BLUEPRINT: RACKSPACE MANAGED HOSTING

THE EFFICIENCY EQUATION
The Building Partner
Rackspace offers a wide range of managed services with proactive service level management, all based on the unique needs of each individual customer. They are the fastest growing managed hosting specialist in the world.

+ Surveying the Project
Rackspace's monthly billing cycle took almost twenty business days to process for over 3,000 customers. At the time, different applications were used to track cost components of the monthly invoice (monthly hosting fee, number of IP addresses, bandwidth overage, and support fees). Reporting became extremely time consuming as Quickbooks could no longer effectively process the growing amounts of data. No fixed asset controls were in place as there were neither formal requisition processes nor the ability to track fixed asset components. Foreign operations were also maintained in a separate accounting system, slowing consolidated financial reporting.

+ Drafting the Blueprint
Rackspace needed an efficient monthly billing routine, a fixed asset/inventory system, enhanced reporting capabilities, and the ability to consolidate books for foreign operations to produce financials in a timely manner. The Rand Group designed a custom billing cycle process to exponentially improve invoice processing times. Fixed asset bar-coding was designed to improve asset inventory control.

+The Microsoft Building Blocks
The Rand Group (TRG) team created a solution with Microsoft Navision as the back-end business management system. A custom billing cycle was developed within Navision, which would automatically gather the needed charges and generate invoices. Integration with the applications which tracked these amounts was seamless with the introduction of Microsoft SQL Server. Further, Rackspace was able to access the data to provide customers visibility to their accounts on their website. Navision was further extended to allow each individual fixed asset (processors, memory, hard drives, motherboards, etc.) to be bar-coded and placed into inventory or assigned to a live server. Navision also supports foreign operations in the same system, with standard consolidation and currency exchange translation features.

+ The Rand Group Expertise
The business process expertise of TRG team members drove system design that reduced monthly billing time from 20 business days to hours. With the knowledge of the CPA's on the team, Rackspace's fixed asset sales tax deferral processes were accommodated in the application. Rackspace has grown substantially and TRG team members have been able to adapt the system to their growth needs.

= Measurable Results
Navision saved over 150 man-hours a month, so a full-time resource was no longer necessary to manage the billing process. Unexplained shrinkages of inventory were eliminated. Navision also allowed Rackspace to realize a positive cash flow of over $700,000 in the first year.