Razorfish Wants to Get its Name Out on Broadband

  • Written By: R. Krause
  • Published On: March 30 2000



Razorfish Wants to Get its Name Out on Broadband
E. Robins - March 30th, 2000

Vendor Genesis

Razorfish, Inc. (NASDAQ: RAZF) was founded by Jeffrey Dachis and Craig Kanarick in 1994, and has evolved into a Digital Business Service Provider (DBSP). It was Dachis's second creation following "In Your Face Inc.", a self-described 'guerilla marketing events firm'.

Razorfish describes itself as is an international digital communications solutions provider, and goes under the maxim "Everything that can be digital, will be digital'. The company cut its teeth on animated web design in server-push / client-pull in 1995, working for the likes of IBM Personal Computers, AT&T, and CMP Publications. From its beginnings, Dachis saw digital technology as a means to change the way business works, though at the time most online services were largely no more than web catalogs.

Razorfish's intentions were - and are - to lead the digital revolution rather than be led. Its early success gave it the cash and share value to acquire the strategic building blocks it needed to follow its vision. Recently it acquired I-Cube to give it respectability as a systems integrator, and TSDesign (Boston) whose main function is to provide quality assurance to the user web experience.

In Europe, it extended its reach into wireless by acquiring Spray Ventures and recently opened up a wireless laboratory in Helsinki. Its acquisitions in the U.K. of CHBi for broadband and Sunbather for web design in Europe, and Fuel and Tonga for web design capabilities in the media industry have enhanced its capabilities and strengthened its strategic positioning as a complete service provider.

Razorfish has also grown partly organically, but this is the lesser process, and must pull together the many strands it has built through internal organizational processes and infrastructures, something it is presently busily doing. Razorfish management has recognized that in this game, you must aim for the Holy Service Grail - providing end-to-end solutions (EES) to its clients. To do this it has developed procedures and internal infrastructures to share knowledge and integrate its diverse acquisitions.

In April 1999, Razorfish went public with a share offering, raising about $45M to provide fuel for its expansion.

Vendor Strategy and Trajectory

Coming from the creative side of web design, Razorfish holds no particular allegiance to a specific technology vendor - in other words, it is a technology agnostic, which is not an uncommon characteristic of vendors of this genre. The advantages of this approach are that it can in theory better serve its clients by providing the best and most appropriate technologies to specific problems. The downside is that the company must have adequate resources to cover all the technologies it will need. To achieve this, however, means that internal resources - management, corporate knowledge and project management, personnel training, and cross-office fertilization of skill sets - must be efficiently utilized. Razorfish has adopted a number of strategies and developing infrastructures to meet this challenge.

Internal Structure and Culture

In general, as a technology agnostic, Razorfish personnel are divided into functional groups rather than technology areas. This means that the personnel focus on architecture, or design, or technology implementations. People move up in these functions, though often the line between function groups is blurred, enabling at least some to cross between the function groups. In this way, at least some personnel can climb to be Client Partner managers from a variety of backgrounds. A Client Partner is the senior client management interface.

Geographically, Razorfish is divided into two zones: North America and Europe, each with its own managing VP. The two zones are linked through a basic knowledge management and project information system called MOM. MOM allows users on either side of the Atlantic to review current projects and project skill requirements, to plan their agendas and interact with others on the network. MOM is the beginnings of a comprehensive inter-office knowledge management system.

A dedicated high-level executive position currently manned by Bob Lapides (EVP of Global Process, Methodology and Market Transformation.) provides the means to sew management systems together and create a unified international presence. Such issues as technology transfer across offices and efficient utilization of skills for project planning and execution are addressed with office group leaders who create skills communities among the offices. MOM and the skills communities reduce travel and traveling costs.

Razorfish's philosophy is that good technical people are able to deal with many different technologies, learn them quickly, and apply them. Within the organization, mentor programs have been established, often across function lines. The mentor can accept or refuse a request, but generally can take on four or five 'interns'. Apprenticeship style learning means skills are learned through osmosis and on-the-job practice more than by any formal training program. However, Razorfish insists the quality of its people is high, and formal training programs are not necessary.

