The year 1985 was a solid growth year for Keane. Revenues were $39,701,000, up 17% from $33,861,000 in 1984. Net income was $766,000 or 83€ per sbare, up 24% from $619,000 or 70€ per sbare a year ago.
At Keane, we define "capital" as the accumulation of "know bow" critical to our future success. This "know bow" takes the form of ap-plications development and implementation methodologies, as well as pre-packaged applications software in-stalled at customer sites on a turnkey basis. In 1985, Keane invested $1,826,000 in software products and methodologies, up 64.5% from 1984. We anticipate this investment in Keane "capital" will significantly im prove the Company's competitive posture in the future.
Keane's Information Services Division, which provides professional services to Fortune 1000 companies, continued to grow steadily during the year, despite a temporary soft market for computer services. The division continued to market Productivity Management (PM), Keane's unique methodology to manage the environment in which computer applications are developed and implemented. Approximately 1000 client personnel attended Productivity Management seminars and workshops during 1985.
Recognizing the increasing shortage of well-trained computer software project managers, Keane also made available to clients during the year the Company's internally researched and developed Project Manager Development Program (PMDP) which 1) identifies the competencies associated with superior software project managers, 2) provides tools to assess an individual's proficiency in these skills, and 3) formalizes the development process for project managers by focusing on the mentor relationship between the project manager and bis/ber superior. Keane trained 15 project managers and their supervisors at Illinois Bell in the first public offering of this pro gram. Client response to PMDP is enthusiastic, and several additional installations are planned for the first quarter of 1986.
Most importantly, our Information Services Division continued to provide clients with the Company's most important "value added" com-ponent, the expertise of our growing staff of technical professionals. A recent survey of key buyers of professional serv ices ranked Keane consistently bigger than competitors. Keane remains committed to the development of our technical staff, managers and sales personnel. Our goal is to pursue excellence by attracting, developing, and retaining the best available talent in the marketplace.
In applications soft ware products, Keane contin ued to enbance its "Worry-Free Software" for bospitals and manufacturing companies during the year. Because of the increasing importance of pre-packaged software, the Company formed a separate Applications Software Products Group. In addition, Keane completed development with IBM of a modular bospital in formation system designed to run on the IBM System/36 called Hospital Information System/36. During the year, Keane began to assist the IBM direct sales force in the selling and implementation of this system.
Also in 1985, Data General announced an agreement with Keane to jointly mar ket Keane's Factory Information System designed to operate on Data General's ECLIPSE MV/Family of computers. Keane support to customers of these two software products.
The rapid decrease in the cost of hardware is dramatically expanding the market for computers. However, hardware needs application software, and the increased demand for software is forming new relationships between major computer vendors and soft-ware companies, Keane's strategy is to build strategic alliances with the direct sales forces of major hardware vendors. We are confident that our technical talents can materially improve the sales effectiveness of these organizations. At the same time, such relationships enable Keane to effectively expand its sales coverage with minimum investments.
The future bolds challenges but great opportuni ties for Keane. We bave put into place systems to improve productivity, and gather in-formation to make sound management decisions. I am confident in our management team, and look forward to a good year in 1986.
Very truly yours,
John F. Keane
Annual Report