Xerox closed a regional sales office and pushed the sales staff out on the road--where it belonged
Michael Nadeau
Last September, Xerox gave part of its New England sales force notebooks and kicked them out of the office. The 135 sales representatives, analysts, and managers in the northern customer operations division would never again have permanent space at the regional headquarters. Instead, each person has a virtual office consisting of a notebook, a modem, a LAN adapter, and Microsoft Office. Xerox won't stop with the Waltham, Massachusetts, office. Within a year, it expects that all 5500 members of its U.S. sales force will work from virtual offices.
Xerox had good reasons for its decision. Salespeople now spend more time in front of customers, and overhead costs have been slashed. But the real catalys
t for the change was a legacy system from hell. Xerox's information infrastructure was based on mainframes, some over 20 years old. As the company added more applications and brought more departments on-line over the years, the system grew in piecemeal fashion with undesirable results.
Many new applications came with their own databases, so one application maintained price lists, another processed customer orders, and another tracked inventory. Linking those databases was difficult--if not impossible--even for those running on the same mainframe. Different geographic regions, particularly those overseas, had systems that could not talk to anyone else's.
The old setup, says
Bill Pittman
, Xerox's corporate vice president and business process manager, "did not allow us to be responsive to our customers. When we did respond, it was with a sneakernet approach." In some cases, he adds, 10 to 20 systems were used to get information requested by one customer.
Although Xerox i
s not the first company to implement the virtual-office concept, it did so in a remarkable way. Earlier pilot programs in other sales regions uncovered potential problems and pointed to innovative solutions. Those solutions, however, meant a complete overhaul of not only the legacy systems but also the regional facilities themselves. The pilot programs proved that salespeople did not need permanent offices, but it also showed that quick and easy access to information was essential for them to be effective on the road. The legacy system simply was not able to deliver that type of access.
A Tougher Sell
The company's products and services--including printers, copiers, on-demand printing systems, and network consulting--were becoming increasingly complex. Sales representatives had to spend more time working with clients to understand their needs. But, according to Pittman, they were also spending 30 percent of their time chasing information stored on the legacy system. Consequentl
y, the sales force spent only 40 percent to 50 percent of its time in front of customers. For Xerox to reach all its potential customers, that percentage would have to increase.
"Solutions selling today is much more complex," says Cathy Lewis, a Xerox vice president and former district manager of sales for Xerox's New England North region. She estimates that her region alone has 2000 to 3000 potential customers. Her staff could not reach them all if they spent only half their time with customers. Rather than hire more people, says Lewis, Xerox wanted to get more out of the staff it already had.
The goal, according to Pittman, was to develop a full marketing and customer database. This database would provide marketplace information, customer profiles, order information, and solution libraries. In short, one centralized data repository would have everything needed by the sales force and other departments, such as manufacturing. Much of the work on this database, which was built using Oracle, has b
een done. Although it resides on mainframes in the form of a data warehouse, it appears unified to anyone accessing it.
Sales personnel can choose any communications package for general use, but to connect to the data warehouse, they use Wall Data's Rumba terminal-emulation software. A Centrum communications server acts as a gateway between the notebook and the mainframe holding the data. Sales-team members have unlimited access to all the product, market-research, and competitive analysis data relevant to their territory. They cannot, however, use the connection to get data on their coworkers' accounts. Contact among the staff is maintained via Microsoft Mail and voice mail.
Productivity was not the only concern. Maintaining the legacy systems was becoming expensive. Also, the end of a lease agreement prompted Xerox's New England branch to adopt the virtual-office plan earlier than expected. The age of the company's old digs meant that rewiring for a new network would be expensive.
Pitt
man expects Xerox to accrue $250 million annually from the project. About $30 million to $50 million of that will come from cutting leased office space by 30 percent. Most of the 65 district offices were downsized, and about half of the 50 area sales offices were closed. In addition, Xerox saves money by processing customer invoices more efficiently, and fewer people are needed to maintain databases and mainframes. Some people were reassigned, and some were part of a layoff, although Xerox declines to provide specific numbers. On top of that, Pittman foresees a 20 percent gain in sales productivity. When you consider those numbers, the project's estimated $100 million price tag to implement the client/server network, renovate facilities, and train the staff looks like a bargain.
