Do you know the impact of your disparate IT infrastructure on your bottom line and customer service?

Follow these four steps so you can get it under control and start growing your business again.

Authored by: Jerry Edinger

www.csdpcorp.com

Executive Overview:

How did we get into the mess we are in today?

In the mid 1990’s, OEMs began to expand and acquire organizations, including third party

service providers and some of the smaller OEMs in order to expand their products and services

portfolios. These acquisitions drove top-line revenue growth and grew market share, but they

also caused significant growing pains. The OEMs had to integrate the acquired company into

their organization, not only from a service and support perspective, but from a manufacturing,

procurement, HR, legal, fulfillment, billing, and cultural perspective. As we all know, integration

is harder in some areas of a business than in others, and service and support is usually not the

first place integration is initiated. It usually begins with HR by moving the necessary people to

keep building products. Then procurement and fulfillment processes are integrated to deliver

products. Finally, the rest of the business is evaluated.

During the integration phase of the service and support IT infrastructure, it is usually determined

that it is easier and less cost-prohibitive to move legacy contracts into the OEM’s IT

infrastructure. If you were one of the OEMs that did multiple acquisitions in a short period of

time before the integration of the last acquisition was completed, you have probably found that

your IT infrastructure has not only expanded exponentially, but has also increased costs, which

could negatively impact customer service. Following the four steps outlined here can help you

get your costs and customers back in line.

1. Determine the owner of the project

The first step is deciding who is going to lead the effort. The project needs to be monitored

closely until the desired results are achieved (e.g. reduce IT spending for service and

support, improved profit margins from service and support, or anything else you see in

your operation that needs to be improved), so high level leadership is necessary.

Experience has shown that the maximum results are achieved when the Service and

Support P&L owner is the overall executive responsible and the one who is accountable to

lead this effort. This works best in partnership with the CIO as the key stakeholder. In this

structure, the person that is responsible for the profit of the Service and Support operations,

the CIO, and the other “C” suite executives work in partnership. With this approach, all

appropriate parties are represented as there will be conflicts that will need to be resolved at

the highest levels of the company.

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2. Precise tracking of processes

An inventory needs to be performed of the different processes being run for Service and Support.

This work should dovetail with the IT inventory work. The following is a list of areas that need to

be examined closely to make sure there are no redundant processes:

How many call receive processes are being run?

How many remote technical support processes are being run? Are they the same for all the

products you are supporting?

How many field service processes are there? Are you utilizing one process or multiple

processes?

How many field service vendor management processes are you running?

How many depot repair processes are running? Do you even want to stay in this part of the

business? Can you get the best-in-class process you are looking for by outsourcing this

work?

How many depot repair vendors do you have and are they best-in-class provider for this

service?

How many contract management processes to you have?

How many billing and invoicing processes do you have running?

How many inventory processes do you have running?

How many logistics processes do you have running?

For each of these processes, you need to determine if it is returning the results you are looking for

and if there is a best-in-class process you are trying to achieve.

There is no one company that operates exactly like another. Knowing this, you will want to

have your P&L owner look very closely at the business processes to make sure that they are

running as efficiently as they possibly can. In most cases, when you are acquiring companies

at a very rapid pace and not completing the integration before you start the next acquisition,

you end up increasing the number of business process in the company, so it takes more effort

to do the exact same things that your company was doing prior to the acquisition.

These business processes are tightly coupled with your IT infrastructure. The company that

you acquired was executing their business processes prior to the acquisition, and your

company was executing your business process prior to the acquisition. Who should change

becomes the question the integration teams run into, because it is human nature for people to

dislike change.

If you do not understand where you are going with your business processes, you will never

understand where you are going with your IT infrastructure.

The critical business processes need to be cataloged and the P&L owner needs to decide what

business processes are going to be executed. This is critical to making sure your company is

not process-bound, and your processes, especially your customer-facing processes, are

efficient and effective from your clients’ point of view.

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3. Precise tracking of IT Costs The precise and accurate tracking of your IT costs in the service and support space is paramount

in fixing this issue. Chances are your P&L owner for service and support has a very good handle

on the day-to-day operation. What they may not know, however, are the process inefficiencies

and disparate processes that could be consolidated even further than what they are today.

Chances are the P&L owner will most likely not know all the IT costs for the operation. Typically,

they have a macro view but not all the details required to identify where all the disparate systems

are (based on the acquisitions).

This is where the partnership with the CIO becomes even more important. The CIO should help

the P&L owner have a micro view of the finances for all of the IT spending. The more granular

the view of the costs, the better your P&L owner can make decisions to get the bloat out of the

company. Some of the key items the P&L owner needs to know are:

System or application by name

Cost to run the system/application by month (the P&L owner can tie this to his monthly P&L

statement)

Cost to repair or maintain system/application per month

Monthly cost to enhance system/application per month

Monthly cost to other companies for applications (license/maintenance)

Monthly costs to other companies for enhancements to system/application

This is not an all inclusive list, but it is enough for the P&L owner to start seeing things from a

different perspective.

