When Tom Murphy, CIO of Royal Caribbean Cruises, was forced to scaleback his IT team last fall in the face of declining travel bookings,he decided to get scrappy. As part of battening down the hatches toefficiently 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 ITteam that's thoughtful, creative and can do more with less." That ideahas worked. By Murphy's count, the team has returned more than $3million to the company's bottom line so far. "It's been a hugesuccess," he says.
In the current economic climate, IT executives are pushed harder thanever to provide a quick return on small, well-planned technologyinvestments. Vendors, smelling opportunity, have jumped in with a widearray of low-cost - $100K or less - quickly deployable products andservices. "There are a lot of vendors trying to convince you thatthere are quick wins out there right now," says Matt Kesner, CIO ofFenwick and West, a Palo Alto, Calif.-based law firm. While some quickwins are real, others are elusive - or even nonexistent.
We asked CIOs where their company found a big bang for relativelysmall bucks and how CIOs can make sure quick wins don't turn intoquicksand. It's advice you can bring to the bank.
Password to Savings
As infrastructure management grows more complex, it has become ripefor low-cost, high-return initiatives - if you know where to look. Oneof the best quick wins Royal Caribbean found, according to Murphy, wasa password reset program called P-Synch from Mercury InformationTechnology. For $25,000, the software allows employees to reset theirpasswords whenever necessary. This contributed to cutting call volumeto the internal IT help desk by 35 percent.
Because Royal Caribbean had downsized its help desk team along withthe rest of IT, the new software was critical to maintaining servicelevels with few staffers. "Plus, we've given the users control, andusers love control," says Murphy.
Joe Iannello, senior vice president and CIO of the Movado Group, awatchmaking company based in Paramus, N.J., had a similar experiencewith a program called UpdateExpert from St. Bernard Software thatlists for under $50,000, which automatically deploys and updatespatches, fixes and other software to user desktops and servers.Iannello's group supports 750 machines around the world and was ableto cut staff time needed for patches and updates by 75 percent. As aresult, the software paid for itself in less than sixmonths.
"Being able to quickly and remotely deploy those fixes without havingto visit those PCs is a great time-saver for us," says Iannello, whoadds that the software also lets Movado be more proactive about havingthe latest security fixes in place.
Iannello cautions that companies get maximum benefit from this type ofinvestment only if users are geographically dispersed. "The moremachines you have and the more distributed they are, the more valuablesomething like this is," he says.
Royal Caribbean's Murphy also warns that such simple solutions may notscale to serve the entire enterprise. A password reset package such asP-Synch may work great for 4,000 users, he notes, but not necessarilyfor 20,000 users as a long-term, enterprisewide solution.
Integrated Cost-Cutting
Integration can be a money pit - that's not news. EAI frameworks andEDI implementations can cost millions of dollars. The potential forcheaper connections both inside and outside the firewall exists withWeb services, even this early in its existence.
Sheri Anderson, CIO of Xilinx, found that by using Web servicescompany Grand Central Communications she was able to establish aconnection with an important external business partner quickly and fora fraction of the cost she'd expected. The key is to avoid one-offcustom integration projects with high, ongoing maintenancecosts.
Xilinx, with $1 billion in revenue and 2,600 employees worldwide, is asemiconductor company that outsources most of its manufacturing andother functions. "We have lots of needs for partner interfaces,"explains Anderson. "They're not optional." When one partner suddenlyneeded to exchange large amounts of unstructured data with Xilinx,Anderson brought in Grand Central to quickly deploy a secure Webservices-based data exchange and format translationcapability.
"It was quite a big win because I didn't have to go build support fora new kind of protocol, which would have taken weeks," says Anderson,who noted that the total cost of the service, at under $200,000annually, was less than one-tenth what it would have cost to solve theproblem using a traditional value-added network.
Better yet, Anderson could leverage the solution for other projectswithout additional custom development because Grand Central's hostedservice included prebuilt connections to many other data exchangeformats and protocols. Once Xilinx built its connection to GrandCentral, it could communicate with additional partners in multipleformats without more custom development. That fit right intoAnderson's plan. "I'm trying to get rid of customization to managedown my costs," she says.
Budget Bandwidth
Cut your bandwidth demand and you'll not only save real dollars, youmight also improve performance. Irving H. "Bubba" Tyler, vicepresident and CIO of Quaker Chemical, found a way to do both usingcheap (less than $100,000 for five) WAN data compression appliancesfrom Peribit Networks. Quaker, a Conshohocken, Pa.-based producer andmanufacturer of specialty chemicals for the steel and automotiveindustries, has 44 offices and 14 manufacturing plants scatteredaround the globe, connected by everything from frame relay to T1s. Inthe midst of rolling out a completely Web-based ERP system, Tylerrealized he needed a better solution to his bandwidth problem thanjust adding capacity.
