The speed merchants

The speed merchants

Rapid growth is what all fledgling businesses want, but how do you handle their technology needs?

Managing the information technology needs of a fast-growing business can feel like standing on a knife edge. On one side lies the understanding that future demands are best met with robust and scalable systems that can tolerate the workloads the business will one day throw at them. On the other is the knowledge that cash is rarely readily available. Hence, the business needs to keep its investments modest. Overinvesting may create excess capacity that is never eventually filled, or even send the business bankrupt.

The problem is compounded by the fact that the founders of many small, fast-growing companies often work so much within the business that they don't have a lot of time to spend developing the systems the business needs to function - such as IT.

This realisation was a motivation behind consulting company Commercial Energy Services' appointment of a business systems manager. Michael Dean-Smith took that role just over five months ago, to review and develop the company's systems, covering responsibilities such as operational health and safety, in addition to technology.

"We have a system that we've outgrown," Dean-Smith says. "It was probably pretty good when it was put in three years ago, but there were only five or six people then, and now we're 16. Our system was over-loaded. It was time to take the next step."

Dean-Smith's background is in sales and business management, rather than IT, but he says the wide availability of outsourced and hosted IT services means this is not a drawback. The company's main requirements are job-costing, design, project management and planning and communications. And Dean-Smith says his ambition is to get everything hosted.

"We want to keep it fairly lean and get the professionals to do it for us," he says. "You can waste your resources by getting too bogged down in the hardware and software. I've got a reasonable knowledge and we know what we want."

Outsourced and hosted services are a common theme in the IT that small, fast-growing companies use. For software maker Atlassian, it is almost a mantra. When Scott Farquhar founded the company with Mike Cannon-Brookes 5 1/2 years ago, it was run off Macs, and everyone did their own tech support. Now it has more than 100 people, but Farquhar says it keeps the overheads down by ensuring everything is hosted.

"As a product-focused, fast-growing company, you try and put your best programmers and your best IT people on your product, because that's going to help you the most in the long term," Farquhar says. "It's a bit like the cobbler's children having the worst shoes. We know how to run products, but we don't necessarily have the same skills in information systems internally."

All of Atlassian's hosting is handled by United States-based Contegix, which Farquhar says is as good as having a systems administrator on staff. Early on, the company bought a rack server, but it became a pain to keep cool and made a lot of noise. Now the company simply buys basic stand-alone PC servers if needed, and outsources everything it can to Contegix.

"Outsourcing our servers means we never have production hassles," he says.

"They manage it all for us. Everything was outsourced from the start. We have basically no desktop applications beyond mail and calendaring clients."

The company also uses hosted applications extensively. Payroll is outsourced to Automatic Data Processing (ADP). Atlassian's own software, such as its tracking and management tool, JIRA, is used for its help desk, while its Confluence wiki is used for documentation and internal processes. Business reporting is outsourced to NetSuite.

Farquhar says he has been disappointed at times with the level of application availability, although in many cases this has been improved.

Working in a small, fast-growing company can provide a level of stimulation not necessarily encountered in larger businesses. This was one of the factors that enticed Ray Warouw into the role of general manager of IT with RedBalloon Days, a company that creates and sells corporate gifts and incentive programs. The company markets its services over the internet and has been growing by 60 per cent a year. In four years, its headcount has increased from two people to 40.

Warouw's personal history includes running his own business. He also spent a long period in IT at Sony before going into university-based research in the open source sector. He was drawn to RedBalloon Days by the passion he heard in a speech by company founder Naomi Simson.

"It's a very high-energy, highly demanding, and pretty outgoing sort of company, and that extends across all facets of work," Warouw says. "IT is absolutely mission critical, so we get a lot of authority and discretion to make significant changes to the business because the impact is so direct and that's very positive. I really enjoy that part of the role and I also enjoy the culture of the people in the organisation because they're very used to adapting to change."

Originally, the IT service consisted only of Simson and one IT specialist. Other directors took on components, but all involved were too busy running the business to consider IT issues such as planning for breakages, maintaining licences and preparing for growth at a basic infrastructure level.

Warouw joined the company in May, and discovered its IT foundation had been overwhelmed by rapid growth. He says lack of a suitable maintenance regime had caused significant infrastructure problems. Hence, the websites were struggling to keep up with traffic, and when problems arose there was insufficient expertise to determine what was wrong.

