Real World Case 2:
For Companies Both Big and Small: Running a Business on Smartphones

BACKGROUND

CPS Energy CPS Energy, based in San Antonio, Texas, is the largest municipally owned energy provider in the nation. Acquired by the City of San Antonio in 1942, it serves 717,000 electric customers and 325,000 natural gas customers in and around the 7th largest city in the nation. The company’s VP and CIO compared the company to other major companies like UPS and FedEx, and realized there was a disparity in his business operation – insufficient labor usage due to the lack of adequate communication. From this realization, the Magellan Program was created. As a traditionally siloed workforce, the Magellan Program was a way to “better mobilize and connect its workforce to the people and systems they needed to do their jobs.” It provided smartphones and custom mobile devices to field employees, most of who did not previously have PC’s, cell phones or Internet access. The company was able to build its own secure Wi-Fi networks. Workers now have access to SAP, e-mail, office applications, voicemail, video and pictures, conferencing, and other corporate systems and applications. It extended CPS’s networking infrastructure and connected a traditionally siloed workforce. The program reduced workers resolution process. Field employees can work more efficiently because they have access to data they need to repair equipment and avoid accidents. The technology is also organized and used internationally. Among the benefits of the program, workers can visit a sight and fix everything without leaving, rather than having to postpone an assignment. In one year, closing of purchases of procurement deals decreased by 65%, which has saved the company $50 million. Additionally, the program has allowed the company to reduce costs by having staff use their phones as digital cameras (without these cameras, fixing an issue at a site has a lengthy procedure on its own, with more staff involved than necessary), which requires a smaller workforce. The program has without a doubt facilitated empowerment within its employees. Employees feel closer to the business. Employee and customer satisfaction has also improved because employees find the corporate system more accessible, which allows them to resolve more customer issues faster without going through multiple procedures, so customers are happier.

Lloyd’s Construction Lloyd’s Construction Services has provided demolition, excavation and waste management services to the construction industry throughout Minnesota for over 20 years. The company consists of 100 employees, 30 trucks, and more than 400 dumpsters. They used paper ledgers, spreadsheets, and radios to coordinate the company. Lloyd’s system for dispatching its drivers and collecting job information was riddled with inefficiencies. Every morning, Lloyd’s dispatchers reviewed customer paperwork, penciled in the first jobs for each driver and called them individually. To move the company in the age of technology, the company acquired the help of eTrace. The software worked to quickly locate remote workers wirelessly on detailed maps, created custom geographic regions and set up a GPS tracking system that notified when a worker travels in and out of designated routes. It also cut fuel costs by 30%. However, a new system did not come without issues and resistance. Lloyd immediately had trouble with technophobic staff, who did not embrace the change. Staff had to be trained. The company had to phase in the new system, by running the new and old system side by side. They found that company assets were spending too much time at the same lunch spots, which weren’t event on the prescribed routes. Nevertheless, by deploying eTrace on smartphones, Lloyd was able to mobilize its office accounting system, eliminate paperwork, speed up invoicing and improve overall field worker efficiency and service.

CASE QUESTIONS

1- In which ways do smartphones help these companies be more profitable? To what extent are improvements in performance coming from revenue increases or cost reductions? Provide several examples from the case. • Profitability: Smartphones helped reduce the time it takes to close a purchase deal. Reduced inventory levels. Increased customer AND employee satisfaction and reduced service call time and costs. • Source of improvements: Performance improvements primarily stem from cost savings/reductions. However, it can be inferred that there is a correlation, where an increase in revenue is from satisfied customers and fewer lost opportunities. Satisfied customers + fewer lost opportunities = increased revenue = performance improvements. • Examples: - CPS Energy: Better communication enabled improved field support with fewer personnel required to fix a problem and the reduced time it takes to close a service call. - CPS Energy: Better communications reduced the time it takes to close procurement deals. This has resolved in lower inventory levels, as well as reduced inventory-holding costs, which could result in fewer lost sales opportunities. - CPS Energy: Improved employee satisfaction – employees have access to the resources they need to do there work effectively and efficiently. - CPS Energy: Improved customer satisfaction – service calls are resolved more quickly thus reducing the impact on their business. - Lloyd’s Construction: Cut fuel costs by 30% with there new system, and cut costs in accounting staffing.

2- The companies described in the case encountered a fair amount of resistance from employees when introducing smartphone technologies. Why do you think this happened? What could companies do to improve the reception of these initiatives? Develop two alternative propositions. • Employee resistance and causes: - CPS Energy: Executive buy-in was a challenge because Management could not visualize the value smartphones would provide. Causes: Without management having first-hand experience or a clear vision to the benefits of the devices, it’s easy for management to not see the benefits and focus on the risks. - Lloyd’s Construction: Employees were not technically savvy and needed additional training, which cut into crossover time. Although it wasn’t directly mentioned, the case implies an issue with the workplace monitoring tools. Causes: Lack of formal education from Lloyd’s employees, which can be inferred from their job titles (i.e. drivers, foremen). Also, restricting one’s freedom (i.e. tracking system) will always get resistance. • Potential solutions to improve reception (both CPS and Lloyd’s): - Implement small pilot projects to demonstrate the value of the technology, which will promote buy-in - Provide employee training programs in all areas of the new systems - Implement the new system gradually, to give employees time to learn the new systems so they won’t feel like they’ve been thrown into new territory without any skills. It minimizes the impact of failure. • Alternative prepositions: - Get feedback from employees via a survey or evaluation system on technology use - Offer incentives to employees to benefit from company’s cost savings (i.e. percentage off for opening a personal account with the company’s smartphone provider) - Provide trainers and/or a help-desk during implementation, to make employees more comfortable if they encounter trouble - Recognize successes to give employees a sense of accomplishment and it also lets others know that the systems/devices are beneficial

3- CPS Energy and Lloyd’s Construction used smartphones to make existing processes more efficient. How could they have used the technology to create new products and services for their customers? Include at least one recommendation for each organization. • Both organizations could • CPS Energy: Create a product to connect with customers by providing them with access to a part of the company’s system. Systems where customers can track their product’s delivery status (i.e. UPS), enter an order, account management, and/or interact with the company agents. CPS may consider making troubleshooting procedures or experts available online. This would enable customers to discover solutions to their own problems or request help from CPS’ experts who will be able to access customer accounts. . • Lloyd’s Construction: Possibly create a recycling business on the side, taking there salvaged materials and creating everyday recycled products. Also, since this company’s work is done on a project by project basis, they could use their system to provide their clients with project status information, schedule coordination of projects, and expense reporting. These systems might also be helpful to demonstrate that they are complying with regulations pertaining to handling demolition materials.

CONCLUSION

These cases provide excellent business values of how companies of all sizes can benefit from using smart phones to improve their business operations. Though they may be met with challenges and resistance, mainly from within, planning effectively to reduce opposition and promote the benefits, can easily sooth this out. Smartphones have placed these companies in a position to become an active competitor among their “peers” and has helped them gain strategic advantages within their company (i.e. easier workflow, connected employees, and upward savings).

Sources:

Etrace Case Study http://www.xora.com/casestudy_pdf/etrace_lloyds_casestudy_xora_10022009.pdf

CIO.com

http://www.cio.com/cio100/detail/1819