If necessity is the mother of invention, then capitalism is surely the mother of innovation. Five of this year’s CIO 100 honorees were driven to develop unique applications of undeniably cool technologies by the almighty dollar (the need to make it and to save it).
The Goodyear Tire & Rubber Co.’s use of computer simulations to bring new tires to market has reduced the company’s costs and driven revenue growth. Software developed by Monsanto is helping it breed genetically superior seeds that big commercial farmers are buying in droves. To prevent its energy costs from skyrocketing, public utility JEA implemented an intelligent system that determines the perfect mix of oil and natural gas to produce electricity while minimizing nitrous oxide emissions. The National Oceanic and Atmospheric Administration’s (NOAA’s) Undersea Research Center built a network capable of transmitting large video files from an underwater lab to the Web in seconds to raise public awareness and government research funding. The Ohio State University Medical Center freed up maintenance staff and increased customer satisfaction by deploying robots to handle tasks such as removing trash and transporting meals.
The five companies feted in this story didn’t pursue technological innovation for its geek chic; they did it to create a sustainable competitive advantage. "At the end of the day, as cool as this thing [we’ve developed] is, it’s a tool," says Stephanie Wernet, Goodyear’s CIO. "It is meant to serve a business end. In our case, this tool lets us put out new, more innovative products faster than the competition."
You don’t have to be Goodyear’s size to do something cool. The key to innovation isn’t money. It’s curiosity and collaboration. Getting the brightest minds from different functions working together on a problem is how great things happen. What made the technologies featured so useful and the efforts to develop them so fruitful was tight-knit cooperation between IT and other departments.
Read on to find out what each company did, why they did it, the significant benefits they’re scoring as a result and what you can learn from their innovations.
Seeds of Change
What: Monsanto’s IT department created software to identify genes that indicate a plant’s resistance to drought, herbicides and pests; those genetic traits are used to predict which plants breeders should reproduce to yield the healthiest, most bountiful crops. The software crunches data from breeders worldwide and presents it in a colorful, easy-to-comprehend fashion. By pinpointing the best breeding stock, it increases breeders’ odds of finding a commercially viable combination of genetic traits from one in a trillion to one in five. Monsanto’s global breeding organization drove the project.
Why: When its signature weed-killer Round-up went off patent, the St. Louis company invested in growing its seeds and genetic traits business, which comprises more than half of its $6.3 billion revenue and $255 million profits in 2005. Monsanto believes it can sell more corn, soybean and cotton seeds if farmers know its seeds will produce heartier crops and require fewer sprays of insecticide and herbicide, thus reducing costs.
Technology: The software is written in Java and .Net. The Java components run on networked Linux and Unix servers; the .Net components run on Windows XP in machines at the breeding stations.
Cool quotient: Monsanto’s scientists use the software to effectively engineer seeds to resist drought and pests and to produce plants that are healthier for humans and animals to eat. They do it by implanting those seeds with the genetic material that makes a plant resist insects or produce more protein. What would Gregor Mendel, the father of genetics, think of this? "This is really different from the way breeders bred their crops," says Monsanto CIO Mark Showers. "They didn’t have this level of molecular detail to determine and select plants they wanted to move forward from year to year."
ROI: Monsanto reaps the benefit of its software but wouldn’t reveal development costs. Earnings per share on an ongoing basis grew from $1.59 to $2.08, or 30 percent, from 2004 to 2005. Its EPS is expected to grow by 20 percent more in 2006. "In the last four or five years, we’ve had a marked improvement in taking market share from our competition. We’ve grown our share at a couple of points per year," says Showers.
The School of Hard NOX
What: Public utility JEA used neural network technology to create an artificial intelligence system it implemented last fall. The system automatically determines the optimal combinations of oil and natural gas the utility’s boilers need to cost-effectively produce electricity given fuel prices and the amount of electricity required. It also ensures that the amount of nitrous oxide (NOx) emitted during the generation process does not exceed government regulations.
Why: JEA needed to decrease operating expenses, in particular fuel costs, as oil and gas prices began their precipitous ascent in 2002. Forty percent of JEA’s $1.3 billion budget goes to the purchase of oil and gas to power its boilers, so a small change in the way electricity is produced could send millions of dollars to the bottom line.
Technology: Neural network technology models the process of producing electricity. Optimization software from NeuCo determines the right combinations of oil and gas to produce electricity at low cost while minimizing emissions.
Cool quotient: JEA, which serves over 360,000 customers in Jacksonville and three neighboring Florida counties, is the first utility in the world to apply neural network technology to the production of electricity in circulating fluidized bed boilers. It built a system that makes decisions based on historical operating data and as many as 100 inputs associated with the combustion process, including air flows and megawatt outputs. The system learns which fuel combinations are optimal by making adjustments to the boiler in real-time; it also forecasts what to do in the future based on specific fuel cost assumptions. "We had issues with oil prices. At the same time, gas prices went from $4 a BTU to over $14. We need to use gas because it decreases emissions. This solution helped us balance all of those items," says Wanyonyi Kendrick, JEA’s CIO.
ROI: The project, which IT drove, cost $800,000 and paid for itself in eight weeks. The system reduced the quantity of natural gas that’s used to control NOx emissions by 15 percent, an estimated annual savings of $4.8 million. With natural gas prices at $11 per BTU, JEA expects to save $13 million on fuel in 2006. What’s more, JEA has discovered it can use the new technology applications for its water business.
