadth and the depth, and they're going to show you a day in the life of a presentation.
And the reason we use those terms, day in the life, you're going to see it all in, like, 30 minutes, but if we won a tender, we'd be demonstrating for five, or preferred in a tender, demonstrating for five days the depth of our software. And we say this also, and when we grow, we narrow our focus. For example, in the U.K., we only focus on higher education and local government. These are new slides. You've never seen these before. So now we compete with traditional ERP or enterprise resource planning organizations. You can see this here, right? Now, they provide software. This is definitions of theirs, that runs your business, supporting automation, processes and finance, HR, manufacturing, Supply Chain, and procurement. For us, that's about this much of what we do. It's very narrow. It's a limited definition.
It doesn't include all the deep market functionality that we have specifically, or for example, in local government and higher education. We're going to show you that later. Then we compete against best of breeds. You might know some of these names here. Now, best of breeds are software applications, as the name says, focused on doing one thing very deeply. Take payroll, for example, and they just do that really deeply. The argument is that best of breed is that you get specialist or advanced capabilities just for that function. And then finally, we compete against these vertical focus players. But we're different. We're ERP, and we're more. We compete and win against the best of breed, hands down, day in, day out.
In short, we don't follow the standard path, and we create the blue ocean by having an ERP for defined vertical markets, for example, local government and higher education, and it's very broad and extremely deep. No one comes close to what we provide for the markets we serve. Now, this is a diagram of the market positioning of each one of those competitors. What this shows here at the bottom, so you've got small organizations in local government to large organizations, and for us, the mission criticality of our software. If you can see over here, local government and higher education, we have very, very mission-critical products. No one else has them. If I go through each one of those, in local government, we focus on the mid to large end. Same for higher education. Government, the whole spectrum.
Health and community services, the mid to large. Asset-intensive industries, again, mid to large. And financial services and corporates, it's the least of our specific mission-critical software, probably the bottom, bottom 2/3. So hopefully that helps in the understanding positioning where we compete. Okay, our next core belief is evolution, not revolution. We believe it's rare that the Big Bang achieves anything. Rather, it's incremental and constant improvement that changes the world. Our enterprise solution, it evolves, and it adapts as we embrace new technologies, new techniques, new concepts, and we share that with our customers, and we never leave our customers behind when it comes to technology shifts. Now, when you think about SaaS Plus, and we're going to get into that deeply later, that was a concept invented five years ago.
It's the next logical evolution for us, but it was a skunkworks that evolved to where it is today. But I won't get into that because the team will take you through that shortly. And then we've got Power of One. so it's quite simple for us. We build, market, sell, implement, support, and run. We do the whole chain. SaaS Plus, which you'll learn later, can only happen because of the Power of One, but we, we own it all. Now, for those that have been with us for a long time, you know that. That's how we were born, all that way, or, you know, 37 years ago. For those that are new to TechOne, and this is what I say at O- Week, you know, Telstra wanted it. They wanted to own the copper under the things and, and the mobile. Aurizon wanted it.
They started with trains, and they wanted to go ports, trucking, logistics. The banks wanted it, right? They wanted to do banking, wealth, super, and insurance, 'cause you get to own the customer end to end. Everyone wants it. We're fortunate 'cause we were born that way. Now, I wanna take you through what makes the Power of One special for us. The first is an IP engine. We build the software, 16 products, 500 modules, and if we bid it and market it, and we lose, it goes back into the software, and we make sure we don't lose the next one.
Once we've won a customer, we've sold it, and we're in implementation, and we're implementing the software, and the consultant says, "Man, this is hard to implement," or, "I could implement it a different way and drive the days down," it goes back into the software, and the next customer gets the benefit. Then, when that customer's live, and we're in support, and support gets tickets for either bugs or education, we go, "That's not good enough." It goes back into the software, and the next customer gets the benefit of that. And finally, we run it on the SaaS platform. If it's non-performant, has security issues, whatever, it goes back into the software, and it creates this fabulous IP engine. That's benefit number one. The second is there's no one between us and the customer.
So if you go the traditional way and buy one of those big ERPs and use a Big Four, the Big Four ends the relationship. And when they fall out of love with SAP and into love with Workday, guess what happens? They replace that at the customer site. So we own the customer relationship end to end. Also, ERP is really complex, right? There will always be issues. In the traditional way, the vendor points the finger at the implementation partner, and the implementation partner points it at the vendor, and the customer's stuck. So we get 100% accountability. In the end, all of this wraps together, and it's one of the reasons we have 99%+ customer retention over the last 37 years. The Power of One is very powerful. Tech is the answer. That's the next core belief. It's the way we think.
It means we can solve the complex. It changes the way we work with our customers. Tech evolves rapidly, and there's always new answers, new possibilities. It's a very deep in us, this core belief. We're an innovation-driven company. You'll know that we invest 20+% of every dollar of revenue each year in R&D. That's been over AUD 1 billion since we started to create this 16 products and 500 modules that you have in front of you. Now, for the investment community, we manage that investment within our total profit growth, within our total margin, and the success we're having now comes from the R&D we did 5 years ago. It's long term. Although we're an ASX 100 company now, at heart, we're still startup. We're still entrepreneurial. We think big. We take big risks. We make mistakes.
The key is in managing these risks. It starts all the way from the top and goes all the way down through our organization. In tech is the answer. You think of some tech shifts. 10 years ago, cloud was all we could think about, you know, the cloud hype cycle. It was a gold rush. Many people rode the fake wave. You probably know of them, and they got found out. Now, in tech today, AI's the gold rush, isn't it? So we look at it the same way. It's a gold rush. It's at the top of the hype cycle. It's a solution looking for a problem. We'll go carefully and, most importantly, find practical solutions for our customers, and we've been doing it for a while.
AI is using tech to automate business processes, and so I just wanna share a few of those with you now. So we've got DXP Expenses and purchase cards. You simply take a picture of an invoice, and it processes all the way through, and it's in your bank account and as an expense claim. That's AI. We have AI in our ECM, which can go over swathes, I'm talking petabytes of data, massive amounts of data in an organization, do a search, pops up the answer. That's AI. You're gonna see LG DXP. It uses, like, general natural language as a ratepayer and searches. It pops up the answer for you. That's using AI.
You would have heard, and you're gonna see a little bit as well today, about AI on garbage trucks or cameras on garbage trucks, you know, just scanning the road, AI looking at the video and finding the defect and automatically processing that all the way through TechOne to the defects fixed. So we've been doing it for a while. The list goes on and on. Now, we talk about our fourth generation quite a lot. It's called CIA, Available Anywhere, Any Device, Anytime. We've successfully reengineered our whole ERP four times. That's four generations over the last 36 years. Think millions of lines of code to take advantage of the latest technology and latest concepts. And one of the simple ones for me is the third Property and Rating, always processed yours and my rates and sent me my quarterly rates bill.
It might have done that at just say, over a one or two day period in a very large council. But with CiA, that now does it in minutes and hours. So it's the same process, but using new tech to speed that up and automate business processes for our customers. Now, we also call this fourth generation the SaaS generation. And our SaaS customers get two releases every year. They get the latest tech. They're always on the latest tech, and they report to us that they save 30%+ by moving to our SaaS. You're gonna see that, up there in a minute.... And finally, we're the most trusted SaaS provider. We have the highest level of security certification of any ER, ERP in the world. We're the first and only global SaaS ERP to get IRAP Protected Certification for the whole ERP.
There's others, but we're talking the whole ERP, no carved outs. We'll continue to invest AUD millions to stay at the leading edge of cybersecurity and certification in amongst all of our competitors. We spent hundreds of AUD millions looking after security, and it's not feasible for individual organizations to spend anywhere near that to keep them safe and secure. So a SaaS-first strategy is the way to go. You would have seen this slide probably a couple of times. We're one of the only a few companies globally that has successfully made the transition from being an on-premise company to a SaaS company. Long-term strategy started probably in 2010, 2012, about that time, and during that time, we've totally reengineered our whole company, our products, commission structures, plans, the way we do everything, every part of our organization.
We've done it without skipping a beat for our customers, and we've done it without skipping a beat for revenue and profit growth. Guess what? We're gonna do it again with SaaS Plus, but Cale will talk to us about the detailed financials later. I'm just gonna spend a couple of minutes talking about SaaS Plus, but before I do, I'm just gonna explain the SaaS journey. So if you look at what Salesforce did, they changed the world, right? They changed the world from on-premise to SaaS today, and it starts with license. So organizations back in the on-premise world were coming to us saying, "We need a license, or an app, or software to streamline our business." Could be financials, could be HRP, one of our 16 products, and this is what they did.
So I don't know, those that are old enough, remember the Yellow Pages? That's how thick tender documents were back in the day. They really were that thick. Okay, so you want to buy a license, but then they'd say, "Please spec the servers. Please spec the service for the license we're buying." And then they'd say, "Match that against the CPUs." This is what we used to have to fill out back in the day. How much memory do I need for the software I'm using? All depends on the size and scale of the business that you're selling to, right? What's the operating system? And you'd always have to keep the operating system up to date. And then databases. Databases are really expensive, right? Oracle, SQL, and then load balancers. All that just to buy the license for what you're running. That's the old world.
That's the Yellow Pages world that I'm referring to. And then organization like Salesforce, they didn't invent SaaS, but they really turbocharged it, in my mind. They came in and said, "You don't need any of that." They came in and said, "For one single fee, we'll get rid of all that complexity, and we'll take care of it for you." Now, they ran into a problem. They're all things to all people, right? They don't have specific IP, and what they have is a business model where they've got the SaaS, but they're tied to the implementers, the SIs, the Big Four, and that takes them one step away from the customer, and it lines the pockets of the integrators.
And that money that goes to the integrators should be going to, if you're in a council, parks and roads, if you're in a hospital, nurses, if you're in a university, the educators. You don't want to spend eye-watering amounts of money rolling out SaaS. Okay, so this is where we go now. So if you're a Salesforce and you're partnering with the integrators, and it's taking you one step away from the end game and the solution, it proves to us that SaaS is only the start. It's only part of the answer. There's so much more. There's so complex. So this exists today, right? So if you're going to one of the traditional providers and you're buying their SaaS, they will say, or you will say, or the industry will say, "Who's your system integrator?" Usually the Big Four, IBM, Accenture, you know the likes, right?
And they'll say, "Which methodology are you using?" They'll bring in project directors and project managers and talk to you about PRINCE2 or PMBOK. And then they'll say, "Who are your SMEs? We need SMEs in your organizations. We need BAs." Can I just go back one slide here, please? It's gone. Yep. SMEs, BAs, they'll talk about config, configuration documents, as is, to-be designs. It gets very, very complicated. And then when you get there, they'll say, "Okay, we've got to talk testing. You need test managers, testers, test script, TestR ail, cutover plans, data migration strategies, interface work. You need all of this complexity." It's catching up with me. This is the traditional way, and this time is long and expensive. But we're gonna simplify it, the ERP world. We're gonna change the ERP world. We've done it four times.
We simplified first with relational databases, and then we took advantage of PCs, then we went web, and fourth, we became a software-as-a-service company because it makes life simple for our customers, where we deliver our software as a service. Just like Salesforce.com changed the world and turbocharged SaaS, TechOne's gonna change the world. It's a game changer. It's the next logical evolution for us, and we're gonna take away the pain of long, complex, risky implementations, expensive implementation, then simplify it for our customers and our prospects in our markets. And we call it SaaS Plus. So hopefully that just gets under the covers a little bit more.
Okay, so for you in the markets, we're going to transition very carefully from low quality, one-off implementation revenue to high quality recurring revenue, and we're going to do it without missing a beat for our customers and without missing a beat for our revenue and our growth. We did it with license, and we're going to do it again with consulting, and Cale's going to take you through that detail a little bit later. And our final core belief, maybe one of the most important, is we dream big and we deliver. We tackle the complex, we face the difficult. We've always got one eye on today, delivering for today, today's challenge, and focusing on the future. We deliver solutions that stand the test of time, and we're masters of our own destiny, you would have seen, and we don't follow the standard path.
We do not believe in the standard path. We believe in different, and we embrace it. Now, I always think about a company founded out of Brisbane in 1987, creating an ERP, taking on the world's biggest SAP, Oracle, Microsoft, Infor, Workday, and winning. These companies have tens of thousands, if not hundreds of thousands, of developers creating their functionality. We've got 400. You probably walk past most of them upstairs. Those 400 developers create the beautiful products. The 1,300 people in TechOne create the solutions, and we deliver for our customers. And we've delivered so many milestones, and I just want to share a few of those with you. These are just the most recent milestones. So a couple of years ago, in 2022, we finished the fourth generation called CIA.
We successfully transitioned all of our customers from on-premise to SaaS without skipping a beat for our customers, for our revenue, and for our profit growth. As an ASX company, we've just entered the hundred. The U.K. is profitable, the flywheel is turning, and we launched DXP. Now, traditional ERP focuses on the back office, you know, the accountants that process the month end, the payroll clerks on the payroll, the people approving your DAs, but DXP gets us into a place that no one's ever been before, the front office. For you and me, the rate payers in any council in Australia and New Zealand or the students in a university. And finally, we became the world's first SaaS Plus company. Now, these achievements, they don't happen overnight.
They're a result of a very clear strategy, consistent strategy that stood the test of time, and we execute against that very clear strategy. Our team have got that relentless focus, as I said, the discipline, the execution, the grit and determination, and they take bold and calculated risks, and this translates into our ambitious R&D agenda. Now, to wrap it up, we're unique. This is our Blue Ocean Strategy. It's this clear strategy which resonates with the market and why we win against our competitors. Once we land a customer, they expand with us over many, many years by taking more products and more modules to streamline and automate their business. It's why they stay forever, and it's what fuels our growth. Now, SaaS Plus can only happen because of the Power of One. It can only happen because we own our broad and deep ERP.
It can only happen because we've got 37 years of deep focus into six vertical markets, and we're hyper-focused on those. It can only happen because we have our own consulting team. We don't use any partners. It can only happen because of the innovation in our products and solutions. No one else can deliver SaaS Plus. Now, TechOne was founded in 1987, listed in 1999, and we've demonstrated strong, consistent, steady growth that whole time. We've doubled in size every five years, and we're going to continue to do so. It's in our D&A. It's what makes us tick. Firstly, investors always ask me, "Why do you always put your ambitious targets out there?" For us, it's very simple. It's one of our values, make the impossible possible. When we set the ambitious goal, we say it, we align our people, and we do it.
So about five years ago, or 10 years ago, we set a target, and at that time, it was a very ambitious target, and that's the target of AUD 500 million ARR by FY 26. You all know it. Think back five years ago, we saw this as an ambitious target, a really ambitious target, and if you think back then, we were still in our cloud journey. In fact, we were pretty early on in our cloud journey. Our fourth generation, CIA, wasn't complete. It had a long way to go. Flips to SaaS, that was just an idea at that time. Our U.K. business had its challenges. We had challenges localizing our products. Of course, we had the global pandemic along the way.
