Digital Transformation at Kimberly-Clark
This is a repost from a previous blog entry - I have been revisiting the concepts in this post, and will share further entries on the subject.
From October 2015: At Kimberly-Clark, I've been extremely focused on a massive organizational transformation effort - one designed to bring technology closer to the business, driving results and revenue for our company. It has been a great deal of work for our entire team, and has meant some hard choices regarding priorities, levels of effort, and personnel. I'm so happy to see some of that effort starting to pay off, in the form of increased innovation and interaction between our technology and business teams.
Beth Stackpole, a writer for Computerworld Magazine, wrote an excellent follow-up article to an award presented to my team. We received an IDGE Digital Edge award for a project that represented a collaborative effort between our technology and business teams - focused on improving worker efficiency for our K-C Professional customers. The article came out first in Computerworld, and was recently released by CIO Magazine. I'm proud of the work my team has done, and I wanted to share the article here. At the bottom of the post is a link to the original article.
The holy grail of digital transformation: Improved employee efficiency
How three organizations delivered digital initiatives that help people close deals faster, reduce paperwork and get the most out of their workdays.
As organizations embrace digital technologies to transform their businesses, one key metric sits clearly in their sights: Employee productivity.
Improving worker efficiency is considered table stakes for modern companies looking for an edge over the competition, and productivity is a measure that speaks volumes about a business's health.
For three organizations, winners of IDGE's Digital Edge 25 awards, a desire to improve employee productivity was the driving force behind their innovative projects. One helps companies deploy personnel more efficiently and better manage supplies, another helps field workers reduce paperwork, and the third enables salespeople to close deals more quickly.
Kimberly-Clark: Building a better bathroom
The idea of an intelligent restroom that would know when it needed a good cleaning or could initiate the process of replenishing supplies such as paper towels had long been on the wish list of Kimberly-Clark's professional division, which sells restroom products and accessories to building owners and facilities management companies.
Instead of just selling supplies, the company wanted to offer a service to its customers, to help them deal more efficiently with the ongoing challenge of keeping restrooms properly stocked and cleaned. Building managers are constantly peppered with patron and tenant complaints about missing items or dirty facilities. Such complaints pile up in part because of the inefficiencies of manual upkeep processes, in which employees go from restroom to restroom to clean and perform routine maintenance tasks without any insight into what to expect when they get there.
"We did an evaluation to look for potential opportunities and ways we could disrupt the competition," says Jennifer Sepull, Kimberly-Clark's CIO. "The question became what could we offer building management teams so they would come to our total solution because we helped them manage operations better."
As Internet of Things technologies became more commonplace, the Kimberly-Clark IT group was able to come up with a viable and effective way to make the intelligent restroom vision a reality, Sepull explains. "We were able to show [building owners and managers] an opportunity to leverage low-cost sensors, their existing networking and some of our application development work to solve this problem," she says. "We also leveraged relationships with key vendors to come up with algorithms that would make this work."
Low tech but high rewards
Kimberly-Clark's intelligent restroom platform uses low-cost sensors placed on all of the equipment in a typical public restroom -- paper towel dispensers, toilet paper dispensers, soap dispensers and toilets -- to collect and feed data in real time through a network to a set of apps. The apps then use the patented algorithms to determine if, say, a toilet needs to be cleaned or a dispenser is low. Maintenance managers see the real-time indicators via an iPhone app, allowing them to prioritize staff resources appropriately and gain insight into which restrooms have the most traffic or experience the most maintenance problems. In turn, maintenance personnel can better plan their routes and keep their carts stocked with adequate levels of supplies.
For Kimberly-Clark, the biggest challenge was steering the organization away from a product sales orientation to a service business model where concerns are with a wholly different set of concerns -- issues such as how to best serve customers and help them ensure that facilities remain clean and in working order.
"IoT puts this dilemma in front of any company, whether you're building a refrigerator or a dryer," Sepull says. "Now you have a different model to be concerned about — making sure the customer is happy and, when there is a failure, making sure they have somewhere to go."
Beyond the technology patents -- related to sensors, applications, data analysis and the way everything ties together -- the collaboration between business and IT also makes Kimberly-Clark's intelligent restroom project unique.
