Monday interview: Stephen Kelly, chief executive of Sage

Nobody would doubt that heading up a blue-chip company is an all-consuming task.

Sage chief Stephen Kelly says Scotland boasts 'incredible' levels of innovation. Picture: Contributed

Stephen Kelly, chief executive of accounting and payroll software giant Sage, admits that he works “incredibly hard”, starting early and finishing late.

And he really does mean early, having already climbed Arthur’s Seat before our 8am meeting during his visit to the Scottish capital.

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His early-morning view over Edinburgh seems to mirror the group overlooking the SME sector, and Kelly says more than half of the companies in Scotland and the UK as a whole are customers of Sage, equivalent to in excess of 800,000 firms all in all.

“It gives us a real insight into their reality and what their issues are,” he states.

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Sage started out in 1981 in Newcastle, where its headquarters remain, and it listed on the London Stock Exchange in 1989, saying it is the only remaining technology stock in the FTSE 100.

Kelly, who started with the company in 2014, is quick to praise the Scottish SME scene, seeing it backed by high-­calibre academic institutions helping to close the digital skills gap.

“We see a vibrant community of small and medium businesses, growth businesses in Scotland,” he says, also complimenting the “immense” entrepreneurial spirit north of the Border.

“The invention and innovation in Scotland from the customers we serve is incredible… the partnership within the Scottish ecosystem between businesses, technology players like us, accountants, chambers of commerce, creates a really vibrant and successful network of entrepreneurs and they’re creating more than half the new jobs in Scotland.”

He entered the business world as a teenager, later completing a degree in business administration at the University of Bath, which granted him an honorary doctorate last year.

After a spell at California-based tech firm Oracle, he served as chief executive of Nasdaq-listed Chordiant Software from 2001 to 2005, and London-listed Micro Focus International from 2006 to 2010, during which the company reportedly grew its market value ­seven-fold.

In 2012 he was appointed chief operating officer for UK government, and in 2015 became a business ambassador to the prime minister, which he says he accepted to boost support for ambitious SMEs.

“When I took that role on, a lot of it was around technology and the entrepreneur spirit, and I’ve been very vocal directly, privately with the UK government and also publicly to say these are the issues where they can really help.”

Sage is also banging the drum, he adds, with the SMEs it represents lacking the time to go to Holyrood, Westminster or Brussels and lobby, “so Sage is acting as a champion and a voice – and quite a public voice.

“We’re quite bold in terms of putting the policy agenda to the politicians on road blocks that are stopping and preventing small businesses being successful.”

In its interim results to 31 March, published last month, Sage revealed a 6.4 per cent year-on-year jump in organic revenue to £838 million, and said it was “very confident” of exceeding full-year guidance of 6 per cent revenue growth. It also announced earlier this month that it sold its North American payments business to private equity firm GTCR for the equivalent of £202m.

Looking ahead for the group, which has more than 13,000 staff globally, Kelly says it needs to “serve the entrepreneurs and live their gains and their pains and their lives every day. We’re inventing technology where they can run their business from the palm of their hand,” he continues.

Nonetheless challenges remain, with the company hitting the headlines with a data breach last year.

Kelly cites competition as a constant worry, but stresses that it keeps the firm on its toes, and says Sage’s biggest concern is “always about ourselves”.

Noting expected continued growth in the number of smartphones, he adds: “We think that platform, that technology can absolutely change everybody’s way they run their businesses and just make it so much easier. The challenge for us is all about execution and delivery.

“We’re growing well – we’re very profitable as a company. I think everybody’s very pleased with how we do but I’m my strongest self-critic. I’m never, never happy so think we can always do better.”

30-SECOND CV

Born: Folkestone, 1961

Education: Folkestone Grammar School, University of Bath

First job: Helping out in mum and dad’s tea and coffee shop, then a paper round

Ambition while at school: Playing football for Chelsea, or cricket at Lord’s

What car do you drive? My daughter’s Fiat 500

Favourite mode of transport: I’m too impatient to sit in traffic, so I prefer the Tube or walking

Music: The Killers – all of my family love the band

Reading material: Papers, I still love great print journalism

Can’t live without: Great red wine – in moderation, of course

What makes you angry? Discrimination and people not getting a fair shot

What technology couldn’t you live without? My iPhone

Favourite place: By the sea. I love sitting in a harbour