If you can identify reasonably simple IT projects that
will bring in significant benefits, the board will hand over the
cash in no time. Liz Warren reports on five organisations
which have reaped the rewards of spending wisely.
This year looks like it is going to be tough for many companies.
Yet past experience has shown that those companies which continue
to invest during a recession are the ones best placed to exploit
the opportunities when the economy picks up. The trick is to find
low-cost, quick projects which allow you to build on previous
investments and get the most out of your existing environment.
Tim Jennings, research director at IT analyst Butler Group,
suggests three areas to look at. The first is infrastructure
consolidation. “People have spent a lot of money on systems and
buying more servers or storage to support them, but they don’t
understand the capacity they have and they don’t take a
business-centric view of what that means,” he says. “In these
introspective times, you are forced to ask what you really need to
support that number of people with those kinds of response
times.”
Taking a better look at what is going on in the business can
reap rewards outside the IT department as well. Business
intelligence tools supplier Cognos can cite numerous cases where
the ability to analyse what is going on in the business can provide
big benefits. Royal Doulton, for instance, was able to save £26m
over three years by identifying and scrapping the 80% of its
product lines which were unprofitable.
The second area Jennings identifies is integration of diverse
applications. “Having made investments in customer relationship
management, enterprise resource planning or e-commerce, you need to
get those elements to work together better,” he says. “A survey we
carried out in early 2002 found that 70% of organisations had no
integration or just point-to-point links and that means every time
you upgrade a system, you are starting from scratch. Laying down an
integration architecture will allow you to handle each integration
need more efficiently and will definitely stand you in good stead
if we do go into another wave of investment, because you will be
able to take on new systems much more quickly.”
Steve Rees, e-commerce product manager at ERP specialist Geac
Enterprise Solutions, suggests using web-based standards such as
the data language XML to facilitate integration with external
partners.
These kinds of technologies will also help in the third area
identified by Jennings: content management and exploitation of the
“knowledge capital” tied up in documents, e-mails and people’s
heads. “Until now, knowledge management has been seen as a big
budget investment,” Jennings says, “but there is now more realism
and a raft of second-tier suppliers focused on quick wins and
implementing content management in a more modular fashion.”
The same is true of other big-ticket items from recent years.
For instance, Rees says, CRM no longer needs to cover every aspect
of the business and deliver the same information to every user.
“More and more businesses are now looking to use elements of CRM to
help with specific business problems such as managing leads,” he
says.
Here, we present five project ideas for 2003 that should leave
your operations more able to face the future or that pick some of
the best elements to come out of the boom years.
Case study: Littlewoods Retail
Business-to-business extranets were all the rage during the
dotcom boom, but it was never clear just who would benefit from the
investment. Littlewoods Retail, the UK’s second-largest home
shopping business and fourth-largest high-street retailer, has
developed an extranet to share financial documents with its 2,000
suppliers which costs suppliers little to use but offers savings
and better service to both sides.
“We have a continuous improvement programme exploiting new
technology to reduce transaction processing costs while improving
the level of service we provide,” says Geoff Maitland, director of
accounting at Littlewoods Retail. “We have initiated several
self-service projects to enable us to introduce electronic workflow
processes and realise productivity improvements within our finance
function.”
The ability to share financial documents is particularly important
to Littlewoods because it operates a self-billing agreement with
its suppliers. This means it generates most of the documentation
relating to each transaction.
Now, instead of posting documents, Littlewoods can automatically
send e-mail notifications when new documents are available.
Suppliers then log onto the extranet to view documents. An audit
trail allows Littlewoods to demonstrate to Customs & Excise
that suppliers have received and read tax invoices, provided as PDF
files to prevent tampering.
The system uses Macro 4’s Columbus products to draw data out of
Littlewoods’ existing finance systems and was implemented in just
three months. The project cost less than £100,000 and Littlewoods
says it will recoup this within nine months, thanks to reduced
printing and postage costs. The number of telephone queries to the
finance department has fallen significantly, freeing Littlewoods
staff to spend more time on other, value-adding activities.
Benefits: reduced administration costs and more
time for value-add activities
Cost: £100,000
Case study: Natural History Museum
When budgets for new developments are limited and the emphasis
is on “business as usual”, it is a good time to look at improving
your existing operations, especially your base infrastructure. For
the Natural History Museum in London, that meant rationalising its
storage with a storage area network.
“We had numerous servers, each with its own storage, and most of
them needed their storage upgrading,” says Chris Sleep, head of the
information systems department at the museum. “We needed to look
for something that would allow us to deal with our storage needs in
a maintainable, future-proof fashion, rather than just slotting new
discs into each server in turn.”
Introducing the San means the museum can update its servers and
discs independently and can dynamically allocate storage between
machines. “With individual storage packs attached to a particular
machine, one machine might be at its limit while another is barely
being used, but it is hard to switch storage from one to another,”
Sleep says. “A San does this easily.”
