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Published in U.S. 1 Newspaper on May 24, 2000. All rights reserved.

IT Talent: From the Haystack

E-mail: BarbaraFox@princetoninfo.com

Last year the dot-com companies got starry-eyed over

selling to consumers. This year, what’s hot are the business-to-business

dot-coms. But in any situation in the years to come, predicts Sonny

Injaty, CEO of Mirronex, the American economy will not be based on

products as much as services.

"All companies, even Cisco, are moving to a service-driven economy,

and once it is there, how do you manage the services?" asks Injaty.

He came up with an E-commerce system that solves one of the peskiest

problems of today, hiring workers, especially computer or information

technology (IT) workers. By 2002 more than half of IT personnel will

be working on a consulting basis. Before, you could hire consultants

by word of mouth, but now AT&T, for one example, has 10,000 consultants,

and you don’t get 10,000 by word of mouth.

At Mirronex Technology in the Princeton Corporate Center, the 34-year-old

entrepreneur leveraged experience in IT staffing and sourcing to create

a neutral hub for clients and vendors to come together to buy and

sell services, plus a pipe to manage the services. Named "mxConnect,"

this product is a Internet-based network to manage the entire supply

chain of IT outsourcing. With it, Mirronex intends to dominate the

online human resources field in the B to B arena.

Mirronex moved in January to 4390 Route 1 North and launched mxConnect

in February. Its first customer was the Limited, a Fortune 200 retailer.

From just 5,000 square feet Mirronex is building out to 30,000 feet.

Injaty has hired at a fast pace, 60 people here and another 20 in

India, and intends to be 200 strong by December. He speaks on "Butterfly

Hubs: Avoiding the Seven Deadly Sins of IT Outsourcing" on both

Wednesday and Thursday, June 7 and 8, at 12:30 p.m. at the New Jersey

Technology Showcase in Somerset. (Also scheduled from this company

are talks on mxConnect and creating brand identity in an E-business

market. Call 856-787-9700 or go to www.showcase.asmcorp.com.)

"What drives people here is that we all belong to the one or two

percent of the population that is changing the economy in ways that

people cannot fathom," says Injaty. "That is the excitement.

What we have seen so far is just the rush. When companies start transforming

the way you do things and add value — that is where the biggest

driver is, being part of this group, focused to achieve a name, or

fame, or whatever you want to call it, and money is just a by product

that comes with it."

The scope of the IT talent problem is mindboggling, as described by

Stephen Neish, vice president, business development at Mirronex. A

high percentage of IT projects are late because firms don’t have time

to bring staff people on and train them. And they don’t want people

on staff trained in one thing when the technology will change to the

next thing. So then they bring in consultants — paid a lot of

money because so few are skilled. But there is a shortage of consultants,

exasperated by a poor allocation of talent to the available positions

and by paper shuffling between the IT department, the procurement

department, and the staffing vendors.

A swamped system takes too long, maybe months, to fill a position.

For every requisition, hundreds of resumes come in. "Managers

can find 500 resumes on their desks on Monday morning, and they spend

their week on hiring, but they are supposed to be doing real work,"

says Neish.

Meanwhile the hiring company has little control. "Two different

offices of the same company could be offering different hourly rates,"

says Neish. In an extreme case, Neish relates, one consultant was

arrested for stealing computer hardware and then three weeks later

was hired into another department in the same company.

Facing such problems, the vice president for IT has a dilemma. "Five

years ago," says Neish, "chief information officers weren’t

a part of the inner management teams, but now CEOs and CFOs are begging

IT departments to come up with quick solutions, to compete."

Compete they must. "The only way left for American businesses

to compete is to apply technology to business situations," says

Neish. "That is America’s advantage, so technology has become

the main driver of competition."

Mirronex considers mxConnect to be the E-commerce hub

that can bring information and control to IT outsourcing. "It

has an end-to-end solution for the entire process, from the moment

a company is deciding which staffing firm to use, through bringing

people on board, viewing their resumes, doing the requisitions, finishing

the hiring paper work, listing expenses, invoicing — we do it

all," says Neish. "No other vendor offers solutions for the

entire process."

Also, mxConnect is customized to mirror a company’s internal workflow

process — how to route approvals, who has access to certain information,

how to access the chain of command, etc. Rather than do the actual

search for full-time or part-time consultants, it allows the hiring

company to talk to vendor firms who are going to place these consultants

for a certain period of time. "We need to educate the vendors

so they know we are put them in even closer contact with their clients.

