There's life after Y2K for Chenault
2000-04-17 Stacey R. Closser, Dallas Business Journal

Another Dallas Business Journal article about us.
Two-Pronged Attack

Consulting duo nabs large  clients while staying small and  hiring the top temps

    • By WELCH SUGGS Staff Writer

CARROLLTON - The sheriff goes out and rounds up a bunch of the town's best men to go after the bad guys. Off they ride at full gallop amid a swirl of dust.

After the varmints are behind bars, the newly-deputized citizens shake hands and go back to their stores and farms. What if the posse were the paradigm for the Information Age society?

For Tom Chenault and Wes Gardner, it is. By rounding up a crew of specialists for each computer consulting mission, the two have lassoed a client list for Chenault Systems Inc. that includes Mobil Corp., Budget Rent-a-Car and Laidlaw Inc.

By outsourcing people and operations, the two-man consulting firm run out of Tom Chenault's study can serve its customers better. With $200,000 in sales in 1997 and projections for as much as $600,000 in 1998, "we are doing fine for a two-year startup," Chenault said.

Chenault's background is in accounting and software development, while Gardner's is in computer science. The two met while working for Power Computing Inc. in the 1980s, after Chenault had started with Arthur Andersen L.L.P. Chenault went out on his own, while Gardner went to work writing software for the electric power industry.

Chenault Systems' projects include customized computer systems, database management, Internet solutions and Year 2000 computer solutions.

Chenault's client list is a little surprising considering that most of the nation's largest accounting firms, including Andersen, Coopers & Lybrand, KPMG Peat Marwick, Deloitte & Touche, and, locally, Travis Wolff, all have consulting subsidiaries which do precisely these types of jobs with far greater resources.

But Chenault Systems operates on a completely different model, which Gardner calls the "1099 approach," referring to the IRS form for contract labor. The firm subcontracts on projects with perhaps 10 people with specific technical skill sets. Having been in the Metroplex for a long time, they both know the talent pool pretty well, Gardner said.

This appeals to clients' sensitivities and to their pocketbooks, Chenault said.

"I saw that there could be a need for this kind of approach," he said. "This is about leaner, more nimble, agile consulting. We saw a niche and went for it."

Add Gardner, "We can talk to the CFO, we can talk to the engineers, we can do the software, because we've both got that background."

Background is particularly important: The larger firms often hire junior consultants right out of college, hiring and training them for problem-solving skills rather than expertise in a particular industry.

That approach has its value in some applications, but Chenault and Gardner said having been around the block a few times is a key selling point.

"Experience helps," Gardner said, "When I got out of college, I knew how to program a computer, but I didn't know much about programming. A lot of these people out there have to be mentored and groomed, but they have sort of a trial by fire instead."

"It's a less expensive way to get the experience we need," Chenault said.

By hiring people on a contractual basis, Chenault Systems also can eliminate additional employee costs, further decreasing overhead expenses. And since the company is still gathering momentum, having contracted employees keeps Chenault from having workers around with nothing to do.

"Also, it's kind of like we get to test drive our employees," Gardner added. "Once we get our client base to a point where we can keep people employed full time, we can bring people on board with the right skill sets. We've had a lot of people approach us."

While Chenault Systems isn't hiring quite yet, the company is starting to get a lot of repeat business from Mobil and other clients, Chenault said. That will be the company's catalyst for growth.

Getting to work
While telecommuting for the masses has yet to make inroads, it can work well if one has a small firm with few employees and works on project deadlines instead of the daily 9-to-6 grind. Telecommuting can work especially well if that small firm consults on projects for clients spread across a metropolitan area.

From their houses in Carrollton and Arlington respectively, the pair manage projects by e-mail and fax between themselves and with clients, sending files and plans back and forth across the Internet.

"We'll have offices, someday," said Chenault, but he didn't sound convinced. "Most clients don't have space to house us. We try to maintain enough of a presence so they know we're there, but we try to stay off-site as much as possible."

"I'm certain that as we grow, we'll have to have offices and employees," Gardner said. "There's just too much poor (software) code (to correct) out there."

Recent projects include a new system for managing dirt usage at Laidlaw Waste Systems in Richland Hills.

Chenault said his company created a database to track the use of dirt at landfill operations for Laidlaw using Microsoft Excel. Minimizing the amount of dirt used enables a given site to hold more waste, and using the database enabled Laidlaw to reduce dirt usage by 42% over 18 months, he said.

In another instance, Chenault created another database for Budget One Way Truck Rental in Carrollton to manage data on its local truck fleet, analyzing rentals by age group and by destination or origin. This enabled the company to structure its rental rates to account for damage trends. The system also gave Budget a means for working out logistics for serving cities with large numbers of people moving in and few moving out, such as Las Vegas.

Marketing hasn't been a major effort for Chenault and Gardner - in fact, they describe it as their biggest problem. Most of their new inquiries have come either from word-of-mouth or from the company's newsletter, which features case studies from current projects, reprints of Wall Street Journal studies and other essays.

Chenault's growth projections show the company's annual revenues topping $1 million before the end of the century. Among the company's growth areas will be building client-server systems, solving Year 2000 problems and working on Internet/Intranet solutions to handle relational databases and other applications.

He boasts that the company is even turning away business.

"Our appetites aren't that big," Chenault said. "We're not going to work without the return on investment and realistic expectations stated upfront. A lot of consulting firms are hired for a project, say it'll take three months, and it ends up taking three years. And it still doesn't work.

"We don't need the money that bad."

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