If It’s Good for the Customer...

It was a brilliantly simple solution. Using the same interface internally and externally would result in channel parity and seamless customer service, and let Vanguard avoid the expense of acquiring and integrating a third-party CRM system. It would also yield jaw-dropping annual savings by letting all channels capitalize on Vanguard.com’s use of a single enterprise database and its enablement of straight-through processing. That meant any change entered online would be made automatically in the appropriate back-office systems with no human intervention. Buckley jokes that Dowds pushed hard for the idea out of pure self-interest, since managing only one system would make his life easier.

This decision ultimately led Vanguard to a three-tiered architecture: the internal/external Web interface linked to standard midtier business objects running on a single enterprise database for all channels. "People made the case, and it seemed to me so obvious after the fact that I wondered why didn’t I think of that," says Brennan. "I wish I had."

The key reason for using the Web interface internally, in Brennan’s view, is that it lets Vanguard offer seamless customer service, regardless of which channel (or channels) a customer uses. "It gives us clarity internally and externally so the crew member and client are on the same footing," he says. "That’s very important." Using the same interface makes it easier for employees to talk with customers about what they’ve done online. Since they know the website so well, employees are also more apt to encourage customers to use it. When customers are handling mundane tasks like address changes online (which lowers Vanguard’s costs), customer service reps can devote more of their phone time to higher-value conversations about investments.

"There’s a benefit for everybody if the routine stuff happens on the Web and the value-added happens with humans accentuated by the Web," says Brennan. Vanguard’s customers are indeed gravitating to the Web. Buckley says that in 1999, Vanguard handled 100,000 calls a day. Today, it gets 40,000 calls daily—and 150,000 log-ons to Vanguard.com. More than half of Vanguard’s transactions are now conducted online.

Using the Web interface as the corporate portal also changes the focus of Vanguard’s training efforts. Because the Web interface was designed to be intuitive (after all, customers don’t get trained), Vanguard no longer has to subject employees to four to six weeks of training on the old client/server systems. "You don’t waste your time training people on systems," says Buckley. "Instead you train them on investments, which is where we want to spend the time." Having an intuitive interface also helps when call volumes and wait times spike and Vanguard activates its so-called Swiss Army, calling on all qualified personnel (from the CEO on down) to help man the phones.