Cellnet’s turnaround man

The legal profession is a long way from IT distribution, and Adam Davenport has been involved in both, these days preferring to be at the ‘coal face’ of business as the managing director of ASXlisted national IT distributor Cellnet.

Davenport, the former country manager at Kanbay, was hired in June to take the reigns at the national distributor, already completing the first stage of a reorganisation of the business that melded together its IT Wholesale (ITW) and Cassa business as well as the audio-visual and telecommunications accessories divisions.

In an increasingly tough IT distribution market, Davenport is charged with restructuring Cellnet in order to reduce operating expenses and position it as a strong player in the market against the likes of distribution behemoth Ingram Micro.

Recently, Davenport was forced to retrench 40 staff at the distributor following a lower-than-expected profit result for the 2004-05 fi nancial year. Despite a 30 percent increase in year-on-year revenue, Davenport said he "had to address profit issues".

On 9 September, Cellnet Group reported an after-tax profit of $6.1 million on revenues of $586 million for the financial year ending 30 June.

The company had previously forecast net profit after tax of between $7.3 million and $7.5 million.

After completing a law degree at Sydney University in the mid 1980s, Davenport started his legal career as corporate counsel Asia-Pacific with USlisted advertising agency Leo Burnett Advertising before he started to dabble in the legalities of intellectual property (IP) and information technology at Baker & McKenzie. "I was originally a lawyer and graduated as a lawyer. I worked in Baker & McKenzie in Sydney in the area of IP and IT back in the late 1980s," he says.

Not surprisingly, Davenport felt that law was a difficult profession and as a result, he was keen to get into business and management.

As a lawyer, he says, "you’re one step away from people making the decisions".

One of his largest customers while working in IT law was now-defunct Wang Computer. With a passion for IT and management he decided to join the company in the role of director of corporate services around the time Wang was in Chapter 11.

"I learnt a lot about the IT industry and change [management]," he says. He then joined the Australian subsidiary of NASDAQ-listed US office products company Blue Star at a time when this industry was consolidating in a very similar fashion to the consolidation that is currently occurring in the IT distribution market and industry as a whole, he says. Small office products buying groups were getting together to get the economies of scale they needed, he says.

"We saw the small resellers still managing to do well and make their way based on long-standing customer relationships," he says.

With IT industry experience under his belt, Davenport moved to Europe to undertake the role of regional vicepresident at 3.5 billion euro IT systems and services giant Getronics. "I was based in London and Paris and responsible for the Europe region," he says.

Davenport gained a great deal of experience when Getronics acquired Olivetti’s services business in 1999. "A lot of work had to be done to develop a strategy and execute that strategy."

"Getronics asked me to go to Shanghai and I eventually came back to Australia and got the country manager role at Kanbay in 2003," he says.

He worked at Kanbay for about 18 months before being approached by Cellnet for managing director. "It’s [Cellnet] been very profitable for a number of years and has had strong revenue growth but has reached a crossroads in its strategy."

Davenport believes the IT market is at an interesting time in its history.

"The China influence is going to affect everything that we do, which will impose different pressures on manufacturers. Price pressures and the development of Chinese brands is going to make it more difficult for them," he says.