Abilis Solutions

Pre-fixed prices win contracts for prisoner management software firm

Prisoners have been good to this Montreal firm specializing in systems and technology integration and customized applications development.

June 2010 • Danny Kucharsky

Prisoners have been good to Abilis Solutions, a Montreal firm that specializes in systems and technology integration and customized applications development. Indirectly, that is.

It was a hard-fought contract for the Offender Management System, a prisoner management software program for the state of Virginia that gave the firm its major entry in the United States. Sales south of the border now account for 60 per cent of the company’s business.

Virginia’s Department of Corrections was seeking to replace 16 mainframe systems with one centralized system in the 1990s. A large German supplier was hired, but abandoned the project 18 months and several million dollars later. A Bell Canada subsidiary took over in 2000, but also ran into problems. Finally, Abilis won the project in 2007 after guaranteeing a fixed price and delivery date. EDC followed suit with a letter of guarantee worth USD3.6 million – the penalty that would be imposed if the project was not completed on time and to customer expectations. “We needed a letter of credit based on performance to insure the risk,” explains Abilis president Eric Le Goff.

Not to worry: the project was finished on time and on budget by Abilis. Through its software program, Abilis now manages more than 35,000 prisoners incarcerated in Virginia as well as more than 100,000 people who have passed through its prison system. After acquiring the intellectual property for the program last year, Abilis has gained similar contracts in Maine and New Hampshire and is eying contracts from additional states and provinces. In fact, in February CORIS (Abilis’ Offender Management System) became the largest correctional integrated software in production in North America.

Abilis was founded in Montreal in 1996 by Le Goff and his partner after original plans to set up shop in France fell through because no one in that country would provide financing. (French-native Le Goff completed his engineering training in Paris.)

The firm now employs 160 people and has sales offices in London, Paris, Portland, Maine and Albany, New York. Most of the work is conducted out of Montreal.

The company’s key to success is a business model that establishes a pre-fixed price for projects – something that is markedly different from most of its competitors, who charge by the hour. “It forces us to be efficient, innovative and ultra-productive. We’re able to take risks, including penalties for late delivery.”

The strategy is attracting attention. “The fact we can set pre-fixed prices and deliver on them is becoming more and more attractive to clients.”

Several Fortune 500 companies have hired Abilis, as have European clients like Banque de France, London stock exchange and Toyota Europe. Home heating oil firms have hired Abilis to manage their oil delivery systems, while New York State’s Office of the State Comptroller engaged Abilis to manage retirement plans for its bureaucrats, firefighters and police.

Le Goff says Abilis was barely touched by the recession. The firm won several multi-year government projects before the crisis hit. Although some clients delayed certain projects, there were no cancellations.

Abilis’ growth strategy is now based on acquisition. Le Goff is looking to buy niche software firms and says it’s a buyers’ market. He expects sales to grow by about 30 per cent this year, largely driven through acquisitions.

Being innovative has allowed the company to be competitive and successful, he says. “We’re competing worldwide with companies that are sometimes 1,000 times bigger, with much more means. They can produce at lower cost than us at their overseas facilities, but despite that we’re able to compete with sharper and flexible solutions.”

Le Goff refuses to believe the future for software consulting firms lies in low-cost countries like India. “We’ve shown from our sales volumes that you can produce in Canada, employ staff at market rates at our Montreal Innovation Centre, and still be competitive as an exporter.”