A Q&A With Bill Nussey

To win the Virgin.com contract, iXL Inc. pulled out all the stops. That included getting company president and CEO iXL Bill Nussey to drop all his plans one night and board a flight to London. It helped secure the deal. Below, he shares his thoughts with executive editor T.C. Doyle on the mega project with Virgin.com.

VARBusiness: You have a lot of ambitious clients, but Virgin has to rank as perhaps the most. Trying to crack the list of most-heavily trafficked sites? Rather daunting, no?
Nussey: Absolutely. But people forget how embryonic the market is and how much development and leadership opportunity still exists. People make the mistake of forgetting that existing companies that are not pure dot coms have very strong product brands and very strong brick and mortar capabilities. They are absolutely going to assert themselves in this marketplace.

VB: Tell us about your experience with Virgin.
Nussey: We've been working with Virgin Atlantic for more than a year and got rave reviews for their Web site. They recommended iXL very highly to the broader group behind Virgin.com. I'll never forget the day I got a call that said 'you really want to be in London tomorrow.' I said, 'I do?' When I heard about the opportunity, I hopped on the plane and met with Alexis Dormandy and his team. He's the managing director of Virgin.com. It was supposed to be an hour meeting; it went for three. As you're aware, Virgin funded the project by selling a portion of Virgin Atlantic, which is an interesting irony for us because our friends at Virgin Atlantic not only provided the recommendation that helped us get the job, but also some of the money to fund the effort.

VB: The deal is interesting on many levels: it's large, fast and global. Tell me about the challenges you're going to have to overcome to pull this off.
Nussey: What we've been trying to do for a long time is make iXL a company that can deliver in a consistent, high-quality manner globally. Most service companies serve clients locally. We can do that. But we've spent the past 18 months building a company that can serve global clients from anywhere. In the case of Virgin, we're obviously going to be doing a ton of work from London, but also Denver, Atlanta, and San Francisco. This will ensure that Virgin gets the resources of hundreds of people without regard to where they are based. I love this stuff; it's an incredible advantage for us.

VB: This global approach works in practice as well as in theory?
Nussey: Yes. We do it for General Electric, for example. We serve GE out of 12 cities. And we serve 20 of their divisions around the world.

VB: So you have the team in Denver. What are they going to be doing?
Nussey: When we have our 'internal acknowledgments of our best run offices,' Denver is the leader. It's actually a program office for us. They have some serious experience running programs. They are also a gate-keeper or traffic cop for global projects. That means they'll source teams, individuals or entire offices to help manage projects.

VB: And in San Francisco?

Nussey: They'll obviously provide basic help and certain special assistance. All of our offices can deliver on our core fusion capabilities--engineering, design and strategy. But we have regional centers of excellence. San Francisco, for example, is one of our centers of excellence around marketing services, advertising and branding. Wakefield, Mass., is part of our ERM group and provides expertise in CRM. They are going to develop ERM baseline components for Virgin.

VB: In addition to launching the site and making it look good, what are some of the technical achievements you're are going to have to make? What's going to set this site apart?
Nussey: The engagement is largely technical, more so than a branding engagement, although it has a branding component. For example, Virgin asked us to create a terabyte, high-speed database foundation to support a customer-management, real-time relationship management system that will work across all Virgin brands participating in the site. It will work not only in the context of this site, but also for their own core businesses. It will support direct mail, a call center and other aspects of customer care that Virgin already has in place. It's a very over-arching effort that includes integration with the legacy customer management systems the brands have.

VB: From a technical standpoint, how savvy was Virgin prior to your involvement with them?
Nussey: They understand technically what it is they are trying to build, but there are very few people that can build the CRM system we are building.

VB: Let's talk about your ability to pull down some big deals. You've worked with GE, Delta and now Virgin. Is it your intent to be the guys that do the big e-business deals, instead of CSC or EDS?
Nussey: Absolutely. CSC and EDS don't do this kind of work.

VB: I've got press releases and white papers that say they do.
Nussey: They never showed up. They were not invited to present to Virgin, nor are they typically invited to present at most of these things. The trouble is this: CRM and ERM are very broad definitions. In fact, Andersen is a very good company and they have the ability to build a certain kind of CRM system. They are particularly good at building very large, sophisticated systems. But as a company, they don't know much about the Web. For example, what is the appropriate behavior model and customer-object model to use on the Web? We have been doing marketing on the Web and understand customer demographics and segmentation better than anyone. We're probably the only ones that have the capability to build terabyte-class databases and model all that learning. Andersen doesn't have the experience and it isn't gaining it very quickly in the broad, marketing aspects of the Web. We win on those big engagements. In the case of GE, I know they did talk to IBM, but they quickly dismissed them because IBM cannot offer the fusion of engineering and talent we do. What's funny about the Web is you can look at it as a medium like some agencies do, or you can look at it like a technology the way IBM or CSC does. But what makes it awesome--and the reason Jack Welch says it truly is the biggest business phenomenon since the industrial revolution--is that it is both at the same time. You never read about companies who try to have their marketing people address the marketing aspects of the Web and the technical people address the technical aspects of the Web separately--unless it's in the context of a total failure. There are very few outsourcers like iXL that can serve in both dimensions.

VB: One could argue that the contribution of those bigger firms to this entire phenomenon has been to serve as the training grounds for employees that you later steal. That said, who were you competing with to get the Virgin deal?
Nussey: I don't think I should talk about that.

VB: Without naming names then, what distinguished you over them?
Nussey: The ability to bring an entire organization seamlessly to a London client. The proven ability to serve big clients like GE. The other company we competed against in the Virgin.com opportunity still deals with clients on a local basis and still sees clients as projects.

VB: Can you be more specific?
Nussey: Sure. In the typical outsourcing model, most of what is done is in the form of a project. It's true in the Andersen model, for example. The best project is the biggest project. So I want to implement SAP and I want you to pay me $200 million to do it. Those companies are run by engineers and they are doing engineering work. They have a discrete, deliverable mentality, which says 'I'm going to do a thing as big as possible and hand it to you.'

VB: In that world, are projects time and materials, or fixed projects?
Nussey: They're both. In that world, providers prefer time and materials but market pressures have forced them to go to a fixed model. But the trouble with that kind of contract is that you spend half your management time trying to negotiate change orders, which is ugly. In the case of our competition at Virgin, they really took a giant project mentality. What we told Virgin was that we wanted to break the engagement into as many small and discrete projects as we could. If we can get a project done in three months, let's do it so that by the time we are done it's still relevant instead of a 12 month project that by the time we deliver it, six competitors have already beat us to the punch with features we invented. You have to take a fast-track mentality. But to do that, you have to have the very unique skill of being able to manage simultaneous projects. And you need to manage them across divisions and keep them all in synch. Service companies, whether you're Andersen, IBM or whomever, have never had to tackle this before. This is a new skill and we think it is essential to what we call 'the next generation professional services model.'

VB: What will be the first milestones of the Virgin.com project?
Nussey: The launch, obviously, though we are not yet talking about actual dates yet. The creation of the CRM system will be another one. The full translation of the brand to the Web medium will be another. Externally, the launch of the site will be what the public really cares about. Virgin doesn't envision this as one monolithic thing in that once you turn it on, it's done. They see it as an evolution and they plan to what we call 'fail fast'. In other words, you put things up fast and if they don't work you kill them. You learn and do the next thing quickly. Virgin really understands this, which is one of the reasons we're so excited to be working with them, and one of the reasons why we think they are going to be very successful.