Galactic IT Vice President Anthony Okrongly recently harnessed Web technology to automate and scale up the traditional employee suggestion box.
Galactic offers trips, merchandise, gift certificates and other noncash incentive programs that firms can use to reward their employees. It designed the Ideaworks program as a way for its clients' employees to earn rewards by submitting cost-saving or revenue-generating ideas via the Web -- an intranet suggestion box that pays off.
The program had to be quick and easy to use and shepherd an idea through its many stages: creation, submission, evaluation, feedback, approval and reward. When the program was tested internally, for example, a Galactic employee showed that having all workers use a single type of pen would save thousands of dollars over time. The company gained the savings, and the employee received points to be redeemed for merchandise. When sold to clients, Ideaworks generates revenue for Galactic through the fulfillment of the incentive awards and administration of the program.
Ideaworks was first piloted internally in the summer of 2000 as a paper-based awards program. In January 2001, Galactic's nine-person IT staff began designing a Web-based version using existing hardware, software and infrastructure. The Web version went live in March for Galactic's own employees to test and use, and development of Version 2 was outsourced to Bryte Software Design in Irving, Texas; dedicated infrastructure resources were installed at Galactic to support it. Version 2 can handle 100,000 registered participants in as many as a dozen separate client programs. By January 2002, the first clients were using Version 2.
The system is hosted on clustered Dell Computer Corp. server technology, with storage-area servers, Cisco Systems Inc. routers and content switches. It uses Cisco's new iSCSI technology as well as Microsoft Corp.'s development and hosting software.
Galactic is the first in its market to offer such a program, says Okrongly. Internal use of Ideaworks at Galactic has increased teamwork and improved communications, and internal savings alone have reached US$2.3 million. Revenue from clients is expected to dwarf that amount, he says.
Based on the $2.3 million savings minus development costs of less than $1 million and $180,000 spent on incentive awards, the in-house product alone has generated a return on investment of well over 200 percent, says Okrongly. Revenue for 2002, with client participation and the ensuing revenue from administration and awards fulfillment, is projected at $20 million to $30 million, for an anticipated ROI of 2,000 percent to 3,000 percent, he says.
"This project exemplifies what many small companies will have to do in order to create value for their customers using the Web," says Philip Anderson, professor of entrepreneurship at INSEAD, an international business school in Fountainebleau Cedex, France. Galactic's strength is partly its speed: "The company is moving fast and can pick off some significant customers before competitors show up," Anderson says.
Starting small, staying on budget and gradually building as the concept proves itself financially eliminates resistance, says Okrongly. He also credits the use of Stamford, Conn.-based Gartner Inc.'s Gartner Institute Project Management model for the project's success. "When the going got tough, it made all the difference," Okrongly says.