As Published In February 2006

The Profit Business Excellence Award Winners
By David A. Kelly

Companies from all over the world drive success with the help of technology.

Frequently the nitty-gritty details of IT implementations can seem—well, less than heroic. But for the individuals profiled here, technology has been a tool for transforming their businesses—although each one would say that the energy, intelligence, and efforts of their teams and of the company as a whole played an even more-important role in driving company success. We're privileged at Profit to be able to honor just a few of the many innovative leaders who have simplified and automated business processes throughout their enterprises—narrowing the selection down to just these seven was a difficult task. In the following profiles, learn more about their accomplishments and their advice to other businesspeople who are contemplating similar efforts.

Bob Willett
Alfredo Carvajal
Ma Jun
Bill Fitzsimmons
Barry Libenson
Patrick Piccininno
Norm Fjeldheim

Best Buy

Bob Willett
CIO and Executive Vice President of Operations

Products Oracle Financials, Oracle Portal, Oracle Application Server

"When your employees are a critical part of your 'secret sauce,' you want to make sure you're leveraging as much technology as you can to communicate and help them measure their own performance," says Bob Willett, CIO and executive vice president of Operations for Minneapolis-based electronic retailing leader Best Buy.

To do that, Willett has been developing a portal for Best Buy's 86,000 employees. "We're using Oracle to build an incentive compensation tool and portal for our employees so that they will be able to look at their personal profile, communicate with managers or other employees, and give them instant responses."

Better informed employees translate into better customer service, more-efficient product and service delivery, and increased sales opportunities. Best Buy's business strategy is focused on "customer-centricity" and the idea of not just selling products, but offering a broader set of technology- and product-related services.

"As we transition from a product-centric model to a more service- and customer-centric model, it brings a lot of requirements," says Willett. "Our supply chain has to be efficient and effective. It's not good enough just to have the product there today; you have to be able to anticipate future demand. We're building out a customer-centric data warehouse that enables our people to have data turned into 'customer insights' that will help them manage their business as owner drivers."

Most Gratifying Return on Investment

"Three years ago, IT spending was almost 2.5 percent to sales. Now we're down to 1.9 percent, and we're going to be down even farther. We've kept abreast of the innovation requirements for the business, especially in retail where everyone wants everything tomorrow. And at the same time, we've been able to stabilize our infrastructure and are bringing our costs down to deliver better value for money."

The Path to Success—An Important Milestone

"An important milestone was sitting down with the business leadership and getting clarity and alignment around where we were and where we are trying to go. A second critical step was our creation of a business blueprint to map current technologies and processes against our three-year goal."

What Lies Ahead?

"It's more of the same. We've got a plan. The important thing now is to execute well. Few companies fail because of poor strategy—they fail, usually, because of lousy execution. My job is to keep us focused on delivering the things we promised and trying to keep the business as simple as possible while we grow out significant new customer segments. We're going to simplify and rationalize the infrastructure while building new capacity and reducing costs. We need to remember, however, systems are not a 'silver bullet,' but a vehicle to release the power of our people."

Carvajal SA

Alfredo Carvajal
President

Products Oracle Application Server, Oracle Business Intelligence, Oracle Database, Oracle E-Business Suite, Oracle Portal

For a large, distributed company like Carvajal SA in Cali, Colombia, having the right software makes a big difference when it comes to understanding what's happening at each location.

"Technology plays a significant role in managing our conglomerate effectively and efficiently. That's why we decided to make one of our largest investments in IT and standardize on Oracle software throughout our multiple business units," says Alfredo Carvajal, president of Carvajal.

Carvajal is a conglomerate with businesses in paper manufacturing, printing, publishing, office and school supplies, packaging, and other fields. Carvajal has offices in 18 countries and manufacturing operations in 10 countries, with more than 16,000 employees and revenues of US$1.1 billion. Their strategy is to concentrate on the core businesses and grow by acquisition.

