Tags Innovation, Entrepreneur, Growth

Catch a rising star

Does your technology provider really get what it means to be a growing business? If not, Star certainly does. Stuart Rock meets a real bright spark.

Quick: what’s one of the most frustrating aspects of running a medium-sized business? IT must rate pretty high. Successful growth creates a serious dependence upon IT in every mid-sized business. But the likelihood is that your IT infrastructure is – let’s be polite here – somewhat cobbled together, with every spare cupboard pinched by IT to store yet more hardware. Demand races ahead of capacity and it’s all getting more complex. You have to know about online security as well as compliance with data protection and about software licence costs. No wonder the IT guys are always saying they’re at breaking point.

The finance director is concerned, too, about the growing band of different suppliers – for bandwidth, security, hosting, software and the list goes on.

With five or more Internet Service Providers on the books, each with separate billing systems, helpdesk numbers and account managers, it’s not surprising that the FD wants to consolidate them.

The IT infrastructure also has to cope with peaks in demand, which spike at particular times of the year. But for most of the time, that expensive capacity isn’t being used. And what about the new product, the one that’s going to increase revenue and widen your customer base? Do you spend too much but under-use it (again)? Or risk under-spending and leaving new customers dissatisfied with your responsiveness?

A shining example

Still struggling for answers? If so, Star could be the company you need. Not only does the company focus on the technology issues facing mid-sized organisations, but it’s a mid-sized company itself that is swallowing its own technology medicine (and reaping huge rewards).

Star is one of the UK’s best growth stories of the past decade. It has prospered while other businesses have struggled as companies slashed their IT expenditure in recent years. It has spawned a subsidiary that has become a world-leading enterprise in its own right and it’s investing heavily in people and systems – from £40m to £80m – to double its size again over the next three years. In its ten-year history, Star has become a leading provider of managed technology services to mid-sized businesses and public sector organisations in the UK. Its specific remit: to let mid-sized businesses take advantage of technologies normally thought to be only available to large ones.

“We’ve always focused on medium-sized businesses,” says Bill Henry, Star's former CEO. “As a result we have engineered everything that we do to deliver to the unique needs of mid-sized customers. That is important to a medium-sized enterprise, as we are not providing simply a cut-down version of the offering of a large company.”

Star’s business has three areas: network services; managed technology services; and business applications. In each of these, Henry says, Star can be its own “best reference”, as it works with similarly-sized organisations. The network: Star has one data network that it uses for all its data and voice communications. Star uses Voice over IP which, Henry notes, has had a large impact on the business in terms of cost savings and new capabilities: “The costs that we pay to BT have fallen through the floor, and we provided our team better tools to do their jobs.” Having one network “gives you cost savings, additional functionality such as extension mobility, a raft of helpdesk tools, and allows you to obtain all sorts of performance data.”

Infrastructure: “The instability of a server is inversely proportional to the distance that the IT team is from it,” Henry grins, “because they can’t poke about with them every day.” Star’s is consolidated into one of its world-class data centres. “Your business can’t be great because you run great servers and storage, but it can go very wrong if you don’t.” And, unless you have at least ten people in your IT department, it’s hard to run your own data centre with 24x7 support. “Managing your infrastructure doesn’t help you grow, but where do you want to focus your time?”

Business applications: Star has already given birth to MessageLabs, a successful email security and management service, and has developed a powerful HR tool, but Henry isn’t stopping there. His next focus – for customers but also for Star itself – is customer relationship management (CRM). At present, he says, fewer than one per cent of medium-sized enterprises use world-class tools for their sales or support systems: “If you’re growing your business, you have to manage and track sales and customer relationships. Mid-sized UK companies have lagged behind in this respect.” Star is starting on a journey that will allow its customer service people to see everything that a customer has ever done.

“Time was, your customer contacted you by telephone or in writing. Now they email, phone from mobiles, use the Web, instant messages – all of these contacts have to be collated, logged and organised. And your customers also have relationships with companies such as Amazon and eBay, who have raised the bar in terms of online customer expectations.”

One of the biggest investments that Star has made has been to work with IBM on the concept of On Demand. Customers can use additional servers and storage when they need them: “What would have taken a company years of work and a large capital investment to build for itself, can now be bought from us by the server or by the gigabyte,” says Henry. “Both IBM and Star have invested significantly in our partnership. Star delivers IBM technology packaged to meet the needs of growing businesses.”

Companies – even medium-sized ones – can add additional computing power as and when they need it: “IT capacity, as a rule, used to be relatively fixed,” says Henry. “Now you can add more IT capacity to meet a peak processing window. For example, your website capacity can scale to meet unplanned customer usage automatically.”

It’s not just about cost-efficiency. On Demand lets companies change the rules – “It makes it harder for your competitors to match you.” Quick: what’s the one area of your business that could be far simpler than you ever imagined...?

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