A small, focused IT team, in collaboration with a small business team, worked with external partners in an open innovation approach. The team would come up with a rapid proof of concept to refine the approach and document all the successes and failures along the way. Kimberly-Clark had been working on intelligent restroom systems for a while, but the open approach is what made this effort succeed where past attempts had failed, Sepull says.
The system is currently in the pilot phase and is expected to go into beta in early 2016. "What we are hearing from customers using this is that they can be more efficient with resources and better meet their customers' expectations while ensuring smoother operation and saving time," Sepull says.
Forrester Research analyst Michele Pelino says the intelligent restroom initiative could pay even bigger dividends in the future if Kimberly-Clark uses data collected by the systems to develop new applications. "It could give you a proactive, behind-the-scenes look, so you can have the different pieces and products ready in hand," she says.
NSL Sugars: Gaining visibility into field operations
There's nothing sweet about the fact that, in a commodities business, so much of what you work with is out of your control. That's the situation faced by NSL Sugars Ltd., a major sugar supplier in India and part of the Hyderabad-based NSL Group. The company has five integrated sugar complexes that produce 27,000 tons of sugar cane per day in addition to other crop-based products such as electric power, organic manure and bio-fertilizers.
Sugar manufacturing is a highly regulated industry. Manufacturers face significant environmental input costs related to producing the raw cane material, but the prices for the resulting output (the sugar or electric power, for example) are controlled by the Indian government, and that puts the squeeze on profit margins. For the past three or four years, prices on raw sugar have been dropping 10% to 15% per year.
The only things under NSL Sugar's control that would have an affect on its profit margins are its own internal operations and the efficiency of its supply chain. Because the production of sugar cane boils down to 95% raw materials costs, any fractional improvement in the efficiency of cane recovery can have a significant impact on the bottom line. Timely, transparent access to in-depth information about crop health, harvesting resources and soil and weather conditions, among other factors, are the keys to a successful growing season.
"It came down to management wanting to figure out how to make the most of the operating parameters within our control," says Vivek Gudena, group vice president of IT at NSL Sugars. "The supply chain became the primary factor we started looking into. It was where the company could focus to cut costs and improve operational efficiency."
Specifically, NSL Sugars focused on the role of cane assistants -- the people who manage specific territories and handle everything from recruiting new cane farmers to drawing up contracts, fulfilling orders, managing the planting season and serving as liaisons between the farmers and the company. "Each of these guys has responsibility for 20 to 25 villages, which are within a 20-mile to 60-mile radius," Gudena says. "What they did day-to-day exactly was a mystery."
That was because everything was done manually: Information was recorded in notebooks and registers out in the field and later entered into a collection of 40 miscellaneous paper forms. "There was no way to tell the accuracy of any of the data or whether it was filled in in a timely manner," Gudena says.
Data collection and aggregation was typically done in three-week cycles -- a timetable that was manageable in the initial phases of the growing season but became less acceptable as harvest time approached. "The closer you get to the harvest, the more important it is to have real-time data to make the most out of the product," Gudena explains. The sugar cane has to be delivered to the processing plant within 24 hours after being harvested, otherwise it loses properties that lower sugar content, another reason why transparency was so critical to a successful crop. (To hear more about the NSL Sugars project, check out this video interview with Gudena.)
Freeing workers to focus on the farming
To get a bird's-eye view of bottlenecks and problem areas, Gudena's IT team of about 100 people shadowed cane assistants in the field for several weeks and came up with a plan to use cloud-based systems and mobile devices to enable them to do their jobs more efficiently.
The underpinning for NSL Sugar's new mobile cane management system was a private cloud built on a virtualized data center, SAP BusinessObjects business intelligence tools, a mobile device management platform, and a mobile-ready version of the company's existing custom cane management system. Cane assistants were given Samsung Galaxy Tab Android-based tablets to access the mobile management application and Bluetooth printers, which they can use in the field to print out farmer registrations, legal documents, trip sheets and other materials instead of having to wait to print them back at the plant.