Three years ago, Carvajal decided to invest more heavily in technology. Previously, it had relied primarily on in-house-developed applications, but to date, Carvajal has completely replaced its homegrown applications in two of its seven divisions with a suite of Oracle products, from enterprise resource planning and customer relationship management to supply chain management and business intelligence. "Within a few years, we'll have all our business units running completely on Oracle," says Carvajal. "This is a critical step for a company of our size and complexity, since Oracle will provide us with more-reliable and on-time information that we can use to make faster and wiser decisions."

Most Gratifying Return on Investment

"We are very optimistic that the benefits of the overall project will add up to much more than our investments. For example, the people working with the systems we've already deployed are very happy with the reliability of the systems and their efficiency, as well as being able to get their business-critical information on time."

The Path to Success—An Important Milestone

"A transition of this size and complexity is a very difficult process. One of the most important points in making this project a success has been empowering our people and finding ways to ensure they were sharing information and working together to streamline our processes through the deployment of our new software."

Advice for Others

"A project of this magnitude has to be supported by the entire company. You need to have the head of the company, such as myself, or the heads of the business units involved in the process or it will take much, much more time. We created a committee that included everyone who would be affected by the transition, and we met frequently to make sure we were handling all the problems that arose and made decisions when they needed to be made. I think that's the most important point for companies to understand before they try to deploy a project of this scope."

ChangAn Automobile Group

Ma Jun
CIO

Products Oracle Database, Oracle Portal, Oracle E-Business Suite

Although ChangAn Automobile Group is one of China's leading automakers, it faces the stiff competition and price pressure confronting all car makers. To gain a competitive edge, ChangAn has turned to information technology to streamline processes and drive down costs while modernizing its production.

A key enabler for this transformation is ChangAn's adoption of Oracle E-Business Suite to replace 38 separate information systems. According to Ma Jun, ChangAn's CIO, the company chose Oracle E-Business Suite for the breadth of its functionality, its modular structure, its open architecture, and its ability to integrate with other systems.

The results were nothing short of amazing. For example, in one of its largest factories, the implementation of Oracle Bill of Materials reduced turnaround time for making small modifications on vehicle parts from 30 days down to 7 days and cut the turnaround time for modifications to new vehicles from 120 days down to 65 days. As a result, ChangAn is not only able to save considerable money during the design and development process, but it's able to bring its products to market faster, giving it an additional competitive advantage.

For Ma Jun and ChangAn, the move to Oracle has also impacted the bottom line positively. "In 2003, our economic benefit from Oracle E-Business Suite was US$23 million," says Ma Jun.

Most Gratifying Return on Investment

According to IDC, ChangAn redefined more than 100 work processes, the optimization of which has boosted productivity, improved operational efficiency, and reduced unexpected losses. Altogether it has realized substantial strategic and operational benefits from the Oracle systems, including improved production capabilities, tighter inventory control, shorter time to market, and better enterprise visibility. Based on IDC's analysis, in less than five months, ChangAn recovered its initial investment and realized an ROI of 265 percent.

The Path to Success—An Important Milestone

"ChangAn has not only integrated and centralized management of human and material assets, production, supply, and sales, but has also formed a real-time supply chain involving more than 2,000 suppliers and distributors. This will help the company build a competitive edge."

What Lies Ahead?

"China's government has initiated a program of building roads in every town, in order to facilitate development in economically backward areas. This development needs manpower and materials, and vehicles are the most favorable means to get manpower and materials to these remote areas. Car manufacturers and suppliers are seeking the help of IT to streamline production and logistics to drive down costs—and they are actively looking for foreign partners that will help them modernize production."

Cox Communications

Bill Fitzsimmons
CAO and Vice President, Accounting and Financial Planning

Products Oracle Database, Oracle E-Business Suite, Capgemini Consulting

It's a long way from the cable TV monopolies of the last century to today's broadband business.

"We live in a very competitive broadband services world," says Bill Fitzsimmons, chief accounting officer and vice president, accounting and financial planning, Cox Communications. "Our goal is to be the most cost-effective we can be, while providing a sound value proposition for our customers. If you answer the phone when people call and help them with services they need, you're going to earn the customer's trust."

To accomplish that, Fitzsimmons and the accounting, IT, and supply chain management teams at Cox embarked on a two-year project to replace their aging and highly customized core business applications with a new platform based on Oracle E-Business Suite.

