Sept. 11, 2000

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Cendant's Goal: Most Bang For The Buck

By Cheryl Rosen

aren Johnson may be in IT, but her job is more about business models than technology. As VP of the IT project office at Cendant Corp., Johnson heads an effort to determine which projects deliver the best return on the investment of financial and human resources they require.

"In today's business environment, just being technically savvy isn't enough. You have to understand the customer's business goals in order to support their objectives," Johnson says. "We want to better understand how the projects we undertake relate back to the business, and whether our resources are deployed on things that give us the biggest bang for the buck. If the majority of our people are working on a legacy system, for example, it's my job to ask if we might be better served upgrading the technology so it will need fewer resources and perhaps replace it with an Internet initiative."

The Internet is a major focus at Cendant this year. While its name may not be a household word, Cendant's brands are among the most recognizable in the world--and brand recognition is worth big bucks on the Internet. Cendant is the nation's largest hotel franchisor, parent of Days Inn, Howard Johnson, Knights Inn, Ramada, Super 8, Travelodge, Villager, and Wingate Inn hotels. In car rental, real estate, and finance, it's better known as the parent of Avis Rent-A-Car, Century 21, Coldwell Banker, ERA, and even the local Welcome Wagon.

To capitalize on that, Cendant has reorganized its IT staff and formed a dedicated Internet group. It's also hiring an IT communications manager charged solely with "helping us better understand how the projects we undertake relate back to the business, and whether our resources are deployed on things that give us the biggest bang for the buck."

The IT department has already put up Web sites for each brand group, and it's partnering with the corporate purchasing group to launch integrated online-procurement portals. On the hotel side, the emphasis is also on internal systems, designed to provide all the properties with high-speed Internet access; a common IT infrastructure; and a property-management system that will show the same information to online buyers, travel agents, and the folks at the front desk

The focus is clearly on the bottom line, where the budget for the 2,500-person IT staff consumes about 5% of Cendant's $5 billion in annual sales. "We're putting in a lot of process improvements to reduce costs," Johnson says. "The restructured group is more process-oriented, more focused on doing things faster, cheaper, better." As part of the change-management process, Cendant installed an internal IT help desk that benchmarked its data center and customer support against other IT organizations.

Next on the agenda is a review of Cendant's back end legacy systems. "We're looking at the total population of available resources and asking what is the key activity where they are deployed--is it new development? Enhancement of existing systems? Maintenance? If a significant number are focused on maintenance, we'll really always be behind the curve," says Johnson. "So we're in the process of laying out a cost-benefit analysis of migrating off older technology, and trying to marry our whole system-evolution process with resource management."

Return to main story, "Talent Scramble Heats Up"

Illustration by Jeffrey Fisher

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