Servcorp's multi-layer business infrastructure

The last time serviced office space provider Servcorp needed an ERP system, it built its own from the ground up. Now that the time has come to refresh those systems, it's taking a cloud-first approach — but one that still allows it to customize its business automation to its own needs.

"We're starting to look outside and we're starting to realize building CRM and ERP systems is not our core competency," CIO Matthew Baumgartner told me when we sat down together at the recent Microsoft Convergence event in Barcelona.

Headquartered in Sydney, Australia, Servcorp operates 140 locations in 52 cities across 21 countries. It targets entrepreneurial small businesses — what author Dan Pink has termed the Free Agent Nation — as the core of its 35,000-strong client base.

"That little band of entrepreneurs fit our business model like a glove," said Baumgartner.

Business process layer

With so much in-house systems expertise, Servcorp isn't taking a vanilla implementation of Dynamics CRM, even though it's deployed the multi-tenant cloud service. Instead, it's treating the package as platform-as-a-service, heavily adapted to its specific needs, said Baumgartner:

"The reason Microsoft Dynamics was so attractive to Servcorp was because it's an xRM system. What Microsoft did was so smart. They give you the whole boxed-up package but they also gave you access to the underlying API."

Indeed, Servcorp has ended up building its own version of features that have now been released in the latest version, he added:

"Where I would have loved to have had a bit more inside info — I've built a business process UI on top of that — which is exactly what Dynamics 2013 is."

Servcorp is currently in the middle of a thorough overhaul of its systems that began early last year with implementation of Dynamics CRM 2012 and is set to run through to 2015. A move to cloud applications is a big theme, with cloud-based subscription billing system Zuora an important part of the new platform. Existing internal systems are hosted on Windows Azure along with some Amazon Web Services instances.

Servcorp's own customer business process layer runs on top of these applications to pull everything together for front-line staff, explained Baumgartner:

"All the magic happens in this orchestration layer. We can then pull all these bits of data and mash them up and present them in a way that makes sense for all the people in our business."

Competitive edge

Founded in 1978 and listed on the Australian Stock Exchange, Servcorp has more than doubled in size after an expansion program that kicked off in 2009 — which turned out to be a good time for negotiating leases on office space in the US market.

It uses its own staff to provide and maintain the IT and telecoms services to offers its tenants, so around ten percent of the 1000-strong workforce are IT specialists. "We don't use SIs," said Baumgartner.

He says that Servcorp sees its IT systems as a key part of its competitive edge against rivals:

"They haven't invested in the network, in connecting all those locations together. Every single one of their sites is siloed ...

"Providing all those services as close as where they need to be consumed is a big part of our service delivery."It still boggles my mind that we can do this stuff. Sitting here now, I can sign you up, give you a phone number at any of our locations, and have it answered with your company name in the local language — right now in five minutes."

In the past, achieving those service levels meant Servcorp had to build its own global network, with designated hubs serving neighbouring locations. "With the Azure service we don't have to do that any more," said Baumgartner.

Verdict

The cloud debate is often cast as an either/or choice but Servcorp's story puts a completely different slant on it. Here we have a company with very significant in-house IT resources that sees its IT infrastructure as a core part of its competitive differentiation.

Yet it can also see that  third-party providers can offer significant parts of that infrastructure more cost-effectively and to a higher standard. So it selectively outsources (or more accurately subscribes to) those elements that others can do better; while at the same time retaining precise control over the business process automation layer that drives its competitive advantage.

Bear in mind too that its customers are selectively sourcing parts of their own infrastructure from Servcorp — in their case physical infrastructure, but still on a subscription basis. Thus it occupies a middle tier of a multi-layer ecosystem, using other people's platforms as a foundation for its own IT systems that in turn power other people's businesses.

This gives us an illustrative snapshot of the way the modern business world is evolving — into multiple layers of flexibly contracted, highly configurable services composed from a mixture of physical, virtual and professional elements. At diginomica our name for this evolving model is 'frictionless enterprise'. More on that in forthcoming posts.

Disclosure: Microsoft funded most of the author's T&E to attend Convergence EMEA 2013 in Barcelona.

Photo credits: Reception area courtesy of Servcorp; Matthew Baumgartner on stage at Convergence EMEA 2013 courtesy of Microsoft.