it roadmap san jose 2011 john petrone tearing down & building up
DESCRIPTION
CTO John Petrone shares how Autobytel has used various tools, such as agile development, virtualization and outsourcing, to become a smarter, more effective organization, better able to respond to challenges and change.TRANSCRIPT
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Tearing it Down then Building It Up:
Transforming IT in the Midst of Chaos
John Petrone
SVP & CTO
Autobytel Inc.
November 15th, 2011
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Who is Autobytel?
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Who is Autobytel?
• A leader in providing online marketing services to the
automotive industry.
• An early innovator in the creation of automotive web
sites and online services.
• First major 3rd party web site.
• Multiple patents in online automotive marketing.
• First “dotcom” to advertise during the Super Bowl.
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Who is Autobytel?
Most importantly (for this story) Autobytel is a survivor.
• After an IPO in 1999, survived the dot com crash of
2000 to reach profitability and sustainable growth.
• Made difficult and expensive changes as a small public
company for Sarbanes-Oxley compliance in 2004.
• Most recently, re-built the company to grow and thrive
during the worst recession ever in the automotive
industry.
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Change in Strategy for 2006
Refocused on consumer web sites and rapidly grow
revenue – we wanted to get big fast.
• Built a new consumer web site with all new
infrastructure and technology to handle 3X growth.
• Supplemented internal IT staff with outside resources.
• Re-built other key revenue generating systems at the
same time.
This produced a large IT spend – over $20M/yr, 130+
FTEs, two data centers at a time of increasing losses.
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And then the unthinkable happens:
37% Decline
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Which leads to lower Ad spending…
30% Decline
28% Decline
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Tearing it down…
Autobytel now needed to reverse course – the company
(and IT) had to get small fast. We had to be able to survive
on half the revenue we had before.
• Sell non strategic business units.
• Simplify infrastructure and outsource internal systems.
• Cut desktop supports cost and move to BYOD.
• Reduce headcount.
• Cut costs at all costs.
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Sell non strategic business units
Benefits for IT:
• Fewer applications, technologies and databases.
• Better IT management focus.
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Simplify infrastructure
• Business unit divesture reduced data center needs.
• Retire old or expensive applications.
• Shut down new web infrastructure (too expensive).
• Outsource internal apps (CRM, HR, travel).
• Consolidate down to a single data center.
• Move to virtualization to reduce physical footprint within
data center
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Cut desktop and mobile support costs
• Fewer desktops/laptops = lower costs.
• Freeze annual OS, App and Hardware refreshes.
• Empower end users with data query tools.
• Open up to BYOD – embrace iPhone, iPad and Android
into the enterprise.
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Reduce Headcount
• 4 separate RIFs between 2006 and 2008.
• Reduced data center footprint and fewer business units.
• Eliminated QA, project management, reporting,
architecture.
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That worked great…
• Greater than 75% reduction in IT staff and spending.
• Systems were still running okay (with a lot of deferred
maintenance).
• Down to bare bones on outside costs (maintenance,
support, annual license fees).
But it wasn’t enough
• We could run what we had but we couldn’t grow.
• We were still losing money.
• Not sustainable without something changing.
• You can’t cut your way to growth.
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Building it up…
• We needed to restart growth to get to profitability.
• Yet we also needed to maintain control of our costs.
• We focused on 4 main efforts to achieve those goals:
• Added back some key staff.
• Started to innovate again.
• Looked for a transforming acquisition.
• Re-launched our core brand.
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Adding staff
• Added back project management, key IT leadership
positions and more development resources.
• Former Autobytel IT staff were a valuable recruiting
source:
• They already knew the systems, business and
people
• No surprises – we already knew their strengths and
weaknesses.
• How we treated staff on the way out was a critical factor
in being able to staff back up.
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Innovation
• Needed to innovate to add products.
• To add new revenue streams.
• To prove that we’re still alive.
• We had nothing to lose.
• Need to roll out products much faster than before.
• Agile development, small teams, focus.
• Launched iControl in 2010 –built in-house but delivered
thru a third party platform and relationships.
• Continued patent applications.
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Acquisition
• Acquired a small company in 2010 with complimentary
technology and revenue streams.
• Brought with it a cost effective off-shore development
contract (with a QA team).
• We used a different approach to integration than before
– a slower pace, more inclusive, far less costly.
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The New Autobytel.com The Technology
• All new development on new platform.
• Microsoft .NET 4.0 and SQL Server.
• All in house resources.
• Small team using Agile development.
• Time boxed – must launch by June 2011.
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The New Autobytel.com The Consumer Proposition
Expand brand beyond
in-market timeframe
(every 3-5 years)
Your
Lifetime
Automotive
AdvisorTM
OWNERSHIP
Recalls
Diagnostics
Estimates
Maintenance
Schedules
Ask a Mechanic
REPURCHASE
Present & future
vehicle values
Future Depreciation
RESEARCH
Purchase Price
Vehicle Specs
Reviews
Cost of Ownership
Ownership activities
MyGarage®
Purchase
activities
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Autobytel IT Today
• Re-launched Autobytel.com on June 29th 2011.
• Back up to 28 internal IT staff.
• Off shore development and QA adds 7-8 variable FTE.
• IT spend is a bit over $5M/yr.
• We generate twice as much revenue per IT $ than we
did in 2006.
• We deploy new enhancements every week and have
much shorter development cycles for new products.
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Autobytel Today
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Autobytel IT Tomorrow
• A long list of deferred maintenance and projects:
• New financials package
• Back to annual desktop refreshes.
• New phone system and storage solution.
• New Product Development
• Web site enhancements and mobile apps.
• New dealer products.
• Retire our old web sites:
• Need to continue to keep costs in check.
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Lessons Learned
• What made the difference for Autobytel?
• The right staff (skills, attitude, commitment).
• Small joint teams and agile development.
• Moving to a virtualized environment and cloud based
apps was critical.
• Focus.
• What did we struggle with?
• We over corrected and cut too deep to begin with.
• Keeping the load manageable on the remaining IT
staff.
• Pulling out of the day to day to focus on the future.
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Most Important Lesson Learned
One last take away:
• “To believe a thing impossible is to make it so” – French
Proverb
• The most important change we had to make was in our
own thinking about what was possible.
• Everything else we achieved came after we began to
believe it could be done.