MILES TO GO
These CEOs say IT can go much further in helping them solve their business problems
BY JOHN FOLEY
WITH THE CEOs OF FIVE MAJOR COMPANIES sitting across from him, Microsoft group VP Jeff Raikes recently described how he uses three tablet PCs in his daily work, keeping his data synced up via Microsoft software. The place was a conference room at Microsoft’s headquarters; the subject, IT and business productivity. It was an unscripted anecdote of how one busy high-tech exec stays at the top of his game—and a stark reminder of the gap that separates power users like Raikes from millions of information workers.
The discussion came at the tail end of Microsoft’s annual
CEO Summit, attended by about 100 chief executives on May
21 and 22. They had gotten a full dose from Microsoft’s senior managers on the company’s business-technology strategy and philosophy—and dinner at the home of chairman and chief software architect Bill Gates. Each attendee was given a new tablet
PC loaded with the latest Microsoft productivity tools to use during the conference and, if they chose, to take with them.
Yet, as impressed as they might be with the gadgetry and software demonstrations, the CEOs at Raikes’ roundtable discussion— representing Accenture, Best Buy, Flextronics, Premera
Blue Cross, and Siemens USA—made it clear that neither
Microsoft nor the rest of the IT industry has satisfied all their companies’ needs when it comes to using IT to solve business problems and boost productivity. In fact, their companies are far from mastering the technologies they have in place. “We’re nowhere near the end of this road, nowhere near,” said Michael
Marks, chief executive of Flextronics, which manufactures equipment for tech companies such as Cisco Systems and
Hewlett-Packard. “We have a project list as long as our arm about the next things to do.”
It might seem obvious that companies continue to expect more from their IT investments, if it weren’t for the growing debate, being played out in the media and at industry events like this, over whether IT has matured to the point that it’s becoming little more than a support function. A day earlier, Gates tried to debunk that point of view: “We’re from the camp that says when it comes to defining new applications and thinking about business processes, IT is so central to the way work gets done and the quality of that work, and there are so many opportunities to do that better, that [keeping] it as part of the overall business strategy is very, very important.”
The CEOs at the roundtable seem to agree. Their businesstechnology challenges, they said, range from the basics of information integration and E-mail management to figuring out how to get employees to absorb new technologies and apply them to better serve customers. “We haven’t [spent] enough time looking at the human dynamics,” said Brad Anderson, CEO of electronics retailer Best Buy.
On their technology wish lists: new ways to collaborate.
“What I expect from our IT systems is to be reconfigurable and adjustable to a full group of users,” said Klaus Kleinfeld, president and CEO of Siemens USA. “If I have people sitting in
Sweden who specialize in offshore oil drilling, and I have a customer sitting in Texas who wants to do some offshore oil drilling, I need to make sure, in the shortest time possible, that the data flows.” There’s huge potential for companies that can figure out how to tap more quickly into the knowledge of individual employees, he said.
A breakthrough in knowledge sharing comes “when you can broadly enable collaboration at the grassroots level and also use software to provide top-down structure,” Raikes said. (He then plugged Microsoft’s SharePoint software as a potential solution.) Where do CEOs plan to invest any productivity dividends paid by their IT strategies? While much of the payback in recent years has gone to the bottom line, the target going forward will be customer-oriented initiatives, predicted Accenture chairman and CEO Joe Forehand. “If you look at the whole area of customer relationships, the cost of acquiring and servicing customers is higher than ever,” he said. “And brand loyalty is at a lower point than we’ve ever seen.” What’s required to win customers is deeper integration of marketing, channel, and cusANNUAL
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2 tomer-support functions combined with better business intelligence, Forehand said. “We need to get true insights, with the whole branding and channel strategies, right to the people who are directly serving the customer.”
Best Buy’s Anderson, Siemens USA’s
Kelinfeld, Accenture’s Forehand,
Flextronics’ Marks and Premera’s Barlow say their companies are far from mastering the technologies they use.
