Posts Tagged ‘Fox School of Business’

Shoot for the Middle Ground!

This week’s readings have brought me to consider extremes.  The Computerworld article “IT Governance: Stop the Pendulum!” discussed the pressures to centralizing and decentralizing IT and why companies are constantly swinging from one end of the spectrum to the other.

PROS CONS
Centralized   IT
  •   Efficient in executing corporate wide initiatives
  •   Predictable costs
  •   Stable
  •   Runs global initiatives
  •   High costs are visible (making it a target)
  •   Highly bureaucratic
  •   Lack of local responsiveness
Decentralized   IT
  •   Well aligned to business-unit strategies
  •   Customized to local requirements
  •   High satisfaction levels
  •   Higher cost
  •   Corporate-wide initiatives nearly impossible
  •   No integrated reporting

The article suggests that a better approach is a hybrid model, which avoids both the centralized and decentralized extreme and instead focuses on centralizing only the pieces that make sense and leaving the rest decentralized.  This idea of finding the middle ground seems intuitive, but with local business unit leaders and corporate IT having a different set of needs, there will always be pressure to divert away from this compromise.

This idea of compromise is also the ultimate solution for the HBR case “Globalization of Wyeth.”  The original plan is to completely centralize the entire IT process.  Over the course of the lengthy implementation, the local business unit leaders push back on this plan and ultimately, the result is hybrid model.

Ultimately, this was probably a better option than what the company originally had, but also better than what corporate IT was suggesting.  This really spelled out the needs of the different stakeholders and how they could exert power to negotiate away from the fully centralized approach.

In addition to finding a middle ground in a corporate IT policy, this idea of finding the middle ground can also be applied to the new trend of mass customization and additive manufacturing.  In the Wired article “In the Next Industrial Revolution, Atoms Are the New Bits,” 3D printing is discussed as an option to completely customize manufactured goods to an individual’s specification.

Although this added flexibility is enticing, this does not mean that we should simply throw away everything that has previously been learned from centuries of manufacturing.  There must be a middle ground. Decentralizing the complete design of items will hinder the designers from learning from others mistakes and slow down the forward motion of innovation.  On the contrary, a completely standardized (and centralized) method would hinder the creativity and flow of new ideas that feed into innovation.

The article addresses this concern and discusses the hybrid solution.  When building the rally fighter, the design and exterior was crowd sourced but the internal, complex components, such as the engine, was sourced from BMW.

As innovation continues to push us further into the future, will we be able to finally understand that any extreme is likely a bad extreme and functioning in some sort of flexible hybrid/middle ground is the key to success?

Business Intelligence

Given the nature of my professional experience, I found this week’s readings quite intuitive.  Working in a start-up environment, there is often no formal business intelligence processes, but adding value to the firm is often understanding the difference between reporting what happened and providing tools to drive business forward.

Tips for Getting BI Right

  • Analyze how executives make decisions.
  • Consider what information executives need in order to facilitate quick, accurate decisions.
  • Pay attention to data quality.
  • Devise performance metrics that are most relevant to the business.
  • Provide the context that influences performance metrics.
  • Take into account users’ feelings, and address their concerns up front.

Common Mistakes

  • Not having a solid knowledge of business processes
  • Focusing on BI as a reporting and decision support tool
  • Not understanding the scalability limitations of BI


In the CIO article Business Intelligence: Not Just for Bosses Anymore an accounts receivable problem at Quaker Chemical is used.  Management is attempting to use BI in order bring sales representatives further into the accounts receivable process.  In an effort to drive down the days in receivable at FierceMarkets, I too found myself looking to bring the sales representatives into the AP process.  I developed a report of clients with balances over 60 days past due and directed the sales team to touch base the clients.  In addition to simply looping the sales team in, my team started a system of notes within the accounting platform that detailed unique circumstances for clients.  The purpose of the notes was to start recording additional details (provided by the sales team and collection calls) that would help the accounting team to remain informed throughout the collections process.


