When Tom Murphy, CIO of Royal Caribbean Cruises, was forced to scale back his IT team last fall in the face of declining travel bookings, he decided to get scrappy. As part of battening down the hatches to efficiently support a 28,000 person company with 25 cruise ships, Murphy created a swat team within IT to identify quick hits?low-cost, high-return efforts.
The idea, as Murphy put it, was to “reinforce that you’ve got an IT team that’s thoughtful, creative and can do more with less.” That idea has worked. By Murphy’s count, the team has returned more than $3 million to the company’s bottom line so far. “It’s been a huge success,” he says.
In the current economic climate, IT executives are pushed harder than ever to provide a quick return on small, well-planned technology investments. Vendors, smelling opportunity, have jumped in with a wide array of low-cost?$100K or less?quickly deployable products and services. “There are a lot of vendors trying to convince you that there are quick wins out there right now,” says Matt Kesner, CIO of Fenwick and West, a Palo Alto, Calif.-based law firm. While some quick wins are real, others are elusive?or even nonexistent.
We asked CIOs where their company found a big bang for relatively small bucks and how CIOs can make sure quick wins don’t turn into quicksand. It’s advice you can bring to the bank.
Password to Savings
As infrastructure management grows more complex, it has become ripe for low-cost, high-return initiatives?if you know where to look. One of the best quick wins Royal Caribbean found, according to Murphy, was a password reset program called P-Synch from Mercury Information Technology. For $25,000, the software allows employees to reset their passwords whenever necessary. This contributed to cutting call volume to the internal IT help desk by 35 percent.
Because Royal Caribbean had downsized its help desk team along with the rest of IT, the new software was critical to maintaining service levels with few staffers. “Plus, we’ve given the users control, and users love control,” says Murphy.
Joe Iannello, senior vice president and CIO of the Movado Group, a watchmaking company based in Paramus, N.J., had a similar experience with a program called UpdateExpert from St. Bernard Software that lists for under $50,000, which automatically deploys and updates patches, fixes and other software to user desktops and servers. Iannello’s group supports 750 machines around the world and was able to cut staff time needed for patches and updates by 75 percent. As a result, the software paid for itself in less than six months.
“Being able to quickly and remotely deploy those fixes without having to visit those PCs is a great time-saver for us,” says Iannello, who adds that the software also lets Movado be more proactive about having the latest security fixes in place.
Iannello cautions that companies get maximum benefit from this type of investment only if users are geographically dispersed. “The more machines you have and the more distributed they are, the more valuable something like this is,” he says.
Royal Caribbean’s Murphy also warns that such simple solutions may not scale to serve the entire enterprise. A password reset package such as P-Synch may work great for 4,000 users, he notes, but not necessarily for 20,000 users as a long-term, enterprisewide solution.
Integration can be a money pit?that’s not news. EAI frameworks and EDI implementations can cost millions of dollars. The potential for cheaper connections both inside and outside the firewall exists with Web services, even this early in its existence.
Sheri Anderson, CIO of Xilinx, found that by using Web services company Grand Central Communications she was able to establish a connection with an important external business partner quickly and for a fraction of the cost she’d expected. The key is to avoid one-off custom integration projects with high, ongoing maintenance costs.
Xilinx, with $1 billion in revenue and 2,600 employees worldwide, is a semiconductor company that outsources most of its manufacturing and other functions. “We have lots of needs for partner interfaces,” explains Anderson. “They’re not optional.” When one partner suddenly needed to exchange large amounts of unstructured data with Xilinx, Anderson brought in Grand Central to quickly deploy a secure Web services-based data exchange and format translation capability.
“It was quite a big win because I didn’t have to go build support for a new kind of protocol, which would have taken weeks,” says Anderson, who noted that the total cost of the service, at under $200,000 annually, was less than one-tenth what it would have cost to solve the problem using a traditional value-added network.
Better yet, Anderson could leverage the solution for other projects without additional custom development because Grand Central’s hosted service included prebuilt connections to many other data exchange formats and protocols. Once Xilinx built its connection to Grand Central, it could communicate with additional partners in multiple formats without more custom development. That fit right into Anderson’s plan. “I’m trying to get rid of customization to manage down my costs,” she says.
Cut your bandwidth demand and you’ll not only save real dollars, you might also improve performance. Irving H. “Bubba” Tyler, vice president and CIO of Quaker Chemical, found a way to do both using cheap (less than $100,000 for five) WAN data compression appliances from Peribit Networks. Quaker, a Conshohocken, Pa.-based producer and manufacturer of specialty chemicals for the steel and automotive industries, has 44 offices and 14 manufacturing plants scattered around the globe, connected by everything from frame relay to T1s. In the midst of rolling out a completely Web-based ERP system, Tyler realized he needed a better solution to his bandwidth problem than just adding capacity.