Culturally, Razorfish is a work-hard / play-hard organization. It is expected that their people deliver quality work, since this is what keeps the customers coming back.

From a personnel point of view, with a growing population currently at about 1360 employees, Razorfish has a billable force of over 900. Of these, roughly 20% (about 180) are strategists ( usually Client Partners), 40% technologists (about 360), and the remaining 40% (another 360 or so) are designers, spread amongst its offices. Some 45% of its skill base - mostly in Europe - are devoted to broadband and wireless solutions such as interactive and enhanced TV, and the skill set includes the physical design (including board level design) and branding of hand held devices. Roughly 25% of the payroll is in support and executive management roles.

Sales & Marketing

Razorfish has a no sales group per se, largely because they are in the happy position of having more incoming work than they can handle. The demand provides Razorfish with the ability to be selective about its clientele as it tries to direct the company into strategic directions. Some of the work is created through responding to RFP's as well as from word-of-mouth references, but most is generated from incoming requests. Business development experts screen new business opportunities as they arrive. When appropriate, these are passed on to a Client Partner.

It is interesting to note that Razorfish claims it responds to few RFP's. This complies with other vendors who have also experienced that demand is high, particularly in the past year or two. DBSPs are becoming more selective with their clients: in a recent survey all DBSPs reported the same phenomenon. The results of this survey will be published at a later date.

Part of the marketing issue Razorfish faces is a branding issue. I-Cube clients, for example, have to re-adapt to the new order since the sales approach is quite different. Razorfish has switched from I-Cube Solution Managers to Client Partners; the difference is that the Client Partners are more business oriented than technical, often with MBA's in their background rather than MS's, a move designed to drive Razorfish in the direction of selling front-end strategic services, particularly in selected vertical markets.

Engagement Process

It is the Client Partners who provide the technical marketing skills needed at client presentations and to close deals. The presentations to clients are tailored to the client, and are not canned presentations. Razorfish believes this gives it the edge over its competitors, as evidenced by its high hit rate (85%). This is well above average for the industry. Other personnel who will actually be doing the work on the project may also make an appropriate appearance.

The Client Partner oversees the engagement with the client. Under the Client Partner is the project manager who is in charge of delivering the goods. Deeper down, account developers keep track of internal resource time keeping and internal workbooks to update the project progress.

The stated long term aim of the Client Partners is to focus their efforts in the development of strategic business consulting in the given digital environment, and not be narrowed by either a vertical industry focus or technical capabilities: in a sense they view the Client's business given the context of the digital medium. The Client Partner oversees client relations throughout the engagement. Hence if Razorfish can better get in early in the game, it stands a chance at providing full End-to-End Services (EES).

Pricing Policy

Razorfish does both T&M (time and materials) and fixed price contracts. In the latter, Razorfish prefers very discrete chunks of work, well planned, before it is willing to risk fixed price.

A limited sweat equity position in dot-com's may be a possibility in exchange for services.

Vendor Strategy

Razorfish's strategic directions are based on three basic drives:

  1. First is to have adequate technological ability to cover the emerging digital technologies

  2. Second is to have vertical market expertise where it can leverage work done on one project into that of another

  3. Third is to cover all four functional areas of the digital business service provider space in an integrated manner

To satisfy the first of these strategic directions, Razorfish early on recognized the importance of the broadband and wireless market. This market is exploding in Europe faster than in the U.S., and will no doubt (probability 98%) be the same in Asia, though economic development has been slower there in general, ignoring pockets like Hong Kong and Singapore. It further recognized that the U.S. was well ahead in another area - that of business-to-business and business-to-consumer (B2B and B2C).

Hence it became clear that having a presence in these two market places would provide it with the skill sets necessary to address expected demand on both sides of the Atlantic. To link all these together, however, meant rapid growth, and the fastest means was through acquisition and rapid integration of acquired companies.