"We were very hungry for simple, easy, low-cost ways to increase ourbandwidth," he says, "[because] most of our existing [frame-relay]connections were at a limit." Quaker found the appliance solution tobe cheaper in both dollars and in training costs than the other threeoptions - paying for burst speeds, buying more capacity from thetelecom carrier or a caching solution that would have requiredsoftware, servers and more support. "With the appliance, we literallyplugged in two cords, and we were done," Tyler explains.
Routing optimization appliances can be another quick win in thebandwidth category. John Benzinger, vice president of IT forFreeMarkets in Pittsburgh, a hosted sourcing and e-commerce auctionservices provider, says paying less than $100,000 for one such devicefrom RouteScience Technologies yielded substantial cost savings, andmore important, performance benefits.
The appliance, which identifies optimal network paths for returnpacket traffic back to customers, was easy to install and yielded amajor improvement in page display times. "We had it installed withintwo days and were immediately seeing benefits," Benzinger says. "Wewouldn't have been able to provide the same level of service withoutit, and we also would have had to put more engineers on diagnosing enduser problems."
Both Tyler and Benzinger advise CIOs to test bandwidth optimizationsolutions thoroughly before deploying them, however. The best of thesedevices can be put in listen-only mode so that staffers can evaluatetheir compression and routing recommendations, and likely bandwidthsavings, before anything gets put into production. "Prove it to me. Iwant to experience it," says Tyler.
Fenwick and West's Kesner, who also deployed a Peribit system, hadsimilar advice: "Look under the hood, test it like crazy, and makesure it really works."
Talk About Savings
In addition to data savings, it's also possible to find quicklycuttable costs in telecom space. Kesner, for example, deployed a Ciscosoftware-based VPN application for 700 employees for $30,000. "It'sbeen a huge hit for us," Kesner says, "well out of proportion to thecost."
Before installing the always-on, secure virtual network, the firm hadrelied on dial-up connections and nonsecure browser-based applicationsfor its on-the-go lawyers, with unsatisfying results. "We're aprofessional services firm," Kesner says. "With the new VPN system,we're getting a lot more productivity, more billed hours, and peopleare able to work at home."
Voice-over-IP (VoIP) systems are also showing promise as a way to cutrecurring telecom costs with relatively low up-front investment.Anthony Jabbour, CIO of Amicus Holdings in Falls Church, Va., abanking subsidiary of CIBC in Toronto, says his company saved $1.5million a year in long-distance charges by switching its 350 bankingpavilions and offices over to VoIP. Total infrastructure cost,including servers and software licenses, was less than $100,000 (plusthe phones at $400 each).
"Now we can call all of these locations for free," Jabbour says. Thequality is high enough that the bank is looking at rolling VoIP out toits call centers as well.
Quick Performance Fix
Application performance monitoring and management is an increasinglyhigh-leverage category, with direct impact on both hardware andsupport costs - and on the hard-to-measure but critical end userexperience. For Enzo Micali, senior vice president and CTO ofWestbury, N.Y.-based 1-800-Flowers.com, application performancesoftware was a quick win that enabled him to both control hardwarecosts and guarantee performance in mission-criticalsituations.
The week before Mother's Day, 1-800-Flowers.com typically receives asmany as 100,000 Web orders a day. To handle that kind of demand,Micali needed a better view into the capacity of his three datacenters to maximize performance relative to his infrastructure costs.For less than $200,000, Micali got a suite of software from MercuryInteractive that lets him deploy both functional and performancetesting to simulate quality of service under peak loads.
"How long does a user in Seattle take to add a dozen roses to theirbasket?" asks Micali, noting that the answer can be very differentwhen volume spikes to 10 times the average. Mercury's software hashelped the company simulate Mother's Day, improve performance and puta cap on hardware costs while avoiding risk.
"Relative to the benefit, it's inexpensive," Micali says. "It's costavoidance. 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, Iwouldn't be here on Monday."
Cutting Complexity
Sometimes a quick win comes from just letting someone else's hardwareand software sweat the details of a complex process. Max Levchin, CTOof Mountain View, Calif.-based PayPal, found this out when hepurchased a $30,000 bulk e-mail delivery appliance from IronPortSystems.
PayPal, which has 17 million customers and sends out millions ofe-mails every week, was using a big collection of its ownmachines - running an open-source mailer program - to deliver all themessages. "If the [mail] engine broke, you'd have half a dozen guysworking on it," recalls Levchin, who remembered two or three blowoutsthat resulted in both a loss of business and customergoodwill.
Since the company installed the IronPort mail appliance, which isoptimized to assemble and send half a million messages an hour, aswell as handling bounce-backs and related issues, PayPal's maintenancecosts have dropped by 50 percent while stability greatly increased."It's a cheap packaged solution that takes away thecomplexity - definitely a great deal," says Levchin. One deal amongmany - apparently - for CIOs who are willing to look.