The Transformers, IT Consultant - December 2001
What do you do when the market for traditional IT services curls up and dies? Reinvent yourself as a web-enabling business intelligence consultancy, of course. Katie Puckett talks to OCS Consulting's chief executive Maurice Aroesti to see how it's done.
Imagine taking a consultancy specialising in traditional technology-based services and transforming it into a provider of flashy, web-based business intelligence solutions. A mission and a half, but that's exactly what Maurice Aroesti has done as chief executive of OCS Consulting.
Two years ago, the company had a turnover of £10M and a client list to die for. Then the niche strategy that had made it a market leader backfired, and it was forced to rethink its entire offering. Today, OCS Consulting delivers business intelligence and e-commerce solutions, and has rebuilt its £6.5M turnover and client list from scratch.
'The biggest markets we were in virtually disappeared overnight. From one month to the next, our business went into rapid decline,' says Aroesti. The company faced a stark choice - get a makeover or go under. Sensibly, it chose the former. 'It's been - in quotes - a very interesting time,' Aroesti admits.
An old hand
Though OCS had been around since 1984, providing services for traditional large-scale technologies, specialising in the likes of PowerBuilder, Natural and SAS, it now faces many of the same challenges as a start-up. 'In the last two years, 90% of that £10M business has gone. There's hardly anything we do now that we did two years ago,' says Aroesti. Though only 18 months have passed since the original three-year strategy was devised, Aroesti estimates that the company has completed 80-90% of it. 'We're ahead because we've had to be. We thought the decline might reach a plateau, but it didn't, so we've been trying to renew the business with new business.'
But where to find that new business? After OCS' clients finished preparing their systems for Y2K, demand for its consultants' very niche skills was almost non-existent, and there were no obvious transfer opportunities. But the possibilities of the new and glamorous world of e-commerce were unmistakeable. 'There was a lot of pressure to go the dot.com way,' says Aroesti. 'But we looked at Razorfish and march FIRST and all the big consultancies in e-commerce, and said "that's not us".'
While OCS had traditional IT skills in spades, it had no experience of so-called new-world technologies. 'Our strengths were boring strengths,' Aroesti explains. 'We knew how to deliver IT and to do it well.' After a period of very rapid soul searching around the turn of the millennium, the company realised that it's knowledge of traditional business problems need not necessarily go to waste. Web-enabling internal systems might be the plain, unassuming sister of all things Flash, but it could save a lot of time and money for the companies in question. To date, OCS has built intranets for Argos, Avis and William Hill, and it is currently working on projects for various government departments, including the DSS.
Previously, OCS' market was simply the users of the expensive technology it specialised in -blue-chips such as Barclays, Halifax, British Gas, Securicor, DHL, Royal & Sun Alliance and CGU. The targets for its business intelligence solutions weren't so obvious. What the company did have was experience of working in the corporate marketplace, and a strong reputation for methodology. But though OCS was highly regarded by existing clients, Aroesti found they were reluctant to adopt the new services it offered. 'We thought we would be more successful converting old customers than getting new ones. We actually found that it was a lot harder to convert old companies, because they have a view of you that is hard to change,' he explains.
Aroesti does find OCS' history can be used to advantage when pitching for new business, however. He describes the company's selling point as 'old heads with new visions.' There's still no substitute for experience when it comes to knowing that clients want quick return on investment (ROI) and finding the best ways to deliver it. 'Instead of saying "there's billions of things we can do on this intranet", let's look at the first thing and do that. Let's build it so we can add things later, but let's just do this one thing and get the benefit,' says Aroesti.
The e-business solutions OCS now offers are a world away from the clunky mainframes and client/server systems from which it made its name. Yet they are being delivered by what is effectively the same staff, give or take a few Java specialists brought in from outside. Can't teach old dogs new tricks? Don't you believe it. One of OCS' oldest employees was installing mainframes for Cornhill Insurance two years ago, and now he's one of the company's leading web strategy consultants. For Aroesti, it's the success stories that make at least some of the pain worthwhile: 'You think wow - how good is that?'
