In Search of Excellence

In Search of Excellence

NOTE: This is the first installment in a two-part series covering the recent CIO (US) Enterprise Value Awards. This week we take a broad look at the Awards' mission, along with two winning case studies. Next week's CIO Executive Briefing, meanwhile, will feature three further case studies along with the judging methodology used to determine the winners.

Edison. Ford. Wright. They are revered as people who have made a difference in the world, and they stand out not just because they dared to think, but because they dared to act. Sometimes they had to go it alone; sometimes they had a cadre of believers to share their vision. Often they stumbled. But in the end, they held tight, persevered and eventually reached their proverbial peaks.

The business world revolves around big thinkers with big ideas. When such efforts go unrecognized-well, the old adage is true: The journey is often its own reward. But every so often, those accomplishments are acknowledged and shared with the world. So it is with the Enterprise Value Awards.

Each year, CIO honors the people behind the latest and greatest technology-enabled business achievements. These are the people whose projects have altered a core process, an organisation, a market or even an industry. These are the folks who make a difference. Because of them, there is simply no point to adhering to "the way we've always done things."

The winners of this award are chosen by a panel of independent judges, who consider such aspects of the project as the financial return from the initiative and the strategic impact on the organisation (see "Judgment Call," next week). In aggregate, the award-winners' efforts stand out in several ways: These organisations have brought about a fundamental change, not just marginal improvements, in the way they do business; in doing so, they have raised the bar higher still. In other words, they have gone beyond fixing management-created problems-or getting credit for what one of our judges compares to "simply cleaning up their rooms." They have achieved, in their own context, lasting value.

Of course, determining the success of such projects can mean looking at some traditional, tangible measurements: new revenue, lower costs or reduced time to market. Sometimes, in fact, they need measure nothing more than the widening gap between themselves and their competition.

But the bottom line isn't the only way-or even the best way-to evaluate how IT adds lasting value to an organisation. With the complexity of today's enterprise projects, the basic economic model of justification is simply no longer sufficient. Success must also be measured in not-so-tangible ways. "A company uses IT creatively when it uses it to overcome significant architectural, technological or cultural challenges," says awards judge Christopher Hoenig, president of Exolve and former CIO of the Government Accounting Office. "And IT innovation doesn't always have to be about leading-edge technology," he says. "I first look to see if the project captures my imagination."

Projects that capture the imagination come from organisations that are willing to invest in technology to create the future, not just survive it. Certainly, that's easier said than done. We've all seen those projects that are held together with a lot of positive energy, but the moment you turn your back on them, they fall apart. Projects with a lasting value-the ones that are not artificially held together-keep going because they produce more than they consume.

Look to organisations like Charles Schwab and you see instantly how their web-based stock trading project became self-sustaining. By using technology to redefine its industry, Schwab's customers now have the ability to manage their stock portfolios from their own PCs (see "Trade Secrets"). This project was initiated by Charles Schwab himself, undertaken by senior business and IT leaders, and now it thrives because Schwab's customers not only responded to new technology, they embraced it. Suddenly, Schwab is doing more business with less overhead expense per transaction. That's lasting value.

Because it's difficult to estimate the impact IT projects will have on the future, it's not always easy to recognize their lasting value. How can one see, after all, if a project provides a strategic building block? How can all the risks clearly be spelled out? What is verifiable? What will persist?

Some companies, like Dell, have had to reinvent the very process that Henry Ford created back in the early 1900s (see "Fine Line" next week). Two years ago, when planners at Dell looked into the near future, they saw plenty of opportunity and an enormous challenge. Their forecasts showed a ravenous customer appetite for new computers that could carry Dell to new heights if they could turn out new machines quickly and with maximum efficiency. Did that mean building lots of new factories? "In some ways, Dell is allergic to too much brick and mortar," chuckles Terry Kelley, vice president of worldwide operations I/T. Instead, Dell turned its processes upside down, completely rethinking the way to build computers. The company bought and designed what it needed to run a new type of assembly line, trained assembly line workers in new methods and hasn't looked back, except to view the competition now trying to catch up.

"Dell had to rethink the concept of a production line," says awards judge John Glaser, CIO of Partners HealthCare System. "By doing so, the company was able to increase production, improve inventory control and decrease employee turnover."

Dell is a case where it is hard to separate the technology from the process. With its built-to-order, continuous-flow manufacturing, Dell created a visionary, clean-sheet process that is now an industry benchmark.

