Four Winning Companies Achieve Single View of Customers

Where there is a successful and efficient integration strategy, there is enterprise value. A well-executed integration initiative can provide a singular lens into the business and the customer, speed time to market, consolidate systems and processes, and save time and, ultimately, costs. At its very essence, integration generates value.

Four of this year’s CIO Enterprise Value Award winners have done exemplary work developing systems that drive their integration initiatives while creating value for their organizations. Their efforts to integrate systems and business processes have generated results because they were influenced by both business objectives and technological realities. The winning organizations come from different industries at dramatically different levels of scale?including

global cosumer packaged-goods manufacturer Procter & Gamble, computer manufacturer Dell, travel technology provider Worldspan and Academic Management Services (AMS), a 500-employee academic loan purveyor.

In creating its winning system, P&G took on the huge task of cataloging its thousands of technical standards to expedite R&D. Dell developed an internal sales tool that provides its agents with more complete product information to help close sales. Worldspan consolidated databases for more efficient delivery of its services. And, finally, AMS condensed the Web-based views of several loan systems into a single interface, thereby empowering its loan officers to present customers with more comprehensive options and even helping the company enter a new line of business.

Despite the differences in the winners’ sizes and industries, when pursuing an integration strategy that would generate value, these CIOs and their respective business sponsors shared similar goals, followed similar approaches and enjoyed similar outcomes. Here we present the four companies that have mastered the art of integration with their Enterprise Value Award-winning systems.

A Singular View on Value

For most companies, achieving a single view of the customer is the ultimate goal of their integration struggles. A single view translates to significant value through the time and expense saved by not having to cross-reference or maintain multiple databases and by being able to respond to customer inquiries in a timely manner. “Many companies have pockets of information relative to their customers,” explains AMS CIO John Mariano. “The more that’s integrated and the more business intelligence you can gain from that, the more you are able to deliver value across the company.”

That was certainly the case for Worldspan. The company’s 2,700 employees provide technology services for travel agencies worldwide. Worldspan used to maintain more than 50 databases for salesmen, customers and equipment inventories. The company’s LINK system has enabled it to aggregate those databases into one, which helps salesmen address the precise needs of their customers at the time of a transaction. “We could never keep the databases in sync,” says CIO Sue Powers, who is also senior vice president for the company’s Worldwide Product Solutions division. “The customer often had the impression that we didn’t know what we were doing, and in many cases, they were right.” When a travel agent was opening or moving to a new location, often something would be unworkable on opening day, whether it be phone connections, software or hardware.

The primary reason for developing LINK was to bring these disparate databases together and to achieve that single view, says Powers?something none of Worldspan’s competitors such as Amadeus, Galileo and Sabre have done. “Our whole goal and philosophy was to have a single source and view of our customer that all other applications interface to,” Powers says. The call center, global procurement, billing and all customer-connected applications interact with and extract data from the same customer database, giving Worldspan employees access to the same information.

Dell, renowned for its supply chain efficiency and direct sales model, has also benefited from a system that provides sales agents with a single source of its most current product data, as well as a cross-channel view of customer interactions. Dell’s direct sales come through a variety of channels?catalogs, telephone inquiries and, of course, the Web. In addition, many of Dell’s customers start configuring their systems over the Web, then call in with compatibility and availability questions. This multichannel approach had Dell’s sales agents bouncing across multiple systems to get a complete picture of both the customers’ needs and Dell’s product line. The Integrated Dell Desktop (IDD) has made life easier and more productive for Dell’s sales agents by giving them single views of both their customers’ preferences and available system options.

Now, instead of switching between call center systems and online systems, the IDD provides agents with one view of their customers’ configuration preferences regardless of the sales channel through which they initiated an order. Equally important, they also have a single view to all current product specs and no longer have to switch between the multiple systems upon which that information was previously stored, which speeds query resolution. Now sales agents can focus on quickly and accurately resolving queries. “To the degree that we can keep it a simple, straightforward process, both for folks using the tool inside and for our customers, that’s when integration [delivers] the primary benefits for us,” says Dell Senior Vice President and CIO Randy Mott.

