InformationWeek
Defining The Business Value Of Technology
June 14, 1999
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More Projects, Less Time
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To handle ever-present business concerns better, companies are establishing steering committees that include equal measures of IT and business executives. Hallmark's committee meets monthly and reviews any initiative that requires more than 10 days' implementation time or an investment greater than $10,000. To avoid red tape, "there are small changes, the one-, two-, or four-day decisions that don't even make the steering committee's radar screen," says Clippard. The committee, for example, doesn't get bogged down examining support work or maintaining systems that the "first-level managers can make a value judgment on," he says.
PG&E Corp., the holding company of utility Pacific Gas & Electric, has an IT-business committee that meets more often than before; its focus is staying on top of a rapid-fire IT project schedule. PG&E's technology council includes CIOs and senior business managers from each of its subsidiaries, says John Keast, VP and CIO of PG&E Corp., which has more than $33 billion in assets and revenue in excess of $19 billion. Each month, says Keast, "we're kicking off different pieces" of the company's IT project agenda, most of which was set last year and spurred on by deregulation. The multitasking committee is launching today's projects while also planning beyond the millennium. "Over the next two months, we'll start to put together the program for 2000," adds Keast.
More often than not, these hybrid committees act as project gatekeepers that apply criteria based on business value as they prioritize IT initiatives. "This year, we have a priority process in which we look at projects against a weighting scheme," says Ron Downing, senior VP of enterprise client and server systems at Visa International Inc. Some of Visa's criteria: Does the project affect infrastructure? What is its return on investment? Does it affect the customer, or is it an internal project?
Customer Is No. 1If there's one principle that dominates IT executive mindshare in the InformationWeek Research survey, it's making and keeping external customers happy. Understanding and meeting customers' needs and improving customer service claimed the top two spots, respectively, in the rankings of key strategic technology and business priorities. Equally telling: Three of four IT executives surveyed say they'll attempt to boost customer-satisfaction levels, while slightly more than half plan to mine their data stores to pump up sales per customer and improve customer data quality (for more on the survey results, see "Behind The Numbers: A Look At Priorities From The Bottom Up").
Most IT executives plan to integrate their existing systems and applications to improve the way they process customer data, the research says. That's certainly the case at Burger King Corp., a subsidiary of Diageo plc. The company plans to scale up its 180-Gbyte data warehouse, which in turn feeds daily and monthly reports on the sales of all its restaurants.
The fast-food company, which oversees more than 10,300 restaurants worldwide and had sales of $10.3 billion last year, is preparing reports that will let store managers measure their operations against their peers and help them make better business decisions. "They make their business decisions off the monthly and yearly data, and when they see problems they drill down into the daily data," says Patrick Cope, manager of information warehouse, information and reporting, and decision support for Burger King's brand-strategy division.
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Ultimately, Cope says, he'd like to see Burger King provide detailed data from each point-of-sale machine at each restaurant, both company-owned and franchises. "That would be marketing's dream," Cope says. "They'd know the menu item sold, the time it sold, and the venue it sold in, whether drive-through, eat-in, or take-out. That way, they could tailor promotions to a customer's needs."
For now, Burger King is required by the terms of its contracts to provide its franchisees with only monthly sales reports. With the new daily reporting systems it's building for its company-owned restaurants, Burger King hopes the franchisees will want the same detailed information and purchase the necessary computer hardware and software to accommodate it, says Cope.
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Photo of Cope by Greg Whitaker
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