Parsec is the ideal example of how South African entrepreneurial spirit can establish and grow businesses in the high technology sector to the point where it is globally competitive.
The company was created in 1993 by four software consulting engineers who, through seeing and taking opportunities offered, have grown the business into an electronic engineering power-house through adding hardware capabilities, CAD and a high-tech manufacturing facility. At the same time, in order to complement the service offered to its customers, Parsec acquired the right to distribute electronic components from leading global manufacturers, including Altera. While the various entities of Parsec were initially operated as separate companies, during April this year they were consolidated into Parsec (Pty) Ltd, with three divisions: engineering; manufacturing; and marketing being created.
Parsec prides itself in its exceptional customer service that ensures that highly satisfied clients keep coming back. This customer satisfaction is ensured through providing the required solutions on time at low risk, simplifying the customer interface and providing total solutions with the IP remaining with the customer. While the company today is aggressively pushing its international business through appointment of suitable overseas partners in North America and Europe, it was referrals from previous South African engineers that got it into these markets. Overseas and local customers include leaders in the areas of electronics and telecommunications, as well as the foremost Universities and Technikons. The company is active as a high-tech solutions provider across a wide spectrum of industry, including the defence, aerospace, communications, industrial and medical sectors.
Parsec Manufacturing specialises in contract manufacturing for the local electronics industry. This is also the in-house manufacturing facility for Parsec and this implies that it can cope with the latest in technology, including fine-pitch components and ball grid arrays. This facility can cope equally well with the latest SMDs and through-hole components, while the facility's personnel can assist with optimisation of board designs for manufacture. The focus is on low- to medium-volume high technology production. Parsec has the expertise and facilities to integrate assemblies into complete systems, including the enclosures and cabling. Testing and burn-in facilities are also available and, if required, the company can even package the products with full instructions and warranty material.
In terms of its component distribution business, the Altera agency was sold to EBV-Electrolink during May this year. In terms of that agreement one Altera FAE and one Parsec director were transferred from Parsec to the new distributor. Parsec still distributes a wide range of components from some 13 other international manufacturers. These include leading names such as Analog Devices, Axiom Technology, Mentor Graphics, Imagecraft, NetSilicon, PLX Technology, Blackhawk, Synplicity, Raisonance, KRFTech, Eonic Systems, NVE and Sundance Multiprocessor Technology. Although Parsec sells components to a large number of local customers, the sourcing of components and printed circuit boards is of course, critical to its own contract manufacturing division. Here it ensures that clients obtain the lowest possible prices at the shortest possible lead times.
The integrated Parsec capability is focused around FPGA design and development (VHDL), as well as embedded and DSP processor development (hardware and software). Ideally, Parsec gets involved with its customers at the concept or feasibility stage, and will assist with simulation, PCB design and CAD. Prototype builds and tests would then be carried out and regulatory approvals obtained. The actual production can also be carried out if desired by Parsec, although there is complete transfer of technology to the customer. Parsec has access to some of the best development tools in the world. Continued after-development customer support could include addressing component obsolescence, module upgrades and continued cost reduction. In the short term, what Parsec ensures for its customers is the fastest time to market through use of its resources when internal capacity is exceeded. Parsec's advantage is that it can share the embedded cost of these resources over a large number of customers.
A strong competence is maintained in VHDL and FPGA design and this is shared with the local industry through the provision of training courses. Parsec estimates that it has trained more than 400 engineers in this way. The unique self-developed VHDL training course has been skillfully designed as a hands-on three-day intensive course that covers the equivalent of six months, self taught on-the-job experience. Parsec also works closely with universities and technikons and presents prizes to the best final year VHDL and DSP design projects.
Critical for Parsec in ensuring continued customer satisfaction is its staff, who are seen as being core to success and are therefore treated with better than average working conditions. Appointment of new employees is followed with prudence and a structured and focused interviewing process is used. The company believes in appointing engineers with a passion for electronics and technology and then makes use of an internal culture that encourages innovation and provides autonomy. Through appointing the right people who are capable of driving themselves to achieve objectives and goals, Parsec has managed to create a happy and family-like environment.
Parsec remains privately-owned, although a venture capital partner was brought on board early this year. The new partner has added financial and business skills to the previously engineering-dominated board. Parsec has a current staff complement of 70 people (37 of these being engineers). Over the last few years the company has grown at up to 50% per annum and with increasing international business this rate of expansion should increase even more rapidly.
Parsec has received wide recognition for its achievements and during 2001 the company won the State President's Award for the Most Outstanding Small or Medium Enterprise. At the same event it also received the Award for Technology Excellence. Deloitte's Technology Fast 50 Survey recognises the 50 fastest-growing technology businesses in South Africa. Parsec, based on percentage growth in turnover during the past three years was ranked Number 29 during 2001.
Parsec envisages further rapid growth over the next three years but management is determined that the company will not lose its spirit of innovativeness and entrepreneurship that has served it so well over the last nine years.
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