Where the Rubber Meets the Road
What: Working with Sandia National Labs, Goodyear’s IT department developed software to design and test tires virtually. In the past, the company built physical prototypes and tested them by driving thousands of miles on tracks. Using a mathematical model, the software simulates tire behavior in different driving conditions so the designer can see how the tire gets pushed, pulled and stretched as it rolls down a road, hits bumps, turns corners, screeches to a halt, and grips the road in wet, dry and icy conditions.
Why: Accurately testing prototypes in the physical world requires driving on the tires for thousands of miles; Goodyear wanted to shorten that time to get its products to market more quickly. Three research and development employees advanced the idea of testing prototypes using computer simulations, which could do the job faster.<
The company had never done simulations but figured initial investments and subsequent maintenance costs were worth the payoff. Goodyear’s cost of goods sold as a percent of its sales decreased by 2.6 percent from 2003 to 2004, the year its first fully simulated tires hit the market. Meanwhile, the R&D budget for tire testing and design decreased by 25 percent.
Technology: Custom-built software runs in a massively parallel computing environment, on hundreds of processors on hundreds of Linux computers. Goodyear invested more than $6 million to build this high-powered computing environment. It plans to expand and upgrade its Linux clusters to meet business demands for new tires and to improve the fidelity of its virtual tests.
Cool quotient: Goodyear believes it is the first tire maker to use computers to design and test its wheels. Although the auto industry has done computer-assisted design work since the 1980s, the technology had not been applied to tires because their malleable materials made simulation difficult. The math required in order to model a tire on a computer is as complicated as that needed to simulate a nuclear explosion, which is why Goodyear partnered with weapons researcher Sandia. "This is freakingly cool stuff. It’s way more power than any IT guy should have, and Cool quotient: Landucci used standard communications technology to build the network. With the same technology and the excess bandwidth the new network provides, an astronaut on the International Space Station can talk to an aquanaut in the undersea laboratory. "I have the capability to make that happen. I just haven’t done it yet," he says.
ROI: Phone calls between scientists in the lab and NURC employees on land are now as clear as the skies above Key Largo. The link from the habitat to the buoy was upgraded from a speed of 10Mbps to 100Mbps. Video streams have gone from 30-second delays to three-second delays. Landucci says he’s saved NURC some monthly costs by using open-source software and donated equipment. He estimates that a private branch exchange phone system would have cost $20,000.
Robots Come to Health Care
What: The Ohio State University Medical Center (OSUMC) replaced its overhead rail transport system with 46 self-guided robotic vehicles to move linens, meals, trash and medical supplies throughout the 1,000-bed hospital. The robots do not interact with patients; they carry out routine tasks hospital staff used to do.
Why: Faced with declining revenue and rising costs, OSUMC needed to save money while improving patient care. A steering committee comprising IT, other hospital departments, consultants and vendors drove this project. They convinced medical staff of its value by demonstrating the technology and communicating how it improved working conditions and patient care. Materials transport was identified as a place to cut costs since the hospital needed to upgrade the existing system.
Technology: The robots, made by FMC Technologies, are guided by a wireless infrared network from Cisco Systems. The network is embedded in corridor walls and elevators designed for the robots’ use. Three Windows servers linked to the network maintain a database of robot jobs and traffic patterns.
ROI: Designers can perform 10 times more tests, reducing a new tire’s time to market from two years to as little as nine months. Goodyear attributes its sales growth from $15 billion in 2003 to $20 billion in 2005 to new products introduced as a result of this change.
The Life Aquatic
What: With just $70,000, Dominic Landucci, network administrator for NOAA’s Undersea Research Center (NURC), constructed the network infrastructure to connect NURC’s Key Largo office with its laboratory near a coral reef on the ocean floor, nine miles off Florida’s southern tip. Called Aquarius, the 400-square-foot lab serves as home base for divers studying the reef and as a training camp for astronauts adjusting to weightless life in close quarters. Landucci’s network, which he began building in 2003, lets NURC and NASA employees on land communicate clearly via voice over IP with colleagues in the lab or on dives. The network is robust enough to transmit real-time streaming video to the Web so the public can see the oceanographic research NURC scientists are doing or the training astronauts are getting.
Why: Existing voice and data transmissions were choppy and the infrastructure outdated," says Landucci. "The video equipment often crashed, and the voice over IP system was old." NURC also wanted to transmit better images to spark public interest in the lab’s mission and make a compelling case for funding each year.
Technology: The voice and data connection between the undersea lab and the office is facilitated through wireless and wireline communications. A 180-foot-long wire running between the lab and a 30-foot buoy bobbing on the waves transmits voice and data. Installed on the buoy is a point-to-point broadband wireless Ethernet bridge from Orthogon Systems. The vendor designed it with two antennae to overcome the buoy’s movement and the refraction of radio signals on the water, which made communications choppy. From the buoy, the broadband wireless system sends voice and data signals to audio and video servers and to the office’s Vonage VoIP network. Open-source Darwin Stream of Server software processes the video feeds and serves them via the Web. A videoconferencing device from Polycom lets NURC employees on land talk to and see the divers.
ROI: The $18 million system is expected to save the hospital around $1 million a year over the next 25 years. Since it went live in 2004, OSUMC has saved $27,375 annually on linen delivery alone. OSUMC’s CIO Detlev "Herb" Smaltz says the system improves patient care by freeing up personnel: "If we can take mundane jobs like taking out the trash off of our employees and give them more time to do the things they came into the health-care profession to do, then that’s an added benefit of the system."
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