This evening I read that Auto Windscreens had entered administration and that the situation was so bad they have had to cease operations immediately, threatening 1100 jobs.
Last year Technology Management bid as part of a consortium to implement a new IT system at Auto Windscreens. We didn’t get the project because the partner doing the system to plan and control the windscreen fitters did not have the best solution. If the partner had gone with our recommendation of Microsoft Dynamics CRM we'd have probably won the project, but ultimately it wasn't our decision. We were disappointed but chalked it up to experience and moved on.
So was it a lucky escape for us? No, I don’t believe it was because it was obvious from my viewpoint that the administration of the company was in dire need of overhaul. Service companies like this are totally dependent on having the right stock in the right place at the right time to win each job.
When you need a piece of glass you generally don’t want to wait because if a competitor can do it quicker you’ve lost. This leads to a tendency to hold thousands of stock lines ‘just in case’, which ties up vast amounts of cash. But if you don’t have fast and accurate reporting on what is happening you tend to end up tying up cash with the wrong parts that never move.
That this is the root cause of Auto Windscreens' failure was confirmed by the administrator. Deloitte cited cash flow problems – caused by lower-than-expected sales revenues at the end of last year - and delays in putting a new IT system in place, which was part of a major restructuring.
Which confirms our thoughts that however big or well known you are, getting your IT systems supporting the business correctly is no longer optional – it's mission critical. If you delay or get it wrong it may be that there won’t be a business left to support.
It's a chilling story that reminds me to work as hard and smart as possible for all our clients.