InformationWeek
Defining The Business Value Of Technology
November 16, 1998
For Some, Small Vendors Are Better
After looking at five integrators, including at least one of the Big Six firms, he awarded the contract to Whittman-Hart Inc., a midtier company. "The Big Six firms wanted to push bigger, more-complex packages," Bruaene says. "They didn't offer as much hand-holding as we needed. I felt like all the blue suits came in to sell us something and talked a lot about their company, but not about ours."
Herff Jones' case is not unusual. IT is becoming as critical to small and midsize businesses as it is to large corporations. Because small companies have limited resources and must rely more heavily on outside help, many prefer to work with small to midsize outsourcing companies that provide more personalized service than larger firms.
Mylex Corp. approached KPMG Peat Marwick when the $140 million producer of computer products wanted to update its systems and implement a new enterprise resource planning system. KPMG seemed like a logical choice, since it had been doing Mylex's IT audit work. But Mylex decided to enlist AnswerThink Consulting Corp., a smaller company whose founders were originally from KPMG. "AnswerThink was more willing to customize its efforts specifically toward our needs," says Colleen Gray, CFO and VP of finance for Mylex, in Fremont, Calif. "The larger firms have a generic, standard approach to things."
Smaller companies such as Herff Jones and Mylex say their projects often aren't lucrative enough to get much attention from the top integrators, and that the big outfits tend to put their least-experienced staff on contracts for small clients. "The larger firms are fairly booked up and don't consider an implementation of our size a large project in the grand scheme of things," says Mylex's Gray. "We wanted best processes, not the templatelike solution the larger firms were offering."
Herff Jones' Bruaene says he doesn't see any downside to choosing a smaller firm, but he does see a lot of advantages. "Whittman-Hart steered us away from ERP packages that would require a lot of IT support after the implementation was completed," he says. "And they helped us choose a system that wasn't as complex as some of the larger systems but that could handle our business."
Herff Jones chose an Oracle ERP package running on Hewlett-Packard HP 9000 NT servers. "We needed software that had configuration flexibility for our manufacturing processes, and Whittman-Hart helped find that for us," says Bruaene.
Bruaene also didn't want to outsource IT functions on an ongoing basis. "Whittman-Hart is implementing the software and helping our people learn how to use it," he says. "Then they'll leave. Some have already left. That's the way it's supposed to be." Bruaene says the implementation is about 85% complete, and he expects the system to be up and running on Dec. 12.
Mylex also opted for a package from Oracle but added supply-chain-management software from Manugistics Group Inc. and an export-management system from Vastera Inc. The implementation will be completed next May.
Joseph Conlon, VP of integration services for the small- and medium-size-business unit of IBM Global Services, is well aware of the perception that small companies have about big integration companies. "We haven't done a good enough job yet on the perception that IBM is too big for them," he acknowledges. But he points out that IBM Global Services and other large integrators are paying greater attention to small companies because those businesses now account for nearly half of IT services spending. --Jennifer Mateyaschuk
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