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Coals to Newcastle

Toll has been growing virtually since the outset when Newcastle businessman Albert Toll set up the company in 1888 to haul coal by horse and cart. Integrated into the Peko Wallsend Group in the 1960s, Toll succumbed to a management buyout led by Little in 1986. Today the highly diversified company describes itself as a "market leader in one of the country's most dynamic and competitive industry sectors", spanning automotive, beverages, food and retail, industrial, ports and resources and removals. And its aggressive expansion continues. In 2002 year the company, together with Lang Corporation, bought Australia's two biggest rail networks: National Rail Corporation and Freight Corporation.

Toll's key strength and competitive advantage in the face of such rapid expansion lies in its ability to design and manage innovative supply chain solutions that provide customers with flexibility, reliability and cost competitiveness in managing supply chain requirements. As such the internal IT group headed by group general manager IT Martin Dunne (who reports to the CFO) works closely with Toll Solutions, set up in March 2000 to support Toll's growth as Australia's leading provider of logistics solutions. Toll Solutions has a number of successes under its belt, the most recent being the implementation of its Managed Transport Services which includes electronic billing and proof of delivery (POD), and electronic freight tracking and warehousing systems to create seamless business transactions for customers.

The internal IT area also works closely with Toll Transitions, which manages more than 30,000 relocations each year nationally and internationally. It is also growing its e-commerce capabilities to bring faster, more reliable service to its public sector and corporate customers and streamlining its transactions with its huge supplier base.

Rossington says one part of the internal IT group's role is to work with the customer-oriented groups and to share resources. The other major part of its effort is to integrate, as best it can, the IT systems within all the many diverse arms of Toll. As part of that effort the internal and external groups are collaborating on an internally-developed webMethods-based product called Toll Exchange, which has been set up under Toll's architecture to allow Toll to communicate with external partners and to ease integration of new companies (see "Madness Into Method ", below).

Playing It Safe

Toll has always taken a conservative approach to IT spending, investing enough to secure good operational systems without ever going over the top or forgetting that transportation is its core business. While the dotcom boom played out before Rossington joined the company, he understands Toll did not rush into e-business because it was determined to prove a value proposition before making any great investment.

"They weren't standing back from it, but they were looking for the value proposition," he says. "And I don't think they could establish it back three years ago. I think they were saying: 'If we do this we are going to be so far ahead of our customers that we're not really going to be able to enable any solutions, aside from simple track-and-trace type solutions.' That's not where the real value proposition is, so they looked at where they were going to be able to save money, make money or provide a better customer service, and I think three years ago with dotcom the numbers weren't adding up."

The e-business strategy has been evolving ever since (see "Little 'e' and the Holdings Company", below). Rossington says the company is very happy to spend money on technology where there is a genuine business proposition and a return, which can come in one of three ways. An IT investment must provide a much better customer service proposition, a genuine cost saving or allow revenue growth. "If it doesn't fit into those three principles, then basically it doesn't go anywhere," he says. Every proposition is required to meet an established business case built on rigorous metrics and parameters that must be satisfied, and must be signed off by the board.

"For example, we're spending a lot of money at the moment on an internal project on data warehousing and business intelligence because what we see is that we have a lot of valuable information internally, mixed among our different business units and business groups and operating centres," says Rossington. "There is an incredibly high-value proposition in consolidating all of that data and better understanding our relationships with customers and our trading with customers. Also, from an operational and profitability point of view, we can look at a very granular level at the data that's coming out of our systems and have a basis for making decisions."

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