A Good Combination Of Outsourcing, Resources Drives Business Growth

In a one-on-one with Biztech2.0, Drew Martin, SVP and CIO, Information Systems and Solutions Of America, Sony Electronics, talks in detail about IT at Sony Electronics and the philosophy that it follows to be truly customer centric.

What processes does Sony Electronics have in place to streamline the workflow?

A lot of what we’ve done with technology workflow is related to what we’ve done with outsourcing. We’ve created groups within Sony, so all they do is work with business units and each of these units have specific business goals. We were so busy managing the fixed IS resources that we really didn’t understand our internal customers, so we made sure that we had a group focused on that. We took some of our best development resources moved them there, as we continued to outsource. It was a good combination because it allowed people to get closer to the business and it also gave us flexibility if we found some new project or initiative to look into. We also had some great resources working from the outsourcing side to deliver against that.

Could you talk about the Supply Chain Management (SCM) at Sony Electronics?

SCM is very complicated at Sony Electronics. We have every kind of supply chain, we have boat coming from Asia, air coming from Japan, add to that domestic manufacturing for media and then for TV sets, and lot of assembly line production is done in Mexico. It’s an extremely challenging and complex area, but we start with identifying what the measure is and for us it was whether we were getting the product to the customers when they expected it. The process begins with measuring and then moves onto labeling it as priority. Since a lot of our products are made by third-parties, we really have to think end-to end when it comes to SCM, as we don’t manage the entire SCM.

More from Biztech

Future Group - Reliance Retail Deal approved by CCI RBI ban on cryptocurrencies takes effect; prohibition could force investors to tap the black market

What have been the latest IT initiatives at Sony?

We’re working a lot on the supply chain; a lot of things are being done around multi-channel, in addition to stepping up on the security issues and compliance to green IT. In the US, green computing is very important and it is even more important to do it ethically and it also makes a big difference to our consumers to know how we handle green.

Talking about IT budgets, where do you think the larger investment is being made?

There is a certain percentage that we attribute to running the business and I call that ‘keeping the trains running.’ Typically in an American company, two thirds is spent on just keeping things running everyday and only a third is left for growing the business and moving it forward. So the first challenge is how you run the business more efficiently? We’re in the middle of taking our outsourcing arrangements to the next level, and I think we can be more efficient if we have a stronger partnership with some of the firms. The problem is that every year, we add a lot of new systems and those need to be supported, which tends to be 10%-15% of our budget, thus we need to find those new efficiencies so that we can pay for the new things. We think its alright to increase the IS budget if we’re getting benefits in other areas. If we can leverage more technology to sell more products, to drive customer satisfaction, to improve our SCM and our compliance, we’ll spend more money to do that.

What about IT and Customer Interface?

We have people who are facing off with our business units and together with them we try to find out what’s happening with our end consumers. Everybody in the organisation has a line of sight into consumer satisfaction, in terms of what makes it better, what makes it worse and once we find out where can improve, the better we’ll do. We track something called the net promoter score, which basically reflects on a scale of 1-10 how many people would recommend Sony products. If people rate a product nine out of ten, then they are promoting the product, and if the rating is 0-6, then they are detracting. This is helping us drive continuous improvement in customer satisfaction.

What is Sony’s roadmap to becoming truly customer centric?

We’ve always been a customer centric enterprise, but what we’ve also found is that we’ve operated a lot in silos over the years. Every product group had to be strong, had to do their marketing and go to the customers directly, but we found that this wasn’t working for the customer. This way, customers had too many options and we realised that they like having a few choices and not too many choices. We need to better about the messages and we’ve organised something around multi-channels, which allows customers to buy from the net, from retailers and other sources. It doesn’t matter where they buy it from, as long as they know where they can get, when they get it and with the best service.