Amplify Your Value and you can Reap the Rewards...that’s kind of the theme of this entire series...how you can amplify the value of your IT department and how your company can reap the rewards. But this post is not a summary of our journey, it is about the next step on our journey. It is a post about an organization moving head first into the cloud, moving head first into buy versus build, and moving head first into changing its operating model, deciding to develop its own loyalty card program and execute one of the most impact “IT Projects” in the 85 year history of our company. But...let me start at the beginning.
It was mid 2010 and I had just joined Goodwill Industries of Central Indiana as CIO. That first week, one of the meetings I had, in fact the first meeting with a peer VP, was with our VP of Marketing. That meeting covered a lot of ground and various topics. One that stood out for me was when she mentioned Goodwill had been discussing gift cards and loyalty cards for about eight or ten years but it never seemed to move forward. She even pulled out a folder that had enough of a thud factor to make any contract attorney jealous. It contained page after page of meeting minutes, email correspondence, and requirements. I was floored...eight years? Of talking? What was the roadblock?
A few days later, I was meeting with the VP of Retail. Again, we talked about a lot of different topics. Sure enough, the conversation soon rolled around to gift cards and loyalty cards. We’ve talking about it for eight years...and we’ve made no progress...eight years? Of talking? What was the roadblock?
That afternoon, I met with a couple of folks from my new staff. “What’s up with this gift card and loyalty card thing?”, I asked. Eight years? Of talking? What was the roadblock?
So, since this is my blog, I get to use my “bully pulpit” to air some dirty laundry and perhaps, according to who you ask, some revisionist history. It seemed, the problem was Marketing blamed Retail’s inability to define requirements, Retail blamed IT for always saying “no we can’t do that”, and IT blamed Marketing for want to discuss ad nauseum, but never move forward. I vowed, this was going to change. So in the midst of our Strategic Planning process, I called a meeting to discuss: gift cards and loyalty cards. After all, it was very near to my sweet spot...early in my career I had spent 12 years in banking, specifically in credit cards.
As the year progressed, we began to define requirements and search commercial offerings for gift and loyalty cards. Within a few short months, the team decided to separate the project into two phases. Phase one would be gift cards and phase two would be loyalty cards. With that decision, the project kicked into high gear. Given our Point of Sale system and our requirements, we very quickly identified a gift card software provider. Within a few short months, we launched our gift card program.
Several weeks later, we reconvened our team of Marketing, Retail and IT to start on loyalty cards. We further defined our requirements. We wanted a random reward system, not a points based system, we wanted flexibility in the rewards offered, and most importantly, we wanted to track and drive two different behaviors on the same car: shopping and donating. Throughout the winter, we evaluated many off the shelf solutions. However, it was becoming readily apparent that no off the shelf solution was going to meet our requirements. Sure, they all offered flexibility in the rewards, but they were all based on earning points and none of them could track two different behaviors on the same card. Even taking that into consideration, the team was narrowing the selection down to a handful of packages that met at least some of the requirements.
I knew we had to build it. We had to deviate from our cloud-first, buy strategy and build it ourselves. There was no other way. With that in mind, we developed a response to the RFP we had issued. It was basically a general design document of what could be built. We submitted our “RFP Response” to the team along with the two or three commercial packages that had been down-selected. As selection day quickly approached, I made it a point to discuss the proposal in detail with the VP of Retail and the VP of Marketing. I could tell they were skeptical that IT could pull it off. I assured them we could, and quite frankly, played the “new guy card” and asked for a chance.
Our proposal was selected, now it was time to put up or shut up. We engaged with a local firm (Arete Software) to build the initial database and prototype and then shifted to the internal team. As we worked feverishly on the code, the project team defined the goals and the targets for success. The launch date would be November 11, 2011 (11/11/11); we would achieve an 11% increase in retail sales, our average shopping cart would increase by $5, and we would have 100,000 cardholders at the end of the first year.
Over the course of the summer and the fall, the team worked faithfully to hit the target date. Finally...go live...the organization that was moving head first into the cloud, moving head first into buy versus build, moving head first into changing its operating model, launched its loyalty card program...Goodwill Rewards (™).
Yes, we hit our target dates; yes, we hit our budget; but, how did we do on our goals? Our increase in retail sales was 13%, beating our target by 2%; our average shopping cart did improve, but fell short of our goal (our lessons learned review identified some areas for improvement here); and, we blew past the 100,000 cardholder mark in under six months, in fact, at the end of year one we had over a quarter of a million cardholders, today we have over 550,000 (remarkable, considering our geographic territory is 29 counties in Central Indiana...yes, 550,000 cardholders in just 29 counties in Indiana).
To further validate our success, we were awarded the Society of Information Management of Indiana’s Innovation of the Year award in 2012. Additionally, we licensed the software to a couple other Goodwill organizations in the US, turning us into, if not a profit generator, at least a revenue generator for the company.
How were we able to achieve this? First, it truly was a team effort. In fact, I believe one of the most important outcomes of this project was for Marketing, Retail and IT to work together, as a team, to achieve a common goal. Second, our path to amplify our value by leveraging cloud technologies and avoiding C-F Projects (see That Project is a Real Cluster!) enabled us to spend our energy on this A-C project. Third, the environment and culture enabled us to take a risk, to step into the unknown, to ask for and receive the support to move forward.
Next month, we will eliminate even more C-F Projects by looking at disaster recovery in: Amplify Your Value: A Tale of Two Recoveries.
The series, “Amplify Your Value” explores our five year plan to move from an ad hoc reactionary IT department to a Value-add revenue generating partner. #AmplifyYourValue
We could not have made this journey without the support of several partners, including, but not limited to: Bluelock, Level 3 (TWTelecom), Lifeline Data Centers, Netfor, and CDW. (mentions of partner companies should be considered my personal endorsement based on our experience and on our projects and should NOT be considered an endorsement by my company or its affiliates).
Jeffrey Ton is the SVP and Chief Information Officer for Goodwill Industries of Central Indiana, providing vision and leadership in the continued development and implementation of the enterprise-wide information technology and marketing portfolios, including applications, information & data management, infrastructure, security and telecommunications.
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