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NO. 3 VANGUARD GROUP -- Employees Test Web 2.0, And Customers Benefit(Information Week Via Thomson Dialog NewsEdge) Portal sounds pretty old school for the centerpiece of a Web 2.0 effort. But Vanguard Group, one of the largest U.S. mutual fund companies, with about $1.1 trillion in assets under management, has made a change in thinking about its intranet that every company should consider to improve collaboration and information sharing. Instead of being a broadcast platform to communicate messages out to employees, the intranet portal's now built around personalization, giving the company's 12,000 employees better tools to communicate with each other. Vanguard's also using the employee portal to test interactive tools that it can then apply to its client-facing Web sites. In a nearly $10 million project, Vanguard's IT team is turning CrewNet into the main place that employees-or crew, in Vanguard's nautical parlance-go for information. In 15 minutes, an employee can customize his or her site, including access to Lotus Notes e-mail, news feeds, and a calendar. Vanguard expects to save about $10 million a year through the effort, dubbed eVanguard, by 2009. But some of the benefits already are being realized: Employees go to one place to manage their time-off and benefits, get approvals for training and travel, and collaborate with colleagues using tools from e-mail to online workspaces for shared documents. And there's another payoff. With no retail outlets, Vanguard's Web site is by far the largest channel for customer contact, far more than telephone and mail. The company wants a site that measures up to the best of the Web, so it consciously uses its intranet as a test bed. In 2006, for example, Vanguard knew it was about a year away from wanting to use Ajax-enabled rich Internet applications for customer apps, so it experimented with them on the intranet. "It was really R&D spending for us," CIO Paul Heller says. "If there are going to be bugs, better they be with us." The eVanguard project's not finished. Pilots are under way to provide more useful enterprise search using Autonomy software and to deliver an "expert finder" capability to locate who in the company has what experience. But what Vanguard has done so far is an example of how companies can adapt vintage portals to make it easier for employees to collaborate and gather data, and more important, apply that approach to benefit customers. BUILD SOMETHING PEOPLE WILL USE There's a danger that companies build Web 2.0-style collaboration tools and then they sit idle. One way Vanguard avoided that was by making it easy to add Lotus Notes to the portal, since e-mail's still the lifeblood of collaboration. But there are other ways the company made it useful, so employees got in the habit of using CrewNet. Say you're an IT director going into a meeting with Tim Buckley, who as head of the individual investor group (and Vanguard's former CIO) is a key business-unit leader. Your biggest fear isn't a technical question or project deadline-it's blanking on the name of someone on Buckley's team. On CrewNet, you type in Buckley, and it shows pictures of his direct reports. Roll a mouse over them, and the Ajax-enabled feature shows the names and some background of each person. Managers can call up deeper dives of the people on their teams, including personnel information, such as reviews and salaries. Managers who have to approve purchases, training, and travel get notified of pending requests on their home pages. Links to vacation time and the retirement benefit systems are there, too. So is access to shared e-workplaces, such the team room feature in Notes. Vanguard is working on a feature that also will let employees link to blogs and wikis from the site. All of these tools have Vanguard employees thinking differently about the site. "The change was to get people to think of the intranet as 'the one place,'" says Carol Dow, an IT principal responsible for corporate technology initiatives and investment technologies. "It isn't an intranet; it's 'My Job.'" MORE TO DO There's a lot Vanguard still needs to do. It won't be until 2008 or 2009 that informal collaboration tools such as wikis or blogs can be customized to have their own window on a portal page. That limits CrewNet's effectiveness, since it means one more place to look for information. And blogs and wikis are important: The site's online work spaces are fine for sharing documents for projects in the pipeline, says Dow, but they aren't flexible enough for the kind of brainstorming that leads to the next breakthrough project, or even the everyday tips and complaints that bring about ongoing improvement. And in its enterprise search project, Vanguard is adapting Autonomy's products to allow for more federated searches that cross more databases and are more adept at natural-language queries-ones that ask questions, rather than just use