REDMOND, Wash., June 28, 1999 — For a senior corporate executive, some problems may certainly be worse than the one that confronted Erik Damgaard in 1997, but few are more difficult to resolve. The problem: When your company is in the midst of rapid expansion, how do you manage the negative effects of that growth without losing precious momentum?
In 1983, Erik and his brother Preben developed a PC accounting software package and co-founded the Denmark-based company Damgaard. During the next decade, the company enjoyed steady if moderate growth, adding integrated business management software in the mid-1980s and highly customized enterprise solutions, such as AXAPTA TM , beginning in 1991.
In 1994, Damgaard launched its first efforts to expand beyond Denmark. One year later it began developing business solutions for small and medium-sized enterprises based on the Microsoft Windows platform. Both initiatives were a huge success, and Damgaard quickly established itself as an important player in the global enterprise solutions market. Suddenly, Damgaard was struggling to absorb scores of new employees needed to meet rapidly growing demand for both products and services while maintaining Damgaard’s exacting standards for quality and on-time delivery. By 1997, Erik Damgaard was faced with the difficult task of transforming his company from a tight-knit enterprise consisting of a handful of software engineers into an international corporation with hundreds of employees in working offices around the world.
“We are a company started by developers, and at the time developers were still driving everything,”
says Damgaard, who is the company’s executive vice president for research and development.
“That was fine when we were 10 people. But when we got to be 50 and then 100 people, we just couldn’t work that way. Our projects were getting bigger and bigger, and we weren’t doing a good enough job of coordinating. We kept asking ourselves how we could do better.”
The company found the answer at a Microsoft Consulting Services (MCS) seminar introducing the Microsoft Solutions Framework. A distillation of the expertise and experience of Microsoft’s product development and IT organizations, Microsoft Solutions Framework (MSF) is a series of principles, models, and best practices that provide a highly disciplined team-based approach to planning and executing technology projects. Damgaard was so impressed that he asked Microsoft to help his company implement the Microsoft Solutions Framework.
The process got underway in December 1997. Early in 1998, the organization underwent a radical reorganization as the MSF team model was rolled out to the entire company. Instead of segmenting the company into disciplines, with one group focusing on development, one on documentation, one on testing, and one on project management, MSF provided Damgaard with a blueprint for creating project- and product-focused teams that combined the skills and knowledge of all of those disciplines into a single unit.
By the summer of 1998, Damgaard had fully embraced MSF, with remarkable results.
“We’re a totally different company now,”
“We have a clear method for analyzing a project and determining the critical paths to executing each project successfully. We’re more responsive to market input and more up-to-date with what’s going on within individual projects.”
With MSF in place, productivity and efficiency have increased and Damgaard has been able to handle the rapid expansion of its business more smoothly. Today, the company numbers more than 450 employees, with offices in Europe, the U.S. and the Asia-Pacific region. According to Erik Damgaard, much of the credit for the transformation should go to MCS senior consultant Jakob Nielsen.
“Jakob helped management understand how MSF works and the roles we should play,”
“Then he trained our people and helped us become a better company.”
Leaving Money on the Table
Nielsen is one of 2,200 MCS consultants dedicated to helping enterprise customers and technology solution providers, two of Microsoft’s most important customer segments, achieve success. MCS provides consulting services to help large enterprise customers adopt and deploy Microsoft technologies. In addition, MCS works with technology solution providers to make sure they can offer a wide range of Microsoft-product related services backed by the highest level of technical skill and knowledge. Through a broad selection of initiatives and programs such as the Microsoft Solutions Framework, MCS provides product training, technical support, business development assistance, and other services to literally thousands of technology companies around the globe.
This investment in service providers is a key Microsoft strategy, and one that sets it apart from other major software vendors. Companies like IBM and Oracle have built huge consulting divisions that generate significant revenue and profit. IBM, for example, numbers more than 120,000 consulting and support personnel in its service army. At Oracle, consulting services account for more than half of the company’s revenue.
Microsoft has chosen to use its consulting division to drive product sales and promote customer satisfaction. Rather than building a major consulting-services business as an end unto itself, Microsoft has used MCS to create a
Through MCS, Microsoft has developed strategic relationships with 15 of the world’s largest global technology solution providers, including Arthur Andersen, Cambridge Technology Partners, Compaq, Ernst & Young, Hewlett Packard, ICL, Unisys, Wang Global, and others. Taken together, these companies form an army of consultants and service representatives nearly 160,000 strong. In addition, Microsoft has created a network of more than 18,500 Microsoft Certified Solution Providers — service companies of all sizes that meet exacting criteria for product knowledge and technical expertise.
“Instead of competing with partners, MCS is here to train and enable partners to develop the solutions that customers need,”
explains Nelson Rosas, Microsoft group program manager for partner services and strategies.
“We do this because we genuinely believe that our customers will be better served if we have a pool of partners who are trained in Microsoft technologies, and who use their particular expertise and market savvy to develop applications and solutions based on Microsoft products and technologies.”
The contrast between Microsoft and other large software vendors couldn’t be more stark. Whereas Oracle’s consulting group generates 54 percent of the company’s revenue and competes with its channel for customer
Microsoft collaborates with its partner community on all types of projects, on behalf of all types of customers. In the process, MCS frequently hands off service opportunities to solution partners. Quite often, they are the service partners with whom the customer already has a long-term relationship. The result is additional knowledge transfer and greater customer satisfaction.
