You’re a brand new medium-size New Zealand organisation in need of an IT infrastructure. How do you define your needs and seek out suitable suppliers? In the first of a two-part series, we look for unalloyed advice on getting set up.
The IT manager at a new organisation has a welter of decisions ahead. Do you outsource as much as you can or build expertise inhouse? Which languages, tools and platforms do you develop in? Open source or proprietary? Do you invest heavily in a web presence or build it up more slowly? Single vendor or best of breed? CRM, ERP, SCM? What’s best practice in getting all these balls rolling? Are you being paid enough for all this?
Choosing a vendor
There are benefits to a single-vendor approach.
“The one thing you cannot do is have many vendors, because they point their fingers at each other [shifting the blame],” says Jason Kerr, chief executive of recruitment software firm StaffCV.
At StaffCV, which recently bought Mariner7’s Talent Engine software, Microsoft provides the software, the desktops are Compaq, the laptops are Samsung and the phones also from one vendor.
“Microsoft is the basis of our operations. If you cannot support Microsoft, you are out,” Kerr says.
Interconnection, communication and easy configuration are the key reasons for keeping it a single platform, Kerr says, including SQL Server and now .Net.
“[Microsoft] may not get it right 90% of the time,” says Kerr, noting that in 1992 (straight off) Visual Basic was a poor offering, “but they do get it right eventually.”
Swee Lee, a senior manager in Auckland at BearingPoint, formerly known as KPMG Consulting, says IT managers can minimise their risks by finding vendors that can supply the end technology infrastructure.
“Create a clear list of business requirements both at a high level and the business level and attempt to get a response from a range of reputable suppliers. They will create the framework for you, make sure you have the right connectivity, bandwidth, voice over IP, etc, and implement systems training,” Lee says.
They will also have users participate in the end exercises, particularly on issues such as relevance of data, accessibility, security, the speed and the navigational support, he says.
Cisco systems engineer Arron Scott says working with a reseller that can provide end-to-end support helps avoid buck-passing between different suppliers.
Technology, he says, can be implemented piecemeal using the cheapest boxes, but a reseller will help you evaluate things longer term and show you how they can be integrated properly.
“Our experience is establish a good relationship with a supplier where you are confident that they will have a relationship with you rather than attempt to do a deal,” says Southfresh founder Toby Warren.
Warren says the firm started developing its e-commerce software, now owned by Foodstuffs, 11 years ago when the then small company approached a developer it trusted, Financial Systems of Auckland, to build it an order entry program. The software firm said Southfresh was too small at the time to benefit from it, but six months down the track things had changed enough to warrant the development.
Kerr suggests defining “dream” and “minimum” requirements when planning your infrastructure and picking a point somewhere between the two.
“We spent 150% more in starting up the processes and the infrastructure than we needed to, but it gives us scalability with the transactions,” Kerr says.
Warren advises much the same to any IT manager for a would-be new firm: buy more than is currently needed but less than might ultimately be needed to allow scalability, while keeping a lid on costs.
“In terms of hardware, buy the best you can afford, from companies you know will be there tomorrow.”
You may not be able to put up the business infrastructure you want straight away, Kerr says. Drawing a line may depend on how vital a certain application is to the business and its ability to scale up.
“It is better to spend 20% more now than 100% in the future. But you have to have vision. What is your idea of the future, what is your future viability? Is it 20 people in one location, or 300 across the world? You need future-proofing,” Kerr says.
StaffCV has offices in Auckland, Sydney and Chicago and opted for voice over IP and videoconferencing communications links. Systems were bought to link office automation and sales, with staff receiving training to get full use of systems, rather than the 30% Kerr says staff often use.
The blank slate approach does pay off. “One thing about starting in a new building is you can get the wiring and infrastructure how you want it,” says Kerr.
Build your IT based on what your customers are likely to need, says Warren.
Warren, a former chief fishmonger, says customers defined the needs of Southfresh’s business by requesting various types of functionality that fitted their businesses.
“At the beginning, we drafted our own needs document, but in the main that was based on what our customers told us. As we progressed, our customers pretty well defined needs and functionality for us. We only ever built this [e-marketplace] because of customers or for customers,” he says.
Customers include business partners, Warren says. Southfresh built in much functionality into its systems to have a more efficient relationship with CourierPost, he says, and further functionality was built around what suppliers needed, as suppliers were also customers, “all the time ensuring we were the ultimate beneficiaries of the efficiency”.
Despite the failure of the e-marketplace — it shut up shop in August — Warren thinks Southfresh did a “quite a good job”.
“The main things we did were to find good people and good suppliers, and take their advice. It’s bloody hard. Some were found through serendipity, some through luck and some through selection. We had a fairly rigorous selection process,” he says.
Avoiding the traps
Just as “here be dragons” was the warning that filled gaps on old maps, the same words should apply to similar uncharted territories in the IT world today, warns IT consultant Ian Howard.
IT exists to support businesses he says, and vendors exist to sell products, so businesses may not get exactly what they need, he says.
Auckland-based Howard has been in the IT industry since the 1970s. He has his own consultancy, the iE3 Group, is a fellow of the New Zealand Computer Society, is a course supervisor of the University of Auckland MSIS and a former member of the department of IS and computing.
Vendors will often, Howard says, target the IT manager, talking technospeak and cutting out senior managers with little IT knowledge.
“Suppliers are not lying, they would be acting in the best interests of the [customer] company, but they have a focused view, they have sales targets, quotas, vendor expectations and sales people. Understanding user requirements is probably the hardest thing we are asking of a bunch of people who probably do not understand what is available and you are asking them what they want,” he says.
Internal staff are also restricted in their ability to be objective, as they won’t make career-shortening decisions.
Therefore Howard says consultants are often needed to independently advise firms about the stuff they do not know about and help them develop a strategy and implement a solution.
Howard also speaks of “fashions” in the IT industry, including ASPs, which he says is “a solution looking for an answer”, CRM and “gap analysis”, which he defines as the difference between what a firm does and what is best practice. But cynically, he says, who defines best practice — the consultant.
“Gap analysis is a mechanism that can be used to create a willingness in the company to spend money. If you are a company, beware of gap analysis. I am a voice for the independents. We don’t sell stuff , we don’t get margins,” he says.
Howard also claims the major IT consultancies gain work from their sister financial organisations telling a managing director that since they look after their accounts, they can have a look at their IT system.
More often than not the “independent” report recommends some implementation project, thus the consultancy makes even more money from its customer, he says.
“One of the cool things about IT is you can get what you want, so be careful about what you ask for as you are likely to get it.”