Subject: [NEXTEL-1] Integrating an upturn

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Date: Sun, 27 Oct 2002 14:44:09 -0500

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October 25, 2002 01:01 PM PST

Integrating an upturn

Jack McCarthy

CURTIS BROWN, CTO of New York-based Princeton Review, says the down economy has forced him to approach the future in a more creative way. "In the heyday of the boom, it was easy to say, 'Let's drop $750,000 on a new system and add on some new features,' " Brown explains. "Most CTOs are looking for value with their existing investments."

Brown is not alone. He and other CTOs are looking to save costs while thinking about an eventual economic upturn. They're positioning their companies to wring maximum value out of their legacy systems so they can better compete as the economy improves. These chief technologists are looking for ways to integrate systems where possible, all the while looking at how technology can help them strengthen connections with partners and create new products.

It's what the savvy leader is doing, says Rob Enderle, an analyst at Cambridge, Mass.-based Giga Information Group. "They are making better use of the services and hardware they have to get better efficiency. But they are using the resources they have to set up for the future. It's a great way to use what [the CTOs have] got to prepare for the next wave."

Legacy opportunities

Although retooling legacy systems is nothing new, it's being done while looking to the future and with new technologies. "We are scoping these efforts with an eye to improving our interfaces to our partners and customers," says Brown of the strategy at the Princeton Review. "We will be leapfrogging the competition." To do so, Brown plans to use Microsoft's .Net Web services platform to integrate and scale the applications used by his educational testing company.

In addition, Jorge Perez, vice president of IT at NII Holdings, a subsidiary of wireless provider Nextel Communications, is deploying legacy systems as a strategic tool to bring the telecommunications carrier back from hard times that have afflicted his industry.

Taking a different tack, Brian Finley, CTO of the nearly $2 billion medical products supplier PSS/World Medical, is replacing legacy computing infrastructure picked from an acquisitions spree by using a software integration system. And at the online search engine company Ask Jeeves, CTO Jeremy Rosenblatt is customizing his data warehouse so that it can be easily extended when necessary.

Some CTOs are able to personally oversee the integration of their IT shop to position it as they see fit. Both Brown of the Princeton Review and Rosenblatt of Ask Jeeves supervise integration strategies they think will serve their companies well.

"CTOs need to find out where are the core values of their products and decide how to extend them," says Brown. "There are tools coming out of Web services that are making it easier to do that."

The Princeton Review, an educational testing preparation service for students, which includes three Web sites, has many legacy applications that track student performance and activities. Finding a way to efficiently integrate the applications is a challenge, Brown says.

Brown turned to Delphi applications, a core business system application for programming classes. The CTO will use Microsoft's .Net Web services framework to integrate applications with Delphi and anticipates using Delphi to integrate future features.

Brown's decision is driven both by time and finances. He believes it will be easier to extend the functionality of Delphi with other applications. "It's important for us to continue to evaluate the core products without making a larger investment in another product and rebuilding functionality from the bottom up," he says.

Application integration and the ease of use of .Net will allow the company to scale offerings when the time comes to expand the business. "A lot of companies are building stovepipe applications that don't integrate very well," he adds.

Brown is not the only CTO concerned with scalability. Rosenblatt, of Ask Jeeves in Emeryville, Calif., echoes Brown on the issue. He is also eagerly awaiting and prepared for an economic upturn.

Six-year-old Ask Jeeves has deployed multiple servers to run the many functions of its Web site. "We're not facing the problems that older companies have with their mainframes systems. We're not that old," says the CTO.

Rosenblatt has built a lean server infrastructure using a mixture of Hewlett-Packard, Compaq, Dell, and Sun servers. As needed, he can add to the platform, serving the changing business demands of the company. "We can enhance and extend cluster warehousing [of the server infrastructure]," he says. "It's a system we built, so it's easier to work with."

Rosenblatt says he can easily launch new features or revenues models off of the infrastructure. "We can add additional servers as needed," he says.

Saving money with a little help

IT buying decisions have changed with the recession. CTOs are first looking to internal improvements and are then considering modular and controlled system or application rollouts. The strategies of both the CTOs of NII Holdings and of PSS/World Medical confirm this trend. They have each enlisted the service of enterprise integration vendors to stitch together their computing infrastructure.

At Reston, Va.-based NII Holdings, the Latin American and Philippines subsidiary of Nextel Communications, Jorge Perez is looking to create a low-cost, integrated platform for his legacy systems and applications.

"We are trying to focus on the margins. In the telecom industry right now nobody's interested in growth," Perez says. "We decided we needed business processes that would make our customers happy. Our biggest challenge was to integrate all our applications."

Hit hard by the telecom meltdown and coming out of bankruptcy protection, NII must manage through the challenge and serve more than a million subscribers to its integrated wireless communications services. Market conditions demand finding cost savings from existing systems, Perez says.

"In IT, we are focused on the business rather than on the technology," Perez says. "We are concentrating on what we need to do to improve the business. We are thinking about the customer business management model to better understand the business strategy from the end-user or the customer point of view."

Perez says that NII looked for ways to streamline the company's current CRM, provisioning, activation, billing, and customer care applications in Argentina, Brazil, Mexico, Peru, and the Philippines.

Rather than buying new systems that would cost millions of dollars, NII contracted with Fuego, in Addison, Texas, for its application integration software to implement Fuego's business process management system. "The fact that you can change the business process fast to adapt to business problems that a customer is having is very powerful," Perez says. "[For example,] I can change the billing system if I want. It's all about adaptation."

Perez says the technology can enhance the existing service, a good thing during a slow economic period. "In times like now that are really bad, you need to protect your investment. There's no money out there," he says.

Similarly, Brian Finley, CTO of PSS/World Medical in Jacksonville, Fla., contracted with Citrix Systems in Fort Lauderdale, Fla., to integrate its legacy computing infrastructure as it had acquired several companies, each with its own systems.

Finley says he uses Citrix to cut overhead costs by leveraging Citrix's application servers to deploy applications from newly acquired companies. Citrix deployed J.D Edwards' ERP software throughout the company at scores of call centers that process orders throughout the country.

In such a widespread enterprise, deploying an integration plan from a company such as Citrix makes sense, Finley says. "Sometimes you have to leverage technology to reduce costs," he says.

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