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Sold on Web 2.0 Tools

Midmarket CIOs are finding that Web 2.0 offers a host of e-commerce tools to engage customers, improve product lines and bring greater alignment between IT and the business. Four CIOs tell us how.

Midmarket CIOs find that the newest Web-based technologies are bringing the IT department -- and the business -- closer to customers than ever.

Sifting through family records after her sister's death, Julia Frost Yake of Indiana came across a 1936 photograph of the two girls standing by a mailbox showing off their father's Burpee seed mail-order catalog. Yake, who grew to love gardening as her dad did, sent the century-old seed company the black-and-white photo, along with a 1999 snapshot of Yake standing beside a mailbox and holding a modern-day Burpee catalog. "It's 63 years later, but I still use and prefer Burpee seeds," she wrote in an accompanying letter.

Just one of thousands of letters received annually by the Warminster, Pa.-based W. Atlee Burpee & Co., the correspondence was a staff favorite for years. Today, thanks to a successful Burpee Web strategy that includes blogs and Really Simple Syndication (RSS) feeds, the Yake sisters are part of the Burpee customer experience. Their images and story have inspired other loyal customers to share family gardening anecdotes and traditions.

"Our customers have always been there," says Don Zeidler, a 20-year Burpee veteran who heads up direct marketing and e-commerce. "It's just we couldn't efficiently and effectively engage them in any back-and-forth conversation."

Like Burpee, businesses competing in all sorts of industries are finding new ways to connect with consumers, thanks to the interactive Web 2.0 tools that are redefining today's online experience. Blogs, wikis, podcasts and mashups also have the potential to bring CIOs closer to external customers and internal business sponsors as product development and sales strategies become more reliant on Web features and functions. (A mashup is a Web page or application that integrates elements from multiple sources.)

In a recent Forrester Research Inc. survey, 89% of 119 CIOs say they use some form of Web 2.0 technology. Still, Web 2.0 means different things to different people, and many CIOs will tell you they avoid the catchall buzz phrase and focus instead on specific technologies and tools.

"As the CIO, I drive the technology strategy. Web 2.0 and SOA [service-oriented architecture] are key components of the architecture," says John Beale, executive vice president and CIO at Los Angeles-based City National Bank, which has had notable success with podcasts and RSS feeds for customers. "The goal is to provide increased collaboration and information to our colleagues and with our clients. We believe using Web 2.0 and SOA will help us get there."

Mention Web 2.0, and most people think of popular social networking and social publishing sites like LinkedIn and Wikipedia. But plenty of established midmarket companies with traditional revenue models have found ways to incorporate new Web technologies into their infrastructure. Some neatly fall into the Web 2.0 category, while others simply employ the characteristics that are common to Web 2.0, such as its interactive, user-driven and simple-to-use qualities. Most important, they all use technology to allow customers inside business systems long before they plop down cash for an order.

Because of the privacy and security issues that these interactive tools present, CIOs are right to proceed with caution as they delve into the Web 2.0 world. One way to get started, says Gartner Inc. analyst Stessa Cohen, is to use simple tools such as blogs and wikis internally. CIOs can knock down corporate silos and foster collaboration and innovation by creating a central forum, for example, where staff can share ideas and communicate informally. More notably, employees can gain hands-on experience with the tools that customers will ultimately use.

"You can talk theoretically, or you can get your hands dirty internally and see how [the tools] can be used," Cohen says.

Here we feature four midmarket IT leaders in a range of industries -- from retail and manufacturing to banking and staffing -- who have used innovative Web technologies to establish themselves as sector leaders and to connect with their customers in ways they never imagined possible.

Reaping the Benefits of RSS

While a family-run gardening business dating back to the 1800s may seem to be an unlikely leader in next-generation Internet technology, Burpee has managed to implement some of the most basic Web 2.0 technologies -- a blog and an RSS feed -- with impressive results.

At the suggestion of an employee who used RSS feeds to find targeted content for personal reading, the company launched its own feed two-plus years ago to distribute a blog that features customers' gardens, alerts subscribers to new offerings and special sales, and provides gardening tips. After researching different products, it added a tool from Bazaarvoice Inc. that enables customers to post user reviews on products.