So you can see that setting ambitious goals is core to us because it creates the focus for us, and we stay on that path. 24 months ago, got a bit excited. We could see that we're going to beat this target. We saw the momentum, and so 12 months ago, we upgraded that target. We brought that target forward. We brought it forward by one year, and that's AUD 500 million ARR by FY 25. Now, this strategy, it doesn't drive us anymore. And so we're going to bring it forward again, bring it forward another six months, and we're going to deliver it in the first half of 2025. So with AUD 500 million, it's locked and loaded.
We're going to continue to double in size every five years, and we're going to do it because it's in our D&A and all of our strategies, all of our initiatives, they're designed so that we can continue to double in size every five years. Okay. We've learned, through trial and error, I suppose, we've learned through experience that we need multiple platforms for growth. It gives us diverse revenue streams and enables us to be confident in doubling size every five years, because we all know in business, some strategies or some products or some regions fire in some years and some fire in other years, right? And if you're a fly on the wall in our business, you'd see that the sum of all of our strategies. They're much, much bigger than our stated goals. Our plans are ambitious. We do them on purpose.
It's to make the impossible possible. It helps drive our teams, creates a bit of buffer for us. They're long-term strategies. None of them happen overnight. But with our vision, our ambitious goals, our people, the TechOne D&A, we've got all the ingredients and to give us confidence to continue doubling in size every five years, and I'm going to show you how now. Okay, so we know this. With all of the customers now moved from on-premise to SaaS, product take-up by our existing customers has accelerated, and our target is between 115% and 120% per annum. That's existing customers taking new products and modules to streamline their business. If we do 115% alone, that one strategy can help us double our business every five years. It starts with a couple of layers, right?
So all of our contracts, or the majority of our contracts, have a CPI factor built in. On average, that's growing 2, 2.5% per annum. Very predictable. Then, the way we license our software is by users. So as users grow, our licensing grows. Now, in local government, that's linked to ratable properties. The number of ratable properties in a local government is how we price our products and our modules. And history tells us that local governments grow on average 2.5%-3% per year. That's very predictable. Or in higher education, we're licensed by students, the number of students that a university or a TAFE has. And history tells us, on average, on average, over many years, grows 3%-3.5% per annum. That's very predictable.
You might have heard us talk about, just touch on CiA Live. That's a software we use to seamlessly move our customers from the third generation to the fourth generation. It's very predictable. Now, our second platform for growth is the significant white space in our APAC customer base. So these are customers that have only one or two or whatever modules of ours, but there's huge white space. It's the main game. This is the main game for our growth. We grow by providing value to our customers with our existing 16 products and 500 modules to streamline their business. Our current white space is very large. We know our markets. We know them better than others.
You might have heard us tell a story, you know, where we went to Gartner or Forrester, and we said, "Tell us about the markets," and they couldn't, because they don't know them as much as us. So we know them better than everyone else. We've got detailed models, a big model. We call it Eldorado Map. Lists every customer and the products they use of ours and the ones they don't of ours, so we can sum it all up. And we've got very, very deep relationships with our customers, and you're going to see that. And we plan for the long term with our customers. So we've got long-term visibility of product take-up with our customers, and Stuart's going to take you through total addressable market, after the break. And that white space, it grows and grows. It never ends.
Our third platform for growth is that R&D investment I talked about. We build additional products, additional modules. Think back to 2008, we had eight products. Now we've got 16. Our larger current investments, you might know of some of them, DXP for local government, DXP for higher education, App Builder. There's many, many more. Our fourth platform for growth is SaaS Plus. It simplifies our business. It's a compelling value proposition. It lifts ARR by 40%. Our fifth platform for growth is our history of acquisitions in TechOne. We've done 10 or so in our history, but these are additional products that give us IP, make our offering broader or deeper for the vertical markets we serve, and more mission-critical, and in doing so, more sticky. Our sixth platform for growth, new logos. These are the...
When we say new logos, we mean prospective customers, don't use TechOne products in any way, shape, or form in any of the vertical markets we serve. And then the seventh platform for growth, I think it's, they're struggling to catch up with me. Can we go to the next slide, please? The U.K. The U.K. provides significant opportunity, and we haven't even scratched the surface yet. Okay. As I said previously, there's a whole lot of financial metrics that we use to run our business. And the highest priority for us is net profit before tax growth. And you would've historically known our heartbeat of 10%-15%. At the last sort of guidance, we've upped that. We upped that heartbeat from 10%-15% to 12%-16%, and if a little bit cheeky, you can see where we're going with that.
The next is ARR growth, and at 15% per annum, that'll enable us to double in size every five years. The third is what we call cash flow generation, stripping out all the accounting jargon. Cash flow generation, matching net profit after tax. And finally, the last one is net profit before tax margin growth. Now, if you go back to 2011, that profit before tax margin was 17%. Fast-forward all the way to today, or 2023, full year 2023, that was about 30%, and we've committed to a medium-term target of 35%. But I just wanted to highlight that our priority is significant investment in R&D, so we can continue net profit before tax growth and ARR growth, so they're higher priority. And we believe this is investor focused and conservative and unique in our industry.
And it's allowed us to weather the storm as the market split from growth at all costs to profitable growth, right? So we don't focus on the rule of forty, but do the math, we're about sixty. And while we've got significant investment in R&D, we'll continue our net profit before tax growth and ARR growth. You know, that, that investment in R&D will have a short-term impact on margin, but I just want to let you know that we're staying true to our priorities, net profit before tax, ARR growth. We do it all within balancing all those things. And we just want to restate, though, that we expect margin growth this year, even with the impact of SaaS Plus, and Cale's going to take us through that SaaS Plus impact later. Okay, so we've got AUD 500 million locked in for the half of FY 25.
All of our new strategies, initiatives, they're designed so we can continue to double in size every five years. We've learned that we need multiple platforms for growth and diverse revenue streams because, you know, some things are faster in some years, some things are faster in other years. Now, we're going to continue to double in size every five years with these existing strategies, and that doesn't even include going to a new region. It doesn't include going to the U.S. It's just a twinkle in our eye, which in turn gives us, you know, the confidence to announce another big, ambitious goal. And here it is, AUD 1 billion+ ARR. So, as I said, we originally set a goal of AUD 500 million ARR by FY 26, and we've been working hard on delivering that.
In parallel with delivering on that, we're working on this next big goal, and because we finished AUD 500 million ARR a year early, we had to accelerate our R&D investments for growth. And you would have seen that in the last couple of investor releases, right? And to be honest, we could have sat back and taken the easy way out and stayed on the original strategy, you know, AUD 500 million ARR by FY 26, but we finished it early. And so our strategy, the same for the last 37 years, is we've got all the ingredients, we've got SaaS Plus. We're going to simplify our business again by being just an ARR business coming off consulting revenue. We've got strong ARR growth. The U.K. is powering. We've got high margin.
So today, we announce AUD 1 billion ARR, but we put the target out there by FY 30. You guys all do the math. That's very exciting, and it'll be very exciting what it means for you, our shareholders in the room as well. We haven't even talked about adding a new region in the next five years. Now, folks, thank you for your intent listening and typing away this morning. We're going to stop for a morning tea break. I'll just bring up the thing there. Okay, so short break. During this time, come outside, talk to our team members. They're going to be available on the booths. Have a look at the software's functionality. Light refreshments will be out there. We're going to ask you to come back in about 15 minutes, folks.
15 minutes, and then Stuart will take you through an interview with one of our customers, our total addressable market. You'll see a demo of the software. Thank you, everyone, for the first session.
All right. We are very, very proud and privileged to support over 1,300 customers, managing communities and infrastructure across Australia, New Zealand, and the U.K. Our mission-critical software empowers airports, hospitals, the Department of Agriculture, the Bureau of Stats, and many, many more. Our software provides the clarity on how products and support our customer, and the partnership we've had over 37 years, we've not only transformed the ERP market, but we've had a positive impact in the communities we serve. Now, I could talk to you all day about that, and I could try and explain it to you, but we thought, what better than to get a CEO of a council up here and have a chat with him related to what we do? So please welcome Michael from Hills Shire Council on stage.
Thanks, Stuart.
How you doing?
I'm very well. Very well, thanks.
So a little bit about Hills Shire before I get into it. So Hills Shire has been with us since 2002. They have, they do about AUD 2.2 million in annual recurring revenue with us. They use our EAM, our supply Property and Rating, our ECM. Keep on going. It's a long list. Our HRP, our Performance Planning, Spatial software for about 200,000 rate or citizens within the shire itself. So that is Hills Shire. Hills Shire is known as an innovative shire as well, so we can spend a few minutes understanding what you do. But before we start, how do you become a CEO of a council?
Good question. And for me, the pathway was started in year eleven and year twelve, back in the early 1980s, where, like most of us, I think at that time, you were sort of struggling to hone in on as to what it is you're going to do. And I'll never forget, I was always interested in the sciences and geography and things like that. And my dad was a butcher, and he came home one day, and he said, "I got this visit from a health inspector, and he ran around the shop and shined torches in places where you otherwise wouldn't expect torches to be shone." That looks like not a bad job.
So then I investigated that a little bit more and thought, well, yes, it's based on a science degree, which is what I was interested in. So I started life as a trainee health and building surveyor at Blacktown City Council, which is one of the largest councils in New South Wales, one in the country, and
Customer of ours, by the way.
From there, just worked your way through up to I was appointed in my current role with the Hills Shire Council in 2017. So been with council nearly 20 years, so nine, just gone 19 years, and overall, I've been in the industry just over 38 years. And I'd imagine, like everyone in this room that's got somewhere in life, I think, sometimes it's a little bit of luck, but also it's about putting yourself in positions where that might stretch you a little bit, and particularly positions that no one else wants to do. So a couple of councils I worked for, I've only worked for three, Blue Mountains, Baulkham Hills, and, or now the Hills and Blacktown, so all had-
Just so you know, all TechOne customers.
All TechOne customers. And, yeah, so every now and again, there'd be a role come up that no one really wanted to do, so I would stick my hand up and do it. And the reason I'd do that is you really couldn't fail in that circumstance, could you, if no one wanted to do it? So anything was going to be a bonus, and there you have it. You land yourself into the top gig, and I love it. It's a really rewarding career, a really rewarding role. I've got a terrific organization. Its people are fantastic, right from the governing body. Now, they're politicians, and it has its challenges at times, but right the way down to the trainees like I was in 1986.
So we're gonna spend a few minutes trying to unpack what a council does, so then we can actually associate the software we provide to them to try and help operate that council. So let's just start with what are the KPIs for you? What, how do you measure that the council is running well, you know, how are you measured?
Yeah, look, there's a whole range of measures that you can imagine.
Yeah.
Because a council is so much more than just roads, rates, rubbish. It's a very complex business that's got, effectively for us, around about 28 different business units operating in different parts of the organization that together come under one. So, you know, there's some traditional corporate type KPIs around your finances, around your outputs and those sort of things, but more than anything, we measure our performance through the voice of the customer. So what do our residents actually think of the services and facilities we provide, and do we represent value for money for them? So we test them independently through customer service surveys, targeted and more random ones. And we also have aligned ourselves around some, what we consider, quality of life indicators for our residents.
So we start to measure progress around some of those higher order things. Quite a broad suite of things that we take into account each and every year, and certainly as the head of the organization and in New South Wales, at least, I presume it's very similar to here in Queensland. I am the governing body's only employee, so the other 700 odd for me, all res-- or I'm responsible for, but the council, or the elected councillors, I'm their only employee, so they have no right to hire, fire, otherwise manage the rest of the employees, that's my job, but they manage me.
I just, in the last week, undertook my annual performance review with the governing body, and they measure me around a number of things at that higher level around the organization's finances, workforce turnover, things like workers' comp, even implementing resolutions without delay and not forgetting one. So if the council's made a decision to do something, well, my job is to implement it, so those sorts of things.
The beauty of it was, his performance review was done in our software. So, if you want to see how his performance is, we have a copy of it for you. Talk to me about technology. So as the councils have matured and changed and the expectations of your citizens, how has technology played a part?
Yeah, look, it's immense. If you think about how our council functions and how our council is productive, it really comes in two forms. One is your people, and the talent and the skills and abilities of your people, but also in technology and changes to technology. If I think about how I would manage a building approval back in the eighties to the way it's managed today, and the information at your fingertips today, it's completely different. So, that'll be our next step, changes into the future.
I said this story, I think, earlier today. I can remember in year six, the year six teacher telling the class, which I was in, that, "You guys are lucky, technology is gonna mean more leisure time for you guys." Well, I'm glad that worked out for us all because it certainly did.
We're still working on that part.
Yeah.
So, let's unpack a little bit about the complexity of a council. So if you look at a council, and we're gonna try to build it up for you. The first thing you have is your infrastructure.
Yep.
We're talking roads, sewage, pipes, you know, what does that look like for you in the Hills?
Yeah, look, I mean, our whole shire is 380 square kilometers, which is a big enough land mass, but there are other councils that are certainly a lot bigger than us in terms of land mass. And 200,000 people scheduled to grow to 250 over the next 10-15 years, possibly out to 300 in the next 30 years. So quite a bit of growth, and we're in about 30% of the footprint of the shire. So 2/3 of our shire is rural, 1/3 of the shire is urban. And if you think about it, we sit on around about AUD 5 billion worth of public assets that aid the functioning and the quality of life of our residents.
So whether they be roads, whether they be drainage networks, which could be in the form of physical, civil assets or soft assets like rain gutters, rain gardens, detention basins, and the like. We have buildings, so we have community buildings from picnic shelters, bus shelters, right the way up to some fairly sophisticated administration buildings and things like our fitness and aquatic center, which we just had the pleasure of knock down and rebuilding after 50 years in the last couple of years. So quite critical assets around our entire network that we rely on to deliver our services and our residents rely on to actually get on with their lives.
It's amazing. Now, if we talk about the council and the assets you actually manage, how many people are on your team? How big is the council? And also talk about the third parties that need access to the systems as well, if you could.
Yeah. Yeah. So we're about FTE of around about 760 people. But that's only part of the story because we have a whole lot of reliance in terms of our project delivery with new infrastructure that we're building, but also things like garbage and cleansing, which we use contractors to perform for us. So you could probably add another 300-500 FTE at any one time, depending on what we're doing, just with those other partners that we've got involved in our business. And it's incredibly diverse, whether it be contractors or whether it be our own staff, it's incredibly diverse.
Yeah. And again, one of the things you're most proud of is your parks and your facilities that you have. Talk to me about how you manage that and, you know, how do you get measured on that as well?