In this respect, Razorfish appears to have been very successful, having established a history of successful mergers in the U.S. This success is marred only by a lawsuit in Sweden over its use of the name Razorfish from a company that has the name Razor: in Sweden, it seems, Razorfish's name may yet be blunted.

In addition, Razorfish is investing heavily in infrastructure, one example of which is the building of a wireless laboratory in Helsinki. It remains to be seen if this geographic diversity works, and how it will be utilized.

The second objective to achieve vertical market recognition is, in our opinion, much more difficult as this is a branding and experience issue. Though Razorfish has probably a number of successful implementations in the target industries, these implementations do not go deep enough into the industry and in each individual engagement to have a major brand recognition effect. This is not a problem that Razorfish is unaware of and is trying hard to rectify the situation. To enforce this strategic direction, Razorfish recently created internal vertical market focus groups under the leadership of Barry Wolfield, VP of Startups, for which it is aggressively hiring. Hence a future client might find an Industry Specialist showing up at the presentation with the Client Partner. The vertical industries focus is discussed later in this article.

As an example of implementation depth issues,, building the site for Schwab may have only partly assisted in making it known as a full service provider in the financial industry. However, its work for Schwab was largely limited to building the website - the creative and backend integration - not necessarily providing them with recognition as financial industry web strategists. Again, we think it is a little misleading to think that building websites provides this kind of experience. Currently, Schwab retains Razorfish to maintain the website, which is a far cry from full partnering in the digital business strategic planning sense.

Razorfish is currently upgrading some features such as online training for bank employees - essentially enriching the site. BankOne is another example where Razorfish beat the competition to the punch in web design and execution, but BankOne's strategy had already been formulated prior to Razorfish's engagement. What BankOne wanted was a new look to the website and a focus to integrate its financial services with First Chicago. The web development provided the catalyst, and allowed the two banks to merge their offerings far more efficiently than otherwise. Razorfish's consultants were brought in early (along with KPMG) to assist in the strategic planning of the site, not in the digital business strategy (i.e., answering the question "what are we and what do we do in this new media?") itself.

To add to its downside, Razorfish's involvement was ended after the website went up and the creative work done, and it was made clear on day one that maintenance was to be done by internal BankOne staff. However, the attraction of doing 'one site after another' in a vertical industry where code re-use can be as high as 60%-70%, is a highly attractive and very leveragable model.

The industries Razorfish is interested in include Healthcare, InfoCom which includes Wireless Communications, Media and the Internet, Financial, Consumer and Retail, and Manufacturing.

Strategy for Strategic Consulting

Digital strategy can impact the entire business operations of the client, and hence a broader strategic (global) analysis of an established client becomes necessary. To provide for this front end, Razorfish is slowly developing the expertise and building its credibility through hiring, sitting on industry panels, and developing processes to fit the new environment. Bringing in industry specialists is always the good move, but it takes referenced clients to help you (who often recommend you to others) really move ahead, as well as an impressive procedure that delivers quick results. Razorfish still has a ways to go before it becomes the natural trusted advisor to CEOs and corporate boards. However, Razorfish claims to having already beaten out the likes of Andersen on a number of occasions.

The other aspect Razorfish brings to the table is its multidisciplinary approach and 'fresh thinking'. In this day of fast changing business environments that rapidly are becoming interlaced with cross-industry technologies, there is a requirement for cross-fertilization of ideas, and hence a user may look at Razorfish to get new perspectives in the digital realm. One example given by Razorfish health industry specialist Mike Parker is the use of wireless digital technology in healthcare: a dentist for example may view a digital reproduction of an X-ray while simultaneously caring for the patient, using a mobile device conveniently located for viewing - the lack of wires being a great aid against clutter. The broader implications of this technology can of course be seen in other areas of Healthcare, health care service providers (doctors, hospitals etc.), heath care delivery instrumentation industries, manufacturers, VARs, etc. to which vertical industry specialists can provide insight.