Such a “channel agnostic” approach has helped Dell’s sales agents handle more calls in the same amount of time and, most important, close more sales. It has also reduced training time and helps Dell get its new sales agents up to speed more quickly because the IDD uses a simple, familiar interface that is virtually identical to what the customer sees on Dell’s website. Integrating the channel views within an easy-to-use interface was key to the design of the IDD, says Susan Sheskey, vice president of sales, marketing, services and Dell IT. “We gave our sales agents a tool that incorporated the same look, feel and capabilities that our customers see when they visit Dell.com,” adds Sheskey, who oversees both Dell’s internal sales efforts and the IT that supports those efforts. “As a result, our agents can more effectively relate to the customer experience.”

Time-savers

Doing business faster and more efficiently is another primary goal of integration. Bringing together processes and disparate systems through a single, integrated platform saves companies time, provides new opportunities and creates more efficient operations. Academic Management Services (which was recently acquired by Sallie Mae, or SLM Corp.) has experienced all three of those benefits since developing its Integrated Counseling and Enrollment (ICE) system.

AMS loan counselors work with clients over the phone to determine an academic loan program (for higher education or private schools) that best matches their needs and overall financial picture. Prior to using the ICE system, these interactions required counselors to switch between six separate systems that provided access to and housed information about certain categories of loans. When it developed the new system, AMS consolidated these six systems into one, the single ICE portal.

The consolidation greatly increased the efficiency of the loan counselors as they were able to describe, recommend and approve the loan package that best matched the families’ needs. AMS’s loan agents now handle 1 million outbound and 300,000 inbound calls annually?90 percent more calls than they did prior to ICE. This increase in call volume is due to each counselor’s increased efficiency as well as the system’s ability to accommodate more counselors. Once a family’s complete financial profile has been entered into ICE, loan consultants can even authorize loans within the system, often while the potential customer is on the phone. The ability to approve a loan in this manner can reduce the waiting period for individual families and helps AMS loan counselors handle more calls.

Just as AMS loan officers have been able to work with customers more efficiently, so have Dell’s internal sales agents. Prior to deploying IDD, Dell agents would have to check as many as 40 separate online and offline sources for complete product and service information. The IDD system gives them a single point of access to that information. In addition, because agents now share the same view as their online customers, they are better equipped to help them through the process of configuring their new computer because they can guide them throughout the configuration screens. The Dell sales agent sees the same screens as the customer sees.

Another capability engendered by the IDD is “cart sharing,” where sales agents can view shopping carts created by customers through online or call center inquiries to expedite configurations and ultimately close sales. Dell’s sales agents can access customer carts to check order configurations, recommend changes and finalize system orders. Since customers no longer have to repeat information they may have already entered through the website, the average length of each call has been improved by 10 percent and the sales close rate by 0.2 percent to 0.5 percent.

New sales agents get up to cruising altitude more quickly with the IDD system as well. The system has reduced training time for new agents by 45 percent, and improved ramp time?the time it takes new agents to perform comparable to their peers?by 25 percent. “Integration comes in the form of efficiency and streamlining in terms of how quickly can someone learn the new system and then how quickly can we take care of our customers,” says Mott.

To streamline its processes, Procter & Gamble took on the colossal task of cataloging technical standards for all its products, and packaging and storing them in a single database called the Corporate Standards System (CSS). This rightfully sounds like a monstrous task, especially given the 300 global brands the company produces, but consider this: The formula card (which equates to a list of ingredients or instructions) for a single size and fragrance of one Olay product defines technical standards for 30 raw material specifications, 20 test methods, three packaging standards, eight packaging material standards, four artwork standards, the manufacturing instructions, one quality acceptance criteria, one process standard, two additional formula cards linked to the same packaging standard and 15 substitute ingredient standards for producing the product in different locations. That’s a lot of data for a single product.

For P&G researchers, who need constant access to such standards, a single, consolidated source speeds their work considerably. It also facilitates reuse of technical standards that have already been defined, again saving R&D time. For example, a researcher in one facility may have already defined a technical standard for a shampoo colorant, while another researcher may be working on a similar product or a product that may interact with that brand of shampoo. The second researcher can reuse the colorant’s technical standard and know precisely how that ingredient is formulated and how it will interact with other ingredients.

