Blog

Delivering impact in a challenging year

14 December 2023

2023 has been about growth and overcoming challenges, Opencast chief executive Tom Lawson says in his end-of-year business review.

2023 has been a year of progress and overcoming challenges, serving as a further inflexion point in our growth story. Our previous strategy for business growth, set in 2020, was to get us to 300 people and £30m by 2025. We delivered that last year.

We've gone from being a £37m revenue business last year to more than £50m this year, growing from 400 to close to 500 people in the business. Fantastic top-line growth.

Where the story has been less strong this year has been on profitability. Profits have stayed flat at about £4.5 million, which is about the same as last year, and has required considerable collective resilience and sacrifice to achieve that.

The economic environment has been challenging for most UK businesses in 2023 and we have been no exception. The ebb and flow of project work is inherently part of a consulting business. However, a particularly large programme of work being stopped unexpectedly and in these market conditions is a difficult situation for any organisation.

Large numbers of people available and not billable presented an interesting strategic choice for us. We watched as much of the tech industry made redundancies and downsized to meet the short-term market demand. We decided to take a more medium-to-long-term view – which is that we are still a growing business and intend to be for the years ahead.

Therefore, protecting our people’s jobs and keeping them with us was an important thing for us to do this year. That meant we’ve taken a hit on profitability, but we felt it was an important choice that underlines our commitment to our people, our values and our future growth plans.

There are fantastic benefits for the individuals and the business of having time that isn’t just consumed with billable work. These include training and developing our people and supporting our programme of transformation and change. We’ve tried to balance that with understanding the challenge for individuals that this prolonged period has presented.

Any organisation expanding at the rate we have done will feel some level of growing pain as people, systems and process need to evolve. What we were already doing as we started the year – investing in systems and processes – will stand us in good stead for our next stages of growth.

Colour photo of man standing on a stage speaking
"Protecting our people’s jobs and keeping them with us was important to do this year"

Three-year strategy

We knew this year, in part, would be about reimagining our strategy for the next few years, and we have decided on a three-year strategy that runs until 2026, given the pace we are moving at.

As part of this, we've revisited our purpose, mission and vision. We’ve reshaped these and relaunched them, and also looked at our future go-to-market strategy.

We’ve asked ourselves where is the business going to go? What are we going to do? And who are we going to do that with?

Our three strategic priorities are healthcare, government and ‘interesting others’ (services and capability that we offer, but in impactful and/or interesting other sectors).

Aerial photograph of a large group of people standing outside a building
Opencast now employs nearly 500 people

Client work with impact

In terms of clients, our big focus over the last few years has been in government, along with a range of really ‘interesting other’ work. Government clients continue to dominate what we do and strategically will continue to do so.

HMRC and DWP have continued to be huge clients for us. We've been successful in getting on HMRC’s DALAS procurement framework, which is going to give us access to provide services to HMRC for the next four years.

At DWP, we're now delivering impact across six different directorates. The reputation we've built has meant that we've been able to pick up new projects in different areas.

We've consolidated our presence at the Department for Education, where we're continuing to be involved in helping shape their data governance and architecture. We have other earlier-stage relationships with Home Office, GDS, Cabinet Office, Ministry of Justice and Ministry of Defence.

We are also putting a new and sharper focus on healthcare, building on work with private health provider eConsult, and new work with medical device naming standards agency GMDN. We’re having good early-stage conversations with a range of people in health and expect to progress those next year.

We see the services that we offer, and the purpose and the impact that we want to have as a business, as perfectly aligned with the goals of healthcare organisations. We know from speaking to our people that this is an area they would love to have more impact in.

Our most notable ‘interesting other’ project this year has been investing in green energy start-up Swarm, with whom we are building a solution that will enable people generating power in their own home through solar and battery storage to maximise their returns by being able to collectively sell the power that they've generated back to the grid. At its heart, this is about the future of renewable energy supply in the UK.

So invested are we both as a business and personally that I've taken a seat on the Swarm board in a non-executive capacity, to help them with their mission.

Future technology

2023 was the year that AI came into the mainstream and most organisations have taken steps to leverage the power of these new technologies.

We are building out our data engineering capability, and helping organisations with challenges in that space is a key building block we've been investing in, and will continue to next year, so that we can help them benefit from the power of AI. We're also leveraging AI internally and making ourselves as productive as possible using the power of that technology.

