Bringing More to the Buyer’s Table With Broad Offerings | Article

buyer's tableWhen Matt Sullivan considered the areas where his business’s internal processes were slowing him down, he had a variety of places to point the finger.

Coastal Building Maintenance Inc., a 30-year-old, North Miami, Florida-based maintenance and engineering company, needed a renovation of its own marketing and branding image. It needed financial and accounting consulting and services to both bring the company up to speed with emerging software technology as well as help Coastal keep pace with its own growth. It also needed a new information technology infrastructure set up.

For most of these services, Coastal turned to Total Support Inc., a Miami, Florida-based business process outsourcing firm. Total Support’s marketing division, The Alten Group, handled Coastal’s marketing, Web design and hosting, and branding work. Another division handled the company’s accounting and tax work, allowing Coastal to eliminate a $60,000-a-year internal accounting post.

Now, a Total Support accountant works with Coastal’s own bookkeeper to update the balance sheets and close out each month, quarter and year statements. While Sullivan has turned elsewhere for his IT support, the benefit of turning to Total Support has been significant. The company is saving upward of $30,000 a year, Sullivan says.

“It’s been a real cost savings for us,” says Sullivan, president of the company, which had $6 million in revenues in 2001. “This has enabled me to trim overhead.”

Since its debut in early 2001, Total Support has found its place as a multi-faceted back-office and support service supplier, says Carlos F. Garcia, Total Support’s president and chairman. The company provides IT, accounting, finance, marketing and Web hosting services to small- to mid-market companies.

As a former certified public accountant and manager of assurance and advisory services for six years with Deloitte & Touche in Miami, Garcia realized the importance of business process consulting to the small and mid-sized business market. His focus started with accounting, finance and strategic development.

But where some BPO suppliers are narrowly focused and target single specialties, Garcia looked to a much wider landscape. The company’s TSPS division provides professional services, including accounting, finance and information technology. Total Support Realty Inc., provides commercial office leasing management for executive suites, small business offices and satellite offices, as well as strategic consulting for policies and inventory management.

Like ‘An Outsourced Kinko’s’

Late last year, the company closed its second round of private funding for $1 million, Garcia says. It used those resources to buy The Alten Group, a North Miami, Florida-based boutique advertising agency delivering traditional and Internet-related marketing services. That provided the final leg in the triad of services the company currently offers its clients, who range from $1 million to $30 million in revenues and from five to 100 employees.

“We’re kind of like Kinko’s on an outsource basis,” Garcia muses.

In fact, the private placement funds have allowed Total Support to pull off the roll-up of its services and deliver the scope clients are calling for, he says. The goal is to provide the services without losing focus or strength in any one area, he says.

“We do a lot of things, but we’ve still kept them separate to specialize in what they do,” Garcia says.

Though successful, Total Support’s move to a more diversified BPO product offering goes against current practices, says Lisa Stone, vice president and research director with Stamford, Connecticut-based Gartner Sourcing, the consulting firm’s BPO division. Business process outsourcing is defined by Gartner as delegation of one or more IT intensive processes to an external provider, which then takes over total responsibility – from staffing to management to ongoing administration.

Some companies have targeted the “true BPO space” and are focusing on specific niches, she says. Not Total Support, it seems. The company has seen another trend and has gone beyond that singular focus, she says. This can help Total Support diversify itself and reap broader revenue streams from single clients.

BPO Brings Name Cache

“BPO has a lot of cache, so organizations are positioning their service offerings as BPO offerings,” she says. “The more ingrained in an operation a vendor becomes, the more assured they are of their revenue stream. It’s like cross selling in the insurance industry. If you can sell an individual more policies, you guarantee yourself a better return.”

In fact, diversity helped Total Support survive the recession, Garcia says. The company debuted in January 2001, and longer-than-expected sales cycles and closing times for account pitches made success difficult – but not impossible, he admits. Cycles that should have taken weeks have taken months. One client who was landed in January 2002 was originally pitched in 2001, he says.

Still, Garcia and his partners saw early on the potential behind multi-faceted outsourcing. His vice presidents and partners – L.J. Rodriguez and Jorge De La Torre, both from Deloitte & Touche, and Chris Ranno and Christian Hevia – have accounting, finance and human resources experience. Because of their knowledge, the company early on realized how IT, accounting and other functions have “a closer role than a lot of people imagine,” Garcia says.

Coastal has benefited from that knowledge. After a bid review between Total Support and several accounting firms, Sullivan awarded the work to Garcia in mid-2001. The company quickly began providing overall financial support, which led to Coastal releasing its controller/chief financial officer – a man Sullivan admits was under-utilized. From there, Total Support took over marketing and image design with The Alten Group.

By using a single source for several outsourced services, Sullivan is able to build a stronger relationship with executives from Total Source. While he deals with executives from each division, he knows Garcia runs the show – and who he can call if he has any questions or concerns.

Still, using a single source provider wasn’t his original intent, Sullivan says. “It’s kind of funny how that worked out.”

As for the future, Garcia plans to close another round of private financing by end of summer 2002, and use the proceeds to continue its roll-up binge in the professional services arena, including IT consulting and marketing. “We can roll up some of these companies, keep their clientele, and expand the services,” he says.

Lessons from the Outsourcing Journal:

  • While many BPO suppliers are narrowly focusing on one area, Total Support wants to provide all back office non-core services.
  • Total Support has been able to retain its exert position in each process area by purchasing other BPO suppliers and then keeping their assignments separate from its other offerings.
  • Combining IT with process expertise appeals to small and medium-sized businesses eager to outsource non-core processes.

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