"Our vision is to use our financial applications to create a consistent source of information. In turn, this will lead to a sophisticated dashboard view of the business. We will have cross-functional looks across all the different residential and commercial product lines, combining both financial and operational information," says Fitzsimmons.

Cox selected Capgemini as the integrator in February 2004 and Oracle in May 2004. In January 2005, Cox started off with 3 pilot sites plus the corporate headquarters, added 10 sites in April, and completed the remaining 10 in July 2005. "I give a lot of credit to Capgemini for understanding the collaborative nature of Cox, and they were able to both guide us and let us carry the ball when we needed to."

Remarkably, for a 15-month project of this size, it was completed on time and within 5 percent of its original budget.

Most Gratifying Return on Investment

"The most gratifying element has been how the people from Oracle, Capgemini, and Cox all worked together. We focused on the change management aspect impacting the users and ensuring open communication. We asked for feedback and genuinely sought to respond to it."

Advice for Others

"People—start with the very best you can find, the ones who are already indispensable in their current jobs, and put them full-time on your project. The second thing to consider is vision. Too much vision and you overwhelm; too little and you don't know where you're going. Find someone passionate about the vision, guide them to present it in manageable chunks so that others can absorb it—and let them lead the project."

What Lies Ahead?

"Short-term, we're just trying to make sure we all know how it works. Long-term, it's about identifying greater efficiencies in how we manage business processes and accounting. Ultimately, this will provide a much more integrated financial system that aligns with our business goals. If we do it right, it's going to give us a strategic advantage in terms of information flow."

Ingersoll-Rand

Barry Libenson
CIO

Products Oracle Database, Oracle E-Business Suite

It's not easy leading the IT transformation of an US$11 billion company with dozens of independent business units, but Barry Libenson, CIO of Ingersoll-Rand, and his team have succeeded at that task. "We needed to improve our ability to close our books. We needed to be prepared for the growth, and our legacy systems were clearly not going to do that," says Libenson.

When Libenson became CIO two years ago, he found US$28 million worth of Oracle software on the shelf. "My first task was trying to figure out how we were going to roll it out across a company that had previously been running as 30 independent business units," says Libenson. Ingersoll-Rand is now halfway through its rollout of Oracle E-Business Suite and has altered the platform for everything from financial systems to manufacturing. For example, its Dublin location has 80 different Oracle E-Business Suite modules, running in eight languages. "It's one of the largest international trading systems that I believe that Oracle has," says Libenson. "It moves several billion dollars' worth of goods annually."

"The idea is to have Oracle at the core of our technical architecture," he adds. "And we've done a good job of that—going from having $28 million dollars worth of software sitting on shelves to about $30 million of software fully deployed."

Most Gratifying Return on Investment

"We've gotten some metrics from success of the migration out of some of our plants. For example, our Bobcat facility in North Dakota is one of our largest plants and was running at capacity—24/7. When we replaced the legacy system with Oracle, we began getting between 10 and 15 percent more productivity in terms of the number of machines produced per day. Those kinds of things are very rewarding because I know what type of difference we're making—I can actually say, this new system is making significant amounts of money for us."

The Path to Success—An Important Milestone

"We've been able to put together an incredible team of subject matter experts who work for me, but who go out and support the business units in their implementations. It's their job—their number one job—to share that work and the best practices across the enterprise so we don't have to reinvent the wheel. It's been a very efficient operating model that has helped reduce the cost of implementation and provide a level of efficiency that we didn't have when each business unit was going in its own direction."

What Lies Ahead?

"I want to finish focusing on basic infrastructure and ERP and start working on projects that add value to the business in terms of top- and bottom-line performance. I'd like to invest more in CRM, so that we have a common set of tools to share information across different businesses."

IHOP

Patrick Piccininno
Vice President, Information Technology

Products Oracle Customer Data Hub, Oracle Database, Oracle E-Business Suite, Hitachi Consulting

Selling pancakes sounds like fun, but it's serious business to IHOP, the Glendale, California-based restaurant chain. With an aggressive growth plan, IHOP needed to ensure customer satisfaction and provide timely information and fast response to issues at individual stores.

