Survey: CFOs open to 'soft' benefits of tech investments

Computerworld - Chief financial officers might be focused on hard numbers, but they're willing to be more flexible about the "softer" returns that customer-centric technology investments are able to deliver, according to a new survey.
To some extent, CFOs are forced to consider softer benefits because it's hard to be certain that a technology investment in customer relationship management, for example, has increased customer satisfaction or decreased attrition, said Dave Martin, senior vice president of finance and treasurer at Charles Schwab & Co. in San Francisco. Martin was one of 231 CFOs and 73 CIOs who participated in a survey conducted by Westport, Conn.-based Saugatuck Technology and Boston-based CFO Research Services. The survey was released earlier this month.
"If you're looking at a CRM system to reduce customer service staff, that may show huge returns financially, but your customers may be horribly disappointed," said Dick Warren, CFO at Olympic Health Management, a Bellingham, Wash.-based subsidiary of insurance giant Aon Corp., which develops, distributes and administers Medicare health plans to senior citizens.
"We've seen a shift away from accounting-driven cost-management bias to a more balanced approach that looks at both financial and nonfinancial metrics when assessing the value that [customer-centric technologies] can deliver to the bottom line," said Bill McNee, founder and managing director of Saugatuck Technology. For instance, an investment in a customer self-service system or a sales force automation package won't necessarily translate into a direct financial return, McNee added.
The study also suggests that CFOs are generally becoming more flexible in considering the nonfinancial terms of all types of IT investments, especially as they have taken a more active role in the development and oversight of these projects. "I think our financial [department] is very good at finding the balance between hard benefits of cost expenditures and nonfinancial or soft benefits," such as strategic positioning and relationship benefits, said Carl Ascenzo, CIO at Boston-based Blue Cross Blue Shield of Massachusetts.
Tops in payback
Although the CFOs surveyed cited contact call centers for delivering the highest payback among customer-centric technology investments, many agreed with the report's analysis that the integration of customer databases will unlock the greatest value for their organizations going forward.
"One of the challenges we're continuing to grapple with is having a 360-degree view of the client," said Schwab's Martin. To pull that information together from disparate data sources "is an ongoing challenge for us," added Martin, which is why customer database integration initiatives will be a major focus for the financial services company over the next yearor two.
The interest in investing in database integration initiatives "maps real close to what we're doing," said Olympic's Warren.
After Olympic implements a new health insurance claims processing system in early 2003, the company plans to begin integrating its customer data across platforms, Warren said.
While the direct payback on Olympic's contact call center and sales force automation investments have been tough to quantify, Warren said the call center investments have helped reduce head count in its processing areas by 11%, and three-quarters of those gains are related to customer-centric technology initiatives.