However, proper processes and management tools need to be developed, proven, and used in a number of engagements if Razorfish is to be a serious contender. Their slow approach is reasonable given that they need to create these tools as well as internal knowledge dissemination structures. Further, as a transcontinental company, Razorfish has equivalent leaders on both sides of the Atlantic who must coordinate their efforts.

There is also a fairly broad line between proper digital business strategic analysis and getting to know a client's business in order to create a website, something the user should be aware of. Razorfish is aware of this issue, and as such it is establishing internal business development programs for its technical and managerial staff.

Thus Razorfish's early successes have and will continue to hamper its ambitions at least in the U.S. market: those successes were founded on their ability to do neat websites, and website building - once done - that could be taken over by less expensive and less sexy outsource organizations or internal MIS departments. Another issue is the persona of the acquired companies. Clients of these companies now have a partner with more to offer than previously, as in the case if I-Cube customers. Hence the need to provide an all round set of services - or at least give the appearance of doing so - is paramount if Razorfish wants to move ahead. In Europe it may have more success through its acquisitions, but in essence, Razorfish has a branding problem of its own. Thus the first and fourth components of the EES - discussed below - are currently out of Razorfish's reach. However, we predict that Razorfish should be able to lay claim to the strategy piece within the next year to eighteen months.

In another direction, Razorfish has a major desire not to be so dependent on a few clients, but the reality is that it will continue to derive a significant portion of its revenues from a limited number of larger clients (probability 90%). However, as the company's revenues grow, the anticipated dependence on single clients accounting for more than 10% of revenue should decline. In 1998 one client accounted for about 25% of the company's revenue. With a revenue growth of over 400% from 1998 to 1999 (due largely from acquisitions), and the size of major contracts almost doubling, at least more new clients are being added. USWEB, another DBSP, reports its contract sizes have about doubled on average, confirming the market is tending toward larger sized contracts requiring more services. However, part of the revenue growth, - approximately 15-20%, was due to a 30% increase in billing rates to some major clients in January 1999. This adds some weight to the likelihood that Razorfish is having some difficulty in leveraging itself into larger contract sizes, though the acquisitions blurs this analysis as does its recent international acquisitions .

Acquisition as a revenue generator is working well for Razorfish. The dramatic revenue jumps (Figure 1) in 1998 and 1999 were largely the result of acquiring I-Cube and Spray respectively, as well as through market growth (an estimate shows about half the year-to-year increase). The larger acquisitions were accounted for mostly through stock option exchanges and some cash. Razorfish's earlier smaller acquisitions in 1998 were cash deals. Another troubling trend is the rising cost of personnel shown in Figure 2. In January 1998, Razorfish raised its rates by 30% to at least one major client, though the apparent modest rise in relative manpower costs is masked by acquisitions and expansions. Figure 1 indicates the impact on the bottom line of Razorfish's acquisitions.

One area where Razorfish can have a major strategic development impact and follow-up long term partnering is with new dot-com companies well funded by Venture Capitalists (VC's). These companies often start with a good business idea, often by someone well versed in the industry. Someone, for example, familiar with the automotive parts industry realizes that this is a perfect industry for an online auto parts mart. This happened in the case of partsdriver.com for which Razorfish built the website and the backend integration. However, translating the idea into a working website means that the strategic concepts must be worked out as the business model is translated into the digital medium. Razorfish's expertise shined in this example, though it is a more confined problem than a complex pre-existing brick and mortar company changing or adding spots to its current organization.

We should also take note of the fact that Razorfish's culture is well suited to dot-com's - it being one itself. The cultural match and relationships forged from the 'raising of children' should never be overlooked in this business. In this sense, a DBSP like Razorfish could spawn a network of businesses that will grow as more business is driven to the net.

User's should be aware that typical projects can last 3-9 months. Razorfish's preference is for projects in the $750,000+ mark or above - the mid-market where most players believe the bulk of e-business building exists.

Vendor Strengths

Without doubt Razorfish's strengths are in design, architecture, and technology. All clients we spoke to gave them very high marks for these functions.

