Building a Southeastern Tech Contender
Birmingham-based CTS Inc. has grown up with the IT business — from turnkey software development to the latest in data mining and business intelligence — becoming one of the leading IT consultants in the Southeast.
CTS Inc. CEO Larry Lilley says he’s considering expansion into Texas as his next move, maybe in 2015.
Larry Lilley is the CEO of one of the leading IT consulting firms in the Southeast, Birmingham-based CTS Inc. Computer Technology Solutions has grown in the highly competitive, rapidly evolving enterprise of software consulting from a three-man founding team to more than 200 employees in six offices across the Southeast.
Competition for technology talent is one of the challenges in the IT sector, and CTS's success on that score put the privately-owned company at the top of the mid-sized bracket in this year's Best Companies to Work for in Alabama analysis, an annual recognition presented by Business Alabama and Best Companies Group.
We started in Mobile in late '93, but it was sort of a hobby for us until '95, when we all decided to quit our full-time jobs and give it a go. There were three of us back then, Bill Fenton, our vice president of engineering, was one of the founders, with myself and one other gentleman. Bill was working with Litton Data Systems and I was with CPSI, in Mobile.
It was a time when decentralized computing started to gain traction. Client-server computing was the hot topic at the time. Many companies were just starting to put in networks. With the personal computer and network capabilities for computing on the desktop in the mid-90s a different niche in IT consulting was starting to take hold, with the emergence of peer networks and distributed applications.
We were always a service company and building turnkey solutions, with a proven approach to building software. Software development and the use of appropriate methodologies was a little immature back then, yet we were developing solutions with a methodology and approach that met schedule and budget constraints.
We found by the mid '90s that we needed to help with the complete gamut of information services, from software development to setting up a network, the overall solution architecture. Our service offerings are still geared that way. Specifically — application integration, business intelligence, portals and collaboration, quality assurance and software development.
Application integration continues to be a big demand. Companies buy systems to run their business units, and often those disparate systems don't integrate. We create a layer to share common data across disparate applications without having to hardwire the interfaces between them.
A good deal of new growth is in business intelligence. Companies will have disparate systems with very valuable data but each housed in separate units. We are able to aggregate that data in a fashion that questions can be asked and answered to reduce cost or increase revenue.
At a high level, our business intelligence services really include all aspects of data warehousing and reporting, as well as big data, a new field within business intelligence. Our services span all aspects of business intelligence. What is the information a company wants to know about its customers? We have a process that helps them delineate that. Planning, mapping data to ETL (Extract, Transform, Load), extracting the data, scrubbing data and transforming it into the format they need it — visualization and reporting.
Some of our larger clients are made up of a number of operating companies located in Alabama, Mississippi and Georgia. Each of those operating units is buying supplies from vendors across the corporate footprint. We can enable them to extract that data and roll it up into a warehouse and show trends across all operating companies. A company with a wide geographic market is a perfect model for data mining — where you are able to look across the enterprise and analyze on an enterprise level.
Our first branch office was in Mobile. We have a delivery center in the technology park at the University of South Alabama, with about 40 employees, which opened in 2005. That was our first geographic move beyond Birmingham, a big delivery center. It provides services to our other five offices, which also have sales and delivery functions. Often a big portion of work can be done remotely. Atlanta opened in 2008, and then Charlotte and Chattanooga were the next two, and Nashville opened in December last year.
When we select a market to move into, the decision is heavily influenced by the fact that we have an existing client in the market, because we prefer to serve clients locally. IT consulting is not much different than an accounting or law practice in that respect — it's relationship based. Then we look at target clients and whether their decisions are made locally. And we look at the universities, the number of graduates and students entering programs, to determine the volume of local talent in the competing landscape. Then we look at the competition and we consider what makes us different among those competitors.
There are a number of things that make us a little unique. One is that we prefer not to travel. We serve clients locally. Although there are enormous opportunities across the country, we focus on those territories where we have offices, the Southeast. Some companies will fly in for a couple of weeks and fly out. Beside the savings on the cost of travel, the advantage is being able to take on a different relationship with our clients. It's just a matter of the richness of communication when you're face to face, to derive the requirements for a solution, for a system.
Additionally, we still do turnkey, fixed-price work, which is rare in the IT consulting space. Most companies have moved away from fixed-price engagements, because often clients don’t fully know what they want until they see a solution and business requirements and technology change at a rapid pace. Because we serve clients locally, we can deal with the dynamics of rapid change.
We've grown by about three and a half times compared to five years ago. We've opened three offices in the last two years, and, not relying on external capital, we're limited in our ability to expand into new territories for the next 12 months. We're focused on getting our newest offices up in terms of revenue, and, once we get those where we want them, we'll look farther West, into Texas, in Houston and Dallas, where we already have client relationships. That expansion will likely be a 2015 initiative.
Chris McFadyen is editorial director of Business Alabama.