Before and After
Over 10 years ago, Xerox was one of the first companies to adopt LAN technology companywide, but this proved to be a disadvantage for the virtual-office plan. The existing corporate net
work could not support the mobile sales force. That network is based on Xerox Star network software and runs GlobalView terminal-emulation software with Xerox Model 6085 terminals and a mainframe.
Although the proprietary network was ahead of its time, especially in its ability to transmit graphics images, it was slow and incompatible with the current industry standards. "We were highly arrogant about [our] technology and tried to protect it," says Lewis. Protecting that system kept Xerox blind to technology that its competitors and customers were using.
All the details of the client/server network that will replace the old network have not been worked out at this writing. It will be based on Novell NetWare 4.1 running an Oracle database engine. The servers will be Sun SolarStation 2000s, and the clients will be mostly Windows PCs and portables with a few Macs.
In Waltham, each virtual-office worker has a Compaq Elite 440C notebook. This system has a passive-matrix color display, a 340-MB
hard drive, a Megahertz 14.4-Kbps PCMCIA modem, and a Thomas-Conrad PCMCIA Ethernet adapter. Software includes Microsoft Office, a communications package, a set of Xerox forms, and several megabytes of database files.
The Compaq notebook was not Xerox's first choice. The company planned to use the IBM ThinkPad 750. Pilot programs showed that the ThinkPad was "the first laptop with more than a six-month life span," says Mike Radigan, program manager for Xerox's U.S. customer operations division. However, lack of availability forced Xerox to look elsewhere.
Still, the Elite 440C has a number of features that appeal to mobile workers. Its power supply is internal--there is no "brick" to carry around. The processor, screen, and hard drive are user-upgradable. This improves the system's life span and makes service easier. This is important because Xerox does its own service on the units to reduce costs and minimize downtime. Compaq provided service training and has authorized Xerox to order parts di
rectly. It also keeps a reference model loaded with the same applications that Xerox uses if Xerox calls with a problem it cannot solve itself.
Making It Work
The Xerox experience provides three key lessons for companies thinking about implementing the
virtual-office concept
. First, do testing to be sure you have adequate equipment and an information infrastructure, and identify potential glitches. Second, give the people involved the training and resources they need. Finally, redesign your facilities to maximize their efficiency.
Xerox's pilot programs quickly brought issues to light that might have meant disaster on an actual rollout. Many of the notebooks from vendors other than Compaq and IBM proved to be unreliable. When the tests began, Xerox was also worried about notebook performance and hard drive capacities. The tests told the company just how close existing models came to its requirements.
The speed of the remote connection was another
big concern. It was clear that ISDN availability was too variable and too expensive. Radigan estimated that, for a test in Phoenix, providing ISDN for each participant would cost roughly the same as the notebook. With about 4000 potential virtual-office workers in the company, Xerox decided that fast modem connections over POTS (plain old telephone system) lines would have to do. However, the company continues to evaluate ISDN and other alternatives, such as 28.8-Kbps modems.
To help relieve anxiety about the change, Xerox provided both classroom training and ongoing support for its virtual-office employees. Many of them had never used notebooks or Windows, nor had they ever made a remote connection. "Dialing in was something totally foreign to them," says Joann Halle, marketing manager for the New England operations. Yet other sales-team members had PCs at home and used modems; some of them even looked forward to the change.
Bob Couch, a sales analyst in the Waltham office, is a prime example
. He likes having quick access to information for which he used to drive long distances. Couch has optimized the virtual-office concept further by creating templates in Microsoft Word for all the forms he uses.
After receiving formal training on the new systems and software, each employee who had little experience was assigned a buddy. The buddy was a fellow sales-team member who had more knowledge of computers. During the three-week transition period in Waltham, the buddy was on-call 24 hours a day. If someone had a crisis at 2:00 a.m. while working on a proposal, help was only a phone call away.
