Craig Curtin is a stickler for details. And he's a great punster. So when he named his new ASP company Do IT Right, the moniker had a double meaning. IT is an abbreviation for Information Technology, which the company does right.
Curtin, who is managing director of the Sydney, Australia ASP, started Do IT serendipitously. He has spent the last 15 years installing LANs and WANs. One long time customer wanted to use SAP software. To outfit the 30 person office, the hardware costs alone were $600,000. ** And that price did not include implementation. Doing IT in-house was out of the question for this company.
The managing director of this company approached Curtin for help since his firm had seamlessly managed the firm's network for years. "Because of our history, they trusted us," he says. To satisfy their needs, he would have to become an application service provider.
His firm did the research and decided to go ahead with this additional service. Curtin's banker agreed to a $300,00 loan to finance his entry into the ASP world.
This company ended up letting its French parent outsource the SAP application for them. But Curtin was already excited about becoming an ASP provider and decided to go ahead anyway. The firm is outsourcing automation suites (principally Microsoft Office, email, and fax systems), payroll and accounting. He's confident his volume will grow because he has been quoted in influential business publications as an ASP expert. Do IT Right already has three companies in the process of implementation.
Even at this early stage, Curtin is already able to offer savings to his initial clients. But he believes as his volume increases, so will the magnitude of these savings.
Curtin plans on developing long term relationships with his customers, understanding their businesses intimately. That way, when their business plans change and they need to alter their course, his ASP services can provide the flexibility to do so quickly.
Searching for the right niche, Do IT Right is zeroing in on small companies, which it defines as no more than 50 users. To him, size matters. Every one of his customers is important because he's a small ASP himself. "If a small company goes to EDS, it won't be particularly important to them," he says. "If they work with us, the culture mix is right."
These are the companies that are working with older personal computers that they need to replace, which is a big capital expenditure for them. "They purchase new computers every five years and then run them into the ground," he explains. Or they are just tired of the constant hassle and expense of maintaining and updating their current crop of PCs.
Back up is a major issue for businesses this size. Too often, their computers will crash and they won't have a backup. An ASP relationship eliminates this major problem.
E-Commerce Through the ASP
His perfect customer is a firm that knows it needs to have a Web site and the requisite technology to do commerce with its customers on the Web. He will offer a business-to-business e-commerce solution as an additional ASP offering.
Finally, these companies know they need professional IT help. Typically, the company will drag its accountant into the IT area. Soon s/he is spending more time on computer problems than on the company's books. Outsourcing this area lets the professionals just do IT.
However, implementation can be tough when dealing with companies this size. Many companies this size have an unstructured environment. Do IT Right's first task is to introduce its checklist which provides a framework for the firm. That lays the groundwork for the segue to an ASP relationship.
Curtin advises companies of any size to chose any ASP with whom they already have a time trusted relationship. That will help eliminate the short term business risk of the ASP disappearing from the landscape. In Australia it's a land rush as a wide variety of firms attempt to do business in what they see as a lucrative new arena. Curtin predicts a lot of today's players will disappear.
Technology is limiting the company's expansion. In Sydney, Australia, customers qualify for a fixed tariff if their ISDN lines go no further from the switching station than 25 kilometers or 18 miles. Curtin, who is managing director of the ASP, signed a lease three miles outside Sydney's central business district in Alexandria.
Lessons from the Outsourcing Primer:
- An ASP relationship allows a company the flexibility to change its business direction and do it quickly.
- Chose an ASP roughly your size. That will make you an important client.
- Working with an ASP allows you to adopt new business strategies like e-commerce as well as solve old problems like system back up and recovery.
- Work with an ASP with whom you already have a relationship. That lowers the business risk of outsourcing with a company that might decide to leave the ASP arena.