"It's sort of like talking over the fence to your neighbor," Zeidler says. "It's created this constant communication instead of just seasonal" interaction. At many midmarket companies like Burpee, CIOs are heading up Web 2.0 projects, but plenty have e-commerce experts like Zeidler on board.

While the company doesn't measure the empirical benefit of its Web 2.0 tools, the company's sales have increased since launching the feed, Zeidler says.

Initially, Zeidler and his bosses, the company president and executive vice president, were concerned about giving customers a forum where they could post negative product reviews, but most comments have been fair, Zeidler says. The company does keep one remedy in place: If someone posts inaccurate information -- for example, when a customer complains on the site about a product when the problem actually stems from the delivery service -- Burpee reserves the right to reject it from the site.

The rewards of customer reviews far outweigh the disadvantages, he says. Sales of five-star products shot up far more than sales of products with negative reviews decreased, Zeidler says. The reviews are also enlightening for Burpee's leadership, which uses customer feedback to make product improvements. "You don't get that much of a critical mass from a focus group," he adds.

Mashup Just the Beginning

After 38 years in the IT staffing business, TAC Worldwide had cultivated a database of 150,000 résumés. That might sound impressive, but VP and CIO Steve Morin says the real magic happened after the firm launched its new Web-based recruitment toolkit, TACSource. Within three months, the TAC résumé count jumped to 3 million.

"We were blown away with how quickly we could build that kind of database," says Morin, who's been CIO at the 550-person staffing firm in Dedham, Mass., for nine years. "It widened our net twenty-fold."

Today about 400 TAC employees use the powerful search-and-match function that TACSource -- an application hosted by a third-party firm -- provides. The mashup technology does three things: it allows TAC Worldwide to connect directly to clients via the Web so that a company can submit a job description to a recruiter online in real time. It also allows TAC Worldwide to search external job postings in an automated way. Finally, its patent-pending algorithms allow recruiters to see automated displays of résumés that are good matches for job openings. "To be able to do that in an intelligent and automated way, that's very revolutionary," says Morin, who controls an IT budget of $7.5 million. Recruiters can also tweak the process with their own keywords to help thin 50 results down to, say, five.

"It's very unique," Morin says. "The document -- the résumé -- is the data. The technology is finely tuned to allow you to really pinpoint -- let's say, a matching of geographies, skill sets and experience -- the parameters that we need."

In June, TAC piloted an RSS feed. So a Dallas engineering firm could, for example, opt to receive an RSS feed that would tell it which sort of talent and skill sets are available in the area. Meanwhile, potential job candidates would opt to receive ticker-like updates of employment news in specific industries or regions.

"We know the technology works," Morin says, adding that he'd like to get validation from clients within the next quarter and possibly launch the feed in early 2008. "Web 2.0 is always on our minds."

Morin says the toolkit has changed his job as CIO, bringing him closer to the revenue side of the business. "Leveraging the Web through TACSource and other solutions opens up many opportunities to enhance value-added services to our clients," Morin says. "These initiatives are great examples of how IT is becoming embedded in our core internal- and external-facing processes."

As with many Web-based projects aimed at sharing coveted information between employees, there was some initial resistance to the system. Recruiters who had spent years developing industry contacts and information were concerned that they would lose their edge if everyone pooled information. But Morin says the results -- quicker placements across the board -- helped convince recruiters of the overall value.

TAC executives estimate that TACSource will easily produce a 25% across-the-board increase in the weekly performance of recruiters. Some tech-savvy recruiters have already doubled their performance, Morin says. Finally, TACSource clients know that time isn't being lost. "This is much more of a real-time, proactive process."

Services Banking on Podcasts

For years, City National Bank's investor community subscribed to market update email newsletters to stay in the know. But some clients weren't getting the updates because they had been erroneously routed to users' spam filters.

The $848 million-revenue bank needed to deliver the same timely information to the same audience, but in a more reliable, efficient manner. So in January 2006, it gave its email newsletters a makeover and invited clients to subscribe to RSS feeds. It solved the spam-filter problem and gave the bank a new channel to communicate with customers.

