Two Giants with an Infant Between Them
The American School Directory (ASD) is the Internet guide to every public, private and Catholic K-12 school in the United States. Users have access to communication tools, maps, calendars, menus, payment tools, school wish-lists, images of students at work, alumni directories (even for schools that are now closed) and much more. Schools without their own Web sites can adopt the ASD site, and ASD also works hand-in-hand with schools that have their own sites. With 108,000 K-12 schools, the project has over 108,000 individual, fully interactive Web sites. It is a gigantic undertaking.
The other giant is IBM Global Services. What’s between them is an outsourcing agreement and the Internet. John Myers, Senior Vice President of Information Technology for ASD, says his organization decided to outsource because it is difficult to stay on top of technological advances. “That is especially true in the Internet world,” he says. “The Net is still really an infant, and infants change a lot very quickly, and that’s happening with Internet technology. We, being a small company, felt it was in our best interests to outsource to someone with a lot more resources and the training required to keep their people on top of the latest technology.”
Their initial contract was for a $2.5 million application development effort, and that led to the signing of a $3 million Web hosting contract. The project is enormous, and at the time it was outsourced to IBM in 1996, it was one of the largest Internet initiatives. The sites are hosted on an IBM RS/6000 Web server configured to handle two million hits daily.
Tom Wiley, ASD’s Vice President of Corporate Communications, says there were three primary bidders to the organization’s request for proposal. There were two things ASD looked for in its choice of giant to supply the needed services, he says. “When you’re looking at building a directory for every school in the country, you need to look for somebody that has the experience and expertise to pull that off. But at the same time, working with schools is a delicate issue. So we needed a company that also had a good track record in the K-12 arena. And IBM brought that reputation.”
Besides the huge amount of time compiling and maintaining the information, “the sheer amount of code that’s involved in the project is in excess of 20 million years of code development,” says Myers. ASD had the ideas, and IBM had the team of programmers that wrote that code for a year. ASD collected all the data in the database. It remains a big undertaking to keep that database information current. The schools’ officials can make data changes online, but ASD also does mailings twice a year to get updated information.
“Our main goal is uptime and availability,” states Myers. “A lot of sites are up but are so slow that a user won’t go back there again. And most schools don’t have the biggest pipes and fastest machines.” Cognizant of that, the two companies have built into the site design some things that make pages load a little faster. “And all the things we didn’t think of up-front, IBM brought to the table,” adds Myers.
IBM, in fact, has exceeded both requirements and expectations. “But I can’t say that we didn’t factor that into our decision process,” admits Myers. “We obviously knew that a company like IBM had a wealth of resources; and we obviously hoped that since we were a small company, they could bring a technical resource to really help us out if we got into a bind. And we have had a couple of instances of that.” He says IBM has “responded marvelously” during the past four years and has often done so at no additional cost to ASD. ASD has been impressed with the organization of IBM when there is a challenge. “They have a well-defined procedure for handling problems -- it’s not a one-horse outfit. There’s a team of horses,” says Myers.
Both Wiley and Myers point to good communication as a factor in the success of the relationship. IBM’s project executive frequents ASD headquarters, ascertaining the client’s needs and what might need to be done or changed. Myers said another big help is IBM’s willingness to educate ASD on IBM’s culture and procedures. “Part of the problems that a small, entrepreneurial-type company will have in outsourcing to a large company is culture clash,” he explains. “But they have done a good job showing us how to push the right buttons within their organization to make sure there is no breakdown in communications.” Coinciding with that, IBM has also taken the time and effort to understand ASD’s business and culture.
ASD travels to school principal and administrator shows nationwide and often bumps into IBM people coming up with new ideas and information to share with its clients. ASD appreciates this as “just one of the intangibles that a giant like IBM brings to the deal.”
Myers says what is most impressive about its supplier-partner is that “the dollar value of this deal to IBM doesn’t even show up on the radar screen when they do their corporate yearly report. But IBM treats it like a big deal. They treat us like we are very important.”
The contract was renewed for five years in 2000. In the infant Internet world, five years is a long time, but ASD is confident it has the right partner to help it meet its goals.
Lessons from the Outsourcing Primer:
- Internet technology is still in its infancy stage, and buyers need to select a supplier that will be able to stay on top of the newest developments.
- There is a culture clash between large supplier companies and small, entrepreneurial buyers that can cause communication problems unless the supplier helps the buyer understand how things are handled.
- Buyers appreciate being treated as though they are important to the supplier, despite the amount of supplier revenue involved in the contract.