Yeah. So, there's obviously strategic measures around basic units of measurement of hectares of open space per 1,000 people. So there are high-level benchmarks that we measure ourselves against. But then it's about the quality and the use of those spaces and the user experience around that. Now, we've got things from natural bushland assets, which we don't do terribly much with other than manage bushfire and manage perhaps environmental protection or rehabilitation. Some streams, so creeks and streams that make up the river system. To then you start to get into your local parks. So we like to have every resident within a 400-meter walkable distance to a local park. And we find that's about the distance that a parent will let their children go unsupervised.
So while you might have a 400 Spatial requirement, you then start looking at, well, okay, that's no good if it's next to a major road and the kids have got to cross the major road. They're not gonna do that. So you look at those other sort of features that would cause you to arrange them a little bit differently or add more. And then we go up to more district facilities and more regional facilities. And the district facilities are the sorts of things that you generally find your sporting fields located. And traditionally, these days, we just opened one a couple of months ago, and we're about to open another one in a few months' time.
They're effectively four sporting fields, so based around two cricket ovals, so four short-formatted football fields or soccer fields or something like that, that make up the cricket, cricket ovals, amenities, basketball courts, tennis courts, play facilities-
Yep.
- those sorts of things. Right the way through to aquatics and-
Yep
... even just, all abilities play with water play and all those sorts of things, yeah.
One of the things I don't think The Hills deals with, but some councils that we manage do, they've got to manage airports and some critical infrastructure as well. I know it's not something you necessarily deal with, but you have critical assets you have to manage.
That's right. And look, I'm probably lucky that I don't have to look after an airport, to be honest, 'cause that would be pretty complex, I would have thought. But yeah, our asset management of our asset classes, it is important that we understand them very well. It is important that we understand, like your car, how it should be maintained for its optimal service life. It is important to know when we should be planning interventions to those assets to keep them in service or, in fact, retire them, whatever the case may be. So, the most extreme would be the one I just mentioned, which is our fitness and aquatic center.
If you could think of this, a shire of roughly 200,000 people, one pool, and that pool was built about the year I was born in 1967, and it was very tired. Probably didn't represent best asset management decision-making over its life. We took the decision to work with the elected body first to get their approval, but then they use us to actually shut that facility for two summers while we knocked back and rebuilt. Trust in government's probably at a low in my lifetime, I think. To get the trust of our council and the trust of our community to do that was quite a complex process.
I can remember the interrogation through the council meetings, which were all public, public meetings, public decision-making, to finally get a decision that we're going to spend AUD 55 million knock down and rebuilding our only pool, and then to pull it off during COVID for under budget, little bit over time, but under budget, was remarkable. And that facility now is set up around its technology and its needs, so that hopefully in 50 years' time, the future generation is coming off a stronger base around its decision making than what I and our council were with this facility we just upgraded. So very important that we understand a lot of data about our asset network, our road network, our drainage network, our building network, our recreational network. Very important.
But not that much data that you become, you know, captured by data. So we've had a really strong focus on capturing the data that is critical to our decision making, not just nice to have. So that hopefully, it drives us to a more efficient expenditure over time on that asset-
Great.
On those asset bases.
And then when we think about a council, the thing we always think about is housing. So, you know, we think about housing from getting our bins picked up, which I'm sure you hear about quite a bit. I'm sure you're popular in the pubs when related to that subject, but it's far more complex. Can you just spend, you know, a short minute on that?
Yeah, and it's interesting because our shire is growing pretty, pretty quickly. And, and the last five years, for example, the housing targets the, the state imposed on us was about 9,000 dwellings in a, in the five-year period, and we thought we did really well at 10,500. And that was so quick that we couldn't keep up with it, really, let alone government infrastructure around major road upgrades, schools. We got the most overcrowded schools. So they couldn't keep up with the investment that they needed to as well. And just recently, we've been asked, with... well, tasked with a target of 23,500 dwellings over the next five years. So that is phenomenal, phenomenal growth, and yet we don't build a house.
So we've got to make plans in our planning documents to show where that is likely to happen. We've got to support that with our own business plans around infrastructure, so we're gonna collect a contribution off the developer to buy the infrastructure that we need to provide for that new community. We need to take the role of risk in that to a degree, because you're dealing with fragmented landownership to begin with, so parcels are being merged. A developer will come and buy a part of it, but that might happen here versus there, so it mightn't be a logical rollout. My utopia is having a developer that comes in, that has the whole growth area, and then they stage it and roll it out. Well, most of our growth areas aren't that. You start off with about 200 and...
200- 255 acre landowners, mums and dads, all at their various life cycles, and then the zoning comes over the top, and then the market's got to try and sort that out. In the meantime, we're sort of playing banker around some critical infrastructure, around road upgrades, stormwater upgrade, recreational assets, and the like.
Yep. And then the final piece of the puzzle, again, I don't think the shire has to deal with this one, but water, wastewater. So we have a lot of councils that have to manage the water and the wastewater, too. Can you talk a little bit about that from your perspective?
Yeah. In Sydney, generally, water, wastewater is managed by the water authority, the State Water Corporation, so Sydney Water. But certainly in our rural areas, there are councils that would manage sewer and water facilities. At one of our neighbors, Hawkesbury City Council, they manage sewerage for their towns. So, you know, I guess that shows the diversity among councils in-
Yeah
... industry-
Yeah
Moreover, but also shows just the level, like I said earlier on, you know, even in our council, 28 different businesses all operating in their own, for want of a better word, market. Some of it's a monopoly market, but some of it, we're competing with others, for those services. So that's childcare, that's the aquatic and fitness center. Not too many competitors to a 50-meter ten-lane, heated, FINA-compliant Olympic pool. Not too many people compete with us on that, but certainly on the gym and the things that make money around learn to swim, they do. But right the way across to the other services, like, you know, we'll put a meal on your table through our Meals on Wheels program.
If you need a book, you can go to any one of our libraries, and you can order the book, and if we haven't got it, we'll buy it for you, you know, free of charge. So the road network, the footpath network-
Yep
... the recreation network, all of those sorts of things.
Let's get under the hood then. I think we've painted a picture of the complexity of the operations you deal with. We'd like to think that we're kind of the backbone of how you operate the council but we're one of many. So, talk to us about that. How many are different kind of vendors do you have that you have to deal with? How many critical products do you have that operate the council itself?
Yeah, that's a very, very good point you make, because across those business units, we would probably deal with about 28 different product vendors-
Yep.
Across that for a variety of reasons. And part of our recent decision with TechOne is to further consolidate and cut some of those opportunities. Because obviously, there's some of our facilities that the customer experience is going to be very different to other services that we provide. So if you're a rate payer just wanting to pay your rates, you're gonna expect a different contact and a different service standard than if you're looking to book a gym session or a learn-to-swim session for your children. And that system that deals with that is gonna be really driven by around, well, how do we compete with the likes of the Virgin Active and those private gyms? What's their customer experience? How do we measure up with that?
So there are times where we do need to, and there's 28 occasions, where we go to other best-of-breed type of solutions. And then, the challenge then is just to integrate it back to our core corporate systems.
Yep.
I think we've been with Finance One for an awfully long time, and-
2002.
Yeah, and the integration back to that is very key to us.
So we're gonna go a little off script 'cause I'm gonna try something and see where this goes. But, I think this room mainly knows me for talking about net revenue retention, which means that selling additional products into a customer base. And so again, been a customer since 2002, and recently Property and Rating from us. Why, why did you do that?
We were at a bit of a crossroad. We'd done a little bit of a navel gaze with some independent help around our IT strategy and our IT needs. You've already heard a little bit about my background came through, you know, science or health and building surveying. So what I knew about IT, I literally could put on the back of a postage stamp. So I needed some help, and so did the executive, and we started looking at the risks around the multiple vendors. We started to look at the risks around, well, you know, our property rating, our financial, our document management. These are very, very core systems that provide obviously a service delivery platform, but also an efficiency measurement and a compliance platform.
So we did a bit of a navel gaze around that. And, and about the same time that, TechOne was talking to us about, about the future and where it could be, and it... In the end, it, it became a, a fairly, clear alignment that this was the direction we needed to head. It's going to be a massive change management exercise for us across-
Yep
... some of those businesses, but we've already involved some of those businesses in that decision. So, we see that that'll do a couple of things. So it'll give us better data and one version of the truth of that data across our operations. It should change the way we work and maybe should also enhance the customer experience in the fullness of time because of that one version of the truth.
Awesome.
And it should also help us as leaders in our leadership team manage the businesses differently and more effectively. And at the end of it, hit the compliance tick as well, particularly around you know, our record keeping and privacy management and all those sorts of things.
Perfect. Perfect. Last question: about 18 months ago, we came to market and introduced, SaaS Plus. From your desk and from what you see, what does that mean? What do you think that means to the market and to the councils?
Well, for us, it was, you know. Again, explaining my background, you can see I have technological limitations, but one thing was for sure, we knew things will always change and always evolve and probably at a rate that none of us are ready for. So we just saw that as the next reiteration, the next generation, if you would like.
Yep.
We did see advantages for us around moving to a model where we're less focused on on-premises type activities, storage and IT effort, for want of a better word, to a new platform. And that was not really a question for us of, "You shouldn't do it." Well, really, if you didn't do it, we're gonna, I think, hold ourselves back and not be as competitive in the future as we potentially could have been.
Thank you. What I hope you see today is kind of a small example of what I was mentioning before. I would say we have the best developers in the world, but it's our relationship with the community, that we get to steal their IP, to take that knowledge and build it into something. So, the products we've built over the last 37 years has been a result of the relationship. We don't have the IP. We've got the developers, but because of the Power of One, it's that integration between where they wanna go and what they're seeing and our ability to translate that into products the market wants, that's made us successful. It's an unbelievable partnership we have with Hills.
I think it was last week, we just phoned up Michael and said, "Do you wanna come down to Brisbane for the day and talk to investors?" And it was, "Yeah, let's go." And that's the relationship we have. So thank you so much, Michael, for doing this.
You're very welcome, and I appreciate the time, and it was not a very hard decision to come to Brisbane in winter, I can tell you.
Good stuff. Thank you.
Thank you.
And so to start the conversation related to TAM, let's get into it pretty quickly. In summary, the TAM for local government for us is AUD 3.2 billion with the product we go to market with, called OneCouncil. Now, we've heard from Michael what it means to him. We've tried to paint you a picture of the complexity of it. We've tried to give you a little bit of flavor of how we got there, but enough talking. You came here to see some software. I'd like to invite Loretta and her team up to show us this amazing product in action. Come on up.
Hello, everyone. My name's Loretta Libke, and I'm delighted to welcome you to our demonstration today. A little about myself. I am a former CIO of the third largest council in Australia, and I have over 23 years' experience in local government. I know I don't look old enough, do I? Thank you. So across that timeframe, of course, I have implemented a number of core business systems, but more importantly, ERPs, and most notably, TechnologyOne's ERP. So Property and Rating, document management, HR payroll. In addition to that, I implemented or oversaw the implementation of TechnologyOne's asset management system. Now, this involved taking hundreds of staff, and I mean hundreds and hundreds, mobile in the field. So their work orders would come through to their devices out in the field, and they would attend to that work and close out the work order.
Now, you will see some of that in the demonstration shortly. Now, it's for this reason that I can truly say that both council and TechnologyOne share a common goal, and that was referred to by Ed, where he mentioned, "It's all about making life simple for the communities." That's very important at a local government level. Today in the presentation, we will be showcasing our OneCouncil solution, and that was developed specifically for the local government industry. This presentation will be kindly hosted by River City Council, and while it sounds like paradise living in River City, they do need to contend with seasonal flooding. Yeah? The team there will walk us through some real-life scenarios using OneCouncil. Throughout the room, you will find some screens here.
To the left are the business processes that we will be using throughout the demonstration, and over here to the right will be the product. This is OneCouncil as we use the product, and we will highlight the individual modules as we go through those business processes. Most importantly, a demonstration of our live software, capably run by Alex. Hi, Alex. Okay, let's head over to River City and get started. Thanks.
Good morning, everyone, and welcome to River City Council. My name's Poppy, the CEO here, and we're thrilled to have you with us today to witness firsthand how we use TechnologyOne's local government solution to enhance business efficiencies and simplify our operations. So as the CEO, I need to focus on three key areas. The first one being customer satisfaction, which you can see up here. Budget management, which you can see across the three graphs here, and town planning, which you can see up here. The Council on a Page dashboard, which is what you're currently viewing, enables me to stay across KPI tracking as well as daily council activities. Now, it's really important I take a measured approach to each day, dealing with the key performance indicators as well as the inevitable issues that arise from day- to- day.
It's really good that you're with us today, because we've got a really busy day at council. First of all, we're going to meet our new starters, then we're going to have a chat with our maintenance team, and then we need to finalize our rates for the next financial year, which are going to be presented at the next council meeting. Let's kickstart the day by going to meet our new starters. We've got 1,500 employees at council in total, which you can see on the dashboard up here. It's really important that they feel welcome from day one and that that onboarding process is simple. Hi, Lisette. How are you?
I'm good, thank you. How are you?
Good, thank you. I wanted to personally introduce myself to you today. So my name's Poppy. I'm the CEO, and I just wanted to make sure that you received your welcome email. Now, this should have been automatically sent to you about a week ago.
Yes, I did.
Perfect. So with the onboarding solution now part of OneCouncil, the onboarding process is now fully automated, and simple. So I'm going to leave you to it. If you see me in the corridor, please feel free to come over and say hi, and let me know how you're going.
Will do. Thanks, Poppy. Well, I did all of the onboarding tasks last night, so easy, and to add my emergency contact and my bank details. But I did notice that I could already apply for leave, so maybe I'll quickly do that. All right. Well, I do have a short holiday plan for New Year's in Noosa, and I'm already counting down the days. Let's see if it's as easy as everything else. I think I will be away from maybe the 31st of December, and I suppose I'd better make it short, as I just started here. So maybe only until the 8th of January. Mm. Yep, that looks about right. Cool bananas! Hey, and you check that out. You can see how much leave I would have accrued by then.
Okay, I better finish this off and get back to my induction, though I cannot wait to chill out by the beach.
This isn't good. Have you all seen this? Hmm, it looks like it was related to the festival that happened on Saturday. I'm wondering how this made its way into the newspapers.
Just... It's a beautiful Saturday morning here in River City. There we go. All done. How easy was that? And you know what? I might give the paper a call as well, just to let them know about this issue. Concerned Citizen Tom has such a nice ring to it.
