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The IT team at Avnet, the No. 4 company in the InformationWeek Elite 100, spotted a new revenue stream by building on an acquisition's training platform. The project is on track to drive $30 million in revenue this year.
When it comes to mergers and acquisitions, IT organizations are often the unsung heroes. It's the IT professionals who make sure that the incoming and existing corporate infrastructures play nice with one another and won't heap on unexpected costs. But that due diligence work and the subsequent merging of systems and operations are typically only acknowledged if something goes wrong.
In Avnet's case, IT's M&A involvement proved to be much more: The opportunity to spot a new revenue stream.
Avnet, a $27.5 billion a year global technology distributor, acquired Magirus Group, a European distributor, in 2012. During the acquisition's due-diligence and integration process, the joint business and IT team uncovered a small but profitable portion of Magirus Group’s business that provided authorized training courses on behalf of a key supplier, VMware. While Avnet already had some customer training capability, Magirus had developed a technology system to manage the registration and delivery of these courses, improving customer experience and profitability.
"It's a really good example of IT being at the heart of delivering direct business value," says Steve Phillips, CIO of Avnet. "That's energizing and empowering for everybody across the enterprise."
Avnet CIO Steve Phillips
Once they saw the potential, Avnet’s business leaders, educational services experts, and IT teams together began designing a system to let Avnet expand those training capabilities. The goal was to create an online operational training platform that could scale globally.
The platform is on tap to deliver $30 million in revenue in 2015, says Phillips. Avnet is now able to offer training from more than 30 suppliers and IT vendors. The system supports about 3,000 courses and 19,000 scheduled classes. More than 3,700 students have participated in online courses offered through Avnet, with 16,400 students attending classroom trainings.
"This started like many IT projects at Avnet," says Phillips. "We like to try to socialize these things internally to gauge interest and then complete do a high-level assessment before we burn a lot of resources on it."
Avnet discussed the planned capabilities of this system with its suppliers, including IBM, and suddenly the stakes got a lot higher. IBM selected Avnet as one of four companies to serve as an IBM Global Training Provider -- making Avnet a go-to training resource for IBM partners, customers, and employees. As a part of this contract, Avnet needed to ramp up quickly and have the system live and fully functional in more than 60 countries.
Avnet hosts all of the courseware material, online training, and on-demand training. Avnet also leveraged its own VMware-based private cloud environment to create virtual lab environments, which are required for several of the technical courses.
"This was one of our first customer-facing cloud solutions, and we learned a lot about the benefits of using cloud tools," says Phillips. These benefits included the speed at which the team was able to operate, the ability to reduce time to market, and the opportunity to have flexibility in how the project was scaled. "We can invest in our capacity as the business requires from a revenue standpoint," he says.
Avnet Academy in session
To create the Web presence needed to offer these global training capabilities, Avnet developed a global front-end Web portal, academy.avnet.com. Avnet’s IT team designed this portal to provide customers with an easy way to find training schedules, search for courses by vendor and delivery method, enroll in classes, provide feedback, and chat with Avnet’s educational experts. Adding to the complexity, the team also needed to localize the portal to support multiple languages, accept local currency, incorporate local taxes, and ensure course participants were authorized to participate in the training classes.
The IT team that originally developed the system at Magirus Group got the job of scaling the system globally, which Phillips saw as a good learning experience on several levels. Not only did this present the chance to see a system prove itself as a profitable business driver, it helped the IT pros joining Avnet from Magirus learn how their lives would change working inside a company the size of Avnet.
"Large companies typically have more formal structures around governance, change management review, and complex IT environments where it can be challenging to introduce new capabilities," says Phillips, who himself came to Avnet from a smaller company via an acquisition 10 years ago. When it came to Avnet's more formal approaches to change management and architecture, "We had to make sure they understood why those processes were important."
In addition to the customer-facing aspects of the portal, Avnet also wanted it to provide employees with key functions. These included the ability to:
Schedule training sessions, manage registrations, and incorporate student information into Avnet's CRM system
Publish training materials and print course materials automatically
Manage promotional pricing, and
Provide feedback on statistics and track payments
Avnet used several cutting-edge elements to develop the system. It developed the Web application on Grails -- the high-productivity Web framework that is based on the Groovy language and designed for the Java platform. It used a state-of-the-art technology stack using Spring, Hibernate, Quartz, and front-end frameworks, including Bootstrap and AngularJS. The development workflow also included automated multiplatform testing using BrowserStack and the Spock framework.
Equally important to the project, says Phillips, is the culture of innovation and collaboration at Avnet that made it possible. Avnet has an online form for the IT team to record how it's spending its time. "It's not to make sure everyone is putting in enough hours. It's to track how much time we're spending on maintenance and support sustaining our systems," he says. "We track 70% sustaining and 30% on innovation. We have this constant mantra: Be more efficient. Deliver high-quality service levels, spend less on sustaining, and deliver more innovation."
Avnet's efforts to spur innovation include a company-wide program known as Results, in which anyone can put forth an idea for evaluation. "We'll look at it. Maybe it gets investment, but even more importantly, we shine a light on it so that others across Avnet can become aware of it," Phillips says.
For IT, there's the CIO Challenge, in which individuals and teams are encouraged to put forward ideas that will make Avnet a better place to work. "I'm willing to spend $50,000 to support a good idea. We put the ideas up for employee voting, and the winning idea is implemented," he says.
In setting big initiatives, Avnet's approach is similar to many big companies: The executive board, at an annual off-site meeting, looks at the overarching business goals and what each function must do to drive the strategy.
For ideas big and small, understanding what the business really needs to succeed helps the company determine where it invests IT dollars.
"You need for people to be confident enough to put ideas on the table, and also be confident enough to accept that some ideas don't get to the top of the list," Phillips says. "If you have a good collaborative approach with some flexibility from all parties, you can drive an innovative culture, even within a large corporation."
Susan Nunziata leads the site's content team and contributors to guide topics, direct strategies, and pursue new ideas, all in the interest of sharing practicable insights with our community.Nunziata was most recently Director of Editorial for EnterpriseEfficiency.com, a UBM ... View Full Bio
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