Now they can have a real-time link. The second the manager sees the

resume, the vendor knows about it. The instant that client is rejected,

the vendor gets an E-mail about it.

"We are building a marketplace of staffing firms with no paperwork,"

says Neish. "A client can deal with many more vendors without

being bogged down with administration."

How it works: "Consultants from all the firms enter their time

on our online time sheet. In the workflow engine, these timesheets

flow electronically and go to the approving manager who adds an electronic

signature. Once approved, our system grabs the time sheets, works

out an invoice, consolidates all the invoices, and presents one master

invoice. The client makes one payment, and our system separates all

the payments out." Bills stay archived online for seven years,

and beyond that you can receive data in two business days.

The software is suited for crossing boundaries. Large clients such

as the Ciscos and AT&Ts of the world, with a strong international

presence, have centralized procurement, and they need the same solution

across the board. That explains the Bangalore office, which will serve

markets in the Asian subcontinent in places like Hong Kong, Singapore,

and Tokyo.

Mirronex uses the model of the application service providers (ASPs).

Everything happens at Mirronex. Nothing happens at on the vendor side,

though the client and the vendor can get to their records and download

them at any time. It is always backed up and redundant on the Mirronex

server, which is located at Qwest Communications in Newark.

Mirronex has just announced a deal with Bank of America, then based

in San Francisco, to invoice payments to mxConnect. "We have found

that Bank of America is the most up-to-date bank in E-commerce,"

says Neish. "It was able to do things in things in half the time

it would have taken with other banks."

Current clients include the Limited and Champion Mortgage. Citing

a six to twelve month selling cycle to Fortune 50 companies, and noting

the clock starting ticking in January, Neish says he expects to announce

some mega clients in the next couple of months. He also hopes to have

500 staffing firms on board by July. "We have two ways of getting

vendors," says Neish, "asking clients to bring in their vendors,

and signing up vendors independently." A vendor partner program

is scheduled to be on the website on May 24. The eventual goal is

to create job histories on each consultant who goes through the system.

Every software has its competition. One alternative method is to use

a less complete program, to handle only the billing, for instance.

"One agency can handle the billing for several agencies and accomplish

the same thing on the billing side. It works beautifully," says

the head of one of Princeton’s IT personnel agencies.

"Such a vendor is going to mark up costs by 30 percent," replies

Neish, "and will likely slow down the hiring process. Vendors

who understand our system know that we get their consultants on billing

faster."

Other alternatives to the Mirronex solution might be:

Build your own solution to deal with paperwork. A company

takes the time to construct its own work flow hiring process. But

one Fortune 50 firm tried that, and failed. "We had been talking

to them for 12 months," relates Neish, "and after four months

they thanked us for telling them how to do it and went away and were

going to have it built for January 2000. January came and went. They

came to us in March, saying they didn’t have the people, budget, or

resources, and asked us to come back in. We are hoping to announce

them as a client soon."

Hire a mega staffing firm. But other staffing companies

would not want to route their resumes through a competitor’s system.

"Clients have a problem with neutrality of the staffing firm,"

says Neish. Also, the company doing the hiring would lose significant

control.

Use a competitor’s quickly-done system. "We spent

18 months building an infrastructure to support the end-to-end system.

Something built in a week is built on sand," he says.

Narrow the source of supply by limiting the number of

staffing firms that you deal with. One company in New Jersey is narrowing

700 firms down to 10, he says, but that’s like what the Detroit automakers

face. Narrowing sources is more efficient, but you when you need to

increase production suddenly, you end up subcontracting anyway and

paying more as a result.

Sonny Injaty, age 34 and single, is a native of Bangalore,

India, where his father was an insurance executive, and he is one

of six children. He majored in industrial engineering at the University

of Bangalore (Class of 1988) and worked for a number of years at Bellcore.

"I have always been very entrepreneurial, and I started my first

company, an automation company, when I was 18. I watched the red tape

and the bureaucracy in other companies, and it was not an issue of

whether I would start this company, but of when," says Injaty.

After founding this company in 1996, Injaty and his cohorts spent

the early days building IT solutions for regional Bell operating companies,

but they had the idea of building an E-commerce hub for human capital.