Well, whoever the newspapers found out about this, we better get on top of it straight away. Otherwise, our customer call center could be inundated with calls, plus we'll receive hundreds of digital requests. Okay, I'm gonna bring up the Council on a Page dashboard again, and as you can see here, the number of requests being logged has increased. But not to worry, I'm sure our maintenance team already have this in hand. Why don't we meet Charlene, our maintenance manager, and you can see her team in action?
All righty, let's see what we've got on the plate today. First things first, gonna tidy up around here. Gotta do everything my damn self. All right, I've got a new starter starting today, so I might take a quick look at my team's information. The new starter checklist is automated, so, it's really easy for the new starters, but there's also other automations as well. For example, issuing IT equipment or perhaps some training enrollments. So I don't need to spend a lot of time sending emails to 5 million people around the business. It's all just taken care of. All right. As a manager at River City Council, my team's information is at my fingertips. So I can see here, for example, my new starter, Lisette, and I've got everyone's current leave balances there, and everyone's submitted leave requests right there. So that's all looking good.
Let's go find Lisette, and we'll go sort out that footpath issue. Welcome aboard, Lisette. How are you going?
Good, thanks, Charlene. Eager to get started.
Cool. That's good. So we need to take a look at this footpath issue that's got everyone up in arms today. The good thing is, I can just crack out my iPad, and we can get started right away.
Wait, you can use an iPad?
Yeah, it works on any device.
That is so cool. At my last job, this was all paper-based.
The TechnologyOne's mobile field app is designed specifically for field workers, but it's still connected to the rest of the system, which you'll see more of later. This screen here shows us the incoming work that has been routed to our department. The system uses workflow so that we only ever get work that's relevant to us, so we'll never get, like a waste management request, for example.
That's really great. It must save tons of time.
Yeah. Oh, I can see you've already put leave in on your first day?
Yeah. Look, I had a bit of time, and I thought I'd do it before I forgot.
Well, I guess it's best we know these things as early as possible. Otherwise, I would assign you to a crew that week. Okay, let's take a look at this request that the community member has added. And there it is. So I can see the pin that they've dropped. That's cool. Now, this is one of those cases showing where everything is connected. The maps here are embedded, unlike other products that use third-party maps. So as soon as the pin is dropped, it's available everywhere in the system. Now, I can also view any photos that the person may have added to their request. Yep, there we go.
Ooh, yeah, that tripping hazard is pretty bad.
Yeah, I agree. Okay, I'll generate this work order for this job and which I can do right here on the same screen. Just click that button up there, and we can get that going. Traditionally, requests like this would be triaged back in the office. But now I can create a work order here on the iPad. I can spend more time out with my crew instead of behind a desk. We can actually access heaps of other stuff here as well. If I click over to the Assets tab, it'll show us the assets that are actually around us at the moment. So we're here out on the street, and we can see there's some, maybe there's some pipes or something there in the street there, but we can also go inside the building.
Oh, yeah. Wait, I can see my desk from there.
Right. So we're looking at level 5 here at the moment, and we can see all the assets that are there. We can also actually just click down to this level, level 4, and see what's going on on this floor. This kind of thing really helps new starters like you to find our assets that are inside of buildings.
That's really great. I've never seen this kind of layered representation before.
Okay, well, let's get back onto the job at hand and get out to the truck. Now we have our work order, the real work can start. So we're gonna open up the work order here for that trip hazard. Now, we can do a lot of other cool stuff right here from the work order as well. So for example, if I needed to reschedule this to a different crew, I can just do that here, and then it would appear on their app when they log in. I remember the old days, we used to have to do this by calling back to corporate. Don't need to do that anymore.
Thank goodness for that.
Okay, I can start the timer on this job, which will track obviously how long we take to do the job. And once we arrive on site, and we see the physical issue in real space, I can actually use my device location to record precisely where the fix is going to happen. So it might not exactly align with what that customer has added. Now, it looks like we just need some cement for this one. Check this out. I can also just stick this on my work order, and the system will automatically order a replacement for us.
What? Really, no filling out manual supply orders?
Nope. I can directly access the catalog here, and this uses the industry standard for categorization of catalog items. Yeah, try say that three times fast. Okay, let me add this cement here. That looks good. Done. All righty. Now, that we've done the physical work. I will update the condition on the asset. Doing this makes it easier for our boss, so they always know the current state of the footpath, for example, and when they do their planning, they always have the most up-to-date information about all the assets. Let's just add that here. Set that for today and the condition. That's looking good, and that should be it. Done. Awesome. Now, I'll stop the timer and complete the worksheet, the work order.
Perfect. When do I need to fill out my timesheet?
Nah, that timer I was just talking about, it automatically flows back to payroll for everyone on the crew, and it will even know if we've done something like work on a public holiday, as if. But anyway, we don't need to do time sheets at all.
That's really good. I hate doing time sheets.
Also, I don't need to let anyone know that the job's been done. Order notifications were automatically sent out, including to customers whose requests were tied to this work order.
Nah, come off it. That's insane.
With everything here on the app and all these background processes and workflows taking care of the paperwork, we can just focus on getting out to the next job.
Excellent. Let's head back to the truck then.
Thanks, Arlene and Lisette.
Ah, cool. I just got a notification that the request was completed. Great job, council.
Well, it's great that the footpath's been fixed and great to see communications are working. It's crucial for customer satisfaction that we let our community members know when their requests are being completed. It can be really disheartening when you raise a request and then you never hear back. Okay, it's time for us to meet Harry. Harry is one of the maintenance planners at council and looks after some of the analysis and strategic modeling of council infrastructure for us.
Thanks, Poppy. Phew! It's been a hard day at work. Struth, this rain's been great for our gardens, but, man, does it create some potholes. Did you all know requests from the community aren't the only way we can identify defects here at River City? We're using TechnologyOne solution, where we mount cameras on various vehicles like garbage trucks, council utes, or even my pushy. And with the help of AI and machine learning tech, we're identifying hazards better than before. Let me show you some now. Here we can see what those cameras have picked up, and you can see all of them down the page here. It's even circled the problems in red for me. We can see here, it's even telling me how severe each issue is, up in the top corner.
If we have a look at this photo, it can even categorize a crocodile crack, which is different from pothole to a sinkhole. Now, this is something we could never ask the public to do. So have a look at this photo. Even I can't tell what it is, and I've had years of experience, as you can tell, right? It would be nearly impossible for someone, even from council, to raise all these requests with all the information that we really needed manually. Now, while we still need to allow citizens to raise these requests, this is where those cameras really come in handy. They can detect problems without a single customer involvement even being necessary. And we're now able to address some of these issues before a single complaint is even lodged.
This means for us, it's way more cost-effective, as we can schedule everything in an area at once, meaning less time driving out, and our call centers experience less calls regarding asset maintenance, too, because we're fixing more defects than ever. This is a great outcome for our community, as it means the roads issues can be proactively managed, and I don't have to spend more time on the phone. Who doesn't love a happy customer, right? Now, with all that camera data that we gathered, it can be used in a couple of different dashboards and analyses to help us plan ahead smartly. Let's jump into some now. The data you're going to see today helps us make decisions about our city's infrastructure based on real information, and can even help us to forecast the future, too.
If it's degrading faster than we expected, not only can we tell, but we can plan for it. So any work that they may have done out in the field has already come through to these dashboards, meaning we can always be up to date on our assets' health. So if we have a look here, we can quickly gain an understanding of our most worn out assets. Over on the side here, we can see which areas are degrading faster in the red and slower in the green. Isn't that fantastic? This helps inform our future investments at the council. So let's double-click on this and drill into one of our most degraded assets, this road here.... Here we can see the change in the asset's health over time.
You can see it going up and down, up and down, and uh-oh, something bad's happened at the end here. So what we can do with this is even start to look at that trend analysis, and we can see that it's suggesting that it probably should be renewed in about 2026. So I'll keep note of that. We can then use this data to drill even further into our strategic asset modeling product, and we can get a view of our capital spend and how much maintenance time we'll really need to spend on that asset over its life. You can see here, if we did actually renew that asset in 2026, shown by that green graph, the wear and tear on that asset in the red goes from high right down to zero and then slowly back up. Geez, I feel like a weatherman up here.
From these analyses, we can get a really good understanding of our whole council's depreciations over its life and into the future. We used this modeling to go back to council this year to ask for an extra AUD 2 million due to that flooding damage over all of our assets. Our true goal here is to keep our city's assets from getting too worn out, but also avoid overspending on asset maintenance that we don't really need. We needed that little bit of a funding boost to keep it all on track. Like many councils of our size, our assets, like bridges, roads, and even trees, are worth AUD billions, and TechnologyOne helps us save money on all this maintenance and keep track of it all. This is crucial because our city budget is tight, and we have to spend your public money wisely.
Now, this last dashboard over here with a map... Oh, is this live? Thank you, Alex. This dashboard here, last one, I promise, is where we... A breakdown of where we spend capital in our city. The colors on the map here really make it easy to see where we're spending the most, like in this ward in here, and where we're spending the least, over here. Plus, I can drill down to see how much we spend on different suburbs using the filters or on different projects or things that we own. We can even click on the pie graph there to filter the whole dashboard. So I can see here that we spent AUD 12 million on renewal projects last year alone. But that's enough dashboards for me today. It's time for smoko. Does anyone want a pie? No?
All right, well, I'll hand you back to Poppy. Thank you.
Thanks, Harry. Some really valuable insights there. Now, as you can imagine, at council, it's not all about managing assets. The local government sector is large and diverse, and there are many different SLAs and KPIs that we need to be across, and all the necessary information needs to be concise and easily accessible. That's why the Council on a Page dashboard is crucial, not only for me but for my management teams. Now let's have a little look at it in more detail. Here we can see our capital expenditure, which is what Harry was showing us earlier. Then we've got our operating expenditure. So you can see our operating expenditure versus budget, and we can see that this at a cost center level, as well as being able to delve into it in more detail.
If I was a fleet manager, I could see all of the necessary data right here. It's also possible for us to see our revenue for the next financial year, and as you can see in this graph here, it's currently sitting around AUD 130 million for the year, with rates and annual charges being the largest contributor at AUD 89 million. Perfect. So now it's time for us to meet our revenue manager, Henry, so that we can finalize our rates for the next financial year, which is going to be presented at our next council meeting.
Thanks, Poppy. As Poppy has highlighted, rates is one of council's main income streams, but for most councils, this can be a really painful process. I'm sure Michael would agree. But we made it super simple in our OneCouncil solution. So let me take you through the rates that I've just run. So you can see that it's an easy step-by-step process that starts you up on the top and works its way down, so you always know exactly where you are within the process itself. And we can also see the AUD 86 million that was generated as part of this rate run as well. So nice and easy.
Thanks, Henry. And I can see the rates notices are being sent automatically out of the system.
That's right. So within a single function, we're able to run the rates, review the rates, and email them out to the property owners as well.
Great! Well, I'm really happy with what this is showing. Can we please have a quick chat about the flood management for the next financial year?
Of course. So let's have a look at rates modeling. The functionality that we just saw within rates billing is also carried across to our rates modeling function. So this is truly what sets TechnologyOne apart from other competitors. Rather than having to extract our data out of the system and model the rates charges across multiple spreadsheets using different formulas, we're able to do that directly within the solution without impacting our data. So let me show you through the rates model that I've just created. And we're just gonna do a search for our flood levy here. So what we can see here is that this flood levy applies to 3,000 properties at AUD 500 each. Now, we did hear from Harry that we need an additional AUD 2 million to cover the additional investment needed for this year.
So we can simply select that levy, do a goal-seek revenue of AUD 2 million, and hit Apply. And the system will now recalculate that, and we can see that our properties will be charged 642 each next year. So the last thing that we need to do is just approve that flood levy, and it'll be ready to go.
Thanks, Henry. That's a really big increase, but I'm sure given the severity of the flood last year, the community is going to be expecting this. I'm really happy with what it's showing, and I'm sure it's going to pass the vote. How much time do you think you and your team are going to need to get this programmed in for the next council meeting?
Yeah. It's all ready to go. That's the beauty of having it all within the OneCouncil solution. We're able to just apply that to all the necessary properties straight away.
Great. Thank you. I really appreciate your work with this. I know it's a complex business area.
Awesome. Thanks, Poppy.
Thank you. Well, there's one final thing that I want to show you today. I mentioned earlier the importance of town planning. One of the key KPIs that we track at council is the number of days it takes to process a development application. I'm just gonna bring up a graph here, and as you can see, it's currently on a downward trend. It was previously taking us around 150 days to process a development application. But thanks to all of the work and collaboration we've done with TechnologyOne, it now takes us only 60 days. This process was initially complex. However, we've been able to streamline this by utilizing our automation engine. We've harnessed the data within OneCouncil, stripping out manual processes such as assigning applications and double handling.
Our data integrity has increased, and with it, our ability to make quick decisions. Now, our planners are spending less time on administrative tasks and more time on complex developments that may impact the community. By reducing approval times for development applications, we can unlock numerous benefits for our community members. It can stimulate economic growth by attracting investment, creating jobs, as well as helping to meet the growing demand of housing and infrastructure. Okay, so that wraps up our day at River City Council. I hope you've enjoyed your day. As you've witnessed, our business is fully automated, allowing us to monitor everything in real time through OneCouncil, seamlessly connected from end to end. And I'm glad that you could join us today and experience a glimpse of working in local government.
Next time you're at a park, paying your rates or checking out a new development, think of us.
I agree. What a great showcase of our unique OneCouncil solution. Remember, 73% of Australians and New Zealand's residents actually live in a council powered by TechnologyOne, and we have a growing footprint in the U.K. Even if you don't live in the beautiful River City Council, you have probably interacted with our software in some way. Thank you, and enjoy the rest of your day.
Well, I hope what we've showed you over the last little period, the complexity a council deals with, and then at the same time, how we support them through what looks quite simple, but if you're paying attention over here, the amount of different products we are constantly hitting, trying to give them that simple view. And that's where the power of the ERP comes in compared to that best of breed. An amazing demonstration. Thank you, team, for doing it. As many of you are aware, we focus on six verticals: finance, health, community service, asset intensive, government, local government. But there's another key one that I need to talk about just for one minute. That's the education vertical. If you look at an education vertical, it's not dissimilar to a council. All it is, is a compressed council.
It's got all the same issues, materially, that a council has, from a complex infrastructure of buildings, parks, sports facilities, a significant amount of buildings over a vast span. We are uniquely positioned in the higher education space because we can do that. But we can't just do that from an educa— So from an ERP standpoint, we can do that because we have the critical components, the mission-critical software that a university needs, such as timetabling, scheduling, and of course, our Student Management solution. So what does that mean? Underneath, these are all the different components that run a university. Much like a council, there are about 80, and we are the backbone of that university. We are running the heartbeat of that university, from its back office, its administration, its academics, and as well as its students.
