Electronics retailer Circuit City Stores Inc. Tuesday said it has signed a deal to outsource e-mail for the training of sales associates at its 600-plus stores, becoming the latest user to join a small group of companies that are moving to Web-based services for some of their messaging needs.
Circuit City's corporate e-mail system will still run internally on Lotus Development Corp.'s Notes software, said Dennis Bowman, CIO at the retailer in Richmond, Va. But Circuit City is turning to San Francisco-based outsourcer Critical Path Inc. to provide Web-based e-mail services for its training program.
The ability to use Notes off-line is "a huge advantage for our mobile sales force," Bowman said. But the Lotus software is "too robust" for Circuit City's training program, he added. With the Critical Path deal, the company now has "almost staked out a position that [is] at the other extreme from Notes," Bowman said.
As part of the training program, mentors at Circuit City will be able to communicate with new in-store sales workers and answer specific training-related questions via Critical Path's e-mail service. The new employees will be able to communicate only with their mentors, not with one another or outside of the Critical Path system.
Bowman said the new approach to training had to be up and running in time for this year's holiday season, which was a big reason for going with an outside service provider.
"This is not a one-size-fits-all situation we have," Bowman said. "We were looking for not just the software but a [partnership] in which Web-based software development could be established within 30 days and we could roll it out and get going."
Critical Path will also provide antispam protection, virus scanning and other security measures as part of its service, all in return for a monthly fee that will be based on how many mailboxes Circuit City needs for individual end users.
But despite the hype around application service providers, there have been only "a handful" of similar announcements by companies that are farming out parts of their e-mail systems to outsourcing firms such as Critical Path, said Mark Levitt, an analyst at International Data Corp. in Framingham, Mass.
Fewer than 10 large organizations have outsourced e-mail services thus far, according to Levitt. He added that it makes sense to parcel out just some of a company's e-mail needs at first, until an application service provider can prove its ability to handle the complete network e-mail.
Companies that have taken the plunge in addition to Circuit City include Bechtel Enterprises Holdings Inc., a subsidiary of San Francisco-based Bechtel Group Inc., which announced a deal with Critical Path two weeks ago; LM Ericsson Telephone Co., which entered a deal with Mail.com; United Air Lines Inc., working with USA.net Inc.; and McDonald's Corp., whose partner is United Messaging Inc.