Development Skills: Among Razorfish's skill sets is a strong capability in UNIX, C, C++, COBOL, and VB. As well they have moved to JAVA and are going to combine and grow their skill sets. Further, Razorfish has built at least one unique tool - an automatic translator from COBOL into SAP's language ABAP, a fact that won them a translation contract with SAP. Likely as not, proprietary tools built from internal expertise can provide Razorfish with added advantages.

The company does not have many technology partners, and this can be viewed as a strength on the one hand, and a weakness on the other. On the strength side it means it is not beholding to any technology. On the downside, it means that it may not have the relationships with product vendors to truly leverage their knowledge. Among the company's packaged solutions expertise are Siebel - where it needs more people - Vignette, and Ariba which is increasingly used to interface with installed systems.

Design: The design side has without doubt won them many contracts. However, it is like an actor who plays a role: once identified with the role, the true character of the actor is never recognized. From the website perspective, design and implementation are now even stronger - the Customer Experience quality assurance has been enhanced with the acquisition of TSDesign in Boston.

Internal Organization and Infrastructure: Another strength is its internal organization development and infrastructure. Razorfish seems ahead of many in terms of its integrated approach to office management. This is critical as companies expand overseas. Given the nature of the Internet, the shortage of manpower and high cost of development in the U.S. (and even parts of Europe), the ability to go offshore and still manage, track, and retain a skill set will play an ever increasing role in the success of a company.

Skills gained from early acquisition and learning to integrate other companies without killing the acquired organism (the Big 5 do so well at killing their creative babies) is something that is more and more needed. However, as Razorfish evolves into a larger organization, it may find this harder to achieve.

Broadband and Wireless Focus: The early move into broadband and wireless is a great move by Razorfish. This market is likely to explode since infrastructures, deregulation, and the enormous mergers and acquisitions in the telecommunications industry are setting the stage for real emergence. On top of this, new technologies are arriving. Within the next five years we expect the rise of the system on a chip - giving the computing power of a desktop today to communications devices like the cell phone and PDA (probability 85%). At present, it cannot be anticipated what this revolution will do, but hand-helds are likely to become the major driver behind the next generation of business applications.

The wireless facility and early associations with the likes of NOKIA and ERICSSON in Europe will provide backbone for Razorfish when this emergence occurs. Meanwhile, there is plenty of work to do in the area, even if it is to hook coke machines up with the cell phone so you can dial a coke if you don't have the change!

Vendor Challenges

Razorfish is like most vendors in this space - trying to achieve the holy grail of providing each client with an end-to-end solution (EES). EES is essentially composed of four functions:

  1. Digital business consulting in which a business plan is translated into digital business strategy; this can include marketing and branding.

  2. Architecture and Design wherein the digital business plan is turned into a technological architecture: this can include website design and structure, as well as the technological building blocks needed to execute the solution.

  3. System building and integration with back end systems.

  4. Extending the business relationship into a true partnership where the client and the vendor continually re-invent the business and expand / improve the digital capabilities of the client.

Of these, Razorfish certainly provides (2) and (3), and has yet to prove itself in the first and fourth for all classes of client, as argued earlier. Razorfish has an uphill battle for recognition and needs to move away from an image just as a creative player. It needs to be perceived as a more stolid consultant capable of entering the boardrooms of Brick and Mortar establishments - at least in North America.

As indicated earlier, the ability of the company to make itself known in a few vertical industries is also impacted by the vision of the company as a creative website designer and builder, not the true digital strategist. In order for it to be seriously taken as a player in the vertical industries on which it has an eye, Razorfish will have to look for players that are already present and respected. However, it is difficult to see who and what: the large industries it wants to enter are governed by the Big 5 consulting houses or large media consultants, none of which Razorfish can acquire (oops, but maybe the other way round?).

Maintenance of quality is a key issue. As the company expands it must continue to strive to hire the best, educate and distribute knowledge according to need. This is a major internal challenge. It must strive to upgrade its current MOM system into a true project management / knowledge-sharing tool, otherwise its geographically distributed talent may not be able to (at least as cheaply) exchange their knowledge pools efficiently. Acquisitions also have to be absorbed and merged into the corporate culture. Luckily, Razorfish's culture is similar to many new companies, but as it grows, so will the culture change. PeopleSoft seems to have retained its culture: maybe Razorfish should look around for examples so it can make sure it can do the same.