We are proud that more than 90% of the students in this country use our software today. 90%. It should be noted that the TAM for One Education is AUD 2.6 billion. Now, I've been in plenty of presentations with you over the years, and you've been asking us about TAM, and we've known this information for probably three-four years, and we've used it to guide the way that we go to market. We've used it to make sure that the investments we make related to R&D are in the right place. And I'm super proud that we can share it today because we've been waiting for a long time to do this. If I break it down, this is a TAM by product, and then this is our component of the TAM that we own today.
What I'm gonna walk you through very quickly is the breakdown of our component of it, as well as the competitors in that space. Let's get into it. Enterprise Asset Management. What you just saw from that demonstration was heavy in the asset management component. It's critical to all of our customers, regardless if it's local government or education. Yes, please.
Just in terms of the time that we talked about, does this include the U.K., or are we looking at-
Nope, including U.K.
Okay.
Yep. I like this. Questions already. That's good. Please ask any questions. Enterprise Asset Management, the asset-intensive market, health community service, all use this product. It is the backbone of managing their infrastructure. Our natural competitors and our best of breed would be Maximo, and in the ERP space, you'd see Oracle and SAP as a standard competitor. Business Analytics. Again, a key component of an ERP backbone. Its ability to see what you saw today, the analysis side of all that amazing data that's coming out of the system. Again, there are lots of best of breeds here and a $3.5 billion TAM. DXP, I'm going to go completely off book. Loretta, how many DXP LGs have we sold so far?
We've sold 27 deals to 25 customers.
27 deals to 25 customers for a product that we've had out for about 18 months. What you can see there is the value of that product set, and we've barely started. We're only three modules into what we know today, at least to be six, and goodness knows that the R&D team will just keep going from there. To be honest with you, we don't know the TAM, because that thing will just keep growing, and we don't really have competitors in the space. If you look at Oracle and you look at Salesforce, they're trying to address the data in a different way, but not—they're not driving the product, the richness of the information, like you saw this afternoon. I'll just take one more step. I've been doing this for about 30-odd years. A bit depressing, but yes.
What you usually see in a demo is things that we're going to do. What you saw today in that demo is what 35 customers, 35 councils are actually doing today. It's vastly different. Enterprise Budgeting. When we talk about when we're going to get an aquatic center, how do we manage that complex infrastructure, these big spends, making sure we're going to get the return? That's what Enterprise Budgeting does. That alone is a AUD 273 million TAM. Enterprise Cash Receiving, AUD 48 million in TAM. Content Management. The amount of times I've sat in a room with you guys and talked about objective. Yeah. For us, the TAM of that is AUD 1.6 billion. But it's different for us in an ERP world because you can see how it all integrates.
You take a picture, it stores in the system, associates to the asset, generates the work order, stays with you for the lifetime of it inside that ERP world. Of course, the backbone of who we are, how we started as a company, is financials. We're very proud of this product. It sets the stage of the relationship we have with our customers from the very beginning. It starts with a differentiation. I've met a few people over the last few hours who actually started their career using this product. AUD 1.4 billion in TAM. Yes, I'll round up a little. HRP. It's a natural progression in an ERP world that you start with financials, and you get to the HRP side. If you look at the competitors we have, it's not exactly true. Workday doesn't do payroll.
So what you see there is the people are doing the HR side, but it's very, very rare that we have a competitor out there that do both of them because of the complexity. Trying to manage payroll is different in WA than it is in Queensland, different in Australia than it is in New Zealand, different in England than it is in New Zealand, different in Scotland than it is in England. We learned all this the hard way, so trust me, it's tough. Performance Planning, AUD 336 million in TAM. And one of our crown jewels, one of the things that separates us from everybody else, Property and Rating tool. all, I think it's 5.5 million rates come out of our system on a quarterly basis. We are by far the biggest provider of this software in Australia.
We kind of set the stage for the market. We're very, very proud of this, and its fourth generation product has actually taken us even further. Strategic Asset Management. Now, I don't think this is correct. I started my career in the asset management space. I don't know of another company on the planet that does what we do with Strategic Asset Management. It's the ability to take not only the forecasting, but then compare it to others. It is something that differentiates, not from an EAM standpoint, but the next level up. And so that AUD 223 million in TAM is something that really is the market for us, because we don't have a natural competitor in that space. Timetabling and Scheduling. Now, we bought Scientia two years ago, two and a bit years ago.
We entered into a space to make sure that the market could see that we're continuously not only evolving our products, but helping differentiate in the ERP world. You can see the power of taking a timetabling and scheduling solution for an education provider, university, or TAFE, integrating that directly with a Student Management system, integrating that directly within an EAM system or Enterprise Asset Management system, so that when you're seeing that you're going to get students that are doing different courses, do we have the right rooms? Do we have all the right tools inside that room that are calibrated correctly to do that work? And then do we have all the academics to do that work? You can see where it gets unbelievably powerful in an ERP world. We are the Rolls-Royce in that space with a TAM of AUD 346 million. Spatial.
What you saw today was pretty cool. There's really only one competitor in the space. If you know the space, you know Esri. They are the Rolls-Royce, they are expensive, they are challenging to work with. We have a very strong footprint in this country, and we're building that continuously. That product it just grows and grows. That three-dimensional work that you saw there is relatively unique. That ability to break down a building by its floors is unbelievably unique and is empowering when you get your maintenance people out in the field to try and do the work, and you can pinpoint it exactly to the desk that you're trying to solve. AUD 134 million in TAM. And of course, the one that's near and dear to my heart, Student Management.
Ed's already mentioned today that this product is not for the faint of heart.... PeopleSoft did it to a point. When Oracle bought PeopleSoft, they let it die because they saw the complexity of it. Workday, ex-PeopleSoft team, will do it again. They started. They got quite a few contracts as early adopters. They came out to this country, and I'd say that, Ed and I would say that we were probably concerned three-five years ago, that they came in all gusto. They signed contracts with four universities in this country that, "We'll build this with you." Those universities invested tens of millions AUD in the development of a Workday Student Management solution. About two-thirds of the way through, Workday said, "Whoa! All too hard. Thank you for your time." Went back to the U.S. This is a tough product.
We built this product with a customer, Curtin University. So we took the IP, we sat down together more than 20 years ago to build this out. The TAM is AUD 654 million. We're going to get all this TAM in the U.K. And finally, Supply Chain Management. Now, I can't see a world where you're going to go and actually use us for financials, and you go get Oracle for Supply Chain, so it's not really a competitor. If you're in our wheelhouse, if you're using our product set, you're going to use us for Supply Chain. That product alone, AUD 2 billion. So what does that mean? The total TAM for us today, as what Ed showed you earlier, there's still a lot more to go, but as we know today, is AUD 13.5 billion.
Now, let's look at it a different way. Let's look at it by the vertical itself. So if I break it down, I've shown you the total TAM by product, but now I'm going to show you that same number broken by the verticals themselves. And as you can see, we're very well diversified. Now, I would love a day when every vertical fires, but it just doesn't work like that. But because of the diversification of the verticals we have and the mission-critical products we have inside those verticals and the market presence we have inside that, that gives us the confidence that we've got the right products, we've got the right position, we've got the reference ability, and we've got the IP in this company to be able to deliver upon that.
It's our mission-critical software, it's our defense in-depth SaaS solution, and our new SaaS Plus go-to-market position, that we are well positioned for the AUD 1 billion goal that you've heard about today already. Now, I'd like to invite Cale up to the stage to talk about SaaS Plus and how we're going to get there.
Thank you, Stuart. Good afternoon, everyone. Today, we're going to walk through the SaaS Plus from its inception to the financials, unpacking how we model it, both on a per-deal basis as well as the full portfolio. SaaS Plus is a methodology to sell customers SaaS with implementation bundled into one fee. It's applicable for all future module sales. It doesn't impact previously implemented software. It's important to note. SaaS Plus is our go-to-market strategy in the U.K., and here in the APAC region, about 80% of our products are SaaS Plus solution ready. From a revenue perspective, SaaS Plus can be considered a 40% uplift in our TAM, and our price book for future sales. With the Power of One, we build, market, sell, implement, and support our own software.
This necessitates a bespoke sales process, where our team names their deals during the quarter, as a part of their sales cadence. Our team are required to outline the client and the module for deals that they're going to close this quarter and give some visibility into future quarters. This is really complex to achieve. It's necessary, though, for our business, given the Power of One, because we need to align our consulting team. We need to make sure that we have the right consultants, with the right skills, ready to implement our software to keep our customers happy. With 16 products and more than 500 modules, I'm sure you can appreciate that is a very complex task. But this is our strength.
It creates an IP engine, where our consulting teams feed back into our R&D team to continuously improve our products with the belief that tech is the answer. It's often said that necessity is the mother of invention, and our desire to scale within the confines of the power of of the Power of One necessitates increasing efficiency and productivity, which has driven a manufacturing floor approach, creating highly optimized cartridges to enable implementation processes more efficient than anyone else in the industry. So today, I'm going to talk through and walk through the traditional consulting model, outline the genesis of SaaS Plus, and then step out that financial profile of the SaaS Plus strategy and what we think it'll mean for TechOne. There are three key takeaways from my presentation here today. Firstly, SaaS Plus will create a long-term revenue and profit tailwind for TechOne.
Secondly, this model has driven a strategic focus on increasing productivity. And to give some context to that statement... The largest R&D investment theme in our 25A release is SaaS Plus. We are really focused, extremely focused on the success of SaaS Plus, and this investment is really only possible due to the Power of One. And finally, this is a long-term strategy. Financially, we would have been better off staying with on-prem license revenue, but I don't think there's anyone in the room who isn't a believer in the SaaS revenue model. In the short term, we're better off not disrupting the traditional consulting model. We could continue to make money as we always have.
But in the long term, we're confident that the opportunity of SaaS Plus is significant for TechOne, and we have a good track record of managing these kinds of transitions, having already successfully moved from on-prem license revenue to SaaS. So our consulting business has always run on a ratio of 1: 1.6. That is, for a hundred dollars of SaaS fees, we should expect the implementation to cost AUD 160. For every 100 in software, there's a once-off AUD 160 implementation, 1: 1.6. For comparison, Oracle is around 1: 5, and SAP, well, we have the expert in the room, Chandan, we brought over from SAP. Chung, what's the ratio at SAP?
It would be 5:6.
There you go. My point is, we're already pretty efficient when we compare ourselves to our competitors. So the 1:1.6 ratio was company lore, but no one really understood where the number came from, but the intent was very clear. If the implementation quote from the consulting team was above the ratio, it was cause for reflection. Now, did we really know the customer? Was our solution actually fit for purpose? Do our consultants have the requisite skills to implement efficiently? If the answer to those questions was yes, and we could learn something repeatable through that process, we would absorb anything above the 1.6 as an investment in IP to feed back into the product. So we understood the intent, but what about the number? Was it just made up?
Well, without an accepted bottom-up science to the number, why couldn't it be 1: 1, 1: 0.8? Fortunately, some would say, our experience as a challenger in the U.K. required us to do fixed time, fixed price implementations. We're not the incumbents in the U.K. that we are here in APAC, but that required us to be focused, tight on scope, and disciplined to reduce the risk of our implementations. This was the platform from which we could try to push the boundaries. We just needed to evolve the model to break that accepted 1: 1.6 ratio, and Blackpool Council in the U.K. was the perfect opportunity. A large implementation covering many pro- products. We pitched it at 1: 1 and delivered ahead of budget at 1: 0.8.
Fundamentally, we delivered the Blackpool project twice as fast as under the old methodology. And to achieve that, in our labs, we incubated a number of solutions that broke the mold and opened a world of possibilities. Importantly, what did the customer see? Well, they saw faster time to live, faster time to value. What would have traditionally taken up to three years under a traditional methodology utilized by system integrators took just 16 weeks under the new approach. We'd made what we previously thought impossible, possible. But now what? This was the beginning of solution as a service. So there are two primary challenges in the consulting model. Yes, Stuart? I'll just leave that. He didn't outline it. We're moving along.
When you deliver under a time and materials methodology, there's an economically rational incentive to kind of drag that implementation out, to make it more complex. As I spoke to earlier, the Power of One and the 1:1.6 model does remove TechOne's incentive to do that. The Power of One ensures that if something takes too long to implement, we feed it back into the R&D roadmap to improve. This is different to the system integrator model, who are just implementing a vendor's software. They don't have any control over that vendor's roadmap, and complex is profitable. Secondly, traditional implementations are simply not a great business model. Implementation revenue is low quality, one-off in nature. SaaS Plus is a complete rethink, and TechOne is uniquely positioned to execute on it.
Rather than trying to make implementations more complex and drag them out, we completely align our interests with our customers. We're trying to bring a simpler, faster implementation to our customers, and it's enabled by the deep expertise that we have in those verticals that we serve. In FY 23, TechOne made AUD 13.8 million of PBT on consulting revenue of AUD 73.2 million. The traditional consulting model is quite simple to understand. Alongside the sale of software, we contract to deliver a one-off project.... This project is typically time and materials based, so long as the rates under the T&M contract are reasonable, the consulting business will earn a circa 20% margin on that work. Fundamentally, we're marking up people. Revenue is generated by time, and clients are billed, usually monthly for the duration of that project with fairly short delivery cycles.
Revenue and cash receipts are closely aligned from a timing perspective. The example here on the slide is of the consulting component of an AUD 1 million SaaS fee sale. We're just looking at the consulting here, not the software revenue. So assuming a one-year implementation with the 1:1.6 ratio, in year one, alongside the AUD 1 million of SaaS fees, we'd earn AUD 1.6 million of traditional consulting revenue and AUD 320,000 of PBT on that revenue at the 20% margin. This is a well-tested model. Cash and profit timing aligned. This is good for us, but it's not good enough for our clients that we wouldn't want to innovate. When our customers buy from us, they're buying the solution to a problem. No clients are out to purchase a large, complex implementation process.
They're really looking for outcomes. SaaS Plus is aligned to our customer interests. SaaS Plus can only be achieved through deep industry expertise because we know what a model implementation should look like. We've done it before, many times. So we can define the core scope tightly and get our clients live quickly. Additionally, the SaaS Plus model requires the integration of our R&D and consulting businesses, learning and iterating to deliver implementations faster. This is an ongoing strategic initiative, utilizing our R&D teams to continuously improve implementation productivity. When you consider the breadth of our products in the verticals that we serve, executing on SaaS Plus will create a moat that is not replicable. Given the mission-critical nature of our product, our client relationships are long, and our churn sits at around 1% over more than 30 years.
With SaaS Plus, we take the cost up front, but the revenue that we would have earned in that first year is spread over four years. While this impacts negatively in the first year, in year two and beyond, the revenue that we lock in, ostensibly for consulting, falls directly to the bottom line. If we look at the upfront cost as an investment, we see an IRR of 39% on very conservative assumptions around the length of our relationship. I'll now walk through an example of a AUD 1.4 million SaaS Plus contract. This example just focuses on the component notionally allocated to consulting. In practice, it's all just ARR.
