Anittel's Ilkka Tales talks to Leon Gettler

Fast growing ASX-listed IT services provider Anittel has a rigorous policy around research and development.

The company's former chief executive officer Ilkka Tales says the company devotes 1000 hours a month to development of products and services. It means making hard decisions and choices, something that every strategy requires.

“We have more than 160 engineers,’’ Tales says. “The question for us is taking their time off from billable type of work to focus on services and product development. In our segment of the industry, it becomes a challenge because the prioritisation is for revenue generation rather than product development per se.

“The norm within any business is that revenue generation is the number one priority. The development side gets left to second priority. We have changed it slightly within our business.”

One of the most radical measures at Anittel was to appoint someone to work as a champion of research and development within the company. “We have one person responsible for development,’’ Tales says.

“He is responsible to a certain degree of approving development work. He is responsible, along with our CFO, for making a business case for a product offering or a service.

“We do the analysis, prepare the business case and then roll that through as a project in its own right. We then measure the success of the outcomes of that project.

“We get the best and brightest working on it and he approves their time spent on it in the same manner that we do for a particular project. It’s the same process basically. He is an internal client and at the end of the day, he manages product and service development for us.”

Tales says the best research and development ideas come from three sources. “They come from your customers, your staff or your suppliers and parties you do business with. Those are the sources of value creation in time of innovation of ideas. It doesn’t happen in a technical sense.

“If you look at the whole value chain, you have product development, you have channels and you have got technologies as part of that mix,’’ he says. “Most of the value gets created at the financing end. So it’s about being able to package your service very differently, or being at the brand end, being able to market your services or products differently, whether that’s through channels or brand pricing at that end of the mix.