While MCS charges market rates for its services, it is a cost center, reinvesting all service profits into programs that help service partners
on Microsoft technology skills in their chosen areas of focus prior to an engagement. In this way, Microsoft has created a vast network of service partners who have more skill, knowledge, and expertise than any single company could ever hope to offer. Customers gain not only a choice of providers for designing, developing, deploying, and managing solutions, but also best-of-breed services in these areas.
“A lot of industry analysts compare Microsoft to other computer hardware and software vendors that are turning more and more to services, and ask why Microsoft focuses on building business for our partners rather than going after it for ourselves,”
says Ian Rogoff, Enterprise Services general manager.
“It’s a win-win strategy. Customers have the opportunity to leverage the core competencies of providers at every level of the supply chain to receive the best services, and to do business with their long-standing service providers. Partners are able to develop successful solutions businesses based on Microsoft technologies. And Microsoft is able to focus on taking customer feedback and delivering great products to the market.”
The Microsoft Solutions Framework is just one example of the programs and initiatives that MCS offers to its solution partners. For many companies, the first step is a Partner Development Plan (PDP). Under the PDP program, a Microsoft consultant conducts a thorough assessment of a potential partner’s technology knowledge and business processes, and also helps to identify market opportunities and the developmental steps needed to achieve them.
The resulting report typically includes recommendations aimed at strengthening both technical skills and what Nelson Rosas calls
One new MCS program designed to do both is the Solutions Deployment Workshop (SDW). A series of three-to-five-day seminars, the workshops were created to help partners deploy Microsoft products. Partners involved in the SDW program receive intensive training that provides clear strategies for deploying key Microsoft technologies, such as Office 2000, Windows DNA, and Windows 2000, and developing Microsoft-based integrated business solutions for e-commerce, knowledge management, and collaboration.
A PDP may also recommend that a solutions provider engage a Partner Program Manager, or PPM, an MCS consultant assigned as a resident advisor to a partner company. Working closely with management to build technology and management expertise, PPMs help partners design effective application development services and build successful consulting practices. They also serve as a liaison between Microsoft and the partner, acting as a conduit not only for technical information, but also for market knowledge and customer contacts.
Wang Global is one company that has benefited greatly from the PPM program. Once the world’s foremost manufacturer of word processors and minicomputers, Wang Global has transformed itself into a leading international provider of network technology services. The eight PPMs assigned to the company have been crucial in making that transformation a success, according to Ed Gould, a Wang Global vice president for integration and consulting services.
“They are totally involved in what we do here, from e-commerce, to infrastructure development, to training,”
“They play an important supportive role on sales calls, help solve issues that come up in delivering projects to clients, and then they can sit down and do the detail-level work when that’s called for, too.”
The depth of that involvement recently helped Wang Global establish a major engagement with the World Bank. Initially, the World Bank approached MCS directly, hoping to contract directly with Microsoft to execute a critical Systems Management Server project. MCS Management Consultant Kevin Dolan informed Sean Tyler, one of the PPMs assigned to Wang Global. Tyler managed that initial project, but made sure that Wang Global technicians did the actual work.
“That first project showed the World Bank the value of the partnership between Wang Global and Microsoft,”
“More importantly, it demonstrated that Wang Global has the skills and knowledge to deliver the technology that the World Bank needs.”
The success of the Systems Management Server project has led to additional engagements for Wang Global at the World Bank.
“Having the expertise of someone like Sean sitting beside you gives the customer confidence in your ability to deliver,”
“And there’s a tremendous amount of interaction in the solutions that we can provide together. If we go in to do a Systems Management Server project, it often leads to application development work. If we go in to help with infrastructure development, there’s often training that needs to be done. That’s really helped us build our business.”
Customer Satisfaction Over Billable Hours
Cambridge Technology Partners (CTP) is another major solution provider that has benefited from its alliance with MCS. Based in Cambridge, Massachusetts, Cambridge Technology Partners has more than 4,000 employees in 53 offices around the world. The company operates on a fixed-cost, fixed-time basis for client projects, according to David Rodriguez, a CTP managing partner based in Los Angeles. He believes that his relationship with MCS mitigates a great deal of risk for Cambridge Technology Partners by helping the company ensure that projects are delivered on-time, on-budget and to client expectation.
“I’m focused on relationships with a major movie studio in L.A., and those clients have incredibly high standards,”
“Because MCS’ primary goal is to extend adoption of Microsoft solutions, MCS is highly focused on enabling our resources to get the best possible job done for our client. MCS provides immediate access to high-level technical support, sample code, and real-time technical leadership. This creates a true ‘win-win’ relationship with MCS, in which our development team receives valuable on-the-job training by seasoned Microsoft development professionals who have ‘been there/done that.’ The client receives the best possible solution, and Microsoft product implementations are successful.”
Microsoft’s decision to focus on software technology leadership rather than compete in the services market, is a main reason that partners choose to invest in Microsoft technology. It is precisely this arrangement that has made the MCS model so successful for Microsoft and for its solutions partners.
“It’s the reason I’m here,”
says Sean Tyler.
“When I first heard about MCS, I knew that the idea of creating a consulting group aimed at making companies happy instead of creating billable hours would revolutionize the industry. By supporting the efforts of our partners, we’ve helped our customers to operate more efficiently and our partners to be more successful. In the process, we’ve also worked to make Microsoft technologies the standard platform for building powerful enterprise solutions.”