When Ken Kirkpatrick joined navigation technology company OSI Maritime Systems nearly 15 years ago, most warship operators were still using paper charts to track their location.
Today, after demonstrating the value of its pioneering technology, Burnaby, B.C.-based OSI has convinced more than 20 naval customers worldwide to roll up those charts and rely on its navigation and tactical solutions instead.
The technology, designed specifically for naval and maritime security operations, enables warship and submarine operators to detect what’s around them in the water, for safer navigation, and to better defend themselves during a conflict.
“Our strategy has been to become a leaders in the naval market,” says Ken Kirkpatrick, president and chief executive officer of OSI.
That includes both the retrofit and new shipbuilding markets, the latter of which Kirkpatrick says is a much larger and of higher value. In a retrofit, the contracts are usually valued at about $250,000 to $350,000 per ship. In the new build market, with the OSI integrated bridge system, he says values can range from about $3 million to $6 million per ship.
OSI develops and delivers its Integrated Navigation & Tactical System (INTS) for warships, dived navigation systems for submarines, and C2 systems for small craft. The company’s technology is currently installed in more than 500 warships and submarines worldwide.
To keep up with growing demand for its business, OSI has more than tripled its staffing to more than 100 employees over the past four years. The company is also aggressively searching for about 20 more highly skilled engineers to help with its future growth. Recently, OSI’s success earned it a BC Export Award for job creation.
Navigating the future
OSI was founded in 1979 and introduced the first generation electronic chart system for the maritime market, known as the Warship Electronic Chart Display and Information Systems (WECDIS). It has helped to revolutionize waterway navigation.
In 2001, OSI decided to focus solely on the warship navigation market. It started by working with the Royal Canadian Navy, proving the benefits of its systems and to design its technology to meet the specific needs of the military naval vessel market.
“It gave us the foundation to build on to take that technology around the world,” says Kirkpatrick.
That includes not just buying and installing the navigation and tactical systems, but also providing the complex training infrastructure around them.
“The investment navies make to deploy this technology is significant,” Kirkpatrick says.
Today, OSI’s customers include navies around the world in countries such as Denmark, Australia and New Zealand, and the United Kingdom. Kirkpatrick says the United States is also becoming a larger customer for the company.
The new shipbuilding market, where OSI is focussing a lot of its attention, is valued at about $1.5 billion over the next five to seven years. More countries, like Canada, are investing in new ships either to beef up their military presence or to replace older vessels, and in turn to create jobs.
Kirkpatrick believes OSI is well positioned to capture a chunk of those new contracts coming to market. It also plans to leverage its technology to explore the command management side of the business, which helps navies set strategy on how to respond to potential conflict.
“We are at the forefront of leveraging all of the knowledge and expertise we’ve gained over the years, and educating the navies of the world on the advantages of our technology,” says Kirkpatrick. “We are able to show them how adding capacity allows them to do the job more efficiently and more effectively.”
Insights from Ken Kirkpatrick, president and chief executive officer of OSI
What was your first export sale?
It was to Denmark in 2002. It was a fleet-wide procurement of our technology, for about 50 warship navigation systems. It was a really nice first export contract. The foundation of our success with the Canadian navy was extremely important in us winning that program because it provided credibility.
How did that first export opportunity arise?
It was through our persistent marketing efforts and education. We sent business development and technical people to Denmark (and other countries) on a regular basis. Through that process they ramped up procurement and went forward with the purchase. The meetings started in late 2000 and led to contract in late 2002. In that stage in our business development it was very much about working to convince the naval customers that the technology had value. It was really leading edge stuff and took some time for navies to get through their process to acquire the technologies.
When it comes to exports, what do you know now that you wish you knew then?
It may not have been as clear to us at the time, but having success at home first really helped. Establishing partnerships with large companies to access markets and specific programs is also very important. As a SME trying for the first time to move outside of Canada, finding those partnerships that compliment your technology is really important. Local partnerships in those markets outside of Canada are also important.
How has the trading world changed since you started in business?
The competitive landscape has changed. The introduction of lower-cost labour markets in places like India and China and others has had an impact from a competitive standpoint. We see competitors that are setting up operations in these places, which impacts the pricing in the marketplace. It really is becoming more of a global economy. At the same time, we’ve become a significant player: our market recognizes we have 20 significant navies as customers – success breeds success – that hasn’t changed.
What is the #1 thing new SMEs need to know about export and trade?
Probably the most important is the local partnerships that provide an on-the-ground presence and support, and be prepared for the unexpected. Those are key.