Ann: Isentia H1 FY19 Results and Strategy Presentation, page-44

I agree. We just have to watch out for software development blowouts because it looks like they are redoing software from scratch as they had got behind with technology developments and platform.

Software development always has a tendency to cost more than initial estimates. I can name many companies + from my own professional experience. One good example is GBST Holdings (ASX:GBT). They kept skimping on software development spend (relied on high recurring revenue from stick customers) and eventually a few competitors caught up with better offerings. Even starting taking some of their sticky customers and won lots of the newer contracts. Eventually GBST came clean and said they need to spend $50M on new platform when they had MC of maybe $150M at the time!

Problem for ISD is they do not have as sticky customers, ie not much cost involved for customer to switch. So they need a much more modern, real time offering before some of these contracts expire within 12-24 months. 

I think the experienced management should be able to get them across the line, but I will be looking closely at their reported technology spend each half.