Tighter govt purse strings hurt Objective

Aussie software vendor Objective Corporation said government reorganisations were partly to blame for its below-expectation Asia Pacific results announced yesterday.

Aussie software vendor Objective Corporation said government reorganisations were partly to blame for its below-expectation Asia Pacific results announced yesterday.

Helicopter

Despite a lacklustre performance in the Asia Pacific, Objective has found positive news for investors in its Defence contract extension. (Helicopter image by DVIDSHUB, CC2.0)

"A contributing factor was the impact of the reorganisation of some state government departments, particularly in New South Wales," the company report said.

Over the past year, NSW has been reorganising its 160 departments into 13 super-departments in an effort to minimise service duplication and drive savings through coordinated procurement.

The massive departmental restructure came after the NSW Government was continuing its coordinated IT purchasing program known as People First.

The People First program recently underwent a progress audit, with auditor Ernst & Young delivering its report to parliament yesterday, according to The Australian IT.

New South Wales is not the only government undergoing an IT consolidation, however. The Queensland Government had been conducting a similar super-departments scheme, and had also been attempting to consolidate its IT procurement and implementation through various reform projects flagged in 2006, only to suffer major setbacks in the roll-out of payroll systems for Queensland Health. The ensuing payroll disaster led to Queensland abandoning the ambitious shared services dream.

Tony Walls, Objective's chief executive officer, also noted in the company's results presentation that weak foreign exchange rates between the Australian dollar and that of the UK and New Zealand had contributed to the low revenue and earnings results in the two markets.

According to Walls, however, the malaise has been affecting enterprise software vendors around the world.

"Government reorganisations, expenditure review committees ... and a cautious predisposition to delay projects has impacted on operations. Subsequently, Objective has experienced softer software sales than anticipated," Walls said.

Despite these concerns, Objective found good news for investors in 2010 — solidifying its relationship with the Australian Department of Defence.

"Objective is working closely with Defence to upgrade its current software to Objective 7.5," the report added.

Originally signed in 2000, the $10 million contract extension will see Objective supply electronic document storage and records management software to Defence over the next five years.

Walls said that Objective remains "cautiously optimistic" for the year ahead, flagging that the company may bolster its stable of products and services through future acquisitions.

"The company continues to consider strategic acquisition opportunities that will add to our existing capabilities and provide opportunities for all stakeholders," the report added.

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