Warouw's first action was to investigate anything that was putting barriers in front of business processes and remove them quickly. Then he put measures in place in the infrastructure to ensure similar problems would not arise again.

The company had arranged a three-year outsourcing partnership with Bluefire, before Warouw joined. It became his job to implement that relationship.

"The outsourcer had promised to deliver a whole lot of things, but it was waiting for direction of course from the business," he says. "I've been working with the outsourcing agreement for the past three months and we've finally reached the first level of critical infrastructure implementation."

That involves rolling out all of RedBalloon Days' desktop infrastructure through a desktop Citrix migration into the Bluefire data centre. Warouw hopes this will deliver all of the preventative and corrective infrastructure measures that the company had been seeking. That migration will be followed by moving the company's server environment, which runs its business.

"Then we have one system where the outsourcer can completely control the whole environment, from our customer to our back end," Warouw says. "That's a critical part of our strategy. "What we want to do as much as possible is keep the intelligence of the marketing campaigns and business processes in our internal development group here, so we don't divulge that knowledge."

He is taking a long-term view of the company's IT needs, particularly its outsourcing arrangement. "I think it'll work very well for us," he says. "But it depends on what happens to the business in three years' time, and what sort of size and volume we are."

The Microsoft-focused IT services provider Readify has taken the idea of virtualised IT infrastructure one step further, and operates as a virtual company. It has no head office as such. Employees either work from home or on the clients' premises.

This was one of the factors that attracted Andy Lamb to managing the company's IT infrastructure. He says his previous role as manager of technology planning at Goldman Sachs JBWere gave him an idea of what to expect. In that role, he had to understand the drivers within the company and relay that into IT strategies and projects, making sure groups had what they needed when they needed it.

"The best way to do it is to make sure we don't spend too much now," Lamb says, "We need to look at the investments we do make, so that we can re-use them when we expand beyond where we are now."

One of the problems of managing IT in fast-growing technology companies is that such companies employ a lot of smart technology people, many of whom have their own way of doing things.

Lamb's goal is to develop standard pro-cesses, which will not only ease IT support and management, but will make future implementations smoother.

Once that list of items is cleaned up, he wants to turn his attention to further use of many of Microsoft's newer infrastructure tools. He is also keen to adopt Microsoft's unified communications strategy in support of Readify's virtualised business model. As a Microsoft Gold Certified Partner, Readify is also keen to stay ahead of its customers in terms of implementing new technologies, such as Longhorn.

With the company growing more than 50 per cent a year, Lamb says it is assumed that it will employ a lot more than its current 60 people 12 months from now.

"We'll probably have more like 85 people, and then over a 100 in another 12 months," he says. "There's an understanding that things have probably been done cheaply in the past and the systems that are there have supported the company in its growth, but the direction we've been given is to make sure that the company is set up as if there are 150 people working here."

He says larger corporations are more likely to upgrade their infrastructure in a big-bang manner. But he says the approach he is taking at Readify is one of smaller projects and upgrades.

In companies with more than 2000 people, he says, it can take years to implement these things. "But in a small, rapidly growing company where there's a massive can-do attitude, it's a lot easier," he says. "People just want to roll up their sleeves and get it done. It helps us out, and it helps the guys on the consulting side in the market show we can actually do what we're talking about."

That does not mean walking out and spending $500,000 on blade servers and a storage area network.

Lamb says he can buy reputable commodity-level hardware from companies such as Hewlett-Packard, Dell or IBM, where he says the capacity is good for now but also 18 months or two years out. It helps that the cost of hardware and systems needed to run a fast-growing company is cheaper and more highly scalable than in the past.

"I started in the industry 17 or 18 years ago," he says. "Back then, everyone had to have a computer room and masses of hardware. Now if I want a service, I can pick up a hosting provider. Rather than coming out of [capital expenditures], a lot of stuff can come out of an operating expenditures budget.

"I always say to people that it's never about IT now - it's about what you want to do in the business, and the IT systems, the processes and the technologies are just enablers allowing you to do whatever you want to do in the business."


Founded: 2002

Turnover 2006-07: $22.52 million

Growth this year: 168.3 per cent


Founded: 2001

Turnover 2006-07: $11.1 million

Growth this year: 67.8 per cent


Founded: 2000

Turnover 2006-07: $4.7 million

Growth this year: 63.6 per cent


Founded: 1999

Turnover 2006-07: $7.9 million

Growth this year: 51.9 per cent

© Fairfax Business Media

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