Maximize everything now

CIO - Optimization. It sounds so incremental. Boring. For tweakers and Ph.D.s. Is all the fuss really warranted?
Here's the basic idea: During the past few years, you've spent hundreds of millions on core systems (for things such as enterprise resource planning, customer relationship management and supply chain management) and on populating those systems with data (and you're not done yet, by the way). That data is useful, but it's a mess. And you can't get at it in real time, correlate it, leverage it, segment it or get it to where it's useful -- points of interaction with customers and points of decision-making inside your company.
The basic idea behind optimization is quite simple: Unlock the potential of that data, and apply it to your key business processes to make them more efficient and profitable.
But can it be done? Can optimization really make a difference to your bottom line? Yes, thanks to new and more powerful real-time integration, process and analytics technologies. Whether you're matching supply chain data to customer demand data to optimize profitability, adding business rules to a workflow process to optimize efficiency or leveraging knowledge about customer preferences to optimize customer satisfaction and revenue, the benefits can be very real. And there are some very real examples.
DHL Worldwide Express Inc. is using software to customize and optimize pricing for large accounts based on business rules reflecting the company's cost structure and on prior customer history from the customer relationship management (CRM) system. Its target: To enable its salespeople to write more and more profitable business.
ETrade Group Inc. is using intelligent call-routing software to cherry-pick high-value customers who call its toll-free number (again by dipping into the CRM database) and quickly connect them with an agent whose skills match the customers' likely problem. Target: In financial services, 15% of the customers can generate 300% of the profits. You do the math.
Canadian Imperial Bank of Commerce is using workflow and business-process management software to document and eliminate inefficiencies in the back-office processes of its private-branded banking services division. Target: Additional accounts opened in a shorter time while using fewer people.
Sounds good, you say, but what does it take to do optimization well? Here are some quick thoughts, whether you're trying to optimize a customer-facing or an internal process.
It takes discipline. As a friend told me recently, you can buy the best pair of running shoes available, but you still have to train. Scrub the data. Build the model. Connect the systems. Write the middleware.

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