A close-up study of how a company brought in its own expert to upgrade its system, and what that was like.
Bringing in an expert to overhaul your systems can take you to the next level -- if you survive the experience
Quick Start
Challenge: To provide customized high-tech debt-collection services to a rapidly growing set of clients representing more than a million debtors
Solution: Bring in a full-time computer expert to replace an aging, cranky computer system with a networked system and customized relational database-management software to track and send out letters to debtors
Resources: A 486 Novell server to hold the company database; a 90-megahertz Pentium-based database server; four Pentium machines; a bulletin board for clients to dial into to upload account information or download reports
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It is 3 a.m. on a Sunday in August 1994, and in the recesses of an office park in Calabasas, Calif., Jose Gonzalez absorbs the bad news: his database has puked. Again. "Man, I can't believe it," fumes the weary programmer. Sometime around 10 o'clock, his log tells him, the system mysteriously rebooted itself, regurgitating the 200 million bytes of data that Gonzalez had spent the weekend feeding it. "All that work is lost," he mutters. "We'll have to start all over again." It will take two days to reload the data. So instead of heading home to bed, Gonzalez looks to watch dawn break from a stark, overlit office, hunched over a Pentium machine, listening to the fluorescents buzz and his keyboard clack, trying like some Sisyphus of software to push a binary rock once more up the hill.
The episode is just one more reversal in the race to install a new information system at Collectech, the high-speed, $5-million collection agency that employs Gonzalez. And while an act of God might help, Collectech's managers would settle for a clean data dump right now. The company's conversion from an outmoded central processing system to a custom-built client-server network hinges on it. More than a million records must be imported from the old system to the new before weeks of testing and debugging will make CTech Express, as its creators have christened it, safely habitable. Depending on whose schedule you consult, the conversion is already six months, nine months, a year late. "The pressure is on," says Gonzalez. "The board is desperate to see it happen. And if we're not up by September 1, I figure we'll be having one serious discussion."
If that discussion takes place, Marwan Kashou will be leading it. The impatient president and cofounder of Collectech, Kashou is a dark dynamo of a man accustomed to making deals and sales, and even wrenching change, happen fast. A new challenge can get this former weightlifter "pumped out of my mind," as he likes to put it. But this metamorphosis -- an ambitious technological overhaul of the company's operations -- is different. "We're taking a fairly mundane business and transforming it into a high-tech deal," he says.
Collectech got by with outdated computer systems through its first five years of manic growth. But those days are now over. "This company cannot grow at anywhere near the same rate without the right information systems," sighs Kashou. CTech Express, he insists, is the key to nearly doubling sales to $9 million this year. In fact, Kashou has more or less staked the company's future on the success of the new system. And so, indirectly, he has staked the company's future on Gonzalez. It is an arrangement that has required all of Kashou's faith. It has required a lot of Gonzalez's sweat. And it has required some $200,000. "This system is going to work," says Kashou. "It has to."
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Marwan Kashou is not a natural-born computer geek, though he does own a pocket protector (a gift from employees), and he can get characteristically "pumped" talking about the future of E-mail or electronic data interchange. No, whatever this 34-year-old son of a Palestinian grocer knows about computers, he picked up on his own in the past few years. He holds no engineering degrees, harbors no hacker past, in fact, had never so much as laid his hands on a keyboard before 1988, when he learned his first great technological truth: if you are not a student of technology, you are its victim.
Collectech, as its name implies, was intended from the beginning to offer a sophisticated alternative to the bounty hunters ordinarily retained to prompt debtors to pay. Rather than demand a 30% to 40% cut of every dollar collected, Collectech charged a few dollars per debtor up front and promised earlier, friendlier intervention: letters that intervene before third-party collection agencies have to be called in.
Automation was more than a technique for controlling costs: it was a license to exist, the only way Collectech could achieve the volume needed for profits. The company, which rarely employs phone collectors, processes more than 75,000 delinquent accounts every month, about six times what a conventional collection agency paying 40 collectors might turn. Through automated letter writing, it can turn a profit pursuing accounts that other collectors shun. Waste disposal businesses, paging service firms, security companies -- these and firms in dozens of other industries had long carried hordes of nonpaying customers whose low-balance accounts aged so rapidly that the debts had always simply been written off as uncollectible.
Collectech's very first letters were produced a few hundred at a time on a system consisting of a Wang minicomputer that ran some no-frills word-processing and database software, a printer, a burster to cut and trim the letters, and a web of custom COBOL code to keep it all working together. The system cost $122,000. It was also already five years out of date the day it was installed -- a day that happened to arrive some four months later than had been originally estimated, thanks to difficulties in getting the software up to speed. That delay shut down sales and precipitated the business's inaugural cash crisis. It was a rite of passage for Kashou the salesman, who learned that if he had no code, he had no product, and if he had no product, he had no sales. As the Collectech sales jocks put it, "No heat, no eat."
