A rental car agency's automated system has streamlined the replacement rental process and cemented the company's standing in the industry.
With its automated rental management system (ARMS), Enterprise has streamlined operations for car insurers that pay for rentals to replace owners' vehicles damaged in collisions. Because using ARMS makes it easier to do business with Enterprise, the company's volume of business with major insurance companies that use the system has grown twice as fast as its overall business with insurers. Enterprise has calculated that 6.8 phone calls are cut from each rental transaction, saving the insurance industry between US $36 million and $107 million annually.
HEADQUARTERS: St. Louis.
CORE BUSINESS: Local car rentals.
FINANCIALS: $6.3 billion in sales for FY2001.
THE WINNING SYSTEM.
Cost: $28 million in hardware, software and staff time; $7.5 million in annual maintenance.
Hardware: ARMS Claims uses Sun Enterprise Servers as its Web and application servers. Those, in turn, connect to IBM's AS/400 operational systems.
Software: On the Web servers, ARMS uses Apache software to put up the webpages. On the application servers, it uses BEA WebLogic Server software to perform business logic and dynamically build HTML.
Network: Enterprise uses TCP/IP as the protocol running over its Ethernet network.
Traditionalists beware: CIO Bill Snyder says that Enterprise does not use any standard value assessment tools such as the Balanced Scorecard, project portfolio management or economic value added. Instead Enterprise relies on a computer review committee consisting of Snyder, CEO Andy Taylor, COO Don Ross, CFO John O'Connell and several other executives. The committee members evaluate and priorities major IT projects based on their gut feeling of what the customer impact will be. Customer-focused IT projects do not go through an ROI analysis, but internal IT projects, like ERP implementations and infrastructure upgrades, do. "Fundamentally, IT doesn't care what it's working on, though we like to work on those things that have the highest return for the business," says Snyder. "The [steering committee] prioritises things."
CIO Bill Snyder says the ARMS online site evolved from graphics-heavy and slow-loading to toned-down and faster.
Enterprise Rent-A-Car promises in its TV commercials, "We'll pick you up." Lately it's been providing a huge pick-me-up for perhaps its most important customers: insurance companies.
Occupying a unique niche in the rental industry, St. Louis-based Enterprise gets 95 percent of its business through local rentals - a significant chunk of which are replacement rentals paid for by auto insurers while the renter's car is in the repair shop. With its Enterprise Value Award-winning Automated Rental Management System (ARMS), Enterprise has brought the previously Labor-intensive replacement rental process online, streamlining operations for insurers and protecting its niche in the process. To illustrate, the company claims that its overall insurance rental segment - which includes many insurance companies that don't use ARMS - has grown 35 percent between 1998 and 2000. But Enterprise says that business with several of its biggest insurance customers - all of which are using ARMS - has grown at two or three times that rate. And insurance companies are thrilled. "We find it very user-friendly - it increases our efficiency by helping us create reservations faster and easier," says Joseph Ashooh, rental coordinator for MetLife Auto & Home. Greg Horn, material damage director for the GMAC Insurance Personal Line, notes that GMAC has increased its business with Enterprise by 40 percent since going on ARMS, because it improves customer service and lowers costs. Those reactions demonstrate why ARMS is a winning system, says John Glaser, vice president and CIO of Partners HealthCare System and a member of the Enterprise Value Awards judging panel. "Clearly Enterprise had a niche that's very solid, and they've taken very intelligent steps to protect and strengthen their position," he says. "They understand enough about their partners to know what IT innovations will provide value to each of them."
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