The P&L owner also needs to understand, at the micro level, the number of processes they have

in the areas of Call Receive, Remote Technical Support, Field Service, Inventory Controls,

Logistics, Depot Repair, Training/Education, Billing, Contracts, and Sales. By understanding this

at the micro view, the P&L owner will be able to identify some other systems/applications that are

hidden out of the view and control of the CIO. The following list of items should be identified and

the costs of each need to be understood:

How many call receive agents do you have and what is the cost per transaction they

process?

How many call receive centers do you have and what is the cost of each from a real estate

perspective? Are there opportunities to reduce the number of centers?

How many remote technical support people do you have and what is their cost?

How many remote technical support centers do you have and what is the cost of each from

a real estate perspective? Are there opportunities to reduce the number of centers?

How many field service technicians do you have and what are their costs?

How many field service vendors do you have and what is their cost?

How many depot repair centers do you have and what is the cost of each from a real estate

perspective? Are there opportunities to reduce the number of centers?

How many depot repair technicians and people do you have and what is their cost?

How many depot repair vendors do you have and what is their cost?

You can go through each of the process segments or organizations and get all the items

cataloged so that the micro view is available for the P&L owner and CIO to collaborate.

.

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4. Optimizing the P&L

Based on the cataloging that was performed, your P&L owner can now do what all P&L owners

do---optimize the P&L! They can streamline the business processes and therefore reduce the

operational process costs. They can tell by this exercise where the most money can be saved.

By partnering with the CIO, the P&L owner can embark on a roadmap to greater profits. This

roadmap effort should NOT be to fix everything at once; it needs to be a gradual consolidation

of the processes to a single I/T infrastructure.

The best approach to do this is a Services Oriented Architecture (SOA). SOA provides a

business-centered approach for linking your processes and infrastructure. If you take the SOA

approach, you can efficiently take out the old technology and move to the next area of the

business that is bleeding cost and affecting your customers the most.

Selection of SOA vendors can be a very tricky part of the process. Like all software vendors,

they would like to do everything for you and sell you all of their products. Make sure that the

vendors you select (and we do mean multiple suppliers) are SOA compliant and compatible.

SOA Compliant vendors are difficult to find. In the late 1990’s and early 2000’s, CRM and ERM

providers sold their products as a utopia to companies’ IT solutions. Large amounts of money

were spent by companies to implement CRM solutions to automate the sales force and sales

processes. On the manufacturing side, large amounts of money were spent on streamlining the

procurement, fulfillment, and manufacturing process. The reason the focus was on these two

areas was simple: you must be able to procure widgets in order to manufacture the products a

company sells to. Then, you must fulfill the orders a customer places for those products.

The above sounds like a very logical way to get your products to the market, and quicker and

cheaper than your competition can. However, the post product support was an afterthought, and

those companies that tried to use ERM/CRM packaged software found that each of those

packages could only do part of what a firm needed them to do in the post-sales support arena.

The Out Of Box (OOB) implementation approach would not support the clients’ demands, and the

implementation became long and very expensive. You may find a similar lack of focus on your

post sales support that needs to be addressed as part of your SOA.

In the end, to fully optimize your P&L, each of the steps outlined here need to be fully completed.

The best way to maximize your return on investments is to determine the owner of the project and

get their buy-in, identify the processes, track the IT costs, and utilize an SOA approach to integrate

disparate systems and bridge the gaps between the CRM/ERP packages.

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About CSDP

CSDP offers flexible, agile solutions to unify infrastructure and transform cost centers into profit drivers resulting in greater customer service and market share. Our services-lead software is fully customized to fit your company's needs and is respectful of existing infrastructure so that it implements quickly and begins generating ROI immediately! CSDP’s clients have realized a 20% decrease in IT/infrastructure costs, reduced labor costs by 15%, and improved customer satisfaction by up to 15 points. We not only help our clients drive down operating and service delivery costs, but enable them to drive up customer satisfaction and increase revenue and market share! CSDP is a services-led software company with a tailored suite of Service Relationship Management (SRM) © process tools. We offer service providers and product manufacturers in any industry an affordable way to increase efficiencies, reduce costs and enable cost centers to become profit contributors. The SRM solution ties together CRM and ERP by addressing both service objectives and business processes. CSDP's SRM © software solution has been delivered to some of the world’s foremost Fortune 500 companies to include IBM, Xerox, Fujitsu, Whirlpool, Rockwell and BOA just to name a few. Visit our website, follow our blog, and join the Service Relationship Management © 3.0 group on LinkedIn. To learn more about CSDP’s SRM Transformation solutions email us at info@csdpcorp.com or call Jerry Edinger at 888-741-2737 X 101 to learn more. CSDP Corporation 15615 Alton Parkway, Suite 310 Irvine, CA 92618

www.csdpcorp.com