"Our technology initiatives have been focused on helping the restaurants operate more predictably and cost-effectively, and helping field organizations gain better access to information, so they can work with franchisees to continue to improve guest satisfaction," says Patrick Piccininno, vice president of IT for IHOP. To do this, IHOP created a Restaurant Support Center (RSC) at its headquarters that allows franchisees, customers, or field organizations to get questions answered or have problems resolved.

"We rely on Oracle E-Business Suite as well as the Oracle Customer Data Hub to track and manage our interactions with customers and franchises in a single location," says Piccininno. "We're using all the information to produce a series of management reports about restaurant operations that we can give back to the franchisees to help them manage their stores more effectively."

While managing all that data and coordinating the needs of hundreds of stores is a daunting task, Piccininno has been pleased with Oracle E-Business Suite. "Oracle has done a wonderful job helping us meet the objectives we laid out when we started this project—and they're very aggressive objectives. Oracle Support and Oracle Development have helped us push the envelope. I believe that Oracle's vision is going to be proved out to be one of the best in the industry."

Most Gratifying Return on Investment

"In the past, we couldn't track and manage and see what our guests were saying about us and we couldn't follow up to make sure complaints were resolved satisfactorily. With the help of Oracle, we went from not knowing if we had complaints to being able to resolve guest complaints in an average of three days. That was a huge achievement."

The Path to Success—An Important Milestone

"I think it goes back to Julie Stewart, our CEO, and her vision for an RSC and single point of contact and resolution for both guest and franchisee inquiries. This vision was really the starting point."

Advice for Others

"Having strong executive support and user buy-in is incredibly important. Never underestimate the change that an enterprise application system like Oracle brings to an organization—especially one like ours that's operated for more than 45 years with little automation. Another thing that's important in a long project is to make sure you celebrate small victories as you get things up and running. It helps people to continue focusing on the long-term goal, because often they don't see how all the pieces are fitting together over time."

QUALCOMM

Norm Fjeldheim
CIO and Senior Vice President

Products Oracle E-Business Suite, Oracle Database, Oracle Application Server, Oracle Portal

For Norm Fjeldheim, CIO and senior vice president of wireless communications leader QUALCOMM, it's hard to see where business growth and new opportunities will end.

"QUALCOMM is opening up engineering and sales offices all around the world," says Fjeldheim. "We're on six continents right now, but if they ever start building or deploying cell phones in Antarctica, we'll get there too."

Of course, preparing for a trip to Antarctica or simply for the type of rapid business growth that QUALCOMM has experienced requires both agility and a solid foundation on which to build—something that QUALCOMM didn't have with its older business applications.

"We were running into problems with our previous ERP implementation," says Fjeldheim. "It had been heavily customized, we were not able to meet the needs of the business, and costs were escalating significantly. We were at a crossroads because IT was not able to support the business effectively and instead was a barrier to success."

To address these challenges, QUALCOMM made the decision to replace its existing ERP systems with Oracle applications. "Moving to Oracle was an 18-month project for us and nearly a US$17 million implementation, but it enabled our business to grow," says Fjeldheim. "If we had not implemented Oracle applications, we would not be where we are today—for example, shipping our two billionth chip. The move was a significant accomplishment for us."

An important component of QUALCOMM's success was its partnership with Oracle to develop additional functionality that ended up in the released Oracle products—functionality that otherwise would have required custom development by QUALCOMM. "It was a huge cultural shift for us as a company, but it was ultimately a huge cost saver," says Fjeldheim. "I would estimate that we've easily saved US$5 million in development costs that we otherwise would have spent."

The Path to Success—An Important Milestone

"About halfway through the project, Oracle released new modules that had significant functionality that we were interested in. We opted to extend the project and spend more time and money on the implementation in order to do it right, rather than to hurry up and get it done, and then try to retrofit the new capabilities back in."

Advice for Others

"Not customizing whenever possible and simply using the product as it was designed or partnering with Oracle to get the functionality you need added to the product. With the speed of today's IT requirements, being able to make changes because you're changing configuration settings rather than changing code will have huge benefits down the road."