CTO John Petrone shares how Autobytel has used various tools, such as agile development, virtualization and outsourcing, to become a smarter, more effective organization, better able to respond to challenges and change.

1. Tearing it Down then Building It Up:
Transforming IT in the Midst of Chaos
John Petrone
SVP & CTO
Autobytel Inc.
November 15th, 2011

2. Who is Autobytel?

3. Who is Autobytel?
• A leader in providing online marketing services to the
automotive industry.
• An early innovator in the creation of automotive web
sites and online services.
• First major 3rd party web site.
• Multiple patents in online automotive marketing.
• First “dotcom” to advertise during the Super Bowl.

4. Who is Autobytel?
Most importantly (for this story) Autobytel is a survivor.
• After an IPO in 1999, survived the dot com crash of
2000 to reach profitability and sustainable growth.
• Made difficult and expensive changes as a small public
company for Sarbanes-Oxley compliance in 2004.
• Most recently, re-built the company to grow and thrive
during the worst recession ever in the automotive
industry.

5. Change in Strategy for 2006
Refocused on consumer web sites and rapidly grow
revenue – we wanted to get big fast.
• Built a new consumer web site with all new
infrastructure and technology to handle 3X growth.
• Supplemented internal IT staff with outside resources.
• Re-built other key revenue generating systems at the
same time.
This produced a large IT spend – over $20M/yr, 130+
FTEs, two data centers at a time of increasing losses.

6. And then the unthinkable happens:
37% Decline

7. Which leads to lower Ad spending…
30% Decline
28% Decline

8. Tearing it down…
Autobytel now needed to reverse course – the company
(and IT) had to get small fast. We had to be able to survive
on half the revenue we had before.
• Sell non strategic business units.
• Simplify infrastructure and outsource internal systems.
• Cut desktop supports cost and move to BYOD.
• Reduce headcount.
• Cut costs at all costs.

9. Sell non strategic business units
Benefits for IT:
• Fewer applications, technologies and databases.
• Better IT management focus.

10. Simplify infrastructure
• Business unit divesture reduced data center needs.
• Retire old or expensive applications.
• Shut down new web infrastructure (too expensive).
• Outsource internal apps (CRM, HR, travel).
• Consolidate down to a single data center.
• Move to virtualization to reduce physical footprint within
data center

11. Cut desktop and mobile support costs
• Fewer desktops/laptops = lower costs.
• Freeze annual OS, App and Hardware refreshes.
• Empower end users with data query tools.
• Open up to BYOD – embrace iPhone, iPad and Android
into the enterprise.

12. Reduce Headcount
• 4 separate RIFs between 2006 and 2008.
• Reduced data center footprint and fewer business units.
• Eliminated QA, project management, reporting,
architecture.

13. That worked great…
• Greater than 75% reduction in IT staff and spending.
• Systems were still running okay (with a lot of deferred
maintenance).
• Down to bare bones on outside costs (maintenance,
support, annual license fees).
But it wasn’t enough
• We could run what we had but we couldn’t grow.
• We were still losing money.
• Not sustainable without something changing.
• You can’t cut your way to growth.

14. Building it up…
• We needed to restart growth to get to profitability.
• Yet we also needed to maintain control of our costs.
• We focused on 4 main efforts to achieve those goals:
• Added back some key staff.
• Started to innovate again.
• Looked for a transforming acquisition.
• Re-launched our core brand.

15. Adding staff
• Added back project management, key IT leadership
positions and more development resources.
• Former Autobytel IT staff were a valuable recruiting
source:
• They already knew the systems, business and
people
• No surprises – we already knew their strengths and
weaknesses.
• How we treated staff on the way out was a critical factor
in being able to staff back up.

16. Innovation
• Needed to innovate to add products.
• To add new revenue streams.
• To prove that we’re still alive.
• We had nothing to lose.
• Need to roll out products much faster than before.
• Agile development, small teams, focus.
• Launched iControl in 2010 –built in-house but delivered
thru a third party platform and relationships.
• Continued patent applications.

17. Acquisition
• Acquired a small company in 2010 with complimentary
technology and revenue streams.
• Brought with it a cost effective off-shore development
contract (with a QA team).
• We used a different approach to integration than before
– a slower pace, more inclusive, far less costly.

18. The New Autobytel.com
The Technology
• All new development on new platform.
• Microsoft .NET 4.0 and SQL Server.
• All in house resources.
• Small team using Agile development.
• Time boxed – must launch by June 2011.

19. The New Autobytel.com
The Consumer Proposition
RESEARCH
Purchase Price
Vehicle Specs
Reviews
REPURCHASE Cost of Ownership
Present & future Purchase
vehicle values activities
Future Depreciation Your
Lifetime
Automotive Ownership activities
AdvisorTM MyGarage®
OWNERSHIP
Recalls
Diagnostics
Estimates Expand brand beyond
Maintenance
Schedules
in-market timeframe
Ask a Mechanic (every 3-5 years)

20. Autobytel IT Today
• Re-launched Autobytel.com on June 29th 2011.
• Back up to 28 internal IT staff.
• Off shore development and QA adds 7-8 variable FTE.
• IT spend is a bit over $5M/yr.
• We generate twice as much revenue per IT $ than we
did in 2006.
• We deploy new enhancements every week and have
much shorter development cycles for new products.

21. Autobytel Today

22. Autobytel IT Tomorrow
• A long list of deferred maintenance and projects:
• New financials package
• Back to annual desktop refreshes.
• New phone system and storage solution.
• New Product Development
• Web site enhancements and mobile apps.
• New dealer products.
• Retire our old web sites:
• Need to continue to keep costs in check.

23. Lessons Learned
• What made the difference for Autobytel?
• The right staff (skills, attitude, commitment).
• Small joint teams and agile development.
• Moving to a virtualized environment and cloud based
apps was critical.
• Focus.
• What did we struggle with?
• We over corrected and cut too deep to begin with.
• Keeping the load manageable on the remaining IT
staff.
• Pulling out of the day to day to focus on the future.

24. Most Important Lesson Learned
One last take away:
• “To believe a thing impossible is to make it so” – French
Proverb
• The most important change we had to make was in our
own thinking about what was possible.
• Everything else we achieved came after we began to
believe it could be done.

25. THANK YOU
johnp@autobytel.com
November 15,