In the two years since going live with the system, NSL Sugars has improved cane recovery by 0.2% and volume by 2.5%, which has resulted in any annual savings of $2 million. Plant operations personnel now have real-time access to what types of cane is being harvested along with testing results so they can better optimize operations.
A GPS system on the mobile devices helped cut operational expenses. It monitors the status of trucks on Google maps and sends SMS alerts if there is a problem. "This has brought our transportation costs down and helped raise the quality of cane to what we feel it should be when it's cut and brought to the plant," Gudena says.
"We are able to spend more time with new farmers and build better relationships because we can now get a quick response from department heads when they have questions," says Sudhir J. Patil, deputy manager at NSL Sugars. "We can also more easily update farmers on requisitions like advances, seed requirements and incentives."
ADT: Smoothing out a fractured sales system
ADT might be best known as a provider of high-tech security systems, but its customer onboarding process was decidedly low tech. Sales teams were stymied by manual, paper-based processes in which they had to handle cumbersome multipage contract documents and capture customer payments manually, and had no automated way to sort through the company's patchwork of products and promotions to make sure that customers got the best available offer.
"It's not good to be handling paper when you're selling a technical system," says Kathleen McLean, senior vice president and CIO at ADT. "All the burden for the various work steps on the punch list was on the salesperson. It was not automated in any way to ensure the steps that needed to be done were done in any consistent manner."
When McLean joined ADT two years ago, she reorganized the IT group, pivoting from a technology orientation to align IT with the various business units along the company's value chain. When the business expressed a desire to replace the paper-based contract process with a system that uses electronic documents and signatures, IT came back with a more holistic plan that would address shortcomings both upstream and downstream in the lead-to-order process.
"Because IT was aligned with business partners along the value stream, IT really understood the end-to-end process and could design a soup-to-nuts solution for the sales team," McLean explains. Without such an orientation, the request would have been limited to electronic signatures, a point solution based on point technology, she explains.
A soup-to-nuts sales tool
The project, dubbed Hermes, kicked off in June 2014. Its goal was to deliver a single digital platform that would integrate all steps in the process of selling and installing security systems. Sales reps, whether working in call centers or directly with customers in their homes, now use the Hermes system to complete most steps in the workflow, including researching and specifying products and promotions, processing orders, getting credit approval, processing payments and booking installation appointments.
Built on a service-oriented architecture, Hermes integrates three primary pillars: Salesforce.com, for handling the steps from lead generation to order initiation; IBM's Sterling Configure, Price, Quote system, which supports an electronic product catalog that delivers configured price quote capabilities for guided sales and field order creation; and Service Power, a tool for managing appointments and scheduling installations.
Additional components of the Hermes system include MasterMind, a security industry monitoring and billing platform; Vertex, a tax processing system; and Equifax for credit checks.
McLean says that open APIs and the SOA architecture were key to giving Hermes the ability to handle the entire lead-to-order sales workflow. "The beauty of this system is that it's sewed together in a seamless workflow so the sales rep thinks they are in Salesforce the whole time," she says.
Hermes has been fully implemented in ADT's small business group and has almost been fully deployed in the residential side of the business. Sales reps are reporting faster close rates -- from 24 hours to just under a minute -- a smaller window between order acceptance and service installations, and faster collection of deposits. In total, ADT anticipates Hermes will deliver a $36 million cash savings over the next five years.
Fernando Paz, ADT's Florida area sales manager, says Hermes has transformed the sales process. With the old setup, reps often misplaced their paperwork and it took a long time to close sales because reps had to meet with customers on site. "Now, the sales process time has been minimized, giving our reps more time to secure new business," Paz says. "The contract generation, payment, order submitting and scheduling can be done in less than 10 minutes, and the rescheduling of jobs is more streamlined."
Given that Hermes represented a complete change from an established sales process, getting employee buy-in and addressing cultural issues were far bigger hurdles than any of the technology challenges, McLean says. The IT team addressed that challenge by offering an initial round of training and then setting up a practice area in Salesforce where reps could try their hand at the new system without fear of making mistakes.
"As with any change, the shift was challenging at times to change old habits," Paz says. "But managers made sure all of the sales reps were maximizing the tool, not only for adoption, but for practice and to achieve comfort in using it."