Power Tools 1993 November

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Text File | 1992-10-26 | 20KB | 456 lines

ComputerLand Corporation (TRW Customer Service Division) Company Statistics Company: ComputerLand Corporation Location: Pleasanton, California Founded: 1976 Chairman and CEO: William Tauscher Acquisition: July 1992, TRW Customer Service Div. 1991 Revenues: ComputerLand - $2.6 Billion TRW - $110 million 1991 Service Revenues: ComputerLand - $180 million TRW- $100 million Service Employees: ComputerLand 2,300 TRW - 1,200 Note: According to ComputerLand, the full integration of the TRW Customer Service Division acquisition into ComputerLand's service operations will not be completed until the beginning of 1993. ComputerLand confirms that it plans to convert TRW's dispatch operations over to its Atlanta-based service information and reporting systems. ComputerLand indicated that it may be transitioning to a TRW service model, offering its customers the maximum of flexibility in support services. Because the service operations of ComputerLand and TRW remain autonomous at this writing, the following analysis will be segmented into two distinct sections: ComputerLand service offerings and TRW service offerings, reflecting the respective service portfolios and delivery/pricing strategies of the two firms today. Products ComputerLand ComputerLand is one of the world's largest multivendor computer resellers, as well as a reseller of over 2,000 related systems and peripheral products. It sells to individuals, small and large companies, and Fortune 500 corporations. ComputerLand considers itself to be the world's largest multivendor provider of LAN software and value-added networking support services. TRW Customer Service Division TRW's Customer Service Division, acquired by ComputerLand in July, 1992, is a nationwide third party maintenance organization. TRW Customer Services Division services equipment from over 125 vendors, including: microcomputers, minicomputers, automated teller machines, computer output microfilm devices, point-of-sale equipment, printers, storage devices, terminals, PC boards, and communication devices. Today, it estimates that 80% of its business focuses on service and support of microcomputers, with other segments of its support services including: HelpDesk (10%), LAN Support (5%), Lifecycle Management (2%), Account Management Consulting (2%), and Training (1%). Service Mission/Target Market ComputerLand PC/LAN SUPPORT SERVICES AND NETWORK SUPPORT SERVICES ComputerLand focuses on providing high-end, multivendor network integration and local area networking services for large corporations. Through its alliances with numerous hardware manufacturers, ComputerLand promotes its vast experience in multivendor environments. Continuing its acquisition strategy, in July, 1992, the company acquired TRW's Customer Service Division, thus significantly enhancing ComputerLand's service/ support capabilities from the standpoint of: technical service representatives; help desk technicians; LAN, network and multivendor technical expertise; installed customer base; and service revenues. Furthermore, in the past year it successfully completed the integration of NYNEX Business Centers (acquired in June 1991) which strengthens the firm's advanced systems integration and networking expertise. ComputerLand, in its efforts to move away from franchised operations to direct ownership of its branches, has acquired previously-franchised ComputerLand branches in 50 major markets. This move affords greater unity of ComputerLand operations in major markets and greater consistency in service delivery, strengthening its position as a provider of equipment/service to national accounts. Most ComputerLand branches market and sell to individuals and small businesses, but many will target a specific segment or application area based on internal expertise or the needs of the local market. ComputerLand hopes to extend its presence in the Fortune 500. Today, the ComputerLand network includes over 600 branches in 40 countries; of these, approximately 400 branches are located in the U.S. TRW Customer Service Division MULTIVENDOR SERVICES TRW has been providing hardware maintenance services on a variety of computer equipment since 1976. TRW's goal is to proactively develop new microprocessor-based service/support programs while managing a quality organization in terms of its technical expertise, management capability, and delivery of services. TRW primarily markets its service capabilities to large corporations (Fortune 500) as well as the end-user market. It also pursues authorized service relationships with original equipment manufacturers, value-added resellers, distributors, and dealers. In these relationships, TRW positions itself as the OEM's or reseller's installation, warranty and/or maintenance service partner. In 1991, TRW Customer Service Division expanded its services to include (network) server support (for Novell customers), connectivity support and end user help desk services. Service Offerings ComputerLand PC/LAN SUPPORT SERVICES While local service offerings provided by each branch (terms and conditions and pricing) may vary, ComputerLand has a National Service Agreement (NSA). NSA was developed for multiple-location organizations in order that the same service options and performance could be delivered nationwide. The program provides central dispatch, call management, and customer satisfaction monitoring. The company also canprovide customized plans (e.g., resident customer service engineers, loaners, warranty upgrades) when specific business requirements warrant. ComputerLand maintains a hotline to backup its stores' support technicians. It will also dispatch a corporate technical expert to a local site when necessary to solve a customer problem. ComputerLand has standard hardware service offerings, a custom option, and a National Help Desk support option, which replaces ComputerLand AnswerPac services: o Standard On-site Offerings o Basic: 48-hour response (two business day) o Preferred: Eight-hour response (next business day) o Comprehensive: Four-hour response with loaner (for critical systems) o Custom: Special packages outside standard options o National Help Desk o Multivendor technical assistance hotline o Segmented into four options: Comprehensive, Immediate Help, Network Help, and Application Help o Single point of contact