Most of OCS' 80 employees have been with the company throughout the transformation. According to Aroesti, the culture of the company has proved the biggest barrier to change. 'On the surface, we've achieved a hell of a lot, but much of that 10-20% still to be done is changing people's mindsets, and it's incredibly difficult.' Getting consultants who were used to thinking only in terms of technology to consider their clients' business needs was a challenge and, though the company has invested a great deal in reskilling, for a few, it is just too much of a mental leap. 'People are really struggling,' says Aroesti. 'It's not resistance; some just don't get it.
For those that do, however, new career opportunities abound. In the old-style technology-based consultancy, it was hard for people to develop. Now, consultants who had peaked in terms of their value are the greatest asset to the company. Aroesti recalls the case of one long-serving technician, who was becoming more and more interested in the analysis and design side of consulting - something not often called for in OCS' purely technical niche: 'Suddenly, his skills are exactly what you want. That's really nice.'
The management of OCS have also found there is a lot to learn. Aroesti joined the company nearly ten years ago, and was instrumental in shaping it as he rose up through the ranks, becoming chief executive in 1999. An experienced manager, he nevertheless found recent events presented new challenges. 'It's taken me a long time to learn that management of business is not a simple, consistent thing. There's not just one way of doing it. Businesses go through ups and downs and, at every different point, you have to manage in a different way.'
There was much uncharted territory for the consultancy, not least because of a certain reticence in the business world. 'People don't really talk about having to go through a difficult time. Everyone always talks about how you're going to grow, how you're going to do more, how you're going to be better,' says Aroesti. 'Difficult times require different skills - when it's good, it's easy.'
Far more so than in boom times, a business in decline demands constant attention. Drains on expenditure that would go unnoticed or unchallenged in healthier times must be addressed immediately. One key lesson Aroesti says he has taken from the transformation is never to take your eye off the ball. This is advice many real start-ups would no doubt do well to follow. 'Having a strategy and a plan is all very well, but you have to be able to change it very quickly if you see something won't work. Academically, you can do this exercise but, if you're not aware, then you will just end up going nowhere,' he says.
Aroesti also learned that you can't do things by halves when you're transforming a business: 'If you're going to effect something like this and be successful, you have to be completely committed to doing it. You've got to do it 110% and leave no stone unturned.' Driving change is not for the passive - Aroesti believes that you can't afford to let problems go unchecked. 'Things that are wrong act as seeds and flourish,' he says.
Resistance to change is a barrier no manager can fail to have encountered. Aroesti knows only all too well, and is aware of how a forceful approach can be perceived: 'We've been really pushing and pushing and pushing. They see it as being pushed around, while we see it as trying to get into their minds and telling them they have got to change.' At OCS, the managers frequently get everyone together and update them on the company's progress. It often comes down to telling them what they don't want to hear. 'It's presenting what you want them to do in black and white: "we're doing okay, but we're not doing it well enough and it's everybody's responsibility. If you don't want to do it, then go".' It is vital for Aroesti that the senior management team stick together and provide a consistent message. 'You've got to have the same vision - it's an everyday thing,' he says.
Of course, there have been difficult decisions to make. Aroesti believes that shrinking from them does not benefit anyone: 'However much we complain, the people running business are being decisive, trying to secure the future of the business and all employees that work for it. Companies that don't do that will go bust, and everybody who works for that business will be affected.'
OCS now plans on a much more short-term basis. Giant implementations have become a thing of the past, along with the dinosaur database solutions OCS used to provide for its clients. Now, the cycle is much shorter, with a contract lasting 12 months instead of three years, or three months instead of a year. This means that there is a lot more activity in securing new contacts and maintaining relationships with clients. 'You have to work very, very hard to keep it going,' says Aroesti.
Worth the effort
Overall, the trials and tribulations have paid off. Aroesti feels that the new incarnation of OCS is far more attractive to clients because its consultants can advise them of the business benefits of the technology, rather than just the nuts and bolts. 'Going forward, we're very well positioned in the IT world to add more and more value to our clients, which I think is a nice place to be,' he says.
Not that Aroesti is ready to sit back and relax just yet. 'I'm really pleased with what we've done, but we're not quite there. Everyone's future is not totally secure yet.' Until he can go on holiday for a month and feel confident that the company will still be standing when he gets backs, his work will not be done. 'The lesson is that you can do a hell of a lot and have a great story, but it doesn't mean it's finished. It's not a happy ending today - we're at the interval.