"After reaching annual sales of $1 billion and succeeding in doing in three years what we planned to do in six, we recently decided to update the strategic plan I announced when I became CEO at the start of 2014. The plan now has a new name, 'NICE2b', meaning a sales target of $2 billion," NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) CEO Barak Eilam told "Globes" as the company released its 2016 financials.
Since Eilam took over as CEO of NICE, which provides customer relations and risk management solutions, he and the company's management have been busy. Last May, NICE bought US company InContact, which provide cloud computing solutions to customer service centers, for close to $1 billion. The acquisition was one of several strategic steps that NICE has carried out in the past eighteen months with the aim of focusing on enterprise customers.
Among these steps was the sale of the company's defense and security activity in two deals, to Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) and to Battery Ventures, and in early 2016 it bought US company Nexidia, a provider of advanced customer interactions analysis solutions, for a total of $135 million cash. The two acquisitions contributed to a rise in NICE's sales, and Eilam expresses great optimism about their future contributions to the development of NICE in the coming years: "In my view, one of the tasks of a CEO is to look as far ahead as possible. When I took up the post of NICE CEO three years ago, we announced a strategic plan that we called 'NICE 2020', in which there were very many elements. During the time since then we peeled off the layers from it one by one like an onion.
"We managed to proceed with our plans much faster than originally scheduled. In organic development, we focused on well-defined areas, such as cloud and analytics, and in the past year we made two significant acquisitions, Nexidia and InContact."
How is progress on the integration of InContact?
"Excellent, and it is fitting into our strategic plan well. This company was in our sights for at least a year before we bought it.
"I very much believe in setting aggressive goals and so we set a goal of doubling revenue. That focuses everyone on a certain vision. Of course there are many more elements to the plan. We believe that, following the changes we have made in the past three years and last year's acquisitions, we are now in the markets where, if we carry out our plan in the best possible way, we can reach this goal."
Which markets do you mean
"Cloud, analytics, and omnichannels. This means that the markets in which the company is interested are much bigger than they were with its former activity. We believe that we can now connect the worlds of cloud and analytics."
"For example, when you serve your customers via the cloud, their data goes through you. You have much more information about them and belonging to them, and so you can carry out analytics on the data at a higher level. Today, we provide services to the vast majority of the Fortune 100 companies and to about 75% of the Fortune 500 companies and we can give the customers very many services based both on information analysis and events that occur at other NICE customers."
"Take financial fraud for example. That is something that is developing all the time. It's an unending war against the various kinds of hackers. Every day, we block fraud attempts amounting to tens of millions of dollars, and if we spot fraud at one customer, say a bank, we can immediately warn other customers and implement appropriate changes and protection.
"This is one possibility of exploiting the combination of cloud and analytics. We call it 'wisdom sharing', the ability to join ideas together. And of course this can be exploited in customer service as well. So every customer that joins this community and adds and contributes information can benefit from and utilize the accumulated knowledge at NICE that comes from other customers. In the past, development of a solution for a particular customer could take years. Today, that has shortened to a few months, sometimes a few weeks."
Are there still customers that have not switched to the cloud?
"From the point of view of implementation, we are still at the beginning, since at many of our customers there are still solutions that are very very critical for them that were created and developed over many years and are installed with them. A change is underway, but from the point of view of percentage penetration we are still at the start. The growth rate is very rapid. There's a huge market to conquer. We are well placed for expansion."
Will the $2 billion sale target be reached through acquisitions?
"We are of course examining possibilities on the market all the time, but we are not opportunists. The acquisitions serve the strategy, not the other way around. Before we closed the InContact acquisition, I was in touch with the company's CEO for eighteen months. I believe that you should be in touch with as many people as possible in the industry. It can only help."
Have you set a date for reaching the new sales target?
"No. We have our internal calculations. I believe that we have built trust vis-a-vis the investors. We have no specific date, but we are putting this target in front of our eyes. Our investors understand our markets and the opportunities available to the company and they know how to evaluate what we say."
Published by Globes [online], Israel business news - www.globes-online.com - on February 16, 2017
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