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Delegata in the Sacramento Business Journal
Growing local tech firm helps state systems communicate
Kais Menoufy, Delegata President and CEO, was interviewed by Melanie Turner, Technology Beat reporter for the Sacramento Business Journal regarding Delegata’s recent growth and future plans. The following article appeared on page 7 of the Sac Biz Journal on September 29, 2006.
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Too busy to take on new customers for more than a year, Sacramento-based tech consulting firm Delegata Corp. now is starting to look beyond its immediate client circle and plans to expand outside California as early as 2007.
The 6-year-old company projects sales revenue of $15 million this year, up from $12.6 million last year, with a profit margin of about 15 percent. The self-financed company has zero liability and a "very strong cash base," said president and chief executive officer Kais Menoufy, and it's gearing up for out-of-state acquisitions.
It's also more than doubling its office space, hiring to fill some 30 open positions, and is likely to hire about 40 more next year.
In 2005, Delegata decided not to accept new clients for at least a year because it was so busy doing work for repeat customers, like a job working with the California Department of Justice to build a first-of-its-kind Web-based system that tracks owners of handguns and other firearms who pose a threat to public safety.
The $386,000 pact with the DOJ is one of many state contracts the company has landed. Delegata has worked for the Department of Motor Vehicles, Department of Alcohol and Drug Programs, California Public Employees' Retirement System, the Controller's Office and the Legislative Data Center.
In 2007, Delegata plans to acquire as many as three out-of-state companies of similar size to itself using cash and shares or other options. It also plans to add private companies to its customer mix.
Long-term plans call for establishing a "partner" to help Delegata open out-of-state offices while keeping its headquarters in Sacramento, Menoufy said.
The company has no sales department. It is expanding "by reputation," said Menoufy's daughter, company spokeswoman Amira Menoufy.
"Success came from very strong partnerships and relationships with our clients," Kais Menoufy said.
Susan Rushing, deputy director for the Department of Alcohol and Drug Programs, said she had never heard of Delegata when her department first awarded the company a contract about four years ago. But, she said, "I think that their reputation has been growing.
"They have consistently done very good work for us," she said. The department mostly has used Delegata to make old computer systems work more efficiently. Beginning Oct. 3, Delegata will help align its business and information technology systems, she said.
John Kost, managing vice president with Gartner Government Research Worldwide, said the tech consulting market is very competitive. In any given state there are usually large integrators plus lots of local firms with local relationships. Government pays poorly and is unable to retain all the talent it needs internally, so it constantly brings on consultants to satisfy short-term needs for particular IT skills, he said.
It's important for such firms to develop trust through cultivating long-term relationships. "Companies that maintain a strong stable of talent, particularly in areas with strong demand and overall skill shortages, will do very well in the consulting market," Kost said.
Delegata employs more than 100 people, including consultants. In the immediate future, the firm plans to hire as many as 30 workers, and maybe 40 more next year.
To accommodate future growth, Delegata in December will occupy the 25,000-square-foot second floor of one of south Natomas' most prominent sites, the former Earthlink building at 2495 Natomas Park Drive off Interstate 5. The company started in a subleased space at Cal Expo and now is in 10,000 square feet on the 20th floor of 400 Capitol Mall downtown.
Amira Menoufy said while Delegata's reputation already was well established when the company took on the DOJ contract, the project acts as a model for other states, and like other Delegata projects, was delivered on time and on budget. California is the first state to develop such a system, which went live in January.
Senate Bill 950 mandated that the state establish a system to enforce laws that prohibit certain people from owning firearms. The DOJ already had separate databases for those who have purchased firearms, and for arrest and conviction records. But information on the two databases could not easily be compared.
"Getting those two to communicate is a lot of what Delegata did," said Nathan Barankin, communications director for the DOJ.
Before the integration work, law enforcement was not alerted when a person who lawfully possessed a gun was convicted of a felony. Under California law, anyone convicted of a felony is prohibited from possessing a firearm.
In the past 10 years, about 1 million people have purchased 3 million firearms, Barankin said. Of the 1 million, about 57,000 are prohibited from owning a gun. "The trick is identifying the 57,000," he said. The new system automatically alerts law enforcement when there's a match between a newly convicted person and the gun-ownership database.
This article can be found online at The Business Journal's Website.
Credit
Sacramento Business Journal -
September 29, 2006
by Melanie Turner, Staff Writer
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