Although this process was a more roundabout approach to solving the problem of high days in receivable, the outcome was similar to the implementation of Quaker Chemical’s business intelligence system.  The key to my AR system’s success was that I viewed the sales team reports as more than just interesting information.   They were a tool for the team to use in order to directly improve number of days in receivable, which in a start-up company, is a performance metric that is extremely relevant to the business.

My experience with thinking in terms of business development without having the resources to invest in a formal business intelligence system leads me to the following question:

Can BI systems be developed with enough flexibility to fulfill the ever-changing needs of the start-up community (and at a price that would allow budding entrepreneurs to take advantage of them)?

Communities of practice and instant gratification

This week’s readings have centered on communities of practice.  Although I was not previously familiar with the term, this is something that I utilize and benefit from constantly.  It was interesting to read about an idea that has become so embedded in my life without me realizing it.  Years ago, I searched for information on specific topics in an effort to perform research, but today, I Google nearly everything.  The items that I Google are often extremely random question that I am seeking a quick and immediate answer to.  For example, in the past 24 hours, I have Googled the following questions seeking instant gratification:

How do you cook tofu?

How fast do cyclists go in Tour De France?

What movie has the song “tiny dancer” in it?

The answers to all three of these questions were delivered to me by a community of practice.  The first search directed me to the website Savvy Vegetarian.  The site supports vegetarian & vegan diets and is comprised of a community randing from life-long veg to those just thinking about it.  The site’s goal is to provide/promote “easy recipes, simple cooking, health eating, green living.”  The second and third search directed me to Yahoo! Answers, a forum where people ask and answer each other’s questions and readers rank the answers based on validity.  Although the Savvy Vegetarian and Yahoo! Answers have a different scope, they are similar in that they are based on the open sharing of knowledge.  Individuals with different skillsets collaborate in order to inform novices and share learnings relative to their topic of expertise.

As more and more communities of practice find their home online, more and more individuals have access and are able to get involved and benefit from them.  This is particularly interesting in regards to communities that are seeking the development of new technology and innovation because the online space has the ability to drastically decrease the time between problem designation and solution development.   As a result, my question to the class would be, what industry can/has benefit(ed) the most from online communities of practice?

Online and Over Exposed

This week’s readings have led me to think about the level of online exposure that our generation has become comfortable with.  People are constantly adding to their online profile by searching on Google, uploading pictures to Facebook and tweeting on Twitter…and all of this is at will.  The general public often forgets that nearly all of their actions online are often recorded, tracked and searchable.  This means that even when looking to let out frustration, the internet is not really a safe forum.  That same vent may come back to haunt you in the future.

Luckily, for the vast majority of an individual’s data will likely make for fairly boring reading for an outsider.  It’s extremely unlikely that I will miss out on a job offer due to updating my Facebook statue with lyrics from a song.  The most that my interactions with social media will do is humanize me and potentially give a potential employer insight into my personality.

Unfortunately, it is possible to have an online presence that is not associated with at-will sharing; people are also being tracked by sources out of their control.  In this week’s case, the job applicant is at risk of losing a job offer because of her history as an activist.  The potential employer ran a Google search that turned up news articles that linked her to her past in activism.  Since news pages often out rank personal ones on Google, the record of her history is not only out of her control, it is also extremely difficult to bury down in Google’s ranks.

If I were in the shoes of the potential employer, I would request a follow-up interview and address the items that were discovered in her background check.  Since the activism was directly related to the job that she was applying for, it makes sense to obtain further information.  Her involvement in the issues appear to have been very deep at one point, but that point was nine years ago.  A lot can change in nine years and it does not make sense to immediately turn away a highly qualified individual for her past beliefs on an issue.

As an adult, I understand the ramifications of my actions fully both online and off and am careful to protect my online presence.  Luckily, my generation was old enough to understand this before the internet grew to be so prevalent.  As future generations are raised on the internet, will they understand the need to protect their online presence?