The buddies continue to be available as long as they are needed. If a problem is too vexing for a buddy to solve, the Waltham office has a CNA (certified NetWare analyst) on-site. It also has access to a CNE (certified NetWare engineer) provided by systems integrator EDS, which set up the notebooks. To Lewis, the buddy system was a success. She says her staff "feels like they can talk to customers at a
ny level."
Each virtual-office worker has a home office with a phone line and printer, both of which Xerox provides. Xerox gives each employee $200 to set up a home office. The company has also set up the Waltham office with a classroom that's equipped for videoconferencing. Now employees can get on-site training for new products or procedures without traveling to a central training facility in Leesburg, Virginia, as they did in the past.
Imperfect Success
Xerox has not yet perfected its virtual-office implementation. Perhaps the most significant issue to be resolved is moving from the legacy system. By the time you read this, all the company's U.S. sales operations will have the capability of working from virtual offices. The major European divisions will follow by the third quarter of this year. But Xerox will not shut down the mainframes until next year.
All the "real support" is still in the mainframe, says Pittman. In practical terms, a sales representative c
onnecting remotely won't know the difference between getting data from a legacy mainframe or from a client/server network. The trouble is that some employees with whom the virtual-office workers need to communicate still use only the legacy system. This presents a problem with E-mail. Thus, the Waltham office still maintains some of the old Xerox systems for access to legacy services.
Both the Xerox planners and the virtual-office staff would like to see improvements in the portable systems. Wish-list items include a bigger hard drive (the Waltham staff did not have enough room to install XSoft's GV-Win, which provides connectivity to the legacy system), a better color display, and a faster modem. In most cases, 14.4 Kbps is adequate. But downloading a bit-mapped form is still too time-consuming.
Smaller problems still abound. Lewis cites the need for people to learn better E-mail etiquette; some staffers tend to unnecessarily copy everyone on the E-mail messages they send, clogging up mailboxes
. Couch would like to see all sales personnel have a CompuServe or other on-line account. This would give them access to the Internet and to on-line users groups catering to Xerox products, not to mention another avenue of communication with customers.
Down the Road
Xerox is currently examining the next step in its information-system strategy: the implementation of an object-oriented approach to data management. It is too early to know which model or platform the company might use, but Pittman sees some important benefits to using object-based applications.
First, he and Pat Wallington, who is chief information officer and architect of the strategy, expect the upkeep of the applications to be easier and that local managers will be able to build more of their own reports and applications. The company will also be better able to adapt applications to different geographic needs. But perhaps most important, Pittman sees the object-oriented approach as insurance that Xerox "d
oes not wind up with a new legacy system."
WHERE TO FIND
Compaq Computer Corp.
Houston, TX
(800) 345-1518
(713) 370-0670
fax: (713) 378-1442
Oracle
Redwood Shores, CA
(800) 672-2531
(415) 506-7000
fax: (415) 506-7200
Sun Microsystems
Mountain View, CA
(800) 786-0404
(408) 276-1931
fax: (415) 969-9131
Xerox Corp.
Rochester, NY
(800) 275-9376
(716) 423-5090
fax: (716) 427-5400
VIRTUAL OFFICE, TANGIBLE BENEFITS
The Problems
-- Selling complex office products and support services requires
on-site meetings, but sales representatives didn't have time
to meet with the 3000 potential customers in the region.
-- The sales staff spent 30 percent of its time chasing essential
product and customer information stored on the legacy system.
-- Maintaining the legacy system was e
xpensive.
The Solutions
-- Give the sales force notebooks.
-- Close down the central sales office.
-- Develop a centralized, quickly accessible data repository.
The Benefits
-- A possible annual payback of $250 million from increased sales,
lower computer costs, reduced office rent, and staff reductions.
Lessons Learned
-- Run pilot programs to gauge equipment and
information-infrastructure requirements.
-- Fully train and equip the staff.
-- Redesign your facilities to maximize efficiency.
illustration_link (207 Kbytes)
photo_link (68 Kbytes)
Bill Pittman and Mike Radigan of Xerox
miken@bix.com
.
Not Lost in Space
