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September 14, 1998

Better Business Through Innovation

Ordinary budget? Existing technology? IT companies improve their business anyway.

By Caryn Gillooly

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Information Technology

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With data from Hoovers Online

Innovation in the IT sector used to mean being the first to adopt new technology. Today, it means using technology-new or old-to help improve business.

Computer hardware, software, and networking companies have always been on the cutting edge of technology-they are, after all, the ones that produce it. In the past, those IT providers considered the most innovative were the first ones to implement packages such as Lotus Notes or the first to have mobile users communicating via the Web. This often meant that the largest companies were considered the most innovative-because they had the most money to spend.

However, bigger no longer necessarily means better. A new breed of innovators is emerging in the IT sector. These companies, not all of which are large, are not only using new technologies; they're also customizing existing technologies and bringing the two together to fit business needs.

Quantum Corp. in Milpitas, Calif., is a prime example. The hard-drive maker, with $5.8 billion in sales in its most recent fiscal year, runs a corporate network of about 7,000 PCs. Earlier this year, Quantum won an award from the Data Warehousing Institute for its virtual data warehouse, which lets the company's nine global business operations run on multiple servers but appear as one entity.

"We've centralized all our business applications worldwide, including Oracle enterprise resource planning data, into one Oracle database. We then put together the tools and common definitions so everybody down the food chain-from the executives to the engineers-can all look at a consistent piece of data," in real time, says CIO Hank Delevati.

The virtual data warehouse uses Hewlett-Packard HP 9000 Enterprise Servers, Oracle database and Oracle Applications, and NoetixViews from Aris Software. As a mass-storage provider, Quantum uses its warehouse to increase employee productivity and improve customer service and support.

The warehouse lets Quantum better respond to customer needs. For example, Delevati says, two years ago, if a computer maker such as Compaq called to say it needed 2 million drives, "a Quantum employee would have had to say, 'I'll have to call you back.'" Today, information on what products are in stock, when they can be shipped, and at what price is available right away.

The system can also track products that have already been shipped, letting Quantum managers know if deliveries have been made on time. "We are able to be more responsive and more accurate because all that data is available immediately," Delevati says.

The virtual data warehouse has also helped Quantum save money. Because all company data is available in one place, in one format, and in real time, information that used to take 16 hours to gather for presentation in 15 different reports can now be presented in a single report that takes as little as five minutes to put together. In addition, end users can obtain information much more easily. This lets Quantum have one IT staffer per 250 end users. "This isn't just a nice pretty screen," Delevati says. "This is real-time online data that lets us make better business decisions."

Gateway Inc., formerly Gateway 2000, is also linking supply and demand, sales, and customer-support processes to improve its business. But instead of linking the information through a data warehouse, the $6.3 billion PC maker is using the Internet as the connecting medium. "We feel we're ahead of most other companies in our general use of the Web from a sales and customer-support per- spective," says Gordon Bloom, CIO at Gateway, in North Sioux City, S.D.

Today, Bloom says, a customer can order a PC, have it configured, pay for it, and even get basic customer support over the Web. On the back end, once an order is placed, it's automatically sent to the factory floor so the PC can be made and shipped to the customer. "We've shortened the amount of time the inventory is in-house by 100%," Bloom says.Linking these technologies has made Gateway a just-in-time manufacturer.

Web Technology For Enhancement
Nearly all of the most innovative companies in the IT sector are using the Web, or an intranet or extranet, to enhance their business. Xerox Corp. has long been a technology innovator, with its extensive Xerox Wide Web intranet providing information exchange for more than 70,000 connected PCs. The intranet has more than 10,000 home pages-every business unit or department can create one-as well as executive speeches, stock prices, organizational charts, policies, customer and market information, competitive news, and more.

This intranet, linked with Xerox's extranet and the Internet, is opening up a world of possibilities for the company, says Patricia Wallington, former CIO at the $18.2 billion document-processing company, who recently announced plans to retire at year's end. For example, the company is moving aggressively to explore the different ways it can use electronic commerce to enhance business. "This is a whole new area of focus that can lower the cost of sales and will let us tap into new markets and new ways of selling," Wallington says.

Intranets: The Second Generation
Bay Networks Inc. is already on its second-generation intranet. "Most companies today have an intranet of some kind. We had one, too, but the complaints were all the same: There was too much information, and it was too hard to find," says Jorge Taborga, VP and CIO at the $2.1 billion maker of networking hardware.

In March, the Santa Clara, Calif., company went live with an enhanced intranet, dubbed BayWeb, that runs off a corporate data repository. Taborga explains that on the previous network each home page was handcrafted; because the pages were not updated regularly, much of the data they contained got stale quickly. The new intranet offers a format for creating a standardized home page, an integrated search engine, and an automatically generated index on any subject or keyword. "Now, particularly for the sales force, it takes only a few minutes to find the information they need, compile it, and make it available to themselves and to potential customers," Taborga says.

Bay is already working on a third-generation intranet that will allow collaboration among employees-specifically between product developers. "The next step is to make all the information part of a knowledge base that can then keep track of information people are using in the product development cycle," Taborga says. He explains that the current iteration of BayWeb doesn't get into the nuances of workflow, authorship, and views. The new version, set to launch in November, will. "This will let people work together as a team," he says.

Xerox is also looking to make future enhancements in its Web-based technology. As part of what the company calls its 2005 Strategy, Xerox plans to build an infrastructure that will link its intranet, its extranet, and the Web to open up its network to customers and partners. "Right now, security is our biggest barrier to that," Wallington says. But once that hurdle is overcome, she says, customers will be able to find out the status of orders, and Xerox business partners such as suppliers will be able to work on projects jointly online.

A Voice For The Web
Bloom says Gateway plans to bring voice capabilities to its Web-based networks. "We think everything should be Web-enabled," he says. Although the technology isn't necessarily available yet, linking voice and the Web can provide better customer satisfaction. Bloom explains that with this type of technology, a customer could be using a PC and run into a problem. With just the click of a button, that customer could connect to a Gateway customer-support representative who would already know the PC's configuration-because the information about that customer and that PC would have been in the company database from the time of the sale.

That instant connection, and instant access to information, would shorten the call and make it a better experience. "We do a lot of business on the Web today," Bloom says. "Wouldn't it be nice to hit a button and get customer service?"

IT companies are also turning to sales-force automation to improve customer support and satisfaction and, naturally, to boost their sales.

Computer Associates employs 3,500 mobile salespeople worldwide, and according to Gary Quinn, executive VP of global information and administration services, CA's sales-automation initiative is one of the most important projects at the $4.7 billion software company. "If people come into your company to sell you something, you want them to understand your business," says Quinn. "The system we built lets all the salespeople share all the information about a single account-who's in charge, who's evaluating what products, etc. It has really helped us in the sales cycle."

According to Quinn, Computer Associates took existing sales-force automation software and customized it to meet CA's own needs. "We married new technology to old systems, put agents on notebooks, and everyone uses the same applications," he says.

With the customized software and mobile communications, the sales force can pull up information about client-server pricing or can access tools to lead them through the process of interviewing the customer. "Some- times people don't ask the right questions, or forget to sell customers things they might need, like network connection software," Quinn explains. "This has helped the salespeople to be much more efficient."

Xerox has also placed an emphasis on providing more-advanced technology for its sales force. While previously paper reports were sent to all sales representatives, all orders and customer information can now be tracked online. "This [provides] a better level of accuracy," Wallington says.

Increasingly, the focus at Xerox and many other IT providers is not on technology itself but on finding the most beneficial ways to use the products these companies produce. That's helping them uphold the tradition of being among the most innovative IT users.

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