for end-user support services oToll-free 800 number Availability: 8:00 a.m. to 9:00 p.m. (EST), Monday through Friday o Access to technical experts (130 software packages, 1,400 hardware items) o Includes application support and networking assistance o Network operating systems supported include: UNIX/Sun Microsystems, DOS/Windows, Novell, 3Com, Microsoft LAN Manager, Banyan Vines, and AppleTalk/AppleShare o Dispatch service for nationwide on-site maintenance and repair o Annual Network Administrator phone support features: monthly detail reports, unlimited calls available to the network administrator and a single back-up ComputerLand NETWORK SERVICES National Help Desk ComputerLand's National Help Desk option "Network Help" provides telephone network support to users, with a one-hour response. This service may be complemented with on-site service. Network Centers of Excellence To address the growing need for network support, ComputerLand instituted a program called "Network Centers of Excellence." This program was designed to create a national pool of networking resources for the firm, qualifying individual ComputerLand stores to provide network design, installation, configuration, training and/or support based on their internal capabilities. While no longer actively promoted, this programwas a central part in the firm's efforts to build network expertise at the local level, complementing corporate resources. Network Consultant Services: Advanced Solutions Group ComputerLand's Advanced Solutions group is a national resource of specially trained project managers and engineers with high-level network expertise, available to branch offices anywhere in the U.S. The group focuses on complex network integration, which entails enterprise-wide networks including a variety of LANs. Skillsets include: project management, network management, system design, configuration, and installation, diagnostics and troubleshooting, integration of systems, and a variety of host connectivity solutions. TRW Customer Services Division MULTIVENDOR SERVICES TRW's PC service contract portfolio addresses customers' need to have multiple cost-saving contract service offerings. The company offers five programs for microcomputers and minicomputers. Priority Support Priority Support is the highest level of micro/minicomputer support available from TRW. Service is provided on-site on a custom basis ranging from normal business hours to 24 hours a day, seven days a week. Labor, travel and parts are included. There is no minimum site configuration and no service area is required. Partnership Support The Partnership Support program is basically a central site support program that includes labor, travel, and parts. Service is provided at the customer's site during pre-scheduled visits. To participate in this program, a customer must have a minimum of 50 CPUs per site. TRW also requires that a service area be designated at the customer site. The customer pays an annual fee; no per-incident fee applies. Shared Security Support Shared Security Support includes labor, travel, and parts. Service is provided during normal business hours with a four-hour response time. The Shared Security Support program requires a minimum of 50 CPUs per site. The customer pays both an annual registration fee and a per incident fee. Parts are included in this plan. Costs are capped at 120% of standard Priority Support. Economy Protection Service Economy Protection Service is a pre-purchase time and materials support plan. TRW provides repair labor during normal business hours (9 a.m. to 5 p.m.) with a four-hour response time. Travel and parts are not covered. The customer must purchase a minimum of 250 hours of repair time in advance. Volume discounts are available for larger blocks of time. Unused hours are rebated to the customer at the end of the contract period. Carry-In An annual Carry-In service contract is also available which covers parts and labor with a best effort turnaround. Other Support Services include: o Life cycle management, including inventory tracking and product evaluations o Help desk assistance (TRW PC InfoAccess and TRW Package Access) on hardware, operating systems, application software and operator problems. o LAN support including design, implementation and support. o Server support for Novell networked customers, to be utilized in conjunction with standard maintenance coverage. o Connectivity support services, to provide maintenance on all accessible network cables and cable connectors. o End user training on microcomputers and related topics. o Account management for on-site supervision of technicians, communications, vendor coordination, management reporting and consulting. o Printed circuit board and electro-mechanical assembly reconditioning. Service Delivery ComputerLand PC/LAN SUPPORT SERVICES and NETWORK SERVICES While the facilities and equipment at each of ComputerLand's branches vary, most branches have a certified network engineer on-site. Furthermore, ComputerLand promotes its National Help Desk "Network Help" capabilities to assist customers with multivendor, business-critical LANs. ComputerLand guarantees response within one hour, or the call is "free." Furthermore, corporate expertise via the Advanced Solutions Group, is available as a local resource to branch offices. In the case of ComputerLand end user support on-site services, users may call the central, toll-free number of the National Help Desk to activate a corporate-based dispatch system. The nearest ComputerLand operation to the site is contacted directly and a service technician is sent out to perform the repair. When a problem occurs that cannot be solved in the shop or in the field, the ComputerLand store may contact the ComputerLand-sponsored hotline or contact the vendor directly. Many stores will use the company support line when problems occur in a multivendor configuration, but use the vendor's support when a single brand system is at fault. TRW Customer Service Division MULTIVENDOR SERVICES TRW's field organization provides support nationwide (including Hawaii), as well as in Puerto Rico, Canada and Mexico. The approximately 125 field offices and sub-locations are linked to a central dispatch management system. A central support database is updated with each service activity, providing a complete history of technician's arrival/repair time, parts used, description of problem resolution, etc. Over