Coping with the crunch: Crime does pay for firm behind intelligence-gathering software

IT SOUNDS like every schoolboy's dream: working for a company that combines computers with intelligence gathering for the police and the military. For David Carrick, chief executive of East Kilbride-based software firm Memex, it's just another day at the office.

Carrick's company designs programs that manage information and intelligence for clients including the Los Angeles Police Department (LAPD) and the US military.

But as hi-tech as such systems sound, the reality often differs from its glamorous portrayal in television drama series. Carrick says that his company's software is used in places such as the counter terrorist unit (CTU) seen in TV series 24.

But he explains: "Not all of them are as hi-tech as the CTU on 24 – I've been in one or two that are like that, but I've also been in loads where paper notepads are still used. It's not all like CSI or 24."

But despite that side of it America has been the land of opportunity for Memex. Founded as a spin-out from Heriot-Watt University in 1979, the company's software is in demand from police forces across the US.

As well as the LAPD, customers include the Georgia Bureau of Investigation and Pennsylvania State Police, which has been a client for ten years.

Carrick joined Memex in 1990 as a software engineer, when the company had ten staff. He rose through the ranks, watching the firm being taken over by first MR Data and then an American company, Lason, under whom he was appointed chief executive.

When the American owners put Memex up for sale in 2001, Carrick led a management buy-out with other staff and the Strathclyde Investment Fund chipping in. "We've never looked back," says Carrick. "In 2001, we were turning over 2 million and were making a loss. We've been profitable every year since then and this year hope to turnover about 9m."

Memex now has about 80 staff – about 57 of whom work from its East Kilbride headquarters – and has hired ten people this year.

In the past, systems may have been used by individual police forces, but Carrick now sees Memex's technology being used in a more co-ordinated fashion.

"All forces have information, but it only becomes intelligence when they start piecing it together to find out something new," he explains. "We're putting systems into 'fusion centres' in the US, where we're working with the local police force, sheriffs' offices and the FBI.

"These people come together and pool information before analysing it. They tackle serious organised crime and terrorism.

"I think we've got the right software for the right time at the moment – but my challenge is where do we go next?"

While law enforcement – in the US but also in the UK, Spain and South Africa – has been Memex's bread and butter, Carrick is looking at diversifying the business.

"In the US, we've been on short-lists, but then the whole contract has been pulled due to lack of money," he says.

"One of our worries is that all the money that the US government has put into supporting the banks has to come from somewhere and there will be cutbacks on public spending. That could affect companies like ours.

"We've worked with AIG and Merrill Lynch on insurance fraud. We're not looking at individual frauds but more patterns in organised fraud, such as that perpetrated by doctors or lawyers. I think there's a great opportunity there for us in financial services.

"In some ways, it's the right time because they're all struggling and so want to investigate fraud and save money, but at the same time their budgets for such work may be getting cut."

As well as finding new uses for Memex's systems, Carrick wants to build on existing contracts in the UK – and hopes to do more business with Scottish police forces. The company counts the British Transport Police among its clients, having supplied their national intelligence system.

But Carrick – who sits on the CBI's small and medium-sized enterprises (SME) council – wants to see smaller firms given a better chance of winning public procurement contracts.

"There are a lot of changes in the way IT is procured in the UK," he explains. "A lot of it is being centralised, but you have to be careful not to stifle innovation. Innovation won't come from the large companies – it will come from the small firms, some even smaller than Memex. They're more agile and can move quickly.

"I would like to see more public sector procurement funds being allocated to smaller businesses."

Though Carrick is clearly the polished businessman – adding a masters of business administration degree to his CV before taking over Memex – you can tell that at least part of him is still a geeky software engineer. He and his staff were chuffed when Memex's CrimInt system was mentioned on ITV's The Bill and in the Doctor Who spin-off Torchwood.

"My wife even found one of our systems mentioned in a detective novel she was reading," Carrick laughs. "But I had to explain we now have a newer version of the system that does much more."

Keep the positive messages flowing during recession

David Carrick's tips on how to prosper in the downturn:

&#149 Reassure customers about your financial position

Getting out and meeting customers is imperative: hearing growth plans first hand from you builds trust and confidence. Also, keep your staff informed as to how the business is progressing.

&#149 Don't get caught up in the doom and gloom

As much as the recession is real, many investment decisions will be affected by sentiment.

Don't get caught up in the "doom and gloom", but continue to execute on those initiatives that make sense: marketing, product development and of course sales.

&#149 Be innovative

We constantly review how our operation is organised and preach that our business and our people must be flexible and adaptable.

Can you be more creative on pricing? How can you benefit from partners and sales agents? Can your products be used in different and novel ways?