June 11, 2004
An idea doesn't have to be far-reaching research and development to face budget scrutiny these days. IT leaders know all too well that a dose of budget creativity can be necessary to get any additional funding for a project.
At J.C. Whitney & Co., CIO Marty Wehrle was in the midst of a project to upgrade the auto-parts retailer's product database when he realized how much more valuable the upgrade would be if the company's 1,200 suppliers could automatically upload new products and pricing changes. The ability to show and price new products rapidly and correctly was increasingly important to the business: J.C. Whitney's sales on the site shifted from 25% of company business three years ago to 45% today.
An interface that would support suppliers' various data formats would add about $100,000 to the $850,000 budgeted for the upgrade project. Wehrle was convinced the automated interface would be cost-justified once in operation through savings in staff time and database administration cost. The IT team squeezed out the project's funds by keeping other areas of development to the minimum needed to meet requirements so that work could be done on the interface. Use of staff from outside the project, paid for by the IT operating budget, helped keep down costs.
With the interface, refreshed data helps J.C. Whitney marketers put together up-to-date print catalogs and present the most-current selection of products on the company's site. Although Wehrle hasn't been challenged to do so, he believes he could easily justify moving funds within the project by tracking additional revenue that comes from having new products listed on the site faster.
Mark Bonfiglio, lead IT architect at utility company Entergy Corp., wanted research funds to test with 20 Entergy employees a Web portal that eventually would distribute key internal applications, such as sales-force automation apps that employees could access while traveling. Such a portal would cost $400,000 to $450,000. To build the pilot test, Bonfiglio had to convince top management that it would provide savings. "We don't just run out and spend R&D dollars unless we have a vision in place of how the technology will be of value to Entergy," he says.
Bonfiglio's team showed top management that the employee portal would let the company consolidate 200 Web servers to 130 by centralizing on fewer servers and applications, delivering savings equal to 75% of the cost needed to justify the project, with another 25% from reduced development costs for future apps. The pilot test worked, Bonfiglio says, and the full employee portal is in the final rollout phase.
Return to main story, R&D Envy
Illustration by Marc Rosenthal
About the Author(s)
You May Also Like
Cloud Crisis Management: Tech Insights Report
The Forrester Wave™: Vulnerability Risk Management, Q3 2023
Edge Computing Bridges IT and OT People, Process, and Technology
Solution Brief: Fortinet FortiFlex Delivers Usage-Based Security Licensing That Moves at the Speed of Digital Acceleration
2023 US IT Salary Report