keywords. Today, an employee wanting to search across his e-mail database, internal Web site, and an Oracle database for information needs to look in each repository and has limited search tools. Vanguard's making the move to better search tools now in large part because the technology has improved; it's possible to categorize data better without going back to do extensive tagging, Dow says. That should lead to results that are categorized more logically, too. Better search will help employees, but it's also what customers want, too. People steeped in Google expect instant results that are mostly relevant. The result falls short of that today. "Search is going to be the next big push," Dow promises. The business case for eVanguard hinges on cutting wasted hours employees spend on tasks such as searching for information, Heller says. That helps Vanguard keep its reputation as a lower cost provider than many rivals. But it's in its other mission where Heller sees the biggest potential payday: In providing great service, which for most customers means an incredible Web experience. CUSTOMER-FACING IMPACT Vanguard walks a line when it comes to dazzle on its Web site. In terms of functionality, Heller has high expectations, judging the company's efforts against any Web site that customers might use-"whoever brings them the best Web experience." The company has brought in Yahoo's head of strategy to talk with IT leaders and is bringing in an Amazon.com exec, all to get the team focused beyond their financial services rivals. Vanguard's thinking: If Amazon, where you spend several hundred dollars a year, has incredibly useful features for you, and the site where you have your $500,000 401(k) has none of them, that hardly inspires confidence. And the other side is true as well: If there's an error or access problem with Amazon, you get bothered. If Vanguard's site goes down, customers might wonder what else the site is doing wrong. It's why security and reliability always come before function on the site. The IT team is steadily moving features that work on CrewNet to client-facing roles. It has put rich-Internet applications on its site to make it easier to use-time-saving rollovers like those staff photos, but also more complex tools that allow drag-and-drop fund comparisons. Institutional customers, big employers who hire Vanguard to provide 401(k) and other retirement benefits to their staffs, have benefited from these features. For example, Vanguard created a "total retirement summary" to let its employees look at all their retirement benefits at once on CrewNet. Satisfied that it could do that securely, the company has shared the tool with some clients, so their employees link from a company portal to the Vanguard site for the same type of data. It's part of a major push to personalize and simplify the Web, where Heller says it has become too easy to push more data at customers and give them too much to sift through. "We're trying to emerge as the antidote to complexity," he says. One example is that, in late spring, Vanguard started posting a few Web videos of investment pros talking about trends, such as the risk of chasing hot returns by a certain fund. Vanguard hopes to soon be able to serve up that video as an option, say, when a person is doing comparisons of several funds. When it comes to personalizing the Web experience. Vanguard has the data to do so-it knows the age, assets, and often income of those who log on. The next step is to use that to tune content. For example, a huge swath of baby boomers are moving from accumulating retirement savings to figuring out how to spend the money wisely and make it last. Vanguard has an opportunity to offer them advice, in the form of video, interactive tools, and written content. "Why treat a 22-year-old the same as a 65-year-old when it comes to content?" Heller asks. When it comes to overall IT strategy, Vanguard takes a different approach than many companies. It does almost no outsourcing-it has about 2,600 IT employees, plus about 300 contractors. Most work at the company's headquarters in suburban Philadelphia, with about 400 at the Charlotte, N.C., campus. The company builds about 70% of its applications and buys the rest-the opposite of most companies-and integrates them using a service-oriented architecture. It's a place where business executives understand information technology, starting with CEO John Brennan. He holds business-unit executives accountable for the performance of IT initiatives for their teams; a poor understanding of IT isn't an option. The opposite is true for IT: the staff is expected to understand the investment business. It's just the kind of place where you might expect that some of the drivers of Web 2.0-collaboration, interactivity, Web-centric integration-would get the business-friendly, ROI-driven treatment. http://informationweek.com/ Copyright 2007 CMP Media LLC. All rights reserved. Copyright 2007 CMP Media LLC |