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In the Eye of the Storm

This trucking company's CFO learned that being in the heart of Silicon Valley at the peak of the tech market was a mixed blessing.

Marshall Witt would agree with the argument that business in Silicon Valley can be both a blessing and a curse, but with a slightly different take. Witt is CFO of Viking Freight, a San Jose, Calif.-based division of FedEx Corp. that has 140 employees in its tech department, five of whom support Witt and the 125 users of the company’s enterprise resource planning system.

That’s all well and good. But Witt has faced a nettlesome problem almost since his first day at Viking three years ago: Tech programmers don’t feel like their career is going anywhere when their job is supporting a rickety old IBM AS/400 midrange computer that runs an ERP system. It certainly doesn’t help morale among the troops when right up the road are places like Sun Microsystems, Oracle, Intel, Hewlett- Packard, and the army of start-ups building the next wave of the Internet.

“When you try to find programmers who know the AS/400, it’s hard to do,” Witt says. “It’s not a language programmers are seeking out.”

It’s not that Viking wasn’t exactly stuck in the mud where technology was concerned, and Witt notes, “We wanted to give our staff a chance to elevate their skills and be part of the strategic future of the company.”

But last year, the issue was forced for the firm when IBM discontinued support for the CICS middleware that ran on older models of its AS/400 midrange server.

Big Blue’s bombshell was about as welcome as a hailstorm during a July 4th clambake, but it did spur Viking to search for a new enterprise resource planning supplier.

“This was right at the peak of the incredible bull market,” Witt recalls. “And here we are in the heart of Silicon Valley trying to find skilled tech professionals.”

By last April, Viking had decided on Infinium, a Hyannis, Mass.- based vendor that runs an application service provider, or ASP, center out of Marlboro, and the company was live by August.

Witt won’t disclose what he’s spending on the Infinium contract, but he notes that it’s priced with a variable fee tied to the number of users. If the company grows, it winds up paying more. If it shrinks during a recession, the costs will go down, too.

“Our cost is a variable stream that matches our volume,” Witt says. But switching to an outsourcer also helped Witt and the technology staff get a better grip on who was actually using the system and why.

“When you’re on an owned system, you don’t pay attention to everybody who is using it,” Witt says. “This allowed us to scrutinize everything and make sure the people who are using the system actually need it.”

With the switch in systems behind him, Witt was ready to move on. Since the ASP contract went live last year, Viking has embarked upon a variety of Web initiatives. In December, the firm rolled out a service called “I Ship Viking” that lets small- and medium-sized business clients enter orders via the company’s Web site and track their status on line.

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