New Technology Can Play a Dramatic Role in Organizational Change

In the climactic moments of Greek theater, the deus ex machina—the god in the machine—would descend in some contraption (the machine) to work out or eliminate the hero’s difficulties.

But what worked for the Greek playwrights rarely works for CIOs. A new machine, a cutting-edge technology—that’s almost never the answer to a CIO’s or an organization’s problems. But the intelligent use of bold technology can offer companies a chance to achieve significant competitive advantage or save significant money. The keys to using technology boldly and successfully, according to those honored in this year’s CIO 100, are risk management, change management and gaining the trust of your users.

Content Management Becomes Sales Magic

Beer, wine, liquor. Since ancient times, not much has changed about how you make them. And the beverage distribution business reflects that. “Sales culture in the wine and spirits industry moves pretty slowly,” says Bill Healey, corporate vice president for information technology at CIO 100 honoree The Charmer Sunbelt Group, a privately held, multistate wine and spirits distributor. But The Charmer Sunbelt Group’s winning application demonstrates the company’s desire to revolutionize the business, and to do it quickly.

Local autonomy is built into the wine and spirits business because distribution is highly regulated, and state liquor laws vary widely. As a result, sales and marketing efforts are localized by state, and silos of data grow up around state lines. For Charmer Sunbelt, this created redundancies and inefficiencies. The company turned to Healey to eliminate them. Healey was certain he could streamline processes by eliminating some of local distributors’ cherished autonomy (though, he would argue, for benefits they would soon realize). It was, Healey thought, a risk worth taking.

Using Microsoft’s Content Management System (CMS) and a SQL Server database, Healey’s group bucked the industry culture by creating a centralized application that he says reduced headcount for managing brand content from 16 to four while simultaneously increasing the overall quality of the product materials. Instead of numerous regional content managers designing sales materials—often with varying outcomes—now a single person with a strong background in the spirits industry and a knack for creating compelling content can, leading a small team, put together sales and marketing materials for reuse throughout Charmer Sunbelt’s operations. Visit the website for Premier Beverage Company of Florida, look up Alain Paret Syrah, and you’ll get the same information (“medium- to full-bodied flavors with a deliciously rich, round, pure, sweet, ripe raspberry fruit concentration…”) as you would from the Connecticut distributors site.

That description may be interesting to Sideways fans and potential customers just stopping by on the Web, but it’s critical information for Charmer Sunbelt salespeople. An application called E-Pride (also based on the CMS content, collectively known as “product libraries”) gives the company’s sales teams an advantage when putting together their proposals. Previously, salespeople would have to work their way through dozens of product line websites and a proprietary internal system, looking for material they could use to sell their products—from photos of bottles to wine reviews (“a naive domestic burgundy but admirably presumptuous”) to pricing promotions. It was tedious, time-consuming work. E-Pride, however, lets salespeople visit one site and retrieve a wide range of product information and backup material—including real-time access to ever-changing sales promotions—quickly. It also gives them another competitive advantage: They can look up information about competing products. In the wine and spirits business, a distributor might be the official provider of Bacardi in Florida, while the same distributor’s Arizona branch could be selling a different brand of rum. When information was siloed according to state, salespeople couldn’t see information from other states. With E-Pride, all the data is available, helping the sales force know what they might be selling against.

This shift also helped the company’s IT department, freeing staff from having to manually replicate data across different distributor websites. Now, if something needs to change, it happens once in the CMS and ripples automatically throughout the regions.

Healey says that during the initial rollout in Connecticut, even with all the benefits plain to see, “Use was a little timid,” with salespeople feeling that “they’d been blitzkrieged.” To encourage adoption of the new system, the manager of the product libraries, along with a group of true believers from the sales side, started meeting with skeptical users to explain the value proposition (better materials = better pitches = more sales) at training sessions and after-work dinners. In the process, Healey became a disciple of change management. “We learned that culture is embedded,” he says.

“It takes a while for something as bold as this to take hold.”

A Network Is Built Double-Quick

India’s is an ancient culture, but new cultures are taking hold on the subcontinent—most recently, the culture of the cell phone. Looking to tap into the country’s blossoming wireless communications market, startup cellular provider Reliance Infocomm needed to grow quickly if it were to compete with entrenched providers. And it decided to use technology as its prime agent for growth.

Reliance’s first major technology gamble involved choosing CDMA-based networks over India’s much more common GSM cellular technology standard (with GSM also much more widely used internationally than CDMA). But part of Reliance’s business goal was to provide wireless data services, not just voice. And CDMA offered the company both more reliable data transmission and what it saw as a smoother transition to advanced data services down the road. The company’s aggressiveness has paid off: Reliance has acquired more than 10 million subscribers already—including picking up 1 million subscribers last year in a 10-day period during a special promotion—making it grow from nonexistent to the largest private telecommunications provider in India in a mere nine months.

