When Avis Rent-A-Car System Inc. takes the wraps off its next-generation online reservation system this week, it will showcase the development work of a small, little-known consulting company that beat out a Big Five company for the multimillion-dollar job with a blend of business savvy and cost savings.
Although the worlds second-largest auto rental company typically works with top-tier consultants on strategic projects, Avis officials said they chose tiny MindTree Consulting Ltd. to overhaul the flagship Avis.com site only after the consultancy successfully completed a smaller integration job, and MindTree proved “they understood our business.”
“It was the degree to which we felt comfortable” that tipped the scales in MindTrees favor, said Randy Clapp, vice president of technology at Avis, in Parsippany, N.J. “Its a relationship thats really grown over time.”
“Thats the best way to sell your business—get in there and do a good job and build a relationship with the customer,” said Carrie Lewis, an analyst at The Yankee Group, in Boston. Still, Lewis called Avis decision to go with a smaller player rather than a top-tier company “atypical.”
Pricing pressures also helped MindTree, based in Somerset, N.J., and Bangalore, India, score its largest engagement to date. The company leveraged its lower cost for offshore development to outbid competitors for the Avis project.
Avis has been considered a technology leader in the car rental business. For example, it pioneered the use of handheld mobile devices for check-in service. But when the redesign of Avis online reservation system began about 18 months ago, there was competitive technological parity.
“Avis wanted to do a better job of knowing and supporting their customers,” said Erik Mann, vice president and managing partner for the East Coast operations of MindTree. “Also, online reservations are a big bottom-line benefit to rental car companies. Self-service saves the travel industry $4 to $6 per reservation.”
Avis officials said they hope to use the improved reservations site to strengthen the companys hold on business rentals by offering more ways for corporate travelers to manage their accounts.
The company also hopes to use the more streamlined and more personalized Web site to grab market share among leisure travelers, officials said.
One of Avis goals was to accomplish scalability with the new technology selection. “There are no code changes required,” Avis Clapp said. “All we need to do to scale if we see growth is add CPUs or servers—the software will support all of that.”
Avis.com is built on an Oracle Corp. database, BEA Systems Inc.s WebLogic servers, Interwoven Inc.s content management tools and search capabilities from AltaVista Co.
Avis officials said they believe the new Avis.com will pay for itself in less than a year. The project, despite its strategic nature, cost far less than other companies redesigns, Clapp said.
At a “few million, it comparatively was much less than what a lot of organizations spend to rearchitect their Web sites,” Clapp said.
MindTree was able to leverage its lower cost of development in India to do much of the heavy lifting for back-end integration with Avis mainframe systems. At the same time, it managed the offshore work in a way that was transparent to Avis and allowed Avis to remain very hands-on with the project, according to MindTrees Mann.
“We try to move the work around in a way thats seamless to Avis,” Mann said. “A lot of the work was done in our Somerset facility, and selected components were sent offshore. That gives them the face time and ability to make small changes on the fly and a sense of comfort.”
Avis IT organization, which has a strong competency in global sourcing, also leveraged its strength in structuring “contracts that are fixed-price, deliverables-based and focused instead of [based on] time and material,” Clapp said.
Privately held MindTree, founded in 1999, recently secured a second round of funding of $14.4 million. The company, which employs 450 worldwide, expects to generate annual revenues of $231 million by 2005.
