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InternetWeek USWeb Expands Outsourcing Efforts

Enough Rope
But not every growing business is comfortable dragging a fledgling technology consulting firm into new territory, as Codrea was. Some prefer to try less-established firms on projects that relate directly to their expertise before venturing into uncharted waters together. Take David Olstad, senior consultant and MIS director at Rath & Strong Inc., a $10 million management consulting firm that was acquired last year by Aon Corp. (The Lexington, Mass., business continues to manage its IT independently.) Olstad now regularly turns to an IT consulting firm called iCorps to handle internal projects, even those that use unfamiliar technology. But back in 1994, when he first met iCorps' president, Michael Hadley, Olstad was more cautious.

Impressed with a presentation iCorps (then called OHC Inc.) gave to Rath & Strong, Olstad originally assigned the firm a project to install a Windows NT server. This fit perfectly with iCorps' focus on networking, application development, systems integration, and the Internet. Because iCorps was a new business, it gave Olstad a break on the project and continued to offer volume discounts during periods when he needed extra help. After the successful NT implementation, Olstad asked iCorps to provide software training to Rath & Strong's consultants. Only after iCorps' staff had proven their technical and people skills by working with technologies they knew did Olstad raise the bar.

For instance, when IBM first began offering its Global Network Services, IBM.net, Olstad had iCorps deploy it on 30 notebook computers. He then asked iCorps to install Microsoft Outlook, before it was officially released. iCorps also installed just-released routers, a firewall, and servers, and hooked up Rath & Strong to a startup Internet service provider.

Because many of the products and services were new, and because iCorps wasn't big enough to have a team developing proficiency ahead of time, Rath & Strong saved at least $10,000 on what would have been $25,000 to $30,000 projects, Olstad estimates. Since then, the companies have worked together to implement a variety of new technologies at Rath & Strong. Olstad pays 25% to 40% below iCorps' standard fees because its consultants can resell the knowledge they gain in these projects to other clients.

Of course, there have been problems, such as the time an iCorps mistake took Rath & Strong offline to its clients. Although Hadley made fixing the problem a top priority, the company was down for a day and a half. That's when it's critical to have support from the top, which Olstad has. "You need management that will give you enough rope to hang yourself," he says.

Fear of risking downtime or missing deadlines means that some emerging enterprises think it's best to avoid working with relatively untested consultants. Mark Green, director of IS at Hubert Co. a privately held food distributor in Harrison, Ohio, is one of them. He prefers to work with Kizan Corp., a local consulting firm, mainly because its staff "comes in knowing the technology cold." Green has brought in Kizan to port a sales-force automation system from Unix to Windows NT and to set up virtual private networking. "It may be a little more expensive that way, but someone who knows the stuff well might be five times as productive as someone just learning it," Green says.