Razorfish's employee retention rate is reasonable for the industry. Currently it has about 15%-18% turnover rate. Employee retention in the U.S. is hard - particularly in silicon alley/valley locations - and hiring has to be directed at similar-culture organizations such as Cambridge Technology Partners. SAPIENT is not as similar in terms of culture to Razorfish, and hence Razorfish's headhunters do not generally target its employees.

According to Razorfish, many consultants come from the Big Five looking for more exciting work and larger pieces of monetary return from smaller dot-com organizations. However, this also makes them the target for headhunters as well as a breeding ground for new entrepreneurs intent on establishing companies of their own. Dot-coms are breeding grounds for other dot-coms, and perhaps Razorfish may need to look at how it retains its relationships with the babies it helps create. The paucity of available skilled labor in the US also means what it has here in terms of labor costs is expensive. Going offshore for cheaper labor is possible; however Razorfish will have to deal with the inevitable cultural and language barriers.

Another problem it may find relates to its attempt to provide strategic consulting and get in earlier in the consulting game. It may find that the competition resulting from Big X (where X is to be defined as the world changes) organization initiatives will make it harder to compete for more established B&M companies. However, nothing stops these companies from trying out Razorfish, if only to corroborate or add value to the solutions from more traditional strategy partners.

Internationalization is a challenge to everyone. As a commerce web designer and builder, building in the customer relationships for multiple cultures and languages will be a major opportunity. A diversity of internal cultures and language skills is an advantage for any vendor, as well as an internal challenge in getting that diversity to work and play efficiently together.

Vendor Predictions

In a burgeoning marketplace for DBSPs, it is hard to see anyone going down, and Razorfish certainly isn't one of them: its direction is certainly up. The expansion of broadband and wireless services make it well positioned for the new converging technologies marketplace.

Though net profits have generally been negative, this is not a sign of bad management -au contraire, it is a sign of the right direction in terms of grow, die, or be acquired. Internationalization is going to accelerate, and cross-fertilization of knowledge from one continent to the next is going to play an increasing role in the success of a DBSP. As well, as the need to provide services over cultural divides expands, having an international presence can only help.

Razorfish will expand, revenues will expand, but investors are going to pay the price for a while as the cost of the expansion eats the revenues. Razorfish will likely acquire properties in Asia before long (next 12 months), since this is the next wireless zone and we cannot see Razorfish holding back. South America is another attractive apple to bite on - particularly Brazil and Argentina with large and reasonably cell-phone populated cultures in focused areas.

Telecommunication infrastructures are expanding rapidly, as is wireless coverage. The failure of the Iridium satellite system is in fact a good sign: broadband systems are required and Iridium unfortunately has paid the price for being too little too late. However, some use for the system may yet be found to provide some limited low priority bandwidth at some future date. Teledesic, the broadband equivalent of GlobalStar (a digital cell/data satellite system), is due for commercial use in 2004. These systems are best adapted to developing countries and countries with broad expanses of low populated areas. With these systems in place, cell and global roaming capabilities will provide a boost for applications developers like Razorfish, but in cross-cultural terms. This means modifications to existing websites, as well as the creation of whole new lines of services such as language translators, voice recognition and multicultural personalization.

One question might arise: will Razorfish itself get eaten? As a high-end website builder and integrator with facilities in Europe in an explosive market, Razorfish presents itself as a nice target: problem is by whom? It's synergy for merger and acquisition is with the likes of Cambridge Technology Partners (probability maybe 50%), and maybe USWEB (this we doubt - probability 40%).

The Big X would not want to eat Razorfish at this point - its culture is too different and they would surely kill it. Of course, if the market becomes tight it may be another story of Goliath killing David. The probability of a market like this happening is low - 5% over the next two years. Our guess is Razorfish will carry on feeding itself over the next two or three years, and keep growing as long as its bankers can stand it. However, if the break-up of the large accounting and consulting houses occurs, they may well look for new blood and new ways to re-invent themselves.

