InformationWeek

May 17, 1999

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Customer Centricity In The Post-Y2K Era

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Service-Lane Approach
CSX has also implemented an organizational structure that emphasizes individual customer contact. It's divided its organization into "service lanes," each of which is treated as its own business, with a monthly income statement generated by Seagate Software's Crystal Web Reports. The organizations are graded on their ability to increase business and free more railroad car loads, and to minimize the time cars spend in the yard. Since instituting the program, the company says it's shaved as much as two days from the average 14-day cycle time.

Other companies are trying to milk more sales from existing, profitable customers. In the InformationWeek Research survey, 87% of executives said a desire for a deeper knowledge of customers motivated their efforts, while 76% sought better information about their profitable customers, and 69% hope to increase cross-selling opportunities.

Deeper brand loyalty--which 71% sought--drives those relationships. "Your service is going to have to be as good as the best service your customers have got, regardless of the industry it comes from," says Phil Tamminga, a partner in Andersen Consulting's customer relationship-management practice.

With the growth of electronic channels, a rival supplier is only a mouse click away. The Internet exposes poor customer relationships and opens the door for more responsive rivals, says Hjelm of Federal Express. "The level of service you get in some service industries is amazingly bad," he says. "The Web is broadcasting to the world that there's an alternative."

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The insistence of E-commerce customers on controlling their own shipping options, combined with a maturing transportation industry, has led FedEx--which has a long history of customer-focused IT initiatives, including data warehouses and package-tracking systems that use the Web--to step up its customer-focused efforts. Federal Express is integrating its Windows-based tracking systems with those of Roadway Package System Inc., the company's ground-delivery sibling. That lets representatives monitor a shipment regardless of how it was sent. Further enhancements will give customers single-billing and invoices across divisions.

The company is testing a MyEureka portal from Information Advantage, Inc. that will place all customer information in front of everyone from marketing executives to call-center employees. The goal is to help the company analyze trends and recommend action to customers. If a recent international shipment was held at customs because of an inaccurate commodity code, for instance, a representative can warn the customer in advance of future shipments. "You can turn a bad experience into a good one," says Hjelm.

Because true customer centricity reaches all levels of the company, Hjelm hopes to extend that to the most visible part of the company--the couriers who interact with customers daily. "Everyone is in sales," he says. So the company is developing two-way wireless handheld devices that help couriers capture sales leads and give them details about what happens to packages when they leave their hands.

Miles To Go
However, while most businesses are concerned about customer satisfaction, only 98 of the 300 companies surveyed met InformationWeek's definition of a customer-centric organization.

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But technology is helping some to close the gap. Delta Air Lines Inc. "has always been a high-touch, low-tech organization," says CIO Charlie Feld. That changed when new management--led by CEO Leo Mullen, who came from the IT-driven financial-services world--took over a year ago.

Technology is now a priority for Delta, but not the way it is at many airlines, which focus mainly on decreasing flight delays and improving efficiency. The industry has always scheduled planes, crews, catering, and baggage. "But no one ever looked at it from the customer's point of view," says Feld. "If the customer gets lucky, they get a good trip."

Problems and delays affect 20% of Delta's 100 million airline customers annually, so "We shifted focus to the 20 million instances when things don't go right," Feld says. "People understand that you're going to have problems. They don't understand when they're not being taken care of as individuals."

Delta developed a customer-care system for gate agents that links a thin-client Windows NT graphical seating chart to a mainframe TPF airline reservations system and an NCR data warehouse. It can, for instance, track in real time which passengers are on board, regardless of where they checked in, reducing standby confirmation time.

The system, which will be rolled out at Delta's 26 largest airports this year, really kicks in when planes are delayed due to mechanical failure or bad weather. Delta's operations control center can tell which planes are delayed, and the TPF reservations system can identify which passengers are going to miss connecting flights as a result--and how important those customers are.