Sept. 11, 2000

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Corporate IT Faces Competition

Business strategies can help corporate IT prevent internal customers from seeking outside help

By Dave Saul

he drive to enhance internal customer satisfaction often begins with an eye-opening revelation. For my company's IT department, this revelation came when an internal customer-satisfaction survey painted our IT staff as "unprofessional." The survey confirmed that our internal customers were quickly becoming former customers, turning to the growing number of ancillary IT operations within our company and to external IT vendors for support. Suddenly, we had a problem. But we found a way to solve it by running our IT department as one would run any successful service business: applying tried-and-true business strategies to enhance our ability to deliver value for internal customers. These same strategies can help any IT department increase the satisfaction of its internal customers.

Examine the demands of your internal customers. Then consider how well-equipped you are to meet these demands. Above all, success depends on having the right materials and the skill sets. Understanding where you have these--and where you don't--is the first step toward a more customer-focused and customer-satisfying operation.

At Zurich U.S., a leading property-and casualty-insurance company, this gap analysis illuminated a problem that's reaching significant proportions in corporate IT. While our IT department's technical capability was clearly a strength--allowing us to create IT products and services that were standard-setters in our industry--delivery often fell short. Not equipped to manage the volume of requests, our IT shop often overcommitted. Although the IT staff worked diligently to meet internal customer demands, missed deadlines were inevitable. Customers became frustrated and looked elsewhere. And IT staff did, too: Employee turnover hit an all-time high.

The problem was that IT didn't truly understand the demands of its marketplace, and it didn't effectively manage customer demand or relationships. Workload pressure was exacerbated by our company's rapid growth and by our rigorous commitment to technology leadership. Any management of workflow and customer relationships that did occur was left to IT staff members, even though this type of management typically required different skills.

The fix? Make it your business to know your internal customers. Hire dedicated account executives to oversee internal customer relationships and to manage overall IT workflows. Perhaps most important, establish processes to help ensure that IT resources are devoted where they offer strategic value. For instance, we often suggest that an internal customer conduct a cost-benefit analysis or simply discuss how a request aligns with a business unit's critical success factors before it's put into the IT queue.

At the very least, project or service-level agreements should be created before IT work is initiated. These agreements outline the shared expectations, required resources, and individual accountabilities that will make a project successful. They also detail project fees, taking the mystery and misunderstandings out of internal cost structures. With the right people and processes in place, IT workload is kept in check, and the goal of building value for the company is kept front and center.

Meaningful two-way communication with internal customers is also vital. To make communication truly effective, tailor yours to key customer segments. By doing so, you can tell each customer group exactly what it needs to know.

IT departments should also keep a close watch on their competition. Intelligence on the performance of other IT providers and the fees they charge can be used to optimize internal IT performance and to help ensure that internal fee structures are competitive. It will also help you to recognize and capitalize on any competitive advantages--such as institutional knowledge--that you offer over external vendors.

Zurich's IT department applied these strategies, with positive results. While there's room for improvement, our internal customers recently ranked our performance much higher than they did in the initial customer-satisfaction survey 18 months ago. Turnover is about one-third of its previous level. And IT is clearly better focused on the job it was created to do: offer real value for every internal customer.

Dave Saul is executive VP and CIO of Zurich U.S.

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