IT shop stays the course in lean times

Meet Rich Spinelli. If you're an IT manager, his story will sound familiar. It's a story of budget lockdowns and depressed high-tech spending and how, despite what some salesmen are trying to tell us, things won't be improving any time soon.

Spinelli is the Director of IT at Boston Sand & Gravel (BS&G), a company that hit the jackpot in 1987. That's when Congress approved funding for Boston's Central Artery/Tunnel Project, the largest federally funded municipal improvement project in U.S. history. More affectionately known as the "Big Dig", the project will require approximately 3.8 million cubic yards of concrete (the rough equivalent of a one-foot thick layer of concrete covering 2,350 acres) before it's finished.
BS&G was in the right place at the right time. Its plant--here sand is imported by train, turned into cement, and loaded onto mixer trucks for delivery--is located right on the land that the Big Dig goes around, through, and under. Few if any other companies were positioned to deliver cement to the Big Dig within 90 minutes of being manufactured (a CA/T project engineering requirement).
But now, 11 years after construction on the Big Dig began and approximately two years from its completion, BS&G is in a different time and place. After years of phenomenal growth and after most of the concrete has been poured, BS&G is facing the project's conclusion at the same time that the economy is in recession. While the recession presents no threat to BS&G's solvency, it's definitely affecting the company's bottom line. Spinelli is typical of IT executives who are feeling the pinch. Says Spinelli: "We're taking a very conservative, survival mode-like approach, to any new investments in IT."
At the peak of the Big Dig's concrete-related activities, BS&G was moving about 4,000 to 5,000 cubic yards of cement each day. Considering that the company's 75 GPS-equipped cement-mixing trucks only carry about 12 yards at time, managing that much cement on a daily basis would keep any organization that schedules, drives, services and loads those trucks on its toes. The Big Dig's stringent quality requirements and the limit to the amount of time that any mix could spend in a mixer only increase the challenges.
A typical "workflow" for a truck's delivery run includes time allowances for loading, transit, pouring, and even a washing stage that's required by environmental agencies. In BS&G's business, errors can cost a lot of money. It could be a fine from the Environmental Protection Agency. Even worse, the company may have to send a jackhammer crew to "jack out" a cement-pour-gone-bad and then schedule another, unanticipated "workflow" to make good on the bad pour. Maybe the cement-mix spent too much time in the truck. Or maybe there was an error in the mix's formula. It seemed to me a hundred things could go wrong.
But errors are apparently few and far between. Indispensable systems track the trucks and keep them running on time. There are even systems to automate the conveyor belts that control the type and amount of ingredients needed for a particular mix.
"For example," says Spinelli, "we can use the systems to do post-mortems after a day when things really got backed up. We might figure out that we're not allotting enough time to wash the trucks, or to pour the cement, and we make the necessary adjustments. That way, for all future runs, we get closer to making sure the right trucks are in the right places at the right times, all the time. But, I'd be lying to you if I told you that that was all it takes."
Apparently, there's only so much BS&G's systems --- a combination of Windows-based applications running on Citrix (the terminals hold up much better to dusty conditions than PCs) and an AS/400 for accounting and billing ---- can do. It's the hands-on, face-to-face parts of the operation that make it the success that it is. Perhaps a truck gets stuck in a traffic jam, and its unavailability has a ripple effect that only people can accommodate. Or, as one plant manager demonstrated, perhaps it rains on the train that brought sand in from Ossipee, New Hampshire. When the sand is already wet, the mix may not need as much water, and someone has to eyeball the resulting adjustment that's dialed up or down with repeated presses of function keys on a keyboard.
Big vision, small budget
Spinelli is sold on the notion of giving anyone access to anything at anytime. When he observes the way BS&G's managers, salespeople, truck drivers, dispatchers and other staff work with the company's systems and also must walk around to work with each other, he sees a lot of opportunities for technology to help.
"Instead of tying the staff to their chairs in front of WinTerms, says Spinelli, "I could equip everybody with wireless Microsoft PDAs, so they can do the sort of walking around that they need to do to in order to collaborate with each other and respond more quickly to problems as they arise, while at the same time still staying in touch with the systems." The idea isn't too far-fetched. With many of BS&G's staff working through a Citrix-based system, the inclusion of a Windows Terminal client in Microsoft's PocketPC 2002 operating system should make it relatively simple to mobilize the staff.
