Do you want revolutionary improvements in IT quality and speed-to-solution with dramatic reductions in cost? Consider an organization-wide Web services delivery strategy.
Today, businesses demand three key outcomes from IT:
- Delivering faster technology solutions to a growing group of stakeholders;
- Reduction of IT costs in the absolute, or relative to capability delivered; and
- Maintenance of technological currency and proficiency, even as the pace of change is accelerating.
Small to medium-sized firms face an additional challenge: If they are to prosper, they must provide the same expanse and quality of technology solutions as their larger competitors, but with a more limited set of resources.
Web Services: A Revolutionary Answer
The post-bubble era of Internet technology — that is, Web 2.0 — delivers on its original promise of enabling new capabilities in everyday business processes.
One of those changed processes is the delivery of technology itself, now Web services or on-demand computing. Nicholas Carr provides an appropriate historical perspective for this trend by making an analogy to the history of power generation two centuries ago (see “The End of Corporate Computing,” MIT Sloan Management Review, Spring 2005).
Originally, technology solutions were delivered using large mainframe computers hidden on raised floors behind locked doors. Though not especially flexible, this first wave brought cheap computing power to business.
The second wave (i.e., client-server computing) leveraged smaller computers disbursed throughout an organization, which provided easier-to-use processing power for many more business users.
For several years, a third wave has been gestating and will spring from the confluence of Internet technology developments and the business imperatives noted above.
In this third wave, businesses use technology solutions provided by suppliers from anywhere on the Web. Leading-edge CIOs are finding dramatic success using this model to build complete organizational infrastructures.
The benefits are big: delivery of solutions in weeks or months rather than months or years; double-digit percentage decreases in cost, headcount and capital investment; and measurable improvements in quality, stability and business satisfaction.
A Real-World Example
Just as Web 2.0 democratizes information and disseminates its power, on-demand computing will level the playing field between large and small corporate users of technology. For this reason, the on-demand computing revolution will occur from the bottom up.
Take, for instance, Pleasanton, Calif.-based Shaklee. Two years ago, ownership of this 50-year-old direct sales nutrition and natural products company changed hands. Shaklee’s new CEO, Roger Barnett, established a mission to re-energize the brand by making it more relevant to the current generation, expanding international presence and providing new capabilities to support a rapidly growing network of independent distributors.
Shaklee’s IT department was tasked with providing the modern communications infrastructure and real-time technology to quickly enable this growing success story.
With less than 50 staff members and a seven-figure operating budget, Shaklee was saddled with legacy architecture and technology from the 1970s. Ken Harris, Shaklee’s CIO, and his management staff developed a vision and detailed strategy for a Web-based global application architecture and delivery capability. Of necessity and desire, this strategy leveraged hosted Web services and specialized skill outsourcing from best-of-breed vendors.
Within 15 months, Shaklee successfully provisioned and outsourced the management of a global network, including VoIP (Voice over Internet Protocol) and global, secure remote access.
Shaklee also developed an offshore support team for legacy applications and implemented hosted, Web-based services to provide the following capabilities:
- Business intelligence and data warehousing with user-driven, Web-accessible analysis;
- Sales force, marketing and business-building automation;
- Call center and customer service support, including self-service through an online knowledge-base and mass-mail marketing;
- Promotion and success-based Web search driven by real-time analytics and reporting; and
- Promotion and event management.
Making Useful Information Available
Global business intelligence and data warehouse implementations often require multiyear, multimillion dollar projects. Shaklee identified a best-of-breed vendor who could provide the same functionality in a fraction of the time and at a cost that fit its budget. Shaklee selectedSeaTab Software to implement and host their business intelligence solution.
SeaTab utilizes a patented data modeling methodology that can quickly link disparate data sets together, compress the information completely into memory to deliver subsecond query speeds and allow the end user to slice and dice the data to the lowest level.
As a result, Shaklee IT no longer has the burden of building and managing difficult-to-maintain star schemas due to everchanging data. In addition, because the data is logically, not physically, linked, there are no data explosion issues.
For Shaklee, this meant a low six-figure, 12-week implementation that not only provides comprehensive data analysis and reporting for Shaklee executives, but also makes a defined set of reports available via the Web for thousands of business partners.
Servicing Customers as Royalty
Nine months ago, Shaklee had rudimentary customer note tracking and mass-mail communication capability. Then they connected with RightNow Technologies to implement their hosted, Web-based solution in a six-month, low six-figure effort.
Now, Shaklee provides customers with fast, accurate and consistent answers via phone, e-mail and the Web. That is, when customers are not serving themselves with RightNow’s Web Self-Service modules and Shaklee’s growing Web-based knowledge base.
Shaklee is also leveraging the seamlessly integrated RightNow Marketing technology to capture high-value insights from the customer interactions and to send more than 900,000 monthly e-mails for marketing and request-response purposes.
With this implementation, Shaklee has improved its call center tracking measures with such improvements as first call resolution jumping from 35 to 75 percent. By tracking and managing contacts by category as well as customer, Shaklee is better able to recognize patterns earlier and proactively seize opportunities or respond to problems.
For customers, this is the royal treatment they expect and deserve.
Promotion and Event Management
Companies in the direct selling industry leverage meetings, promotions and events to recruit, train, reward and recognize their distributors. A growing and highly trained and motivated core of independent business people are essential components for direct selling success.
For its 50th anniversary in 2006, Shaklee planned an event for these Shaklee Family Members, as promoted using new, hosted Lenos technology.
In 2005, Shaklee adopted theLenos Software Event Marketing CRM platform to enable nontechnical marketing professionals to create customized online event registration Web sites without IT programmers.
What once took weeks for programmers to create and maintain now takes hours for marketers to do themselves. Lenos software services allow the creation and maintenance of event marketing campaigns at a fraction of past costs.
The Lenos implementation involved a five-figure, three-month-long effort, simply and seamlessly integrating with other components of Shaklee’s technology footprint while providing the scalability to manage both simple and complex Web sites.
While Shaklee planners now have the tools for logistical management, Shaklee’s senior management also has the ability to track and analyze event data automatically — an added benefit of the Web service implementation.
What Does It Take?
The technology delivery model will not successfully change without a dramatic change in the skills required of internal IT organizations.
The new keys to success require selecting the right partners, clearly and specifically delineating responsibilities, and establishing standards of performance with metrics for measurement and economic incentives for achievement.
As technology suppliers become more like ongoing partners than adversaries, the skills of negotiation, team participation and vendor management become more valuable. As with any significant change, some people and organizations will adopt better than others and some mistakes will be made. However, the mistakes will lessen with experience and the benefits will only grow.
The technology revolution at Shaklee is not complete. The model has been so successful that additional Web service implementations are underway. Within three years, most of Shaklee’s technology infrastructure will be provided via Web services. Before approval to proceed however, each project must clear a rigorous priority and return-on-investment scrutiny.
To date, each project has returned its capital investment within the first year. Shaklee’s rapidly emerging technology landscape is provided through a reduced IT operating budget. The smaller, increasingly nimble IT organization spends more time with business partners, helping them maximize the benefit from their use of technology. They also spend more time with technology providers to assure continued quality and success for all parties.
Ken Harris is CIO and senior vice president of Shaklee, a provider of environmentally friendly nutrition, personal care and household products.
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