A few years ago, we had the local electric company do a home energy audit. Our 19th-century house was hard to heat, and as we suspected, the inspector found we didn't have enough insulation. But our most cost-effective change turned out to be the purchase of a new refrigerator. You can't manage what you don't measure. Once you start looking at the right data, the results can lead you to solutions you hadn't imagined.
Traditionally, hotels have measured performance the old-fashioned way: by how much money is made from each room. Even in the hospitality industry, revenues have come not from customers but from products. But Marriott International Inc. has started to account for itself differently, using customer relationship management systems to build an income stream based on how much each guest spends--not just on one room in a single stay, but over time, in different cities, at a wide range of hotels, resorts and conference centers. And although Marriott will not be able to measure the bottom line on the changes for some time, it has put in place the mechanisms to do so and believes these changes will ultimately lead to greater profitability.
Three years ago, when companies everywhere were competing frantically for mainframe programmers to fix the Y2K bug, Dan Stanley, secretary of administration for the state of Kansas, responded with a corporate solution: He gave key workers and new hires extra cash. Now, although the millennium bug has been vanquished, Stanley is still handing out bonuses to keep state IT salaries "in the ballpark" to ward off private employers that pay 15 percent more.
Cynthia Egan, president of Fidelity Investments Inc.'s Charitable Gift Fund, knew she had to trim transaction costs and make it easier for contributors to manage their accounts, or they would choose a competing fund. Donors don't want their money going to overhead, so low administrative costs are a big selling point for any charity. When a routine customer survey revealed that at least two-thirds of Fidelity's fund donors had Internet access, "we realized we had a tremendous opportunity" to both cut costs and improve customer service, Egan recalls. In just nine months, the fund established a website through which donors can set up accounts, get advice on how to be a philanthropist and manage their donations. Since Fidelity launched the site last September, donors have made 32 percent of their contributions online. It takes the company only a day to cut the checks for these donations, compared with as much as a week to process paper contributions. Cost are down, and customers are happier, Egan says.
The Defense Logistics Agency (DLA) thought it was on its way to achieving more efficient purchasing when it unveiled its Procurement Gateway website two years ago. The site was designed to draw from several integrated databases to provide solicitations, specs, drawings and other contract documents online. Its aim was to make it easier for vendors to sell to the agency, thereby attracting more bidders and better prices for everything from paint to parachutes.
As president of Blue Fire Partners, in Sherrills Ford, North Carolina, Charlotte Roberts counsels executives on living with and growing with change. Together with The Fifth Discipline author Peter Senge, Roberts writes and speaks about how to create learning organizations that draw strength from the values and vision of employees. She tells CIO why and how leaders should align corporate goals with those of the workforce. (Visit CIO Radio at www.cio.com/radio to hear more from Roberts.)
Refugees from Kosovo are being given Internet access and e-mail accounts that they can use to obtain news and try to contact their relatives as part of an international relief effort launched last week by the US Information Agency.
When the Energy Department launches its next competition to build the world's fastest supercomputer, some new vendors will bid for entry into a club that has been dominated by two companies, Silicon Graphics and IBM.
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