"I think Web 2.0 has so many benefits for so many companies," says Mark Middlebrook, who has been senior vice president and manager of e-commerce at the bank since 1999 and works closely with Beale, the CIO. "Especially financial services."

Before the bank launched RSS feeds and podcasts for customers, bank employees could access weekly audio updates on the market from City National's chief investment officer on the corporate intranet. Then the bank's leadership decided to tweak those recordings so they'd be suitable for a public audience. Given the tools' low cost and ease of use, it was easy to win support from senior executives, Middlebrook says.

How They Do It

Middlebrook's team members, who rotate podcast and RSS duties, create the feeds using an off-the-shelf HTML authoring tool. City National offers monthly personal finance and international business outlook podcasts, a weekly market trends podcast and seven RSS feeds ranging from foreign exchange activities to Securities and Exchange Commission filings.

"Podcasts and RSS feeds are important communication feeds for our clients and colleagues," says Beale. "City National was an early adopter of this technology, and it has realized a number of positive benefits."

Like many CIOs, Beale oversees the company's Web strategy, but Middlebrook, who reports to the director of marketing but also works closely with IT, handles the testing and implementation of these tools.

Internally, the bank is exploring the idea of using blogs as the next iteration of its corporate-information and best-practices portal. It's also investigating whether to use Ajax -- or Asynchronous JavaScript and XML -- on its Web site. Use of Ajax, a method of building interactive Web applications that process user requests immediately using a combination of programming tools, is still in the R&D phase, says Middlebrook.

"We are constantly looking for ways to further adapt the technology in meaningful ways to achieve value," Beale says. In the meantime, demand for the feeds continues to grow. "That tells us we're on the right track," says Middlebrook.

Customers by Design

When IT Director Gary Wallace started at $100-million Anderson Hardwood Floors eight years ago, there wasn't much use for computers. Manufacturing processes at what was then a 150-employee business were handwritten.

But with a fourfold growth in the company -- fueled by the housing boom, the home renovation craze and Anderson's growing e-commerce presence -- IT has become a business driver throughout the company. Six years ago, Wallace took control of IT as a one-man shop, and he now leads an IT staff of four.

"We went through huge growth the last few years," Wallace says, adding that the company's ranks have swelled to 600 employees scattered throughout five facilities. To handle the shift from a mom-and-pop shop to a major player in the flooring industry, Wallace stepped into Web 2.0 this spring by installing a Microsoft SharePoint server to function as a central repository for company information and documents, from invoices to vacation policies and project files.

Before the installation, however, Anderson had discovered the power of a popular interactive Web tool with a customer-facing effort. A year ago, it overhauled its basic Web site and added the Anderson Design Center, which lets viewers test the look of various floor styles and colors online and create virtual rooms before they purchase flooring for their homes.

Prior to the site redesign, Anderson's Web site got about 500 hits weekly. Within months of launching its next-generation site, that number shot up to 1,500 a day. "It didn't take much time for the word to get out," Wallace says, adding that Anderson spent months at the top of Google's "hardwood floors" unpaid search result list.

Wallace researched interactive plug-ins for the Design Center and settled on one from Dancik International, a Raleigh, N.C.-based firm specializing in visualization software for flooring companies. Wallace and his team spent a month taking hundreds of photos of floors. They couldn't use existing images because the quality of the lighting and color wasn't good enough for viewing on the site. "One of the biggest mistakes I made was underestimating the amount of work behind it," Wallace says.

Now Wallace and his team focus heavily on search engine optimization to help guide consumers to the site and present them with high-quality, dynamic content.

Dancik developed the software for the Design Center, and the site is hosted in-house at Anderson, which just launched the second version of its new Web site in January. Eventually, Wallace plans to offer users the ability to upload photos of their own rooms and overlay images of Anderson floors onto them.

Wallace credits much of the company's Web success to the "cheerleading squad" of executives supporting his efforts, including his bosses, the company president and executive vice president. "They understand [the Web is] never going to go away and is a great marketing and information tool for the consumer," he says.

Melissa Solomon is a freelance writer in Austin, Texas. Write to her at

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