Of the AUD 1.4 million SaaS Plus ARR, AUD 400,000 is notionally allocated to what was previously the implementation component. So for the purposes of this example, we ignore the other AUD 1 million paid in SaaS fees. So I spoke earlier about the 1: 1.6 ratio in TechOne's traditional consulting business. The SaaS Plus model is based on the 1: 1.6, but the consulting revenue is spread over four years. So rather than earn the full AUD 1.6 million in revenue that we would in traditional consulting, we earn the same amount over four years, reducing year one revenue to a quarter of the AUD 1.6 million, which is why we notionally allocate AUD 400,000 from the AUD 1.4 million of SaaS Plus contract to consulting for this example.
The revenue is earned for the life of the relationship as we abstract the implementation costs away from the client and simply deliver the solution at a higher price. Costs, however, are all borne in year one. Consistent with a completely customer-focused approach, the cost to implement is our problem, but it's also our opportunity. If we were to pick up the costs from the example outlined when I spoke about traditional consulting, those costs would be AUD 1.28 million, which is shown here in the gray bar. So we now add the AUD 400,000 per year that is notionally allocated to what we used to earn for implementation fees, and that's the yellow bars.
So given the AUD 1.828 million in costs in year one, we are going to take a loss of AUD 880,000 in that first year, all held equal. Clearly, the incentive for TechOne, under the SaaS Plus model, is to get our clients live as quickly as possible. Once we cycle that first year loss, revenue continues to be received in future years with no cost attached because the implementation on this example is complete. The revenue of AUD 400,000 in years two - four will flow directly to the bottom line. While the expense in year one will exceed the revenue, in future years, the revenue will be earned without cost. In addition to the AUD 1 million, obviously, that we're earning for access to the software.
The blue line here indicates that it takes four years to achieve the same cumulative revenue outcome as the traditional consulting project. Simply, we divided the 1.6 by four and split it over four years. The white line represents PBT, which as you can see, is negative in year one at AUD 880,000, but in year two and beyond, there are no costs attached. Importantly, note the dotted bar in year five. This is revenue that wouldn't have been earned in a traditional consulting model, and this continues for the life of the relationship. In reality, though, this consulting component is indistinguishable. The SaaS Plus fee is just AUD 1.4 million per year, where it would have previously been AUD 1 million.
I'm sure you can appreciate that if we can reduce the implementation time, bringing ERP implementations into 30 days, as Stuart outlined at the half year results, we bring the cost down, which raises the low point and brings the cumulative profit point forward. This also enables us to increase velocity on implementations. But don't think the reduction in implementation times is all theory. The drive to ERP in 30 days is the light on the hill for thousands of actions across hundreds of modules, and we have some early traction. Take, for an example, the implementation of project lifecycle management at Mareeba Shire Council, which went live earlier this year. Under TechOne's traditional methodology, it would have required 97.5 days of TechOne effort and 190 days of customer effort.
However, the project was delivered under the SaaS Plus methodology, with a reduction from 97.5 - 37.5 days on the TechOne side. Importantly, this project also required 56% less time investment from our client compared to our traditional consulting methodology. This presentation is very focused on TechOne, but just take for a moment to consider that impact on Mareeba. SaaS Plus took 130 days' implementation effort from Mareeba away. That's impactful for a shire, for a shire council, when you don't have unlimited resources at your disposal. So SaaS Plus is a win-win methodology that can't be replicated without the Power of One. That's why we're so focused on executing the roadmap for SaaS Plus. The roadmap is really a series of roadmaps for all of our modules, each individually tailored to their requirements.
Before we look at the rollout of SaaS Plus across our portfolio, we need to quickly revisit history. We're one of the few companies globally that has successfully made the transition from a traditional on-premise business to a SaaS business and maintained our profit growth. This was a long-term strategy, as Ed mentioned earlier, started in 2012, where we completely reoriented our business from our product through to our commission and reward plans. We began to step the license fees down in FY 19, as represented here by the dark orange line. Every dollar of license revenue went straight to profit. So as the so in the transition off license, it had a significant financial impact. That first year of the transition, FY 19, had a AUD 24.7 million PBT impact.
But as our ARR grew, represented by the yellow line, so did our profit, shown in the white bars. We've managed large business transitions before, and we will do it again with SaaS Plus, all without negatively impacting our customers and continuing to grow our profits. We need to acknowledge that we are very early in the journey. SaaS Plus is new and is gaining traction in the market, but no one has ever done it before, and there is a sales, R&D, and consulting element to this strategy over time. So predicting in high fidelity is simply not possible. But if you take a portfolio view, the white line here shows the PBT difference when we take the deal we walked through in isolation, the AUD 1.4 million ARR SaaS Plus deal that takes a year to implement.
If we were to sell that deal in perpetuity on a monthly basis. Specifically, we're showing the delta to a traditionally implemented project with traditional financial metrics. So that is, we just sell the same deal over and over every month. Importantly, the white line assumes no improvement in productivity, that we make no progress on the path to ERP in 30 days. As I mentioned earlier, we are already making progress, and with the Power of One, we will continue to deliver further productivity gains. I will reiterate, though, that this is a long-term strategy. We are expecting to take many years to break even on the strategy at a portfolio view. If we assume this selling profile, it will be almost 7 years before we break even, 70 months.
The low point there indicates a cumulative impact after three years of AUD 18 million. That low point is before the revenue from deals sold, passed, and implemented adds faster than the cost of that first year, costs exceeding revenue. But if we overlay the impact of it, what improving productivity may be, you can see that as we improve the implementation time, that time to cumulative profitability from the portfolio also improves. For instance, a 10% improvement in productivity reduces the time to profitability from 70 months to 62 months. A 20% improvement brings that time to profitability down to 55 months, 30% to 47 months. You can see why improving productivity is an all-encompassing focus for SaaS Plus.
That improvement in productivity, driven by our R&D team, back through our products and modules to enable them to be implemented faster, frees up our people to do more, to implement more, to sell more. It enables us to grow faster. It's worth noting, though, that the traditional implementation project work, which contributed AUD 13.8 million of PBT in FY 23, won't entirely disappear. SaaS Plus is focused on getting clients live quickly so that they can focus on receiving value from our software. Our early data suggests there will be some ongoing demand for consulting assistance to further configure post-go live. But we will use this to feed back into that R&D team to drive the IP engine. So SaaS Plus is a key pillar of growth on our journey to doubling in size every five years.
While we do expect a financial impact in the short term, the long-term benefits are clear. So I will leave you with three points. Firstly, we're the only vendor that can do this in any market. So we are creating a strategic moat, aligning our interests with our customers' interests, to create a compelling value proposition across a deep, mission-critical product set. Secondly, under SaaS Plus, the TechOne price book increases by 40%, effectively expanding our TAM. And finally, the R&D investment to drive our ERP implementations to 30 days increases our productivity, enabling us to implement more with the same resources. Tech is the answer, and SaaS Plus productivity will enable us to grow faster as we mature the solutions across our portfolio. Most important slide of the day, it's lunchtime. So our team members are back at their booths.
Cale, we've just got a slight change of plans. Can I jump in?
Sure.
I'll take the mic off you here. Folks, we were going to stop for lunch. It's just running a little bit behind. Let me have it. So I'll just do the wrap up, and then we'll go out for lunch, and then come back to Q&A. Thanks so much, Cale. Can we give Cale a round of applause, everyone? Can I just, progress two slides to my slide deck, please? We'll go back one. Just hold there. I think I've got it. Sorry, folks, I'm just getting the technology caught up with, my talk track. Okay, a little bit of a curveball there. Catering's a little bit delayed. We'll just do a wrap up, then we'll go out and have some lunch and come back to Q&A. But, I just want to firstly say, how good was that, folks?
That's TechOne's first ever Investor Day, 2024. We're almost at the end of this Investor Day. I look around the room. I've been at TechOne for 17, 18 years, and I've seen most of you, you know, twice a year for the last 17 years through roadshow presentations. It's been a pleasure having you all here, hosting you at our place. We've opened the hood so you can look under at our engine room. You've walked the halls today, you've met our people, you've stopped at the logos on the wall on level 10, our wall of SaaS, to see all of our SaaS customers. You've seen the yellow shoes. That's a thing. I don't know if you noticed that at TechOne.
We've been very successful over the past 37 years, and we spent the last couple of hours showing you what makes us special, through our core beliefs and through our people. You know, all of these things, they guide all of our strategies, all of our initiatives, and we've described and shown you the Blue Ocean Strategy today. We deliver that through our fully integrated fourth generation Global SaaS ERP. That's a big mouthful, but hopefully you saw it, and it's really hard to describe how powerful it is until you see it.
We've got the deepest functionality of any provider in the markets we serve, and you would have seen through the folks that came up today, both on both sides, how proud they are of the wonderful solutions that our R&D team builds and the rest of the company puts together for solutions and sells and delivers for our customers. They did such a great job. Thank you very much. And a day in the life of presentation today, folks. We'll give them a round of applause. For the first time, we showed you the total addressable market of our products into the regions we serve. Hopefully, you can see there's so much opportunity for us, so much that, you know, you can't even poke a stick at. We will change the world with our ERP and with our SaaS strategy, I have no doubt about it.
I'd love to be standing here, and I know I will be, or what... You know, our colleagues will be up here in 10 years, going: "Look what we did. We changed the world." Just like Salesforce changed the world from on-premise to SaaS, we will have changed the world from traditional- on, you know, consulting all the way to SaaS Plus, and not subject our customers to the long, complex, risky implementations that the market is ready to now. We also showed you a little bit under the covers in our multiple platforms of growth. I think we called out seven of those. That helps us to continue to double in size every five years, knowing that some strategies go faster in some years and others faster in others. And so that gives us the confidence to continue to double in size every five years.
And we released today our next ambitious goal, which aligns us and drives us, like every ambitious goal, of AUD 1 billion+ ARR by FY 30. So I want to say a few thank yous. Thank you, Michael, for coming today. Thank you for the TechOne team, you know, in front of the covers and behind the covers, that made today our first ever Investor Day a success. And thank you to our advisors, some of you in the room as well, that helped us put this together. Thank you to our loyal shareholders. I've known many of you for many, many years. Thank you to the investment community for all the work you do for us.
But most importantly, I want to thank the 1,300 team members all around the globe in TechOne that wake up every day to make life simple for our customers. They have the grit, the determination. You know, I can stand up here and talk about strategies all day long, but they're the ones that make it happen. And just an interesting side note, out of those 1,300 dedicated and loyal employees and teammates, 55% of them are shareholders through our employee share plan. So, you know, they share in the successes and the ups and downs as much as all of us. Ladies and gents, we'll end there. Thank you very much for getting in deep into the content with us.
Please come outside, where we have our product general managers and colleagues, where you can ask them any questions you want around the products. We've got our senior leadership team. Do we have Steph Gilmore here? Steph Gilmore, our wellness ambassador, is out there as well, so you can, you know, fan girl the 7-time world champion. Eight time? Eight time. We signed her at 7, and she won the eighth. That's right, world champion out there as well. So come out and join us for refreshments, and then stay for Q&A. Don't run away. What time are we coming back? Well, we'll, we'll bring you in, and then we'll wrap up with Q&A for the day. So thanks again, ladies and gents. Thank you. Thanks, everyone. Thanks, Steph. Come on in. Don't be sorry. Welcome back, everyone, for question and answers.
Firstly, we wanted to thank Steph Gilmore for coming today. There's a bit of a story about how we found Steph as our wellness ambassador. There was probably a number of things happening at all at the same time. We had COVID, so people working at home. Do you remember being locked down? It's quite amazing. You know, lockdown and out of that, a few themes came out, you know, looking after people's wellness, and that's mental, physical, financial, all types of wellness. We were also, at the time, getting ready for our first-ever big showcase to our customers, and that's where we, you know, bring the show on the road and show our new products and methods and everything to our customers. What better wellness ambassador than 8-time world champion Steph Gilmore? And when you think about wellness...
We started a little while ago eNPS surveys, where our staff, you know, rated our company but gave us feedback on what they wanted us to focus on, and wellness was one of them. So, Steph is our wellness ambassador. We started the gym downstairs to, you know, so they can look after your physical wellness. For financial wellness, we introduced the TechOne share plan, and to be honest, it probably is the best share plan in Australia. Buy two, get one free, no conditions, no holdbacks, no anything. And so as a result of that, 55% is our-
It's capped, though.
It's capped. It's capped at AUD 25,000 per tranche, isn't it? Yes. Yes, yes, yes. We've done the math, though. It's been quite fantastic for the younger generation in TechOne to perhaps save for a deposit for a home. So you wrap all those things up, we've got a wellness program. Steph, thank you so much for coming. We really appreciate it.
No worries.
Good luck to your future endeavors.
Thank you.
Can everyone help us thank Steph Gilmore?
Thank you. Thanks, Steph.
Thank you.
Thank you. Thanks so much.
Folks, just before we hop into question and answers, all of us, but Stuart, Cale, and I, have obviously been outside talking to you all. So I thought I might just throw to Cale first and say, Cale, is there any consistent themes that you were discussing? And if so, could you put that on the record for all of us?
Sure. I'll just, maybe call out one thing, that we've got a little bit of feedback on, and maybe I have a great poker face, or maybe I'm just, you know, I'm actually genuinely pretty relaxed. Just in terms of that profile for, SaaS Plus and the portfolio impact on the company, just to reiterate. As I called out, like, that's a, that's a modeled outcome, of selling at AUD 1.4 million per month ongoing. How we sell it will be different, depending on our client needs. But as I talked to there, that impact, of AUD 18 million cumulatively over three years to hit your nadir there, so that's AUD 6 million per year.
And that's in the grand scheme for us is more than or a lot less than what we think we can, or we know we can manage. So don't expect that profile to impact our profit growth at all. We will find a way to A, improve our implementation speeds to implement faster, and B, pull the levers within our business to ensure that we continue to grow. That is, as Ed put it, that is sort of our guiding light in terms of our metrics. And I didn't want to scare anyone with the size of that. I think in the broader context, we've been through this transition before.
The on-prem license to SaaS was a much larger impact year- on- year, and we're very confident that we have the means within the business to cycle this transition, to continue to grow at the PBT line. And then the back end acceleration is quite exciting for us.
like, you know, have to, because your new logos get one, right? Like, ultimately, your existing back book, there's no real SaaS Plus impact going forward. It's really going to be new logos coming on board. And that could mean, you know, those logos implemented-
It's actually not just new logos. I think you'll see a lot more come from NRR. So we have the back book that is implemented, but for an existing client that wants a new module or a new product, that will be a SaaS Plus product.
