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The Way Business Is Moving

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Issue Date: Dec 2005/Jan 2006

A global pioneer

1 December 2005
Paul Booth

South Africa has no reason to take a back seat in the international software market. In some areas we show the way.
Management Information Planning, later to become MIP Holdings, was originally established in 1989 by Granville Dunbar. It was the IT component of I Kuper, a company that was sold to Investec Bank in that year. It consisted of a computer bureau operation running self-developed software for property companies and medical aid administrators, together with a handful of staff.
Today, the company is one of the world's leaders in the provision of risk-based billing services to mainly, but not exclusively, the financial services industry; has a staff complement of about 170 and a turnover of between R80m and R100m.
It is obviously a major success story, so what has happened during the intervening 16 years?
According to Richard Firth, who took over as the chairman and CEO of MIP in 1996, the company's success lay in the recognition that a shared risk scenario with their clients was a concept that was attractive to customers as well as themselves, albeit initially, an alien concept in the market. From a client's perspective, their complete administration operations become fully outsourced at a cost that is directly associated with the number of members involved in the relevant schemes; and precluded, for instance, any up-front software licensing costs, hardware upgrade costs and software upgrade costs.
Richard Firth, chairman and CEO of MIP
Richard Firth, chairman and CEO of MIP
From MIP's perspective, the revenue stream became consistent and predictable, since the fees charged were based on a per-member basis and provided the flexibility needed to maintain and further develop the solutions that the market desired as well as providing an incentive to deliver the appropriate level of service, since the costs of any hiccups would now be at their own account. It also provided an opportunity for MIP Holdings to fully understand the issues of the vertical markets with which they were involved, thus in turn, providing additional value back to their clients.
As the concept evolved, it became apparent that all schemes were in essence the same and consisted of collecting contributions and paying benefits. To this end an overall framework was created and then tailored for the different vertical applications, so that today there are solutions, for example, for medical aid administrators, pension fund administrators, funeral fund administrators, life insurance administrators, unit trust administrators and motorcar maintenance and warranty administrators.
The framework and solutions are all developed and maintained using the products and tools of Progress Software, who themselves have bought into this shared risk concept, specifically with respect of their licensing arrangements with MIP Holdings. MIP has already won an accolade from USA-based Computerworld USA for its achievements and this year, together with Progress Software and through the use of a case study, are successfully promulgating this concept and its achievements on a worldwide basis.
MIP Holdings is already a BEE company through the 30% of its shares that are managed by I-Capital and has a significant base of some 35 clients including Allcare Administrators, Channel Life, M Cubed Holdings, Safrican Insurance and Telemed Medical Aid Scheme, Telkom SA's medical aid company.
MIP Holdings is yet another example of our superb and innovative local software development capability, creativity and entrepreneurship, which, even today, is still not recognised by many local senior executives. When will they learn, assuming they want to of course, that overseas solutions are not necessarily superior, are often more expensive and in some cases poorly supported locally?


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