Our aim is that as a business, we are impactful, secure, sustainable, and leveraging the power of AI in the way in which we run our business and through the services we deliver to our clients.

During the past year there have been great opportunities to showcase our work and the impact we make. We were a headline sponsor of TechNExt, the North East's new week-long technology festival. We put on five fringe events, including an interview with Newcastle MP and shadow minister Chi Onwurah, as well as joint talks with client stakeholders like DWP.

We are now one of the largest tech firms in the region and we take our role in giving back to the sector very seriously. We’re already planning our contributions to TechNExt 24.

Colour photograph of woman standing at a lecturn speaking
DWP Digital's Jacqui Leggetter joined us at TechNExt to discuss partnership with impact

People focus continues

Another priority for us this year has been developing our people, an ongoing area of huge importance to us. We’ve invested in infrastructure to ensure we're supporting people's professional development, and made further investment in our learning and development capabilities, and into our systems to support listening and feedback processes.

We’ve working further on our approach to rewarding and recognising our people, and we’ve invested in a programme for people in fast-growing leadership roles. We see people progression and development as central to the experience we're looking to offer our people.

Equity, diversity and inclusion (EDI) continues to be a huge priority for us and this year we’ve been supported by external experts Clear Company, who’ve helped us to validate our level of maturity on all things EDI-related, and to develop our plans. With that as a jumping off point, we’ve developed a roadmap of actions that will enable us to nurture a culture of meaningful diversity and inclusion where people from all backgrounds and identities are able to thrive.

Impact in our DNA

One area of particular importance is social impact, which has always been in our DNA. It's what our people care about and is the type of work they want to do. This year has been about cementing that commitment.  

Our application for B Corp status is very much part of this, as is having a social impact strategy that will help guide us into our next phase. We've also invested in a head of social impact, who is driving our work in this area.

Part of our social impact work is our charitable programme. We're proud of our donations and the difference they’ve made. We want to continue to support organisations where funding is tight and our services can be of use.

Some companies have been rolling back their ESG commitment, but our commitment to using 2.5% of our profits to deliver better outcomes for non-profit organisations has been consistent and we've not pulled back from that even in a difficult economic year.

Group of six people standing inside an office and smiling at camera
Opencast continues to donate 2.5% to non-profits

So what of the year ahead?

Our priority for the first half of next year is to get back to stronger growth. We want to get to the growth we originally aimed to achieve this year. We'd like to deliver £66 million in revenue and are targeting around £10 million in profits.

We want to show that the Opencast business model – people-focused, purpose-driven and delivering great growth and profitability is the balance that all modern technology companies should be striving for. Stakeholder capitalism in action.

Next year we plan to trigger our share options scheme as soon as trading and market conditions support this. We want to move our people from options into equity, then give them the opportunity to continue to grow their equity with us. Getting back to a strong level of profitability will allow us to do that. It will demonstrate that you can build a financially successful business that works well for its investors and its shareholders, but also returns value to everyone in the business for their contribution to its growth and impact.

We value highly human connection and people coming together for the right reasons. We remain a hybrid organisation and trust and empower our people to be in the right place at the right time to deliver the outcomes we need for the business and for clients. We’ve opened a fourth city hub, in Glasgow, this year and now have virtual presence in Manchester and Birmingham.

Next year will also see us start to deliver on key social impact and EDI initiatives such as employee resource groups and pro bono projects. There will also be an iteration of our charitable fund’s goals and allocation process.

In conclusion I just want to offer thanks and gratitude to everyone at Opencast for their ongoing contributions and commitment. Thank you all. This year has been hard graft, and it has tested us all more than ever before. The resilience that has been shown under this pressure has been inspirational.

Building a business in the way we’re building it, and at the pace we are building it, remains a colossal team effort and everyone must play their part. Success is down to the personal and team behaviours we see every day, but also the willingness to challenge, to question and push for more and better, so that we continue to be the place that people want to work, and that our current and future clients want to work with. Bring on 2024!

Colour photo of man standing on stage with arms open
"Success is down to the personal and team behaviours we see every day"

You can build a financially successful business that works well for its investors and its shareholders, but also returns value to everyone in the business for their contribution

Authors

Tom Lawson

Chief executive

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