In terms of your growth, actually.
Oh, hang on. So we'll get you a microphone. Sorry, folks, I should ask you. If you've got a question, put your hand up, and we'll get a mic to you. Thank you.
Just seeing it in a different light, you know, the recent guidance that you've given is for that PBT growth to actually accelerate despite some of this, perhaps near-term headwinds that we might be facing from this transition in the model. So, you know, it sounds like that the underlying growth of, you know, ARR should actually be stronger going forward rather than weaker. Can you talk about, you know, some of the key drivers that give us the confidence to have that, you know, stronger outlook?
There's so much in that question. I might start a bit slowly. So, you know, we've always grown profit at 10%-15% and delivered 15%. And, you know, as a recurring revenue business, we're not starting at ground zero like we were with a licensed business. That's the first reason. So we're always starting with a lot more revenue locked in. We're also maturing as a business. You know, our systems, our process, our go-to-market. Things like SaaS Plus, they help us, because when you reduce implementation time frames, you can actually do more implementations for less. So when you put all those things together, we have upped our heartbeat from, you know, 10%-15% to 12%-16%, and I sort of winking a bit cheeky, and you can imagine where that's going to go in the future.
So that's in amongst all the things Cale's talked about. Expect our heartbeat to increase. So don't walk away, please, scared that we're going to reduce our growth. Our growth will continue to get faster. Kiri? We got there, Nick.
Hi, Nick from Morgan's. The SaaS Plus implementation, obviously, that's massive. Just trying to get my head around, I guess, the logistics of how it works. I can understand how you can work to implement it faster on your side, but how do you get a customer to shorten their implementation time? Because I think you said from 190 days down to 60 or something. How do you make them get their act together quicker?
Yeah, good question. Sometimes we can't, right? Our investment in the process is the same. At the end of the day, our customer's goal is to get live as quickly as possible, and we just have to give them that visibility. The sooner we can get to them and say, "If you have your team spooled up for this..." I'll give you an example: Traditionally, what we would do when we would sign a contract, we'd schedule to do training a month and a half later. Now, when you sign the contract, within minutes, you are provided with all the training material, all the videos, so your team can be spooled up. It's these types of all these one percenters that speed up everything.
Now, you might need your SMEs to be pulled off a project, and that's the timeline, but we'll know that going in. So there's two components: One, it's our investment of time. One of the constraints we've had on our growth in the past is the amount of consultants we have. Now, that timeline is still 30 days of my team. Right now, it might be spread out over three months, six months. That's okay, still 30 days of time. But my goal is to get the customer to come on that journey with me to shorten it as well. My obligation is still 30 days of man days to do the work. Did I answer your question?
A little bit, but like, so what do they need to do differently to be able to jump through your hurdles so that they can implement it?
So, so don't look it as a hurdle, because it's what they want. So we're trying to empower them to... Because there's not a customer that's ever come to us and said, "I want to buy EAM because it's nice to have." There's a business need, but it's always been the constraint to the way that we've, we as an industry, have implemented, that has been the constraint. So they want it tomorrow. We just have to show them the path how to get there. Sometimes they can't, right? Sometimes they have their own internal constraints, they can't. But then it's not borne on us. It doesn't take more man days of us because they're going to take a little bit of time. We just scale back and wait for them to meet that milestone to get to the next stage.
But we're far more transparent now by saying, "This, this is the cookie cutter approach. This is what we need, when we need it to achieve this goal." And if they say they can't, we just pull it out. The cookie cutter is the right words, Nick. I think, I was talking to someone in the break, and, one of the questions was: Why is it so fast? How can you make it so fast? There's a number of things in that, but, one of the reasons is, if we do Enterprise Asset Management into local government, guess what? We've done it 300 times. So we know what it takes to do Enterprise Asset Management in local government. And I don't really think customers say to us that we're different.
CEOs, if you ask Michael, that was here earlier, he goes, "Yep, I do it the same way as Blacktown beside me, as Parramatta, as Penrith." And so...
Yeah, and for the ones that say they do it uniquely, it's because they've been re-brainwashed to think they do it uniquely, and what they're all trying to do is get on the mainstream as well. And so they want standardization. They don't want this unique thing that's over here, that's bespoke; it has to be managed separately. They want to get on the standard profile. I mentioned this to somebody earlier. If you kind of look at it, what we're trying to do is build a manufacturing floor. Right? We're trying to systemize this whole process. You know, this is an industry that everything has been bespoke.
You know, you build what I call cold milk. You build financials. Doesn't matter if it's going to a university or if it's going to a manufacturing organization or to a mine. It's just financials. What we've been able to do is build financials specific to these verticals. Now, what we're doing is we're building the total solution specific to that vertical so that we can actually say, "I've got four different times this year that I can implement EAM for local government. Which one do you want?" For us, that's surety. I know my resources are allocated those four times for those different four projects. For them, it's a bit of demand-
... what we learned through the flips is that when we went to the customers and said, "I've only got three times this year when I can flip you from on-prem to SaaS, which one do you want?" Guess what they all said? The earliest, right? And so you build that pent-up demand of saying, "I need that EAM," so there's compelling reason to sign the contract to get that early window. And for us, on David Cope's side, he knows I've got resources allocated all, already. I'm not all of a sudden getting from the sideline, all of a sudden, there's another EAM project.
I know what my world looks like for the next 12 months based on the manufacturing floor process that SaaS Plus provides, 'cause we know exactly what that implementation needs, and we've already built the slots, and we just deliver to the slots now, all the way across.
Hey, guys. I guess consultants are going to have to work pretty hard to bring down the implementation speeds to 90-odd days. So I guess two parts to my question: firstly, did you have to make some significant new hires in consulting to support that workflow? And secondly, is there any change in incentive structures, or is it sort of built into the KPIs to make sure that that 30-day target is hit?
That assumes we're doing it the old way. So, if you looked under the covers in TechOne, we've broken our whole ERP down by solution, by product, by module, by business process. So you, you would've seen Loretta stand up here and say, "That's the product over there, and there's the business process." So imagine there's 150 process tribes in TechOne. That tribe has got no managers on it. That tribe has the developer that writes the code, the pre-sales person, so one of these people that demoed, that does the demo, the consultant that implements it, and the support person that supports that business process. And at every implementation, when we finish one or come up with issues, that team goes, "What are the one percenters?
What are the 1% things that I can make, either in the consulting implementation, the code, and feedback loops, to go back into that one process?" So you can imagine, just say, the implementations today are taking 300 days, and you're seeing that for a fact. That's built up of 150 process tribes down to all their days, and it's the 1%ers. It's the 1%ers right at that, sort of that building block that gets reduced. And they're all at different times and different roadmaps and all of those type of things, and it's a lot of 1%ers that drives the days down. Do you want to add to that?
Yes. I don't think we're putting any additional stress on the consulting team. What we're doing is we're trying to learn from them and embed that back into the product, so the product will solve the problem. But we've got to get that IP out of them into the product. That's part one. Part two, what we've done is we've tried to stratify our delivery. So through SaaS Plus, there's a lot of work that can be done that's very repeatable, very predictable, very simple. And so that's why we built the Malaysia offshore model. So we've got 120-odd people over there that can do that work while the consultants are sitting here doing that little you know, the complex part, that mission-critical on-site work. And so you get a different cost component. So splitting up 120 people to do the other, you know,
Repeatable.
More simplistic, repeatable work is really taking the pressure off of the people on site.
Jerry, question there?
Hey, Paul here. Just in terms of implementation, could you maybe, like, define that a bit for us? So, like, typical customer onboarding, you got to do, like, logins for all the employees. You got to set up your billing, probably data migration, and then, like, employee training and the like.
Sure.
So what, what of those tasks sits in the 30 days for TechOne, and what sits in the, like, 60-90 for the customer? Just to-
Yeah.
Yeah.
Yeah. So the traditional implementation design, of which you kind of stepped through a little bit there, of, you know, an awareness phase, a design phase, a data migration phase, a test phase, they're all traditionally there. All we're doing—trying to do is truncate it down to its simplistic point, because I don't need now... Imagine a world where I don't need to spend a traditional 3 months to do data migration. With the tools that are out there now, using AI, I can do data migration very, very fast, right? And far more accurate. You just, you just have to look at it a different way. What usually used to take us 2.5 weeks of training, I can do in a day now, because I can give it to you, and you absorb it when you want, right?
So yes, you're still going to have to do that, UAT. You can't get around a UAT, but I don't need to be there. And so it doesn't take my man days to do that work. So it's just, you're just basically looking at the same constraints that we've built over time with the traditional software implementation, and we're looking at what component do we need our time on? And of all the other components, how can I speed you up?
So-
But we're not changing the methodology.
Yep. Secondarily, we would usually, if we had to configure a workflow, we would configure two out of 10 workflows with you to show you and then say, "Now, you can configure the other eight." So traditionally, it was a we teach, you learn, so then when we walk away, you can just keep configuring for your business changes. Now, it's so pre-configured, we don't have to do any configuration because we know all the workflows in a specific, you know, business process. You just have to maybe give us your delegations or something along those simple lines.
So our vision in the 30 days is, when you sign a contract with us, you'll get a wizard at the beginning, and that wizard will say, "What's the vertical? What's the size of your organization? What region are you in?" And really, less than 10 questions. It's pre-populated. Now all you're doing is data migration and training.
Can I ask a quick follow-on? So, like, so core financials-
Yep.
Yep.
- 30 days, but if I decide, "You know what? You've convinced me that your whole platform's amazing. I'm going to buy every module.
Yeah.
Like, is there much of a difference between just doing, like, one module and, like, all of them in thirty days?
Let me clarify.
Is 30 days, like, a promise on a defined amount of product?
Let me clarify. It's all in 30 days. So the whole thing in 30 days, excluding Property and Ratings and Student Management.
... Hey, guys. Just in terms of SaaS Plus and taking on that risk of implementation, like, how do you guys go about, you know, potentially quantifying that risk for your business?
Do you want to talk about Blackpool and how we learned, Stuart?
Yeah, I guess, a risk is perception in the first instance. I think, Ed talked to, before. I mean, we've done hundreds of, hundreds of implementations. And we're sort of narrowing the scope of those implementations to get live as quickly as possible. So, so I think from a risk point of view, your perception might be slightly different from ours. You know, we've done it before. We have the muscle, and to the extent that one might go poorly, we actually have a huge R&D team who can make sure that it doesn't happen again. So, yeah, I think from that perspective, I'm relatively comfortable.
We built in the model that the first few would go poorly because we're going to learn. But that IP engine that we've shown you before, the Finance One, we needed that IP to come back in to improve the process. We've got around 50-70 customers now from SaaS Plus. So we, we've got scale. We understand what's going on. You also have to understand that U.K. is probably six months ahead of Australia and New Zealand. And so if you have time with Leo, he's been living in the world of SaaS Plus for more than two and a bit years now, and it's differentiating us. That's why you're seeing the growth, but also that consistency in our delivery.
We talked about starting this idea five years ago, right? What we didn't have back then were the ingredients we have today. So CiA was only half finished, customers were still half on-premise, half on SaaS, and we just hadn't had the fixed time, fixed price muscle, because that's what a SaaS Plus deal is, right? But, I don't know if you heard Cale say that because we didn't have a brand in the U.K., the U.K. implementations had been fixed price for a very, very long time. So we've been taking the risk in the U.K. And because of that, we did the skunk works with Blackpool.
CiA is finished, all the customer on SaaS, we've got all the ingredients, and so it all comes together, and that idea from five years ago is now a reality. Now, Stuart said we've sold 70 or 80 of these customers. I think 20 are live.
Yep.
And they did it all within the time and scope that we delivered. So look, we're always going to find issues, and we're going to have to adjust and pivot to those, but we're very confident that we can address all of those things and deliver great outcomes for our customers. A question over here?
Yeah. Hi, guys. Thanks. Just going back to that implementation time, you said before, you could do a whole lot in 30 days, Stuart. So customers have what? Seven, eight products on average.
Yeah, but not initially.
No, okay. Initially.
Yeah.
The question is, how much initially? Is it three-four?
It's three-four. So it's financial Supply Chain and probably BI or something like that as initial.
Okay. So does that mean, theoretically, you could get it down to, I don't know, whatever two days?
Is that where you're going? No, we'll stay with the 30, thanks.
two days, two days times four is eight days.
Yeah.
It doesn't work that way.
It's diminishing returns, right? So technically, you probably could, but that's somebody else's problem for 20 years from now. But it's an aspirational goal. The market is beyond surprised by it. We see a path to get there. I think we've already called the date that we'll be able to achieve, right, Chung? Yep. So we-
You said it at the last roadshow.
Yeah. I know how confident he was. So we've said when we'll get there, and so it's aspirational enough. And it's already differentiated us in the market, so our customer base is absolutely loving it, yeah. Sorry, just to clarify, it is the only way we sell. So we don't give the customers any options. It is the only way we go to market now.
Yeah.
Questions?
Hi, it's Elise. Thanks for the great day. So that's great if you can increase the implementation time, increase the velocity.
Yeah.
How are you going to scale up the customer sales process, so you've got more in the funnel to sell?
How are you going to do that, Chung?
Well, how are you going to do that? Cal, what are your thoughts?
Invest in the sales team.
You heard it here. We've got a very strong pipeline.
Yeah.
So we've got something called the Rolling Four Quarters. So we can see out four quarters by vertical and by region, and so we know what's already being built out. So you'll see in some regions over the next 6-12 months that we're going to scale up because we can see the demand coming through, how we have that visibility. But we've got the size of the team in our... Let me take one step back. We just finished our strat plans for next year, and so we know the size of the team that we need from sales and marketing and delivery to be able to achieve the goals that we've set for. So it's not something that is going to be a surprise to the system. We've already built it into our models.
I mean, sorry, do you have to actually increase the sales time, like the process time, like the sales cycle, to match the implementation timing slot?
I don't think our sales cycle has materially changed. You know, I think a new logo still takes 12-18 months, and I think a traditional customer with an NRR, depending on the size of what they're trying to do, is somewhere between a month and four, you know, depending on what it is. So I don't think SaaS Plus has really changed the sales cycle, but it's given us a differentiator, a probability of success materially higher.
Thomas?
Thanks, guys. Been in the U.K. for a long time, made an acquisition-
Yeah.
-years ago.
20 years. 20 years we've been in the U.K.
Sort of strong foothold in-
Yeah
higher ed space. A lot of activity you've discussed recently in terms of LG wins over there. Can you just, you know, there's sort of not been a great deal of specific U.K. detail in the, in the sort of presentation today. Just, just keen to get your views as to, you know, where we actually are in getting traction in the U.K., and that being on a trajectory that you can sort of comfortably, you know, share the same detail that you have today and, and, you know, what the sort of life cycles looks like-
Life cycles
or if there's still a lot of heavy lifting to do before-
Yeah
You know, we're there.
