Trash doesn’t seem like much of an online business, but Waste Management says otherwise.
Puneet Bhasin, CIO of the $13.5 billion company, launched an e-commerce site late last year where residential and business customers can rent dumpsters and get price quotes for trash and recycling services. The company plans to add new products for sale every two months during 2012, Bhasin says, and IT staffers will also get sales quotas to fill.
Waste Management is among the relatively few companies putting the IT group at the center of customer-facing, revenue-producing projects. Many CIOs understand the importance of such strategic work but meet obstacles trying to make it happen.
CIOs recognize the need to improve their companies’ products and services: 83 percent of 386 IT leaders say that’s a high or critical priority, according to our annual State of the CIO survey. (See “CIOs Disconnected From Business Execs.”) Yet CIOs generally don’t spend much of their time identifying opportunities for competitive advantage or studying customer needs, our survey finds. Just 17 percent and 9 percent, respectively, say they are involved in those activities.
However, that kind of outward-facing focus must be a significant part of the job for any CIO who hopes to become a strategic leader, says Bobby Cameron, an analyst at Forrester Research. And generating revenue is only the first step, Cameron says. CIOs should be using technology to create ways to make customers happier and more loyal, he says. “Don’t stop at revenue. Make services more valuable.”
Bhasin agrees. He is rolling out custom mobile devices that are carried aboard Waste Management’s 20,000 trucks and that record such variables as load weights, routes and time spent at customer stops and landfills. By combining that data with a customer’s service history, the company could suggest more economical products or redirect trucks to more efficient routes, he says. The data can also be fed back to business customers so that they might change their trash habits to recycle more or produce less waste. “It’s a transformation in how we think about the company,” he says, from trash hauler to logistics and information provider.
The e-commerce effort is expected to produce $200 million in sales in the next few years, Bhasin says, and this year the IT staffers who created the site will be responsible for as-yet-undetermined levels of sales.
“Many of the people on this team have worked for large Internet sites in the past and are used to being accountable for the financial results achieved,” he says.
The IT group built the site on IBM’s WebSphere server with Java tools. Doing the development in-house was new to Waste Management, says Bhasin, who joined the company in 2009.
“When I analyzed our staff, I saw that most of the future-oriented work was being done by consultants,” he says. He dismissed many of them and hired full-time designers, coders and user-experience experts. “I want our own team to build the future.”
Follow Senior Editor Kim S. Nash on Twitter: @knash99.