The "Eureka moment" came when Injaty and one of the two co-founders,

the chief software engineer (Silvano Ravotto), talked about how the

future American economy is going to be based on services, about how

the outsourcing IT industry has been around for 20 years, yet there

was no order in the way the companies deal with staffing IT needs.

Some new hires left companies such as AT&T, Merrill Lynch, Sterling

Software and Salomon Smith Barney to get in on the ground floor of

a start-up opportunity. Anu Nikale is the third co-founder, and Neish

was the fifth person hired. An alumnus of the University of London

(Class of 1990) with a University of Chicago MBA, Neish was an investment

banker in mergers and acquisitions, edited several financial magazines,

and worked at Virgin Express in Belgium and Eurair.com in California

before seeing the Mirronex opportunity on hotjobs.com

Naz Khan at First Union is the banker, and Brendon Dougher is the

auditor at PricewaterhouseCoopers. The attorneys include Jack Hogoboom

at Lowenstein Sandler in Roseland, and Tom Klein of Wilson Somsini

et al in Palo Alto, plus College Road-based Buchanan Ingersoll, which

has done some patent work. Public relations is being handled by PR

21, part of Edelman Worldwide.

On the advisory board are Eric Clemons, a professor of IT outsourcing

from Wharton; Roger Milgram, an intellectual property attorney at

Paul, Hastings, Janofsky & Walker in New York; Steven Kaplan, who

teaches entrepreneurial science at the University of Chicago; and

Josh Koppelman, CEO of Half.com, in Conshohocken, near Philadelphia.

At first the firm was privately funded by the cofounders plus by contract

revenues. Then it raised money from some very high net worth angels,

and now it is in the middle of closing its next venture capital round.

The VCs must be chosen carefully, says Injaty. "We are looking

for the smart money. In today’s economy you need to get the right

resources, the smart money plus money in general, to make things happen."

In the move to Princeton, "we wanted to get to a place that people

would recognize, and also because Princeton is a high tech corridor,"

he says. For the first year and half, while he and his workers did

business process engineering contracts for bigger firms, they were

looking for the "right idea." It struck. "We cannibalized

and refocused the company and have had tremendous growth, up to 60

people in Princeton and another 20 in India," says Injaty.

Though Injaty works 16-hour days ("for me it is a passion"),

he likes to hire entrepreneurial people who take ownership in what

they do and suggests they need not work more than 60 hours a week.

Soccer is scheduled daily and beer parties once a month.

The search for technical talent can be slow, and Injaty doesn’t use

consultants himself. "Our company is very flat," he says.

"We want to have people who see the light at the end of the tunnel,

who share information, and take input across the board."

"When we look at a person, beyond the technical skill, we like

to understand how they think, how they rationalize, are they logical,

what are their beliefs and fears, and what makes them tick," says

Injaty, who labels himself as liking to deal with people. Though he

studied engineering in college, he remembers that as a teenager he

devoured psychology books, from child psychology to parapsychology.

Analyzing a potential new hire can seem interminable. "In the

early stage of the company we used to ask people to solve puzzles,"

says Injaty. Hiring the vice president of technology took a long time

and involved a dinner with Chinese food and a puzzle that did not

get solved until after midnight.

"We put people to the stress test," says Injaty. "When

our director of sales came, he was from IBM, and we said, `Welcome,

now please assemble your chair.’ We tell people to please leave their

egos at the door."

"We like to take something and build a lot of value, for the team

and shareholders and industry as a whole. We have seen that when people

join us, they become much smarter people compared to their counterparts.

I take a lot of pride to be a part of this team."

Injaty likes to contemplate the brand-new Mirronex logo, a butterfly,

because it represents a transformation. "We believe in helping

businesses transform — the butterfly’s wings bring the processes

into its body, and the body is the hub of the network." Initially,

he says, people both loved and hated it. "They called it the moth.

But that is the strong reaction that we create."

What Injaty enjoys most: "The excitement of taking something from

nothing to something big, and looking at it and saying, `You built

this.’ It goes beyond building companies — we are truly revolutionizing

the way business is done."

— Barbara Fox

Mirronex Technologies Inc., 4390 Route 1, Princeton

08540. Sonny Injaty, president and CEO. 609-243-0300; fax, 609-243-0380.

www.mirronex.com.


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