AmexBy Elizabeth Bennett | Posted 2005-12-05 Print
2005 definitely goes down as an interesting year. But who were the heroes of the IT universe and who were the goats?
' Astonishing ROI">
2,736.1%: Return on investment garnered by American Express for developing project management software.
Gold charge cards and travel services are phrases usually associated with American Express, but how about software pioneer?
The New York-based services company is going where few commercial software makers have gone before: It has developed and deployed a Web-based tool that automates the process of requesting and allocating project dollars.
The IOS (Investment Optimization System) was conceived by American Express' International Payment Services group five years ago, when 35,000 Microsoft Excel worksheets kept track of annual investments across the company's 10 business units and geographically dispersed markets.
Each unit used its own system to calculate return; there was poor version-control of budget models and requests and no way to enforce standards such as foreign currency exchange rates and product profit margins. Perhaps most important, there was no way to easily make strategic investments.
Business managers financed a project based on its individual merit or who in the company "made the most noise," not on how the projects fit into the company's overall goals, according to Anand Sanwal, director of corporate finance.
With IOS, the spreadsheets were uploaded to an SQL server, where they were read and analyzed by Microsoft Reporting Services.
The improved analysis led to the reallocation of tens of millions of dollars for more optimal investments. With a return on investment of 2,736.1%, the first generation of IOS was the grand-prize winner of the Baseline 2005 ROI Leadership Awards (Great Gains). The second generation is a Web-based product built in Microsoft .NET by Los Angeles software maker, Solver.
So far, 800 employees in four business units enter budget requests, forecasting and other financial data into an online form. IOS calculates the information and assigns a risk level to the project. The request is passed through a chain of approvers until a final decision is made.
Solver is now offering the software to the masses for anywhere between tens of thousands to millions of dollars, depending on project size and scope.
And there is yet another generation of IOS in the offing. Bigger benefits will come next year, Sanwal says, when Amex's project tracking system, which consolidates project results and actual return on investments, is integrated with IOS.
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