But, what Spinelli doesn't see is room in his budget or the justifications to augment that budget in order to accommodate some of his forward-thinking ideas.
A few years ago, when the CA/T project was at its peak, Spinelli probably would have had the latitude and the budget to try things, even if some of them failed. But now, with demand for cement at 1,500 to 1,700 cubic yards per day (less than half of what it was back in the Big Dig's heyday), most of Spinelli's budget is dedicated to keeping things running the way they are.
"The owners of this company are very smart, and they're good at reading people," says Spinelli. "They know that an IT guy like me can make anything look good on paper. So, I know that when I go to them with an idea, they'll be studying me more than the documented proposal to see how confident I am that some idea is worth a shot. As a result, I go to them with fewer ideas."
"In this economic climate, there's no room for failure. The stakes are higher. It makes me a sharper IT person, and I'm more tuned into the needs of the business."
While the wireless PDA idea seemed like a slam dunk to me, it wasn't to Spinelli. "The technology may be available, but that's not the problem. First, the benefit isn't absolutely clear, [but] not because the ROI is difficult to quantify. The owners are actually less interested in number crunching than you might think. Other factors contribute to the project's success. We also have to ask questions that aren't financial in nature: Does this represent a cultural shift for the staff and will they embrace the change? How will it affect our customers? Are there legal issues with government agencies? How would retraining go? If we're not sure about any of these things, then the probability that we'll move forward begins to drop."
Where else would Spinelli invest if his budget permitted?
"I'd like to upgrade everyone to Windows XP. We still have people on Windows 98 SE. But between the licensing, installation, and training costs, I estimate that the upgrade will run about $50,000 to $60,000. But things are working. It's money we don't need to spend right now. My network administrator could use some better networking tools, but we're getting by without them. We'd also like to remove paper from the order entry and billing loop as much as possible. But I estimate the cost of doing that will exceed $100,000. So, not today."
On the bright side, Spinelli's budget is a bit bigger than it was last year and he has made some small investments. But they've been in areas where the tangible or intangible benefits were absolutely clear. One of those investments was about $15,000 into a system from Thales Contact Solutions that records all of the company's phone calls.
Thales' system, which so far has stored over 90,000 time- and date-stamped calls on one side of a DVD-RAM, is used for quality assurance on all orders taken via phone. It has paid "highly quantifiable dividends," Spinelli reports. "In the case of a customer dispute over mix design or yards delivered, we can retrieve a recording of the original phone order in a matter of seconds, play it back, e-mail it to the customer, and have it resolved within minutes to the customer's satisfaction. That's what we genuinely want."
The payback goes beyond righting a wrong, explains Spinelli. "Customers are more careful when giving us orders and we're more careful when taking them, so there are fewer costly mistakes all around. Additionally, the system is available through the company's VPN, which means that managers have an easier time accessing the system from anywhere at anytime, including dialing in from home."
To save costs, Spinelli has another idea. When PCs need to be replaced, he's considering white box PCs as opposed to the more costly Compaq (HP) systems he's traditionally purchased. Referring to Dell's recent decision to supply white-box providers with low-cost systems, Spinelli says, "I like what Dell is doing there and am beginning to realize that with Intel-based systems, brand might not be as important as it was before, and there's an opportunity to save."
Outside of a handful of very low-cost investments, Spinelli's mantra appears to be "steady as she goes." When does Spinelli think that things will loosen up a bit? His estimates are not nearly as optimistic as those that I've heard from vendors. "I'm guessing that things aren't going to change for about two years," he says. "And even then, that's just when we'll reassess the situation. That's not necessarily when we plan to start spending again."
In the meantime, I'm setting him up with a super rugged, wireless PocketPC-based handheld loaner from Intermec that may survive the rigors of the dust bowl Spinelli works in. I'll report on his findings when he's finished beating it up.
When do you think your budget return to normal? One year? Two? Three? Five? Ten? Never? Want to commiserate? Share your war stories with your fellow ZDNet readers by Talking Back below, or write to me at david.berlind@cnet.com.