Strategy

2016 was going to be a year of challenges, following several years of strong sales growth for the Goods ID Division and even stronger profitability growth. In 2016 we were able to surpass our results for 2105, which was already an exceptional year in terms of the size of certain contracts won. This progress owes nothing to chance. It is the result of a strategic shift initiated in 2012, towards having clearly segmented solutions adapted to each stage of the supply chain. Integral to our success has been the availability of comprehensive customer support for the lifetime of their investments, coupled with Zetes’ ability to draw upon our extensive expertise and experience for the benefit of our customers.

Acting as trusted third party

In recent years, the Group has invested heavily to rationalize its solutions and standardize them to address the principal challenges faced by customers in similar industries. As a result of this strategy, the 6 solutions of the collaborative supply chain were devised.  From an initial position as a provider of custom solutions, Zetes began to implement these standard solutions, each of which could be adapted to suit an individual customer's needs. In this way, any improvements made to each solution would benefit all users. 

The transformation of Zetes also reflects external factors. First of these are the improvements to internet access seen in recent years, including the increasing presence of SaaS (Software as a Service) and PaaS (Platform as a Service) type solutions. A second is the growing desire among companies to focus on their core business. This last point implies investing less in support occupations like informatics and handing over these aspects to trusted third parties with the relevant experience and technological knowledge to take charge of these critical processes.

"The growing desire of companies to focus on their core business implies investing less in support professions like informatics and handing over these aspects to trusted third parties."

Zetes has managed, over the years, to position itself judiciously to fill this role. It picked up the ball by making all its solutions available on the MCL platform, functioning in PaaS mode. Zetes' ability to adopt a global approach is an integral part of this evolution. In both Goods ID and People ID, Zetes is able to work on segments of the traceability or authentication process, but can equally easily take responsibility for an entire project. This panoramic approach allows it to advise clients with answers to the problems they face within their global environments. The value for the customer lies in the permanent availability of proven solutions, ease of management and security of its data.

This strategy, which lies behind Zetes' success in recent years, has enabled it to grow steadily over the years.  It is precisely this strategy that it has attracted Panasonic's interest.  Eager to adopt a similar path and offer clients a software + services approach, the Japanese conglomerate was looking for a partner able to provide a solid anchor in Europe.

Security: an essential aspect of data exchange

Entrusting the management of one's IT infrastructure and data to a third party is not a trivial decision. Indeed, an enterprise's data is often an essential asset, requiring 100 percent protection.  The introduction of advanced technologies and protocols has already been on the agenda for many years in the People ID division. Here Zetes offers all the necessary guarantees for high security data management at sites dedicated to the production and personalization of identity and travel documents. The ISO27001 certification it has obtained attests to its expertise in the field. Security is also an increasingly prominent theme in Goods ID. This concern is linked to the emergence of SaaS models, as operators need to connect to remote servers, with a potential risk of interception or data corruption.  Companies are therefore looking for ways to reduce their operational costs by delegating the management of IT infrastructure, applications and data, without making concessions in terms of security. This is what Zetes offers them with its collaborative supply chain solutions and more specifically, with unique propositions like the MCL platform and ZetesOlympus.

Different continents, different challenges

In Goods ID, Zetes still sees many growth opportunities in Europe. These are related to regulatory constraints, growing traceability needs and the constant search for productivity gains.

Rich in raw materials and with a booming manufacturing sector, Africa also presents fertile ground for the development of traceability. With rapidly growing and migrating populations, it is a market eager for people authentication solutions.

In 2016, Zetes opened a sales office in Bogotá, Colombia. Intended initially to meet the demands of its existing customers and support their projects in the Americas, its vocation is also to become a home base for positioning the company in other Latin American countries, for both Goods ID and People ID projects.

Goods ID: the Collaborative Supply Chain, a winning strategy.

The cooperative model is gradually emerging in the goods identification world and is likely to become a prerequisite in the future. Product identification by individual serial number (serialization) generates an exponential increase of data to create, maintain and enrich. This development is a veritable paradigm shift, leading Zetes to develop new concepts, including the collaborative supply chain. Based on data sharing and secure data storage, this provides increased visibility of the movement of goods and allows all players involved to maximize their investments.  Zetes provides functional solutions, which are adapted for each profession in the supply chain, manages the cloud data conservation solution and acts as a trusted third party for all stakeholders.

Zetes strategy

The offering as structured by Zetes, is totally unique in the supply chain market and truly sets the Group apart from the pack. Zetes' response starts directly with the challenges specific to its customers' sectors and not from technology, which is only one way among many of achieving productivity goals, error reduction and other operational improvements.

People ID: a good mix of both contract models

Concession-type contracts or 'Build and Operate' (BO), continue to be Zetes' workhorse in People ID. These contracts, concluded for 5 to 15 year terms, call for a significant investment by Zetes in development and infrastructure, but in return offer good visibility on future cash flows, as revenue is collected for each secure document issued. This model spares customers the risk of technological and industrial choices and guarantees highly secure documents for their citizens. The contracts usually involve the production of personal identification documents, e.g. electronic ID cards, passports, driving licences and social security cards.

'The BOT model spares customers the risk of technological and industrial choices and guarantees highly secure documents for their citizens . 

These projects require setting up local subsidiaries and recruiting and training local staff. Once these have learned Zetes' business, they can be deployed on missions in other countries in the region.

For election-related projects, the sales model is 'Build and Transfer'. In this case, the project requires a specific budget to be released by the customer, which can be a government or a supranational organization. The turnkey project, including hardware and software, is immediately transferred to the customer. From there onwards, Zetes provides project management and maintenance services to support the customer until the project comes to an end. 

Zetes remains attentive to new opportunities where its competences can be applied, in particular in the field of health. On the African continent, identification of citizens for social insurance programmes is often still largely absent or embryonic and could benefit from Zetes' expertise.  Moreover, the advantages of the biometric enrolment have been demonstrated in clinical trials, and the technology could also potentially be applied to large-scale vaccination campaigns. The establishment of a national register is on the agenda of many African governments, as is the introduction of the ECOWAS card, which will ultimately allow all citizens of the Community of West African States to move freely in the region.

Sales cycles in People ID are very long and require significant investments in business development. Zetes relies on its excellent reputation, based on a growing number of successful references, and on its technical certifications, to increase its market share.