Several of the CEOs agreed their companies would benefit from faster information flows. “Any device that provides precise, just-in-time information about a specific customer, and just-in-time learning for the employee to be able to take that information and leverage it for the benefit of the customer—that would be a powerhouse, killer app,” Best Buy’s Anderson said.
Gubby Barlow, president and CEO of Premera Blue Cross, a nonprofit health insurer that serves more than a million people in Washington and Alaska, envisions a real-time billing system at his company. “One of the key problems for us is the time between a doctor performing service for a patient and the time it gets billed. It’s very frustrating for everyone,” he said. “Having the information about the appointment happen smoothly and more quickly would be good for doctors, good for the patients, and good for us.”
Among the biggest and most basic problems encountered in companies is that the most popular collaboration tool, E-mail, can suck productivity from workers just as easily as it helps them. “We still struggle with the issue of E-mail in our [corporate] culture,” Siemens’ Kleinfeld said. “We have wonderful, beautiful tools that have made access to information very easy.
That’s a blessing. On the other hand, we haven’t established rules, which makes this a burden on us and partially a curse.”
Gates acknowledged the problem in his own comments a day earlier. “E-mail can often be a distraction,” he said, “unless the tool is very good and people are smart about using it.” (During the summit, Gates gave the CEOs a demo of his own E-mail habits. For an excerpt, go to informationweek.com/942/gates mail.htm.) Complaints about E-mail aren’t new, but multiply the time wasted by 25,000—that’s the number of information workers at
Flextronics—and the scope of the problem gets a CEO’s attention.
“We’re inundated with E-mail, and we’re getting bogged down,” Marks said. “I’ve got people working in cubicles all over the world who’d rather sit and send E-mail back and forth instead of going out and seeing customers.”
In a survey of its E-mail usage, Best Buy found that many of its employees get more than 100 internal E-mail messages a day generated from colleagues. “Is that actually producing productivity?” asked Anderson.
Siemens USA, Kleinfeld said, is trying to deal with the situation by distributing usage guidelines to the workforce. Among them: Messages should include a subject line, be clear on whether immediate action needs to be taken, and delineate options available to recipients. Siemens USA employs 70,000 workers in the United States and accounted for about 25% of the
German conglomerate’s sales of $21.5 billion in fiscal 2002.
E-mail and other desktop applications could be more intuitive and easier to use. “Make it simple,” Marks implored
Raikes. “You’re killing us” with features people don’t or can’t use. He joked that Flextronics would pay a premium for light versions of Microsoft’s apps. “We need to simplify those kinds of products, where people spend less time interacting with the product and more time meeting with customers and getting the job done.”
The increasing sophistication and feature richness of computing devices and software raises the issue of employee acceptance, and even workers’ competence in applying the tools available to them. Flextronics’ Marks said making employees more effective in their use of technology is an ongoing challenge, while Accenture’s Forehand talked of worker competence being a “gating factor” in getting the most from IT investments. But the answer may have less to do with finding smarter workers and more to do with how the workforce is trained and managed. “My suspicion is that what’s actually there is underutilized potential,” Anderson said. “We never really prepare leadership to deal with the kind of technological solutions available. You’ll get smart employees if the leader is good.” Tablet PCs help Mirocosft group VP Raikes stay productive.
At Premera Blue Cross, the job satisfaction of customerservice representatives increased, and turnover decreased, when it replaced an outdated claims-processing system with a system that makes it easier to access information. “You can use technology to improve the quality of your people,” Barlow said. At
Accenture, employees who get the most training not only stay longer, but they’re 17% more productive, Forehand said.
Businesses will continue to spend on business-technology initiatives “to keep getting better,” Marks said. But getting the most value out of business technology is easier said than done.
Raikes hinted at that when he talked about using three tablet
PCs: “It’s not something I would recommend to the faint of heart.” Write to John Foley at jpfoley@cmp.com. Visit our Business Applications
Tech Center: informationweek.com/TC/sw/bizapps
From Information Week, June 2, 2003. Copyright © 2003 by CMP Media LLC. Reprinted with permission from Information Week. All rights reserved.