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Some Ups and Downs
In 1960, Genevieve Guidroz gave birth to her second child and gained 45 pounds. She joined a gym and started eating better. She lost the weight and went into the health club business, where she met Sid Craig, who ran a chain of gyms. Eventually the two married and moved to Australia.
In 1982 the couple opened the Jenny Craig Weight Loss Centre in Melbourne. Three years later, they expanded the business to the U.S., where the company became one of the best-known names in the weight loss industry. An IPO followed in 1991.
But the public company stumbled. By 2002 the Craigs had sold the majority of their stake to two private equity firms for $116 million; and the company, which had been threatened with de-listing by the New York Stock Exchange, went private. In 2006, Nestlé, the world's largest chocolate maker, purchased Jenny Craig in a deal valued at about $600 million. The company was added to Nestlé's nutrition unit, which includes the PowerBar and Lean Cuisine brands.
Today, Jenny Craig runs or franchises more than 600 centers in the U.S. as well as in several other countries and plans to become a billion-dollar business before long. The company is adding 25 company-owned stores a year and another 10 franchise-run centers.
The Jenny Craig program features weekly one-on-one consultations, either in-person or on the phone, with weight loss specialists who help participants design a healthy diet and exercise regimen. The company also sells a line of food, cookbooks and exercise videos.
"The one-to-one relationship we build with clients is where the secret lies," says Tiab. "Jenny Craig isn't about technology tools; it's about personal service." But any fast-growing business needs current technology to stay competitive -- and now Jenny Craig is playing catch-up.
Thinning Down With a New Network
Jenny Craig's technology strategy rests on a state-of-the-art WAN for thin clients, which will centralize IT from corporate headquarters in La Jolla, Calif., and connect thousands of users at hundreds of offices around the country. With deep-packet inspection for viruses, management and monitoring capabilities, and Triple DES encryption, the leading-edge network will provide the backbone for the company's technology overhaul. The upgrade began last year and moves into a back-office phase in 2008, including a new customer relationship management (CRM) deployment.
But building a new WAN is often the easy part, notes Jay Pultz, an analyst at Gartner Inc. "It's one thing to put in a brand-new network," he says. "It's another to have the tools to manage it. If there's a problem, how quickly can you fix it? The biggest mistake is trying to do things too fast."
Robert Whiteley, an analyst at Forrester Research Inc., agrees, noting that 70% of the cost of IT involves the operation, not the capital expense. Whiteley adds that it's important to put proper management processes in place to ensure that a company gets the greatest ROI. "IT shops often look like Frankenstein -- things keep getting bolted on," he says. "Thin client really comes down to doing a good audit of your apps. The biggest problem is to continue to prioritize all the apps. You still want tradeoffs between most critical apps and others. That needs to be audited and refreshed every time you add a new app."
Tiab acknowledges that the network build-out will be the easy part of what he hopes to accomplish at the company. "The biggest challenge is always the people, not the technology," he says. "Jenny Craig has been working with the current system for 16 to 20 years. To get people out of their comfort zone and into the 21st century, you have to cross a bridge."
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