This dramatic growth created (no surprise here) dramatic challenges. Part of Reliance’s strategy depended on spreading franchises throughout the country, including in places where network connectivity was limited or even nonexistent. And as its user base grew, the need for faster, more reliable connections between the franchisees and the central office increased. “The organization had to move from batch upload of data to real-time transaction processing,” says Ashish Chauhan, Reliance’s CIO. “The old framework was prone to delay and errors and was inflexible.” For real-time performance, Reliance was going to need a faster network. So it turned to the only other option available—its own wireless CDMA network.

The choice was a serious risk. Reliance was already selling the data-carrying capabilities of its network to customers, but nothing like on the scale its own applications would require. If Reliance couldn’t make its own network function adequately for the franchisees’ CRM, point-of-sale and back-office data needs, the company would have wasted money, lost sales and probably suffered a damaged reputation. Some franchises might even have become economically unviable because of the increased costs of servicing customers over slower, older connections, including dial-up. Even success would create challenges, as franchisees were already accustomed to the old batch-mode system and were skeptical about changing.

To reduce the danger, Reliance made several critical decisions. First, it decided to offer franchisees initially only a small piece of its overall customer processing suite—customer bill payment posting—while it continued to develop the rest of the technology behind the scenes. At the same time, Reliance was working on a backup plan that would allow for real-time updating via fiber optic links in 20 percent of its locations, with the remaining 80 percent allowed to use the old batch system until the new version became operational. And because Reliance’s CRM application did not work effectively over the slow network, it created from scratch a stripped-down version with a different interface—called Simplify—that made more efficient use of bandwidth (though it also required additional training, Chauhan notes).

As the rollout progressed, Reliance started in just a handful of locations and created a new help desk to allow franchisees to ask questions about the new system 24/7. As more locations came online, the company implemented a point system that rated franchisees by geographical area on how much they used the new system, with scores publicized inside the company to allow managers to identify and work with reticent users. As a result, Chauhan says, within 90 days of implementation 100 percent of franchisees were using the new system.

“The project has also reduced the overall cost for enrolling a customer as well as servicing a customer,” says Chauhan, “bringing down substantially the total support cost required for the customer lifecycle.”

If not quite a deus ex machina, Reliance’s CDMA network could accurately be called heroic.

A Safety Net with No Safety Net

The city of Phoenix had some wireless issues of its own. The city’s public safety wireless communications system—encompassing police, fire department, EMT and other radio systems—was stretched to the limit by Phoenix’s dramatic expansion. (The Phoenix area is one of the fastest growing regions in the United States, increasing in population nearly 60 percent between 1990 and 2004.)

But politics (real politics, not the wimpy office kind most of us endure), tightly watched budgets and the ever-changing will of the people tend to make cities cautious in their IT choices. When it came time to build the new public safety communications network, however, which includes public safety groups both inside Phoenix as well as in 17 surrounding towns (including nearby Mesa and Tempe), Phoenix made the bold decision to take a leadership position. And city officials say the resulting Phoenix Regional Wireless Network has become a model for what other cities in Arizona and the country will do with their own wireless systems.

The city decided back in 1996—long before the horror of 9/11 forced every local government to think in terms of tight cooperation between emergency groups—to go with the then-nascent Project 25 digital wireless emergency communications standards being promoted by the Association of Public Safety Communications Officials, the world’s largest nonprofit professional organization dedicated to public safety communications. Project 25 promised both more efficient use of emergency wireless bandwidth and the ability to encrypt channels for privacy, and it works toward achieving interoperability among a variety of compatible equipment, including radios, scanners and repeaters. The ultimate success and exact definition of Project 25, however, was far from certain at the time. And to reap maximum rewards from the effort, Phoenix would need to get every existing local partnering emergency organization on board—hardly a small task given that the groups were sometimes skeptical about handing over such a critical piece of their operation to a central organization so that it could be built on unproven technology.

As a result, risk management, while always critical for business, was even more important for a government that serves and protects the citizenry and uses the citizenry’s money to do so. “We don’t have the money to fix the mistakes,” says acting CIO Kristine Sigfridson. But the overloaded existing system, which posed the risk of emergency crews being unable to make radio communications during catastrophic events, made Phoenix feel that it needed to move decisively.

To smooth the process of technology vetting and adoption, the city’s IT department led a coalition of agencies, including fire and police as well as a variety of technology providers. Unfortunately, the coalition had few if any best practices to guide it. Standards for such public safety networks are still developing. To reduce the risk involved with adopting the relatively unproven Project 25-compatible technology, the group sent representatives to other cities and towns that were already using similar wireless systems. They also spent considerable time quizzing technology providers and other experts on the state of the burgeoning Project 25 standards (at one point in 1997 even having a retired Arizona Supreme Court justice moderate a panel in which interested parties could ask vendors about Project 25 and their products).

Phoenix’s success with this bold and critical initiative has also inspired them to contemplate other bold moves in the future. “I think that it built our confidence in building really, really big things,” Sigfridson says. “We’re far less inclined to be intimidated by taking on projects of this size.”

Bold Conclusion

Three very different organizations. Three very different technologies. But one common theme: the willingness to boldly use IT tools to deliver outsized business benefit. The opportunities are out there, as our honorees prove. It’s up to you to find them.

Technology Editor Christopher Lindquist can be reached at clindquist@cio.com.