the past couple of years the company has downsized to the present field staff of 920 service technicians and 72 engineers handling software support calls. TRW technicians receive new and updated service publications plus local and regional seminars to keep them up-to-date. Service delivery is supplemented by TRW's Sleuth proprietary tester and TECHNET on-line documentation system. TRW has partnerships with more than 125 manufacturers, including Prime Computer, ACER and Epson America, to deliver warranty and/or maintenance services to their customers. Service Marketing/Pricing ComputerLand PC/LAN SUPPORT SERVICES and NETWORK SERVICES ComputerLand provides its branches with a variety of marketing materials and strategies, and has significantly expanded its role as a partner in the sale of PC/LAN service programs to corporate clients. ComputerLand also has created a number of nationally-based advertising campaigns designed to push a specific system/solution or a product line. These efforts have targeted the company's ability to provide vertical business "solutions" to the user rather than just compatible hardware or software packages. ComputerLand provides a set of service program recommendations, but pricing for service agreements and network support are decided by local franchises. Hardware contracts are typically priced on a percentage of the manufacturer's suggested retail price while network design, installation, and support agreements are done on a custom-bid basis. Hardware maintenance (National Service Agreements) are priced as follows: o Comprehensive Plan: 12% retail price o Preferred Plan: 10% retail price o Basic Plan: 8% retail price National Help Desk pricing is as follows: o Network Help: $4,000/year for a designated LAN administrator and 1 back-up or $70/incident o Discounts: Users are offered discounts for sites that are clustered in a tight geographical area and for multiple-year contracts. TRW Customer Service Division MULTIVENDOR SERVICES TRW has a "Product Family" pricing methodology to efficiently respond to customers' service pricing requests. Product families are: microcomputers; storage devices; terminal monitors; printers; controllers/boards; and communication devices. It also provides vendor product specific pricing. TRW's "Product Family" pricing groups microcomputers into various product families: PC/XT, PC/AT (286), Apple Macintosh, 386SX, 386, 486, IBM PS/2, Portables. Annual support contract prices are established based on the product family grouping, plus other components installed (e.g., floppy disk drives, hard disk drives, tape drives). For example, a 286-based system with 2MB of RAM and 40MB hard drive carries one annual contract price, regardless of the manufacturers involved in the configuration. An example of this pricing model is as follows: o Components of a PC/XT system CPU $150 40MB Hard Drive $150 Monitor $ 40 Total Annual Service Contract: $340 Furthermore, all service agreements carry a mileage/zone charge for all customer sites beyond 25 miles of a TRW service location. Zone 2, 26 - 50 miles: Add 18.5% Zone 3, 51 - 75 miles: Add 37% Zone 4, 76 - 100 miles: Add 55.5% Other, 101+ miles: Custom negotiated Support program pricing is structured on micro/minicomputer products as follows: o Priority: 12% to 18% of hardware purchase price o Partnership: Custom bid (typically 30% less than Priority Support) o Shared Security: 35% of Priority plus $175 per each repair call o Economy Protection: $93/hour for first 250 hours, $80/hour for 1,000 hours o Time & Materials: $115/hour plus parts during regular business hours; $157/hour overtime for Monday - Friday plus Saturday, Sunday, holidays. While the vast majority of its service contracts are negotiated directly with the end-user, a Service Management program for manufacturers is offered whereby TRW becomes that company's national service organization. In addition, it has developed Marketing Support Programs for vendors, distributors, value-added resellers, and dealers which allow those who qualify the ability to leverage TRW's nationwide service capabilities. Perception/Evaluation PC/LAN, MULTIVENDOR AND NETWORK SUPPORT SERVICES A key element of ComputerLand's plan to grow both its service revenues and its presence in the corporate market can be summed up in one word: networking services. There are a number of indications of its attempts to strengthen this area of its business: expanding skills/services in multivendor service of LAN and network components over the years; the decision to purchase NYNEX Business Centers, and the networking help desk and technician skillsets associated with that firm; and the acquisition of TRW, and the corresponding expertise in multivendor maintenance services. All of these factors point to a strengthening of LAN and network services. ComputerLand also has established alliances with leading vendors like Novell and 3Com to create network packages and training seminars that will rapidly increase its ability to deliver custom solutions to corporate users. By equipping its local operations with the ability to design, install and maintain LANs, ComputerLand is attempting entry into larger accounts. In particular, Network Centers of Excellence receive specialized advanced training from major manufacturers of key networking products. While TRW's Customer Services Division has experienced management turnover in the last couple of years, the acquisition by ComputerLand should provide clear objectives and management direction for this segment of the business. Although TRW is recognized for aggressively pursuing multivendor PC hardware opportunities, TRW has already begun to expand its service capabilities into multivendor PC software and LAN support. ComputerLand's purchase of TRW Customer Services expands its customer base/opportunities significantly. TRW's growing expertise in the hardware support of servers and network support services complements ComputerLand's network integration skillsets and sophisticated National Help Desk telephone support. Furthermore, it is also a positive sign for ComputerLand's position and ability to be profitable in the expanding multivendor hardware and LAN support market. However, this acquisition is not without the inherent challenges of merging different organizations, cultures, and service offerings, and time will tell if this acquisition will prove as successful as the NYNEX acquisition.