R&D central to TechnologyOne's Cloud transition

Local and international R&D hubs will help transition TechnologyOne's products to the Cloud

Enterprise software solutions provider TechnologyOne (ASX:TNE) has continued heavy investment into research and development in the half year to 31 March 2011 as the company looks to boost its internal software offerings/

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In addition to a net profit after tax growth of 29 per cent to $7.4 million on the previous period, and revenue up 21 per cent to $71.6 million, the company reported R&D expenses for the half year grew some 17 per cent to $14.9 million, representing 21 per cent of revenue.

According to TechnologyOne executive chairman, Adrian Di Marco, the figure was well outside the company’s normal target of 18 per cent expenditure and had affected its results by $2 million in the first half of the year.

Areas of investment included the further development of the company’s customer relationship management (CRM), and integration of its acquired enterprise content management (ECM) product into its Connected Intelligence (Ci) platform.

The company had also “stabilised” its student management offering, completed the migration of its performance planning product to the Ci platform, and was investing in its human resources & payroll as well as business intelligence, enterprise budgeting, asset management, and property & ratings products.

“Our sizeable investment in R&D makes us one of Australia’s largest software R&D organisations, with our R&D expenditure budget for this year in excess of $30M,” Di Marco said in a statement.

Di Marco said the last 12 months had witnessed the establishment of a new R&D centre in Brisbane, capable of housing more than 500 staff and aimed at increasing collaboration and innovation of the company’s R&D teams. That team is also planned to play a central role in the development of the company’s Cloud computing suite, C2.

“I am confident our next generation enterprise suite, TechnologyOne C2, will provide us with significant technological and competitive advantage,” he said.

“It will also provide our existing customers with a simple and evolutionary way forward to embrace new concepts, ideas and technologies, such as mobile computing, the iExperience (for example the iPad, iPhone), and the social networking phenomenon, such as Facebook.”

The company is now assessing establishing another R&D centre located offshore to help it tap into international skills and work on further development of its existing Connected Intelligence, or Ci, product. The offshore centre will also free up Australian R&D staff to focus on the C2 product.

“Our plan is to run an initial trial program over six to 12 month period to prove the new offshore R&D centre concept, and to develop the expertise, systems and processes for it to be successful and to quantify the benefits,” Di Marco said.

Follow Tim Lohman on Twitter: @tlohman

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