The museum also no longer needs to run separate back-up jobs for
each server – a process which used to take three nights – but can
run a single back-up of all data in just six hours. All this has
allowed Sleep to cut the time he spends on storage management by a
third.
The museum worked with IBM San partner Sagitta to develop a
suitable storage network architecture and install the San hardware
and the software agents which run on each server, but handled the
migration of the data itself. The implementation took about three
months once a budget had been agreed and the main cost was £65,000
for the San hardware and new discs. The legacy discs attached to
each server are now used for temporary storage and develop-ment
work.
Benefits: storage can be allocated between
machines and back-ups can happen collectively
Cost: £65,000
Case study: European Court of Human Rights
Document management solutions and knowledge management
initiatives are often introduced as separate projects with very
different objectives, yet they can frequently be two sides of the
same coin. That has certainly been the case at the European Court
of Human Rights, where the introduction of a document management
system has allowed further benefits to be obtained from an
award-winning knowledge management initiative.
The court judges cases brought by individuals or organisations
who claim to be victims of violations of the European Convention on
Human Rights, which has 44 member states as signatories. In 1998,
the ECHR implemented a knowledge management system to make court
judgements accessible on the internet, slashing the cost of posting
judgements to interested parties. The next logical step, according
to John Hunter, the ECHR’s head of IT, was to link the knowledge
management system to the document creation process. This has
allowed the court to automate the process by which judgements are
made public and make more documents available online to relevant
parties.
Internally, the system has brought the typical benefits offered
by workflow and scanning of incoming documents.
Hunter says the ECHR “always had a long-term strategy based on
phases, which would allow any investment to be used in the next
phase. We chose our software supplier Hummingbird partly because it
had a lot of third-party partners which could provide integrated
off-the-shelf solutions that we would need in subsequent
projects.”
The first and second phases took just six months to implement
and cost a total of £400,000. A third phase will shortly introduce
agent technology to allow documents to be pushed to users by e-mail
and apply the knowledge management technology to other collections
of information, creating a knowledge portal giving access to a
wider range of information.
Benefits: documents are made available to more
people more rapidly
Cost: £400,000
Case study: Woolwich
Even sophisticated transactional websites do not fully replicate
the high-street experience: you are usually left to wander around
until you have to pay. Woolwich, one of the UK’s leading providers
of financial services, has added instant messaging/chat technology
to its website to allow it to mimic the way its staff would
approach customers in the banking hall.
“It is a lead procurement tool, getting people to do business
with us who would not have done so otherwise,” says Lewis Hopkins,
sales operations manager at Woolwich.
The system, based on Collabor8’s Netrep system, analyses
visitors’ behaviour and uses previously developed profiles to
identify browsers who may be receptive to an approach. The
conversation is initiated by sending them a virtual business card,
which receives a response rate of about 30%. Research by the bank
has found that more than 90% of those entering into conversations
liked the system and would use it again.
The system took about four months to implement once Woolwich
made the decision to purchase. Hopkins says the main technical
issues were the complexity of linking Netrep to the bank’s legacy
systems and untangling the security issues involved in passing
traffic through its firewalls.
The bank has tested the technology in a number of product areas
and found it to be most effective in areas such as mortgage
enquiries where people want to find out how their specific
circumstances relate to the bank’s lending policies.
In addition, the rate at which customers are approached is
linked to the number of staff available to enter into chat
sessions, with the facility to turn the system off completely if
necessary. “We control it carefully, because the last thing we want
to do is to have an engagement with a customer which isn’t a good
experience,” Hopkins says.
Benefits: improved customer service and the
ability to proactively generate sales leads
Cost: Undisclosed
Case study: Saffil
Implementing a business-wide system like enterprise resource
planning is a huge undertaking. And once it is in place, there is a
tendency to let it stagnate. Saffil, a manufacturing company with a
turnover of about £12m, has discovered that upgrading its ERP has
brought big business benefits at a fraction of the cost of a new
implementation.
Ray Williams, Saffil’s finance and IT manager, says the upgrade
was partly driven by contractual issues but also by Saffil’s
recognition that its business systems needed a revamp to allow the
business to move forward. “We had started looking at other systems
but the contract issue prompted us to look at more closely at the
new version of BPCS. The cost of moving to a new system in terms of
hardware, software and training was much greater than upgrading
BPCS to get the same benefits.”
The upgrade has allowed Saffil to halve the number of steps
involved in handling a customer order from receipt through to
invoicing. On the shopfloor, procedures for issuing and tracking
work orders have been simplified while the finance department has
been able to dispense with some third-party software modules while
gaining greater flexibility and improved reporting. All this has
cut operating costs and freed staff to spend more time talking to
customers.
Introducing the upgrade took about five months and cost less
than £50,000, including new hardware, software, user training and a
mini business process re-engineering project to create processes
which take advantage of new system functionality.
Benefits: reduced operating costs and improved
customer service
Cost: £50,000