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Tearing it Down then Building It Up: Transforming IT in the Midst of Chaos John Petrone SVP & CTO Autobytel Inc. November 15 th , 2011
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IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Dec 05, 2014

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John Petrone

CTO John Petrone shares how Autobytel has used various tools, such as agile development, virtualization and outsourcing, to become a smarter, more effective organization, better able to respond to challenges and change.
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Page 1: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Tearing it Down then Building It Up:

Transforming IT in the Midst of Chaos

John Petrone

SVP & CTO

Autobytel Inc.

November 15th, 2011

Page 2: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Who is Autobytel?

Page 3: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Who is Autobytel?

• A leader in providing online marketing services to the

automotive industry.

• An early innovator in the creation of automotive web

sites and online services.

• First major 3rd party web site.

• Multiple patents in online automotive marketing.

• First “dotcom” to advertise during the Super Bowl.

Page 4: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Who is Autobytel?

Most importantly (for this story) Autobytel is a survivor.

• After an IPO in 1999, survived the dot com crash of

2000 to reach profitability and sustainable growth.

• Made difficult and expensive changes as a small public

company for Sarbanes-Oxley compliance in 2004.

• Most recently, re-built the company to grow and thrive

during the worst recession ever in the automotive

industry.

Page 5: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Change in Strategy for 2006

Refocused on consumer web sites and rapidly grow

revenue – we wanted to get big fast.

• Built a new consumer web site with all new

infrastructure and technology to handle 3X growth.

• Supplemented internal IT staff with outside resources.

• Re-built other key revenue generating systems at the

same time.

This produced a large IT spend – over $20M/yr, 130+

FTEs, two data centers at a time of increasing losses.

Page 6: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

And then the unthinkable happens:

37% Decline

Page 7: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Which leads to lower Ad spending…

30% Decline

28% Decline

Page 8: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Tearing it down…

Autobytel now needed to reverse course – the company

(and IT) had to get small fast. We had to be able to survive

on half the revenue we had before.

• Sell non strategic business units.

• Simplify infrastructure and outsource internal systems.

• Cut desktop supports cost and move to BYOD.

• Reduce headcount.

• Cut costs at all costs.

Page 9: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Sell non strategic business units

Benefits for IT:

• Fewer applications, technologies and databases.

• Better IT management focus.

Page 10: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Simplify infrastructure

• Business unit divesture reduced data center needs.

• Retire old or expensive applications.

• Shut down new web infrastructure (too expensive).

• Outsource internal apps (CRM, HR, travel).

• Consolidate down to a single data center.

• Move to virtualization to reduce physical footprint within

data center

Page 11: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Cut desktop and mobile support costs

• Fewer desktops/laptops = lower costs.

• Freeze annual OS, App and Hardware refreshes.

• Empower end users with data query tools.

• Open up to BYOD – embrace iPhone, iPad and Android

into the enterprise.

Page 12: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Reduce Headcount

• 4 separate RIFs between 2006 and 2008.

• Reduced data center footprint and fewer business units.

• Eliminated QA, project management, reporting,

architecture.

Page 13: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

That worked great…

• Greater than 75% reduction in IT staff and spending.

• Systems were still running okay (with a lot of deferred

maintenance).

• Down to bare bones on outside costs (maintenance,

support, annual license fees).

But it wasn’t enough

• We could run what we had but we couldn’t grow.

• We were still losing money.

• Not sustainable without something changing.

• You can’t cut your way to growth.

Page 14: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Building it up…

• We needed to restart growth to get to profitability.

• Yet we also needed to maintain control of our costs.

• We focused on 4 main efforts to achieve those goals:

• Added back some key staff.

• Started to innovate again.

• Looked for a transforming acquisition.

• Re-launched our core brand.

Page 15: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Adding staff

• Added back project management, key IT leadership

positions and more development resources.

• Former Autobytel IT staff were a valuable recruiting

source:

• They already knew the systems, business and

people

• No surprises – we already knew their strengths and

weaknesses.

• How we treated staff on the way out was a critical factor

in being able to staff back up.

Page 16: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Innovation

• Needed to innovate to add products.

• To add new revenue streams.

• To prove that we’re still alive.

• We had nothing to lose.

• Need to roll out products much faster than before.

• Agile development, small teams, focus.

• Launched iControl in 2010 –built in-house but delivered

thru a third party platform and relationships.

• Continued patent applications.

Page 17: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Acquisition

• Acquired a small company in 2010 with complimentary

technology and revenue streams.

• Brought with it a cost effective off-shore development

contract (with a QA team).

• We used a different approach to integration than before

– a slower pace, more inclusive, far less costly.

Page 18: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

The New Autobytel.com The Technology

• All new development on new platform.

• Microsoft .NET 4.0 and SQL Server.

• All in house resources.

• Small team using Agile development.

• Time boxed – must launch by June 2011.

Page 19: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

The New Autobytel.com The Consumer Proposition

Expand brand beyond

in-market timeframe

(every 3-5 years)

Your

Lifetime

Automotive

AdvisorTM

OWNERSHIP

Recalls

Diagnostics

Estimates

Maintenance

Schedules

Ask a Mechanic

REPURCHASE

Present & future

vehicle values

Future Depreciation

RESEARCH

Purchase Price

Vehicle Specs

Reviews

Cost of Ownership

Ownership activities

MyGarage®

Purchase

activities

Page 20: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Autobytel IT Today

• Re-launched Autobytel.com on June 29th 2011.

• Back up to 28 internal IT staff.

• Off shore development and QA adds 7-8 variable FTE.

• IT spend is a bit over $5M/yr.

• We generate twice as much revenue per IT $ than we

did in 2006.

• We deploy new enhancements every week and have

much shorter development cycles for new products.

Page 21: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Autobytel Today

Page 22: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Autobytel IT Tomorrow

• A long list of deferred maintenance and projects:

• New financials package

• Back to annual desktop refreshes.

• New phone system and storage solution.

• New Product Development

• Web site enhancements and mobile apps.

• New dealer products.

• Retire our old web sites:

• Need to continue to keep costs in check.

Page 23: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Lessons Learned

• What made the difference for Autobytel?

• The right staff (skills, attitude, commitment).

• Small joint teams and agile development.

• Moving to a virtualized environment and cloud based

apps was critical.

• Focus.

• What did we struggle with?

• We over corrected and cut too deep to begin with.

• Keeping the load manageable on the remaining IT

staff.

• Pulling out of the day to day to focus on the future.

Page 24: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

Most Important Lesson Learned

One last take away:

• “To believe a thing impossible is to make it so” – French

Proverb

• The most important change we had to make was in our

own thinking about what was possible.

• Everything else we achieved came after we began to

believe it could be done.

Page 25: IT Roadmap San Jose 2011 John Petrone Tearing Down & Building Up

November 15,

2011

THANK YOU

[email protected]