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How Massage Envy CIO uses outsourcing to enable innovation
Dan Miller is CIO of Massage Envy Spa, with more than 900 franchise locations. He says that by outsourcing maintenance and infrastructure, Massage Envy frees up IT for projects that matter to customers.
TEP: You've chosen to outsource portions of your IT operation. What led you to that decision?
MILLER: When I arrived at Massage Envy Spa five years ago, I sat down with our team, brought them into conversations on what needed to change and worked with them to make the decision to strategically outsource key functions of the IT department. This allowed us to shift from a maintenance-focused, “keep the lights on” operation to a department that is focused on customers and spending time on delivering new innovations.
My goal has always been to achieve a proactive IT department by outsourcing the right things and staying out of the trap many IT departments fall into where the IT department becomes a black hole because it’s overloaded with issues and doesn’t have the bandwidth to take on additional project work. I wanted our department to be a true business enabler that delivers real value to the company. This doesn’t mean our company can stray away from performing basic IT functions, planning for growth or managing security, it just means that we don’t have to manage those functions with internal employees or keep adding to our staff to support infrastructure as the company – and related maintenance – grows.
We had to ask ourselves: what do we want to focus on and where do we want to be in five years as a department? At the time, there was a large gap between where we wanted to go and what activities we were actually focused on. But before we could change course, we had to fix basic IT delivery so we could work on more visible and innovative projects. The company was experiencing tremendous growth, and our larger IT platforms needed optimization and upgrades that some of our IT partners at the time were unable to handle. We quickly assessed who was making the grade, and if and when we needed to look at new areas in which to outsource IT functions.
TEP: How has the move changed your operation?
MILLER: The IT department had to change quite a bit to become a true business enabler. You cannot make the jump from a reactive to a proactive department if your servers or email are constantly down. No one in the company is going to listen to a new project plan or presentation if everyone is living with daily IT issues – they will want the issues fixed before they even consider new ideas. So, the basics must come first. All of our systems had to be up and available for as many hours as our various locations are open. Uptime was a real focus during that time period and continues to be. Once we became a more proactive department, no one missed having to carry the infrastructure load or worry about something failing at 1 a.m. Thus, no one minded moving the servers into an offsite data center. Having too many servers at the corporate office was not only time intensive, but also our staff members did not have the right skill sets to handle enterprise infrastructure needs. Since we did not already have a team of network professionals in place when I arrived at Massage Envy Spa, we did not have to reassign anyone or let anyone go as a result of moving our servers offsite.
TEP: How has the change affected your relationship with the rest of the C-Suite?
MILLER: When I first arrived at Massage Envy Spa, my IT staff and I handled all the maintenance and compliance work. At that time, we would go into meetings and explain what IT could be doing or innovative, forward-looking projects we would like to do, but we didn’t have the bandwidth in the department to get those completed quickly and effectively. We were essentially stuck in a maintenance mindset and our help desk was reacting to ticket items.
The proactive department that we are today looks for opportunities to reduce tickets by improving our systems. Essentially, I had to change our IT department’s culture by making them ask “why are we getting this ticket in the first place?” We needed to determine what had to change to stop those tickets – was our POS partner sending us enhancements, or did we need to further train our franchisee network so that they do not flood the Help Desk with questions?
When your IT department spends the majority of its time fighting fires, it is very hard for the rest of the company to see IT’s value. They may look on their own to incubate new technology – what is considered “shadow” IT activities – in order to meet a company need. Having them realize IT can deliver quickly and on schedule adds to department credibility. They are much less likely to start those projects on their own, especially if you have the time built into your teams’ schedule specifically to incubate new platforms.
TEP: What are some new projects you've been able to implement now that your department isn’t tasked with infrastructure and maintenance?
MILLER: By implementing new projects that are driven by customer demand, we are able to show our department’s value to the organization. For example, we implemented membership sharing into our POS system. This allows members to share their massages with friends and family members. We’ve also been able to implement online booking, improve our reporting structure, enhance our iPhone app and improve security. If we didn’t have outsourced partners to handle our back-end infrastructure, email and more, we wouldn’t have the bandwidth needed to launch these initiatives because our team would be constantly tied up with maintenance and reactive issues.
TEP: How has outsourcing these functions affected IT costs?
MILLER: With our growth, outsourcing IT functions helps us keep on top of key IT initiatives and manage other department priorities while our infrastructure partners manage capacity and grow our systems as needed. They are in the business of quickly adding new servers, adding new storage and planning for future growth – all items that would be very expensive for Massage Envy Spa to do by itself, without sharing the equipment. Outsourcing allows us to scale and use our outside providers’ existing technology at a cost that fits within our budget. Buying all of the equipment on our own would be very expensive.
For example, if we compare trying to build out and manage our own geographically diverse data centers or leasing space, buying all of the equipment and adding network staff to cover different shifts vs. outsourcing, the savings are obvious. With more than 945 locations, we cannot afford any downtime – plus, we need redundancy and solid disaster recovery plans in place. In general, supporting an enterprise company demands a higher level of equipment and 24/7 resources; trying to duplicate this in house, by ourselves would expand the cost and definitely the size of our department. We would be growing the department much faster than the company as a whole.
Minda Zetlin is co-author with Bill Pfleging of The Geek Gap: Why Business and Technology Professionals Don't Understand Each Other and Why They Need Each Other to Survive. She is a regular contributor to Computerworld and CIO, and a columnist at Inc.com.