Bobby Cude, a manager of interactive marketing at Southwest Airlines Co., recently drove 20 minutes from his digs at Dallas' Love Field to a nondescript office building in the suburb of Grant Prairie, where the airline maintains a reservation center. Amid the hum of computers and under the glare of fluorescent lights, nearly 200 agents field some 1,000 calls an hour. Cude made the trip with his team of four Internet developers as homework for upcoming enhancements to Southwest's Web site. Upon arrival, each developer plugged a headset into a reservation agent's phone and spent the day monitoring customer calls.

"By listening to the calls, we're trying to see how we could make the customer experience better online," Cude says. "We shouldn't be thinking technically all the time. We need to develop a mind-set of thinking outside the box." Such outings--regular events for Southwest's IT staff--have led to the development in recent weeks of applications that make it easier and quicker for consumers to book hotel reservations on the airline's Web site.

Southwest intuitively gets what researchers at the University of Michigan Business School are attempting to show--that investing in skilled IT staffers who understand a company's clients and business processes may result in greater customer satisfaction. The researchers, who will unveil findings of their recently completed study at this week's InformationWeek Fall Conference in Tucson, Ariz., assembled data on IT investments by about 70 large companies, with annual revenue topping $1 billion each, from past InformationWeek 500 studies, then compared that with results of consumer-satisfaction surveys conducted by the university's National Quality Research Center. The center produces a widely followed consumer-satisfaction index.

A key finding of the research, based on data from 1999 and 2000, shows that by boosting IT labor investment by 1 percentage point, companies on average saw an increase in their customer-satisfaction rating of 0.27%, assuming all other spending (on IT and non-IT capital equipment as well as non-IT labor) remained constant. In contrast, a 1 percentage point increase for IT capital equipment reduced customer satisfaction by 0.19%.

"You need IT people who understand the business and line-of-business managers who are IT-savvy and understand IT's capabilities and IT's limitations," says M.S. Krishnan, an associate professor and area chair of computer IS at Michigan's business school, who co-authored the study, "Effect Of IT Management On Customer Satisfaction: An Empirical Analysis" (http://eres.bus.umich.edu/docs/workpap/wp02-012.pdf), with professor Claes Fornell and doctoral candidate Sunil Mithas.

That type of IT-business synergy is apparent at Ingram Micro Inc., where CIO Guy Abramo also serves as chief strategy officer and oversees worldwide marketing for the $25.2 billion-a-year computer products distributor. At Ingram Micro, most IT staffers work for the business units, learning business processes and even going on sales calls. "The IT person in charge of sales could handle accounts if he had to," says Keith Blachowiak, VP of IT strategy and planning. Ingram Micro's IT and sales and marketing staff worked hand-in-hand this past year to develop a system to prevent customer attrition as the tech boom of the late 1990s fizzled.

A way to quantify IT's impact on business has been a Holy Grail search for academic and business researchers for many years. The Michigan study examines IT investments and customer satisfaction during two time periods--from 1994 to 1996, and from 1999 to 2000--and for two vertical industries, manufacturing and services. The study indicates that, for the earlier period, an increased investment of 1 percentage point in IT, both capital equipment--hardware and software--and personnel, resulted in an increase of 0.91% over the average customer-satisfaction rating in the services industry. However, manufacturing saw a 0.35% decline.