The CSS, now in phase two, was fully deployed to all 8,200 P&G users in October 2002. Phase two focuses on creating more structured data from the company’s technical standards to ensure that it can provide data upstream and downstream of CSS. Technical standards for any new product, whether developed in-house or as part of an acquisition, will be fully cataloged and defined in the CSS. Maintaining precision and consistency among these standards is critical in heavily regulated industries such as pharmaceutical and health and beauty care products, where ingredients and their proportions must be exact. “Seventy percent of P&G is governed by some kind of regulation,” says Nancy Demoret, associate director for IT in P&G’s Global Applications R&D.

Cost Savings

Pursuing the goal of integration helps an organization define more efficient business processes, which certainly saves time and effort. It also helps with cost savings, including those gained from consolidating and shutting down redundant systems and reducing headcount, and by setting up more streamlined operations.

The huge volumes of technical standard data cataloged by P&G in its CSS were formerly stored in 30 separate data repositories, making information-sharing among researchers nearly impossible. It also resulted in inefficient and expensive materials acquisition. “We had 12 different definitions for blue dye, yet we were going to the exact same supplier for the exact same blue dye, filling 12 different orders for blue dye at 12 different prices,” says Geoff A. Smith, director of IT in P&G’s Global Applications division.

Now that everything is in one place, P&G can get a handle on its materials acquisition and leverage its scale for efficient purchasing. Much of the true financial value of CSS is in the cost savings from more direct and efficient materials acquisition and increasing the speed of the discovery phase of any new product or formulation.

At Dell, the level of discipline and rigor it has applied to its IDD system has helped the company reap impressive financial benefits far beyond its initial expectations. The original business case for developing the IDD system indicated a four to eight times return on investment. Actual figures are tracking at anywhere from six to 16 times return, according to Marketing Manager Carlos Negrete. In addition, by using the same interface and standards-based tools for the IDD that drive its customer-facing website, Dell has experienced cost savings through streamlined development and reduced training costs.

AMS has also saved on licensing and maintenance fees by consolidating and integrating both its systems and processes. “At one time, we had four separate installs of Oracle,” says CIO Mariano. “Now we’ve consolidated to one. It has cut our IT expenses since 2000 by approximately 40 percent.”

In the same vein, Worldspan has saved money through consolidation of both staff and technology. Once the LINK system was up and running, the company was able to sunset, or retire, noncompliant applications, generating significant savings on maintenance and licensing costs. As it developed the system, the company also reengineered many of its business processes, consolidating them within a single procurement group. In that way, Worldspan also saved costs by reducing staff, most notably in provisioning?where Worldspan sets up travel agents across the globe with the equipment they need to do business. “It’s a very complex process involving shipping equipment, provisioning telecom lines, updating the database, and it all has to come together magically on the same day,” says Powers.

The consolidated information available through the LINK system ensures that Worldspan gets it right when provisioning a new agent or an agent who has moved or expanded operations. “You can imagine the frustration a customer has when an agent moves their office and the needed equipment doesn’t come together,” she says.

Financial value comes not only from cost savings but also new opportunities. The ICE system helped AMS enter a new line of business?consolidation loans?in which borrowers can consolidate numerous education loans into a single, lower interest loan. These types of loans now account for nearly 25 percent of AMS’s revenue. “They’ve created a new market ability, created more reliable partnerships with universities and did it all for $311,500,” says Paul Gaffney, executive vice president and CIO of Staples and a member of the Enterprise Value Awards judging panel. “They’re the poster child for IT value.”

A Culture of Integration

All organizations struggle with integration in some fashion at some point. Our Enterprise Value Award winners are proof that significant value lies within a well-executed integration initiative. Starting those initiatives comes easier when a company adopts a pervasive attitude of integration, as Worldspan did. “We won’t do any system unless it is integrated into existing systems,” says Powers.

The IT group can often be the catalyst for promoting a sensible culture of integration throughout an organization. “IT has the broadest view of any company’s enterprise,” says P&G’s Smith. “We see across common activities and lines of business. We can be the conscience of the company. When we see something ridiculously inefficient, we have to get the leaders in each line of business rowing in the same direction.”

By following well-defined integration initiatives, and deploying systems that helped generate significant financial value and promoted efficient business processes, these Enterprise Value Award-winning companies have clearly demonstrated that the paths to both integration and enterprise value are closely intertwined.