“We were very hungry for simple, easy, low-cost ways to increase our bandwidth,” he says, “[because] most of our existing [frame-relay] connections were at a limit.” Quaker found the appliance solution to be cheaper in both dollars and in training costs than the other three options?paying for burst speeds, buying more capacity from the telecom carrier or a caching solution that would have required software, servers and more support. “With the appliance, we literally plugged in two cords, and we were done,” Tyler explains.
Routing optimization appliances can be another quick win in the bandwidth category. John Benzinger, vice president of IT for FreeMarkets in Pittsburgh, a hosted sourcing and e-commerce auction services provider, says paying less than $100,000 for one such device from RouteScience Technologies yielded substantial cost savings, and more important, performance benefits.
The appliance, which identifies optimal network paths for return packet traffic back to customers, was easy to install and yielded a major improvement in page display times. “We had it installed within two days and were immediately seeing benefits,” Benzinger says. “We wouldn’t have been able to provide the same level of service without it, and we also would have had to put more engineers on diagnosing end user problems.”
Both Tyler and Benzinger advise CIOs to test bandwidth optimization solutions thoroughly before deploying them, however. The best of these devices can be put in listen-only mode so that staffers can evaluate their compression and routing recommendations, and likely bandwidth savings, before anything gets put into production. “Prove it to me. I want to experience it,” says Tyler.
Fenwick and West’s Kesner, who also deployed a Peribit system, had similar advice: “Look under the hood, test it like crazy, and make sure it really works.”
Talk About Savings
In addition to data savings, it’s also possible to find quickly cuttable costs in telecom space. Kesner, for example, deployed a Cisco software-based VPN application for 700 employees for $30,000. “It’s been a huge hit for us,” Kesner says, “well out of proportion to the cost.”
Before installing the always-on, secure virtual network, the firm had relied on dial-up connections and nonsecure browser-based applications for its on-the-go lawyers, with unsatisfying results. “We’re a professional services firm,” Kesner says. “With the new VPN system, we’re getting a lot more productivity, more billed hours, and people are able to work at home.”
Voice-over-IP (VoIP) systems are also showing promise as a way to cut recurring telecom costs with relatively low up-front investment. Anthony Jabbour, CIO of Amicus Holdings in Falls Church, Va., a banking subsidiary of CIBC in Toronto, says his company saved $1.5 million a year in long-distance charges by switching its 350 banking pavilions and offices over to VoIP. Total infrastructure cost, including servers and software licenses, was less than $100,000 (plus the phones at $400 each).
“Now we can call all of these locations for free,” Jabbour says. The quality is high enough that the bank is looking at rolling VoIP out to its call centers as well.
Quick Performance Fix
Application performance monitoring and management is an increasingly high-leverage category, with direct impact on both hardware and support costs?and on the hard-to-measure but critical end user experience. For Enzo Micali, senior vice president and CTO of Westbury, N.Y.-based 1-800-Flowers.com, application performance software was a quick win that enabled him to both control hardware costs and guarantee performance in mission-critical situations.
The week before Mother’s Day, 1-800-Flowers.com typically receives as many as 100,000 Web orders a day. To handle that kind of demand, Micali needed a better view into the capacity of his three data centers to maximize performance relative to his infrastructure costs. For less than $200,000, Micali got a suite of software from Mercury Interactive that lets him deploy both functional and performance testing to simulate quality of service under peak loads.
“How long does a user in Seattle take to add a dozen roses to their basket?” asks Micali, noting that the answer can be very different when volume spikes to 10 times the average. Mercury’s software has helped the company simulate Mother’s Day, improve performance and put a cap on hardware costs while avoiding risk.
“Relative to the benefit, it’s inexpensive,” Micali says. “It’s cost avoidance. You don’t buy additional hardware if you don’t need it.” Plus, he adds, “The amount of business risk that’s mitigated is huge. If my site were to go down on the Friday before Mother’s Day, I wouldn’t be here on Monday.”
Sometimes a quick win comes from just letting someone else’s hardware and software sweat the details of a complex process. Max Levchin, CTO of Mountain View, Calif.-based PayPal, found this out when he purchased a $30,000 bulk e-mail delivery appliance from IronPort Systems.
PayPal, which has 17 million customers and sends out millions of e-mails every week, was using a big collection of its own machines?running an open-source mailer program?to deliver all the messages. “If the [mail] engine broke, you’d have half a dozen guys working on it,” recalls Levchin, who remembered two or three blowouts that resulted in both a loss of business and customer goodwill.
Since the company installed the IronPort mail appliance, which is optimized to assemble and send half a million messages an hour, as well as handling bounce-backs and related issues, PayPal’s maintenance costs have dropped by 50 percent while stability greatly increased. “It’s a cheap packaged solution that takes away the complexity?definitely a great deal,” says Levchin. One deal among many?apparently?for CIOs who are willing to look.