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How To Manage IT In A Downturn Print E-mail
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Wednesday, 10 September 2008
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How To Manage IT In A Downturn
Applying these methods
Employee Productivity

Employee productivity


Another critical goal during a downturn is getting more "bang for the buck" from employees-for example, by increasing a company's operating scale, making processes more efficient to reduce rework, and stepping up efforts to automate manual procedures. IT is essential to all of these efforts.


Targeted technology investments helped one retail bank to increase the productivity of its branch office sales forces. The bank needed to adopt a more systematic approach to winning new accounts and to improve its cross-sales to existing customers. Technology helped to increase the hit rate for sales leads from marketing staffers and to create a more robust, "industrialized" way of handling referrals from tellers. These improvements allowed the company to convert such leads more quickly and to raise its revenues per employee.


The bank had relied heavily on manual, paper-based processes to identify and distribute leads, customize offers, and close deals. There were islands of automation at points throughout the sales process but no end-to-end view of its workings or how technology could improve them.


A team of business and IT staffers reviewed branch operations and quickly identified areas where focused action could produce substantial gains. The distribution of leads to the sales staff was automated, and more of them were directed to the reps with the best performance in previous campaigns. The tracking of customer outreach efforts and the keeping of sales conversion histories were automated as well, which made sales efforts more efficient and helped the company to avoid hitting clients with multiple offers. To give sales reps a full view of a client's bank relationship at the click of a mouse, the lead-management system and the enterprise CRM platform were integrated. The system could supply "next-best offers" for each customer, as well as call scripts to help reps push new products. Data entry after each closed sale was streamlined, and vital information that could be used to model strategies for future conversions was captured more fully and efficiently.


After making these investments, the bank reported that it was on track to double the number of daily branchwide sales calls, improve its conversion rates, and significantly raise productivity. Uniform sales procedures, applied throughout the system, were expected to yield further efficiencies.


Downturns give companies a chance to buck conventional wisdom and increase their IT investments. From our experience, targeted investments in many areas can generate efficiencies and revenue growth that surpass the savings from straight cost reductions.


About the Authors


James Kaplan, a principal in McKinsey's New York office, leads the technology infrastructure practice for McKinsey's global IT group. Johnson Sikes is a consultant in the New York office. Roger Roberts, a principal in the Silicon Valley office, leads the firm's IT strategy practice.


This article was originally published in The McKinsey Quarterly. Copyright (c) 2008 McKinsey & Company. All rights reserved. Reprinted by permission.




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