"Visionary" also describes Household Financial's integrated system for equity loans-christened Vision, in fact (see "Loan Star" next week). An object-oriented system that manages the lending process from sales lead to perfected loan, Vision accomplishes several aims for Household. The company's account executives can structure and approve loans more quickly, while the system ensures regulatory compliance. Most impressive, the system includes a neural network-based learning component that helps identify the most appropriate products Household can offer to a given customer. All of these benefits add up to a closer, more comfortable link with customers. That's quite an advantage over Household's competitors in an industry that is predominantly paper-based and reluctant to spend money on technology projects. "It took courage to make the investments that were counterintuitive in this industry," says judge Patricia M. Wallington, retired CIO of Xerox.

It wasn't courage, necessarily, that spawned Pfizer to create its Electronic Submissions Navigator, or Esub (see "Prescription Strength"). In fact, Walter Hauck, Pfizer's director of Clinical Systems, was new to the pharmaceutical industry, "so I didn't know that what I wanted to do couldn't be done," he says. But when Esub helped Pfizer's new antibiotic drug, Trovan, win FDA approval in record time, everyone knew instantly that they had a good thing. By banding together, researchers and IT staff built an electronic version of a new drug application-a document that traditionally could fill a truck when printed. It was that alliance that launched a whole new way of doing business at Pfizer. "The collaborative effort is a standout," says Wallington. "The critical change in the process was in linking and making visible to all the complete set of information as the new product went through the various stages," she says. "I was struck by the number of parties that were involved and needed to agree before Esub could happen."

The system has reduced the drug-review cycle by two months, eventually bringing the company more than $142 million in revenues over four years due to a shorter review time. But beyond the bottom line, it allowed the company to support three concurrent international drug product teams; it enhanced Pfizer's reputation in the field, making it a desirable target for strategic alliances with competitors; and it brought IT to the business planning table in a new way as the clinicians began to see that technology could be used as a competitive advantage.

When it comes to saving lives, the US Army's Internet Tumor Board is a true winner (see "Basic Training" next week). By using technology to connect with cancer experts at Tripler Army Medical Center in Honolulu, remote Pacific Island doctors were able to bring advanced medical care to cancer patients-and change lives by doing so.

The return on investment for such a project was hardly financial; although the program saved significant amounts of money by reducing unnecessary transoceanic journeys to Tripler and reduced costs related to inefficient patient handling or needless surgeries. The most important benefit came from the quality of life decisions that were made as a result. An unexpected benefit was that now remote doctors, who used to have to travel to obtain continuing medical education to remain certified, can now get those credits via the Internet Tumor Board without ever leaving their island hospitals. "It's been an unbelievably helpful way to share knowledge and develop trust," says LTC Jeff Kavolius, a surgical oncologist at Tripler. "It's nice that an award like this doesn't have to be given to a corporation that made the most money. Sometimes it's important to recognize dedicated professionals who make a difference."

Not all IT projects are expected to make such a difference. In fact, most won't, says Glaser. "At Partners HealthCare, we engage in a series of projects that make modest improvements," he says, "and we hope that those gains add what I consider 'lower-cased' value-they somehow increase revenue or reduce costs. But 'upper-cased' value-lasting value-results when there is a substantive change in a company's competitive advantage or a major leap in the organisation's ability to carry out core activities," he says. "And that's remarkable when it happens."

There's an ancient Polynesian legend about two brothers who had spent their days traveling from island to island without finding a satisfactory place to make their home. In time, the story goes, they came to a tiny harbor with a path that led upward from the sea through a halagrove to a high mountain.

"I could stay here in the hala," sighed the older brother, wearily. But the younger one was eager to move on. "This is no place to rest," he reasoned. "The vines will creep over you and cover you from sight, and the thorny hala leaves will scratch you as they fall. Come with me to the top of the mountain. From there, we will be able to watch the birds and the clouds and feel the wind blow. And we will see the whales and turtles swim in the ocean." But the older brother could not be persuaded, and so the younger brother went on without him.

Reaching for the stars isn't for everyone. But what motivates some to climb higher than seems reasonable to others? Is it simply the price of doing business? Or do some people have a vision that tells them their world is only a part of something much larger?

CIO thinks that this year's five Enterprise Value Award winners have somehow seen that their actions can make a difference.

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More about Charles SchwabEdge TechnologyExolveHousehold FinancialIslandPfizer AustraliaSchwabUS ArmyXerox

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