CRM and ERP News

A U.S. Department of Health and Human Services contract awarded in November 2005 charged Accenture Health & Life Sciences and three other tech developers with the creation of a fully integrated health information system to connect healthcare communities. They had to respect the provisions of the Health Information Portability and Accountability Act. CRM Buyer talked to Garret Wu, a partner at Accenture Health & Life Sciences, about the prototype delivered to Health and Human Services.

Was anybody out there checking out jobs with the U.S. post office in 2005? Do you remember when you called that 800 number to get details? Sure you do. Do you remember how the voice on the other end of the line helping you had this soft British accent with a slight African lilt? Do you know why? Because you were routed to a call center in Kenya. So maybe you weren't looking for a job, but you had just bought a new computer. When you turned it on, you clicked the icon for one of America's biggest Internet service providers to get broadband access.

The man who has led Convergys since its inception believes the outsourcing company could potentially join the nation's 500 biggest businesses within three years. However, James F. Orr plans to watch that development as a happily retired shareholder of the global leader in call center outsourcing, which was spun off from Cincinnati Bell in 1998. Orr, stepping down as chief executive officer this month, sees major new growth, from the company's budding human resources business to growing overseas operations in places such as the Philippines and China.

The restructuring wave that swept across the business world in the early 1990s has abated. The business process re-engineering (BPR) movement was a conspicuous part of this wave. It may have served a purpose as a survival response by businesses to the economic recession that was occurring at the time, but it has also had its day. There is now an emergence of a complementary approach.

BPR's particular strength was its focus on identifying core processes in a business and examining ways in which these processes could be honed to achieve corporate goals more effectively. The idea was that a process could be made cheaper and more responsive to customer needs by stripping away peripheral activities and bureaucratic layers.

BPR was not about entering new markets or introducing new products. It was about re-arranging existing processes with the help of new technology. The rise of BPR coincided with the widespread adoption of new I.T. systems based on PCs, networks and the Internet. They permitted more decentralization by improving communications, which allowed firms to strip out layers of middle management and cut more costs as the recession took hold.

The advocates of BPR said it required these four basic actions:

• Assess fundamental organizational objectives;
• Identify core processes;
• Clarify objectives and identify associated goals; and
• Achieve reform through reorganization and the incorporation of new technology.

That may have been a reasonable basis for organizational restructuring at the time, but the approach incorporated critical weaknesses.

There are two main conceptual difficulties with BPR. First, it has an inherently high level of disregard for the impact it may have in social and behavioral terms. BPR's cost savings were usually achieved through staff reductions, so the movement became associated with waves of job cuts that were often implemented by consultancy firms brought in for the purpose.

Organizations that survived re-engineering...

In February, Matthew Desch, chief executive officer of Iridium, the maker of portable phones with service provided by a network of satellites, was visiting the National Air & Space Museum in Washington, D.C. He overheard two men talking unfavorably -- and inaccurately -- about his company, which can provide telecommunications in remote areas, such as in deserts or the middle of the ocean, where there are no cellular towers.

"Yeah, Iridium isn't around any more. It went bankrupt in 2000," one of the museum-goers said as he looked at a display of an Iridium satellite. Desch wanted to tell the men that Iridium is actually still around after private investors resurrected it in 2001 and that the company saw $212 million in sales and $54 million in profits in 2006.

Desch walked closer to the display and discovered why the men were misinformed about Iridium's current profitable state. The plaque beside the satellite read like an obituary, declaring Iridium's life span from 1999 to 2000. According to the sign, Iridium -- initially funded by Motorola in 1998 to an avalanche of publicity -- was kaput, after going bankrupt when the phones failed to catch on with consumers. To Desch's dismay, the museum sign had no information about the company's subsequent resurrection and current success.

On the Upswing

"Iridium had such a public failure and a private success later. Failure looms as the biggest thing that happened to us," says Desch, who joined the company in 2006. But Iridium, based in Bethesda, Md., is now growing, with increases in revenues, profits, and other metrics such as rising user numbers in new markets, like military, disaster relief, aviation, and utilities. Iridium's service has 180,000 subscribers, and those numbers are growing at a rate of 15% to 20% per year.

Other "Next Big Thing" companies that, like Iridium,...