The Kingston and Croydon Branch of the BCS hosted the meeting on the 13th November when Royden Gothelf painted a very interesting picture of the transformation in Reuters as it moves into the digital age. Gothelf described how the company had grown since its inception 150 years ago when pidgeon post was used as the fastest means of communication. Reuters current operational statistics include: 12000 headlines and 350 pictures daily with 1 million instruments of financial information sourced from 275 exchanges and 5,000 contributions. The company has about 500,000 direct users in 50,000 locations around the world. In addition, it has a presence on some 1000 public websites with about 140million page accesses each month. The potential market for Reuters is millions of people who want up to date trusted information. Reuters is included in the Wired Magazine's 2000 Wired Index of the top 40 companies driving the new economy. In the middle of the internet craze of 1999 there was a hiccup when Reuters CEO was asked what the company's strategy was; he hesitated and the share price dropped to 450p. The following February the price leapt to 1600p when he announced an investment of £500m over 4 years.

So how was this transformation achieved? In 1998 Gothelf was made responsible for aspects of strategy and planning within Reuters business transformation programme. The programme has a global remit to identify new business process and systems capabilities that Reuters will need to continue to be a successful business in terms of profitability and customer satisfaction. Gothelf emphasised the importance of taking an outside in view of the company. Most organisations appear to take an inside view, looking at what is best for the company, rather than how someone wanting to compete would assess the market and the business process models. He then explained that Reuters first had to learn how to predict the future by looking at trends in the Financial Services Market and IT; and to understand how those trends could change the way in which Customers will want to do business and who those customers might be. Then it had to determine how to innovate in business process design and in the use of IT.

Some examples of trends that were studied include;

• Growth in financial services
• More demand for content and new analytics.
• Changes in what people expect to pay for information gives changes in the economics.
• Globalisation highlighting cross border legal and regulatory differences between governments.
• Who is selling to who and what is selling. The mobile world of PDAs changing the connectivity model
• Alliances creating new value e.g. Lego and the PC

Customer experience, Technology, Business Processes and Change Management

Reuters investigates where the internet and technology trends affect the value chain and how developments in connectivity provide the opportunity for others to enter the market. Gothelf went on to explain that the internet is used and perceived in different ways. The key is to recognise segmentation. Reuters needed to understand this and to segment their customers into types based on the buying and service experience. It also segments for the products and services that their customers want to use. So in order to provide a complete digital delivery of services to some segments Reuters eCommerce technology needs to focus on many things:

• Entitlements (illustrated with the FT)
• Payments - a key point of no global solution other than credit card. Digicash is under review
• Trust - where Reuters does not own the network
• Directories - for personalisation of content while conscious of differences in data protection between Europe and Amercia.
• Eprocurement - the way in which large customers may start purchasing market data
• CRM to provide multi channel marketing, sales and service differing by segment. eCommerce has to generate a pull model for demand creation, this introduces use of digital offers.
• Knowledge - data mining knowing who is doing what and personalisation

Business process and change management

Key points to consider;

• Know how you want to change your cost base as the value chain changes with eCommerce
• Understand your margins with different price points
• Take your operational staff with you on your change management journey. Ensure they understand the rational of change.

Gothelf gets people to think differently by asking them three questions

1. What does your customer value
2. How does the customer want to do business with you
3. What parts of your business process do you want to change and why

A sad fact is that 70% of projects fail because the people aspects are not managed. People need to understand why you are changing and innovating. It is easy to see why after the event, often hard to understand at the time

Summary

Gothelf ended his presentation with a reminder that Reuters history is one of successful change and innovation to deliver great service to its customers; and that given the current market and uncertainty we all need to decide where eCommerce is going and how we use the internet in our business.