Declaring bankruptcy "was pretty painful", says David Murray-Hundley. But it made him "a better businessman". The IT specialist had "made millions" in the late 1990s working as a trouble-shooter for American bank Chase Manhattan and later as the CEO of various internet start-ups.
"It was the dotcom boom and firms were making a lot of money." Unfortunately, Murray-Hundley, now 38, reinvested all his profits in the shares of other tech firms. As the dotcom bubble burst in 2001/2002, he lost everything. "I remember taking a flight from the US to the UK. By the time I landed in Heathrow I had lost £400,000."
After declaring personal bankruptcy he returned to Britain and took a job at outsourcing specialist Serco. In late 2008, the firm assigned him to the medical sector, where he oversaw its IT contracts with the NHS. His good work was soon noticed by NHS management. "I received a call from a struggling trust. They wanted me to come in and help them turn around their fortunes."
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He quit Serco and worked as a self-employed contractor for the Barnet, Enfield and Haringey Mental Health Trust. "The more I got to know the NHS the more shocked I became about the waste. Money was spent on computer parts that ended up sitting unused in warehouses while the trust didn't have money for frontline medical care."
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This presented a business opportunity, so in 2009 he set up a consultancy firm to help trusts deliver IT projects more cost-effectively. He teamed up with NHS supplier Adaro in a 50-50 joint venture called Adaro Red. "I bought a 12-year-old Passat, so that I didn't stand out in the car park as a flashy IT contractor."
The joint venture soon won work: "I knew a lot of skilled staff at all levels of the business, so I persuaded them to work with me." Soon his team began connecting the IT systems of all the hospitals in the trust. But how to win business elsewhere in the NHS?
He decided to gamble by opening his books and revealing exactly how much margin he would make on every contract he bid for. It worked. "Some NHS trusts feel like they're getting a bad deal from IT firms so this was a way to win them over." He even got angry calls from competitors who complained that they couldn't match his rates.
Murray-Hundley also focused his bids on ways of getting a trust's costs down. "We act as consultants and help them use best practices and the right methodology." The tactics helped him pick up more sales and hire more staff. Yet "cash flow was always a challenge. I have to pay my staff on time but the NHS can be a slow payer." Still, by 2011 Adaro Red had 40 staff and annual sales of £10m. "When you're winning contracts it is quite easy to scale up revenues."
For now, further expansion could be a challenge. "Sadly, in some NHS trusts it's about who you know. We are beaten in some tenders by more expensive bids, just because of a special relationship somewhere." But Murray-Hundley isn't put off. "There are a lot of very good people in the NHS, but often various trusts are working on the same problem at the same time. If they teamed up to solve problems it would prove more effective."
