New Study Shows ZLE-Based Real Time Computing Can Improve Profitability Up to 15 Percent
HOUSTON, October 17, 2001
Compaq Computer Corporation (NYSE: CPQ) announced today a recent study that suggests real-time computing solutions, based on zero latency enterprise (ZLE) technologies, can significantly enhance bottom line profitability. Compaq commissioned Gartner Consulting to conduct an in-depth analysis of eleven major telecommunications carriers around the world(1). These companies told Gartner Consulting that a real-time customer relationship management (CRM) program would, for example, significantly improve the customer experienceand reduce "churn," or customer turnover, from 15 percent to 5 percent. For these companies, that improvement would yield an increase in profitability of up to 15 percent.
The companies studied were among the largest service providers in the world, including Sprint (U.S.); Deutsche Telecom (Germany); Optus (Australia); and IUSACELL (Mexico), among others.
A term originated by Gartner, ZLE describes an enterprise architecture in which information and transactions are propagated throughout the companyin real timein order to create a single, integrated view of the business that is current up to the second. With such "live" information, CRM agents, for example, have a single, unified view of the customer that enables them to enhance the customer experience with assistance and attractive offers that are current and highly personalized.
Roy Schulte, vice president and research fellow at Gartner, said, "For quite some time, Gartner has been advising its clients that a zero latency strategy can deliver substantial business benefit. This study certainly confirms that the value of those ZLE-based business benefits is becoming increasingly evident to IT decision-makers. We continue to believe that trends in enterprise IT point to real-time computing as a strategic competitive weapon for many businesses."
Rick Frazier, vice president, Compaq Business Critical Solutions Group, said, "This study mirrors what we're hearing from our customers across many industries, including telecommunications, retail and finance. They all describe hyper-competitive markets that are greatly increasing the velocity of business. They believe they need to accelerate the internal flow of informationto enable real-time decision-making and personalized customer services. More and more, they see zero latency as a business imperative."
Study Highlights Additional Business Benefits of Zero Latency Strategies
In addition to CRM, the study identified other application areas where the respondents saw significant business benefits related to zero latency strategies:
- For telephone companies, the delay between a customer phone call and the billing for that call can be costly. The delay and associated frustrations with the payment channel can result in an implied loss of revenue for as much as 60 days. By introducing a ZLE-based billing on demand solution, companies believe they can effectively increase revenue by 2-3 percent per year.
- All fraud depends on some kind of internal lag in information flow. If a company operates in real time, the fraud window closes or narrows dramatically. With instant access to credit and account informationand the ability to set parameters in real timeZLE-based solutions can reduce fraud by more than 50 percent.
- Mergers and acquisitions typically combine multiple legacy systemsand can slow down the flow of information within the new company. Zero latency solutions can link separate systems and provide a single, integrated view of the business. This capability can reduce information processing costs by 5 percent to 35 percent.
Additional information on Compaq ZLE is available at http://telecom.compaq.com/solutions/SolutionDetails.asp?Category=14&Solution=192.
Founded in 1982, Compaq Computer Corporation ("Compaq") is a leading global provider of enterprise technology and solutions. Compaq designs, develops, manufactures and markets hardware, software, solutions and services, including industry-leading enterprise storage and computing solutions, fault-tolerant business-critical solutions, communication products, and desktop and portable personal computers that are sold in more than 200 countries. Information on Compaq and its products and services is available at http://www.compaq.com.
1 Gartner Consulting, "An Approach to Building a Business Case for Zero-Latency," Arun Rao, May 2001. The information provided in the Gartner Consulting study should be read in terms of estimates only.
Compaq and the Compaq logo are trademarks of Compaq Information Technologies Group, L.P. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies.
This news release may contain forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the possibility that the Hewlett-Packard/Compaq merger does not close or that the companies may be required to modify aspects of the transaction to achieve regulatory approval or that prior to the closing of the proposed merger, the businesses of the companies suffer due to uncertainty; the market for the sale of certain products and services may not develop as expected; that development of these products and services may not proceed as planned; that Compaq and Hewlett-Packard are unable to transition customers, successfully execute their integration strategies, or achieve planned synergies; other risks that are described from time to time in Compaq and Hewlett-Packard's Securities and Exchange Commission reports (including but not limited to Compaq's annual report on Form 10-K for the year ended December 31, 2000, HP's annual report on Form 10-K for the year ended October 31, 2000, and subsequently filed reports). If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, Compaq's results could differ materially from Compaq's expectations in these statements. Compaq assumes no obligation and does not intend to update these forward-looking statements.