The Customer Is Always Right
A client’s challenge helps Oakwood redesign critical business process.
by Tony Kontzer, May 2010
When executives at temporary corporate housing provider Oakwood were told by their largest customer, essentially, “Either build us a procurement platform, or we’ll let someone else build us one,” a lesser company might have accepted becoming second fiddle. After all, the demand represented a sizable IT investment in an open exchange that could funnel more business to competitors.
But the request came at an opportune moment. Chris Ahearn, senior vice president of corporate sales and marketing at Oakwood, had been advocating internally to create an open marketplace, or exchange, that included other suppliers. The pressure from its customer—one of the nation’s largest third-party relocation providers—and Oakwood’s status as the biggest player in its market, gave the Los Angeles, California-based company little choice. “Having 100 percent of nothing is no good,” says Ahearn. “Having a percentage of something and actually driving the car is really significant.”
Fortunately, the company had an IT asset that would accommodate customers, partners, and even competitors in this exchange: a mature deployment of Oracle’s Siebel Customer Relationship Management (CRM) software, complete with all the toolkit components needed to build a portal extension that could be customized for customers or industries.
Oakwood’s IT team embraced the challenge and quickly realized that everything it needed was in Siebel CRM. With a budget of US$375,000, the IT team emerged less than three months later, in May 2008, with a solution that functions as a clearinghouse for the temporary corporate housing market.
For example, a company with a temporary housing need submits a request that includes parameters such as location, length of stay, price range, and even desired amenities. The solution then forwards that request to a pool of providers (about 100 of the industry’s 1,098 housing providers currently participate), to solicit suitable bids. The system then organizes the collected bid data to deliver the best matches to the customer.
This is a stark contrast to the process being replaced. Previously, customers either partnered with a supplier to provide or source apartments for them, or served as their own brokers. Customers would send separate e-mails to every provider they wanted bids from, sometimes as many as a dozen, and then negotiate with each provider individually. A housing selection was then gleaned from the e-mail replies—a time-consuming task. Customers clearly needed a more elegant process, and Oakwood’s solution seems to be the answer.
Oakwood IT Manager Karl Huber, who led the development effort, says his team was able to build the solution with Oakwood’s existing Siebel toolkit and product knowledge. Better yet, Huber’s team completed the project at a quarter of the budgeted cost. The only hard IT cost was less than US$1,000 on a specific Secure Sockets Layer certificate, and very little input was needed from Oracle—just a few brief conversations with support staff when answers to minor questions couldn’t be found in the knowledgebase on the OracleMetaLink support portal (now called My Oracle Support). “It was far simpler than we’d expected,” says Huber.
A Suite of Metrics
That doesn’t mean Oakwood cut any corners, though. In fact, matching requests with bids is only part of what the solution does. Oakwood’s data-crunching abilities on the back end take the system to another level. Each night, Oakwood’s integration software pulls data from the Siebel database and places it in Oakwood’s data warehouse. Once the data is there, sales analysts combine it with other relevant information from Oakwood’s enterprise systems to create a variety of reports. Oakwood can then use this data to consult with clients about better managing their temporary housing spending and policies. It also helps the company’s internal operations group respond more effectively to changing customer needs.
Even before the customer prodding, Ahearn was thinking about ways to package all the data analysis the company was producing so that it could be shared with customers. All that was missing was the procurement piece. “You marry the solution with our reporting analytics and analysis, and all of a sudden it changes the game for us in terms of being more of a consultant, thought leader, and solution provider,” Ahearn says.
All the data the solution delivers may prove to be its most important innovation. The former e-mail-based process yielded no intelligence on which to base future decisions. Customers had very little idea why they had booked previously with this provider or that one, and providers—Oakwood included—had no clue why they might be losing business to the competition.
The solution changes all that, giving customers a clear set of data on who they’re booking housing with, what rates they’re paying, and whether a property ultimately suits their needs. Providers, meanwhile, see notations about why they lost out on business—high rates, insufficient inventory, or late bid responses.
Supplying so much insight is a clear advantage in a market significantly fragmented by the internet. “You step back and you say, ‘OK, what do our clients need?’ Well, our clients need control and reduced costs,” says Ahearn. “How are they going to achieve that? They need analytics, they need reporting; they need to be able to understand what this all means to them. And we’re finding that they need a way to outsource this noncore capability.” Naturally, no other company is in a better position to provide that outsourced service than Oakwood.
But what about the added information Oakwood gives to partners? No problem, says Ahearn. When all the providers can operate more efficiently, everyone benefits. Besides, the solution has only further formalized the partnerships Oakwood has with many other providers. “It makes the industry stronger, and it’s opened up opportunities for our partners that they didn’t have before,” Ahearn says.