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In 2001, Mehdi Daoudi of DoubleClick had a million things on his mind, all with George Washington's picture on them. DoubleClick paid out over $1 million in penalties for service level agreements (SLAs) violations. This year he hasn't paid a penny in SLA violation penalties.

Daoudi is vice president quality of services within the technology group for DoubleClick, a New York, New York company that provides infrastructure and services for Internet advertising, email marketing, database marketing, and marketing analytics.

Delivering Internet advertising efficiently is DoubleClick's core competency. The firm delivers about 2 billion ads a day for its clients. Of the 12 most frequented Web sites identified by Nielsen/Net Ratings, over half are DoubleClick clients.

The SLA violations clearly indicated a problem in efficient ad delivery. Even though only 370 of the company's 1,370 ad serving customers have SLAs, last year's compliance performance penalties threatened the status of DoubleClick as an industry leader. Proactive measures were in order.

The problem was integrating two areas: Internet performance monitoring and SLA compliance reporting. While DoubleClick has developed many of its own technologies that made it recognized as a leading player, its internal system had shortcomings in those two key areas.

When DoubleClick's initial outsourcing of Internet performance monitoring fell short of expectations, it decided its current outsourcing service provider had to go. It then selected Gómez, Inc. of Waltham, Massachusetts to turn the situation around.

The other piece of the puzzle was SLA compliance. "We used to manage our SLAs through Microsoft Excel spreadsheets. We then built our own tools. With our internal system, we had to wait until the end of the month to figure out if we had reached an SLA. So we decided to look for a real service level management tool and found DigitalFuel," says Daoudi. DigitalFuel is a sourcing relationship management software vendor headquartered in San Mateo, California.

Two Suppliers Interfacing Seamlessly

DoubleClick also insisted that both firms be able to interface seamlessly with one another. This was possible because both Gómez, Inc. and DigitalFuel have open architecture incorporating XML (extensible markup language.)

DoubleClick implemented the Gómez, Inc. outsourcing solution first. Initially, it insisted on a try before you buy evaluation before terminating the contract with the previous service provider. "DoubleClick wanted to look at our service without an obligation, says Jeff Banker, vice president for Gómez, Inc. "Over the course of three months, they were able to compare quality and accuracy to determine that we could save them a lot of money and provide higher quality."

DoubleClick outsourced to Gómez, Inc. in June 2001. Developing the expanded customized reporting features took another three months.

In October 2001 DoubleClick purchased the DigitalFuel server version. Implementation took eight weeks. When DoubleClick updated to the new DigitalFuel version 2.0 in July 2002, it was so clean that Jeff Banker, vice president, for Gómez, Inc., says, "We didn't even know about it."

Real Solutions in Real Time

Daoudi is very pleased with the results. "We now have real time visibility into our SLAs." He can log in to monitor SLA performance and receives a report daily cataloging all warnings and any breaches if there were any. "We get an immediate alarm if a threshold has been reached," he says.

DoubleClick just extended its outsourcing contract with Gómez, Inc."This helps us get our act together from an operational perspective. We have improved our customer satisfaction," says the DoubleClick executive.

Daoudi also points to benefits in customer service. "We design the SLAs with our customers. By addressing their business needs, we hope to build long-term relationships. The SLA goes back to the design of our product. Now, when we have new products being designed, instead of being involved at the end of the process, we get involved in the beginning so we can provide the highest quality of experience for our customers."

Daoudi concludes that, "Thanks to Gómez, Inc. and DigitalFuel, we expect to save $1 million this year due to better SLA management."

Lessons from the Outsourcing Journal:

• There are times when you have to replace an outsourcing service provider. It's best to be able to evaluate the successor to compare apples with apples before you buy.
• If you want to integrate software and/or service providers, make sure the two companies can work together seamlessly.
• Monitoring SLAs in real time allows suppliers to avoid having to pay $1 million in fines!

Publish Date: September 2002

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Copyright © 2002 - Everest Partners, L.P.

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