Yeah, we still have very low sort of brand recognition when you compare it to Australia. I think last published ARR was about GBP 30 million, wasn't it, for the U.K?
Mm-hmm.
Total ARR for the U.K. So, probably one thing. If you take a big step back, U.K. is important, but it's more medium to long-term, right? So we can continue to grow and hit all of our numbers without U.K. firing. Now, I'm not saying that I don't want it firing. Of course, we want it firing. Do you wanna talk about the three or four things that have come together just recently?
Yeah.
And then, you know, causes the flywheel effect.
Yeah. If you look at the U.K. for us, I would say that our brand has become known and differentiated in the last 12 months. I think we've stepped up materially in the U.K. Our rolling four quarters is fantastic in the U.K. as a result of that activity, and I think it's a couple of things: I think it's SaaS Plus, I think it's referenceability, and I think we've been aggressive in the market as well, so we've had that confidence. That's as a result of the localization being complete. All of our products are localized now for the U.K., and so we've got... We don't have any constraints there. We've got massive employees, so we've got about 130 employees there now, and we've got about 120 customers. So you see those three things coming together.
We've spent significantly more in marketing there over the last two years, and every year we've doubled it in size, the marketing spend, to be able to get that brand awareness. As a result of that, you can see it all coming together, and we're at a place where I think, I know these two gentlemen in front of me asked me the question at least three times to test me. I'd say over the next 18 months, that flywheel will really be turning in the U.K., where it's really running, right? I think we've embedded the culture of TechOne over there. We've got the maturity of the management team. We've got a sales force that understands us. We've stratified the sales force there, too, which we've never done before.
So we have a sales team only for local government and a sales team only for education, so they're focused, hyper-focused, and we've got the pipeline to be able to deliver. So it... We're in a very exciting place.
Kerry?
Thank you. So just a quick follow-up on that question. Ed, you kind of mentioned before that you made a point of saying that you're only really in two regions. You know, are there plans in the near term to expand beyond, say, you know, U.K., unless you're going harder in Fiji, I'm not sure, but-
The point I was trying to make is we got so much opportunity in front of us, and I maybe dropped a little bit of the U.S. I'll be dead before TechOne goes to the U.S., but,
Dead's a bit-
I'll be dead. But I'll tell you a story. I'll tell you a story. Just before COVID, we had what? A skunk works looking at the U.S. We were starting to complete tenders, and then just what? Guess what? COVID happened, so we pulled out. But since then, we've realized with all the hard work and investment, not only Australia but in the U.K., the opportunity is massive. And so the one thing I think you'll find about TechOne is that, compared to the massive multinationals, we still are small. And so we've got to hyper-focus our precious R&D resource and the whole team on where it matters. And so that's the U.K., to be honest. So APAC, which is ANZ, a little bit of the islands, Fiji is our customer, but mainly focused on the U.K. for that extra regional growth.
You know, I answered it kind of a different way, too. So again, we do strap lines five years. We're just finishing off the next five-year strap line that we do every year. There's no reference in that five-year plan for another region. The way that we look at it is, we deserve to be there. Our product and team have done the work, that we deserve to be there, but we don't need to be there. The TAM is big enough, the roadmap is strong enough, the pipeline is strong enough. We don't need to chase. And so from an investor standpoint, we're not gonna put the company at risk because we need it to be successful.
How much time do we have before we have to wrap up? 10 minutes? Question over here.
Thank you. So I just wanted to ask on those terms for relative sizes of TAM for different products. I noticed that some of the bars are very big, like, for example, Supply Chain-
Yeah
... Machine Management or Asset Management compared to something like P&R. But I always thought that P&R is your most expensive product-
Yeah
... so I expected a much larger-
Yeah
... bar there relatively. Is it just because of the verticals, kind of personal verticals or?
Yeah, I can sell EAM to everybody. I can Property and Rating to local councils. So as a product cost, it's much higher, but I've just got more people I can sell it to, so that's the difference.
Sorry.
Maybe just to follow up on the U.K. market. Obviously, you know, SaaS Plus and so your implementation costs, it sounds like you've got a massive advantage from a pricing perspective. Like, how are the multinationals and your competitors in the U.K. responding to that? Or are they responding at all?
Do you wanna-
I mean, it's probably a really good question for Leo that we should take offline, but from what I can see, they're not responding. Because they can't, and I don't think until we get something really big, a very, very big council, like a Manchester or something, that it's really gonna take notice. We are in line to achieve our goals related to the different types of councils in the next few months, and that's something that we've been working on for, what? 2.5-3 years. And so we are getting known. The problem is, even when we get known related to the competitors, they don't have a way to compete against us. I'll give you an example in a different way to answer your question.
Tribal, we're going absolutely after, and we're taking their customers away. They've now come to market and said, "For one fee, you can have all of our products." Right? So the scorched earth.
It is scorched earth.
It's... Yeah.
Yeah.
And so they're being that reactionary now to try and just maintain that, that customer base, which is not gonna be successful, but that's how concerned they are.
Scorched earth is a good term. That's a terrible thing. So you give away all your products to your customers, you've got nowhere to go. You can maintain them, but then you're dead in the water in a few years.
They're becoming very reactionary.
Yeah. Yeah.
Local government, we're probably not yet there yet to see an Oracle or an SAP really fight back yet, but just watch this space.
... Just another quick update, just in terms of M&A strategy for it. Is that something that you can give us a bit of an update on the outlook?
Yeah. I think if you looked at the maps that Stuart showed, you know, you looked at a council, you flipped it over, you looked at a uni and flipped it over. The systems, the products that we're in now, as you can see, we've either got two opportunities, don't we? We can build that product or acquire the product. So nothing's changed in our M&A strategy in terms of one, we're conservative. Two, it has to give us IP, and one of those things was IP. That was a product that we don't service in those markets. Got to meet our financial metrics, look at the culture, all those things. So it's all still there. We look at it quite often, but we'll be careful with the money. Yeah.
I was just gonna say, I asked Kyle what some of the sort of conversations you had outside, and it was perhaps the dip in or that model, but we are gonna grow PBT in line with the targets that we put out there. Stuart, was there any sort of themes that came out when you were at lunch?
Yeah, no, the theme for me that most people wanted to talk about was SaaS Plus.
Yeah.
It is so exciting. It is differentiating us. It, it helps us, right, in multiple ways, but it also helps us from an NPS, because we're setting an expectation and being very clear on its delivery, so the NPS will increase. It's helping us from an eNPS or employee NPS, because this team is involved in something that's groundbreaking. It's not just the same old, same old that everybody else is doing. So you can see that just the energy is being lifted up. It's a challenging conversation because it is 1,000 different problems that need to be solved every day, so it's really meaningful. And you can see that it's, it's helping the business in so many different facets. That's the kind of thing.
Yeah, thanks. Chris, up here, had a question?
Property and Rating is the one product you don't have in the U.K., and as you highlighted, it's a key trophy product for you in Australia and has got you great market share. So I'm guessing in the U.K., you've got to lead with financials to get into local government.
Yeah.
Is that a strong enough product on its Property and Rating to get you a strong market share in local government?
I think we've been somewhat successful in local government in the U.K. SaaS Plus is one of the things that will make us more successful. I think Stuart was talking in code. There's different tiers of local government that we have been targeting for some time, and they're just around the corner, and that's Property and Rating, Chris. so as our brand reputation gets better, as we deliver, get reference sites, as we have SaaS Plus, all those things will also make us help us be successful in U.K. local government.
Do you think you'll ever Property and Rating type product in the U.K?
Yeah, we may. We may. Takes time. Josh?
Good day, and thanks for hosting today, guys. Just a question on the DXP sort of roadmap. We got to see some of the product out there, which was great.
Yeah.
Can you just give us maybe a little bit more of a detailed timeline of when we should think about first, you know, early adopters-
Yeah, okay.
and then in terms of contracts for those
Okay
for those sort of customers.
Do you wanna take that?
Yeah.
Yeah.
So we're already there, Josh. So we've passed that already. So for DXP LG, we probably went to general release 18 months ago-ish, after probably three years of working in the labs. It was interesting, Ed and I were sitting down thinking, "We should really celebrate with the team when we cross that $1 million milestone in ARR." Well, Loretta told me today we're at $3 million. So we left that one behind.
Yeah.
And we're already 20+ customers. It's just becoming part of the system. It's selling itself, and we barely spent any money on marketing. But it's kind of that last piece of the puzzle that nobody offered. It's that actually. You saw it. It's that ability of communicating with your ratepayer in such a simple way, what we call Google the outcome experience, that it's already happening. On the Student Management side, we're in early adopter phase right now. It's a complicated one because of what a university tries to do, but we'll get out of early adopter probably in the next six-nine months, and then we'll bring out the first modules in general release.
But that product will probably take three-four years to get to where it deserves to be, and we'll just do it release by release by release, adding more and more functionality into it. There's a massive roadmap for it for the U.K. It is one of the reasons why we're taking out the competitors, because we're bringing it in as part of the offering of... That nobody else can do. So you can see it helping differentiate. And on local government, I think we released the first three phases.
Yeah.
So there'll be another three releases after that. That will probably take another two- three years. Software guys always build more, so there's always-
Yeah.
But it increases the TAM, so it's a good thing. But the success of local, of DXP LG has been fantastic. It really has surprised us.
It's hard to explain. I think there's probably at least three occasions where either a mayor or a CEO visiting a customer of ours with LG DXP has said: "I want that," but then they have to take the entire product suite to get LG DXP.
Okay. I'll go on a bit of a tangent. So one of the problems with LG DXP is we had to build a knowledge base. And to build that knowledge base, we had to take all of your information from your websites and bring it together once, which you saw when you scrolled down and you saw that. So that, somebody had to do that. That usually took three-six months to do. And our next release, I think, in the next release, Jenna? The next release will be building a product leveraging AI. We'll be able to do it in a day, right? And so what we're doing is we're able to take AI, bring all that together, and build your knowledge base within a day, so the rollout is even that much faster. Got another question?
We've touched a lot on sort of new customers, but obviously, Net Revenue Retention and your existing customers is mathematically the most important.
Yep
-part of your business. Can you just spend a little bit of time talking to us about the framework on how you manage your sales and support staff to make sure you keep your, net revenue retention up and they concentrate on?
... or at least spend a reasonable amount of their time on that, rather than just chasing new logos?
Yeah. In fact, it's probably the majority of our work is done on net revenue retention, and we don't really chase that many new logos, Nick. Probably since, I don't know, for as long as I've been here, for as long as you've been here, new logos always been about 50 a year. There's no rhyme or reason. We always win 50 new logos a year, but it means that most of our revenue comes from net revenue retention. I suppose it's in the D&A of everyone in the company, Nick. It starts from having a customer account manager in every region, owning 10, 10 sort of existing customers and maybe targeting four new ones. But it's in their D&A to keep the customer happy, because when the customer's happy, they'll buy more products. It's in our consulting team.
By getting implementation successful and making customers happy, they take more products. It's in the support team. So it's in our D&A, Nick. Most of what we do is focused on the existing customer and net revenue retention. Of course, new logos are important, but we do about 50 a year. Just happens every year. Would you add anything?
No, that's right. We're not very good as a company in prospecting. We're better at nurturing-
Yeah.
It's just the way we've been designed. It's a classic ERP, right? So we're really good at nurturing that customer base, but we let the brand and the product itself acquire the new logos. But you won't ever really see us go to market for new logos. It's more of awareness within our customer base.
One thing I wanted to say from some consistent feedback or questions I had out at lunch was, how good our product is. We are so, pumped and excited about that product. That was a day in the life of demo, right? 30 minutes. As I said, if we, you know, got shortlisted for a tender, that would be five days of pure demo, you know, going very deep into the products by that pre-sales team that you saw there. It's hard for me to explain, how good it is in terms of not only the UI, but the integration and how everything's connected. Now, if you saw the opposite, then maybe you'd understand.
If you were starting at a dashboard by Tableau, one of the things you put there, they have to extract data and report on data. That's great, we all do that, but you can't click and drill and keep going down into transactions like Harry showed you, you know, looking at asset conditions. It's impossible. And then not only that, your one interface jumping to another interface is almost impossible. And then you saw Charlene there do the work with Lisette, and she did the timer and time sheets, magic happened. None of that happens unless you're in a fully integrated ERP, Spatial, embedded. That's crazy. You'd never see that. You'd have to punch out to Esri somewhere else with a different login and different interface and be lucky to have that connection. So it's really hard to explain how deep, how powerful, how seamless, how connected that ERP is.
It is quite magic. Any final questions, folks? Lewis?
Thanks. So if we kind of rewind, when you sort of made the transition from, you know, the on-prem old school revenue model to the SaaS model, you were able to manage that kind of quite carefully-
Yeah
... to ensure that you didn't have an earnings hiccup on the way through.
Exactly.
You know, as was kind of the biggest risk then. As we move to SaaS Plus, you've put 12-16 PBT growth target out there-
Yep
You know, as the kind of guide rails for us to think. So can you control the timing of the customer SaaS Plus journeys to enable you to manage that? Or, yeah, do you see that the customers kind of pick that journey themselves and... I'm just trying to understand how you manage risk around that.
Yeah, yeah.
Confirming that 12-16 embeds the margin drag, I suppose, that you will have from the-
It definitely does.
... SaaS transition.
Definitely does. So just if you focus narrow in on this year, AUD 12-AUD 16 is our PBT guidance, and we will get 1% PBT growth, even factoring in SaaS Plus, right? So, nothing's precise. Nothing's precise. We learned how to do it through the license fee to ARR generation. And what we see is when we come to the end of the year, we know the projects that are already locked in SaaS Plus and the ones that we have to deliver next year, right? So we've got this locked-in revenue, and we can see the potential drag, if you like, and so we can make our investment decisions built on that. Now, no deal signs on the first, and therefore, we can see the end-of-year PBT. They all happen through the year.
So as we manage through the year, we can just make investment decisions. These aren't earth-shattering like they were in the license fees, but we can maybe slow things or speed things up, and that cycle just continues. So we will manage it carefully, and we'll deliver our PBT growth and our margin growth to a lesser extent, because we've got to, you know, take the impact of SaaS Plus. Well, thanks, folks. I think we're right on time. Thank you for attending our first ever Investor Day. I'd just like to thank, once again, the people behind the scenes that made all this happen. Thank you to Stuart, thank you to Cale for presenting.
Thanks to the SLT, and thank you all for making the time to come, mostly from Sydney, I see come up and visit us here in our hometown. Thanks again, and we'll see you at the full year roadshow, if not before. Thank you.