From the EES point of view, we believe that Razorfish will never quite make the ranks of true strategy consultants to B&M's, but will be a strong player in the digital strategy that may be the end reality of many B&M companies. For newly created dot-coms it is another story.

Razorfish will make headway in being recognized in the vertical industries it seeks provided it can pull in respectable personnel in those areas. Part of the issue, however, is that many vertical markets have interestingly common backend needs of integration - where Razorfish is known to work well - while the front end of how business is done in the vertical market is exactly where the strategists are needed to win business. However, Razorfish's 'out-of-the-box' thinking is attractive if these industries find themselves pushed into doing business in very different ways; if not, the more traditional Big X firms (whatever or whoever they may be in a couple of years), will be well placed to take advantage and could shut the door pretty tight in several industries for the smaller newcomers.

The Media and Entertainment industry has a high probability of making it (80%) within the next year, while others will be a long slow climb over at least two years and some hard won engagements. Areas where we think they will have the most challenge (in order) will be in Financial, Manufacturing, Healthcare, and Consumer and Retail.

Vendor Recommendations

We believe that the major issues with Razorfish lay in its structural organization, external image, and perceived capabilities.

The name Razorfish conjures up the striking image of an exotic fish, and therein may lie the problem: exotic fish do not do staid business consulting to B&M's. Razorfish needs to change that image, and exciting marketing campaigns are hard to devise for corporate bureaucrats. Further, the vendor must create proper due business strategy processes for its digital strategic front end and extend business practices at the backend by providing value added services to at least extend its relationships if it wants the goal of an 'annuity' business.

Internal structural issues appear to be related to training. Razorfish has no formal training facilities and dedicated trainers to cover technology areas. To retain expertise, it is our belief that is must do more along these lines; otherwise staff retention and quality will eventually suffer.

User Recommendations

This vendor is clearly capable of providing clients with excellent technical help and its work is of high quality. However, you should consider carefully, as with any vendor, the pros and cons of using the services of Razorfish.

Of prime importance is cultural match. One client referred to CSC, a huge organization compared to Razorfish, yet a competitor Razorfish beat out for the contract with a new dot-com company. The dot-com company stated it had no desire being a microscopic piece to CSC. Razorfish made the client feel more comfortable, largely from size and culture perspectives, but also by the way it approached the engagement.

The user should also be aware of the internal processes for knowledge sharing and engagement practices that the vendor has at its disposal. These may better suit you particularly if you are not clear on the digital business you are about to create and need some flexibility. Large companies such as CSC can be too rigid and difficult to make on-the-fly changes, while Razorfish and others alike may (the emphasis is on may) be more flexible. However, beware of costs and delays that could be incurred by these changes: ask up front.

Fixed price / Fixed term contracting can work to the vendor and the client's advantage. From the vendor's side, it means the availability of resources can be better planned and thereby cut costs, as well as adding discipline into project execution. From the client side it means getting what you want when you want it. For this to work, however, a detailed and clear project must be presented by the client, usually in phased segments where there is room to learn prior to the next phase.

If you are a B&M company looking to a DBSP for strategic services, you may not likely be best served by the smaller DBSPs, and there could be interpretation differences of what exactly is digital business strategic planning. However, that aside, the translation of an existing strategic plan into digital business is probably best served by getting the creative DBSP in early on the discussions. They do have things to contribute, and are willing to learn the whole shebang if you are willing to be the teacher and get the reward at the end. You can ask what strategic management tools they have in their toolkit: those that have proven methodologies may be the ones to consider for an EES.

Glossary

ABAP: Proprietary programming language from SAP

B&M: Brick and Mortar - established companies with physical premises

CSC: Computer Science Corporation

DBSP: Digital Business Service Provider

EES: End-to-End Solutions

PDA: Personal Digital Assistant

VC: Venture Capitalist



 
comments powered by Disqus