Steve Jobs, Predictor of Industry Change

 

In The Washington Times’ article, “Steve Jobs: visionary revolutionary,” Steve Jobs is labeled as a visionary because he was able to look into the future and see what the next big thing would be.  After reading Christensen’s book, “Seeing what’s Next: Using Theories of Innovation to Predict Industry Change,” I feel as though I’ve been granted a behind the scenes look into his thought process.  Chapter 1 describes four unique situations where change is possible and innovation will likely succeed by way of disruptive technology.

1.   Undershot Customers – Current customers have a complex problem and the current product is not providing an acceptable answer.

2.   Non-consumers – People have a task that needs to be done, but currently do not have the money or skills needed to accomplish it.

3.   Overshot Customers – Current customers feel that products are far too complex and/or expensive, but have no choice but to purchase them anyways because there are no alternatives.

4.   Nonmarket Context – Government regulations have shifted the environment and altered industry motivation and/or ability.

After understanding the nature of these four situations, it appears as though Steve Jobs focused on both undershot customers and non-consumers in launching new products.  With the iPhone, Steve Jobs was targeting undershot customers.  He saw that the consumers were currently underwhelmed with their phones and that they were forced to carry around several devices in order to accomplish their tasks.

Music –> Pod or MP3 player

Internet Access –> Computer

Phone Calls –> Mobile Phone

Realizing that the market was filled with undershot customers; Steve Jobs recognized the opportunity for innovation and unveiled the iPhone.  The undershot consumers jumped at the opportunity to purchase the iPhone because although the price was high, it fulfilled their needs where other devices previously fell short.

In addition to focusing on undershot customers, it’s difficult to imagine that Steve Jobs did not have non-customers in mind when leading the development of iTunes.  At the time, the majority of customers were either purchasing CDs and burning them to computers or stealing music.  Many of those stealing music were doing so because there was no legal way to obtain music in a digital format.  Steve Jobs recognized that people were willing to pay a reasonable amount for digital music, but simply had no way of doing so because there was no product or service with that offering.  This sparked the opportunity for innovation, and Steve Jobs jumped on it with the release of iTunes.

ITunes gave the non-customers a service that could accomplish the task of legally downloading music.  Through the release of iTunes, Apple was able to convert these non-customers into customers by recognizing their unmet needs, and fulfilling them.

It is clear that Steve Jobs had a knack for recognizing the four situations where innovation will likely succeed.  Looking forward, will Tim Cook spot similar opportunities and continue driving Apple forward with innovative products and services?

Keep innovating, Google!

In the summer of 2004, while just starting as an intern at FierceMarkets, a coworker sent me an invitation to create a Gmail account and I’ve been following Google in some way, shape, or form, ever since.  It often appears as though everything that the company slaps its name on or develops turns to gold and every market it enters, it dominates.  Although this case reads a bit like the Wikipedia page of Google, it’s interesting to read the in-depth history of a company that I personally find intriguing.

What I found the most interesting is how Google is such a prime example of a company that does things correctly.  Google has never type casted itself as a search engine company (read more about Ted Levitt and Marketing Malpractice in my previous post).  Instead “Google’s mission is to organize the world’s information and make it universally accessible to all.”  In addition, Google understands the importance of a shared value and vision and lives and breathes it.  Extremely important decisions are routinely based on the philosophy of “don’t be evil.”  It truly impresses me that the company, which Fortune placed 2nd on its 2011 list of most admired companies, so closely follows the strategies that I am currently learning about as an MBA student.

Google seems to be doing nearly everything right, but being on top today does not ensure future success.  Being on top means you must constantly fight to stay on top.  The case asks what Google should do next and the clear answer to continue innovating.  To date Google has been so successful because it has constantly changed and improved and developed and created.  As long as the company can continue to hire the right people and focus on constant innovation, it will continue to be successful.

Will general knowledge kill the IT department?

The key point of the article What IT can learn from the railroad business, is that the masses are quickly learning new technology and the IT department is marketed in such a way that it may eventually be considered “general office knowledge” along with copying and faxing.  This may result in the eventual breakdown of the IT department, similar to how computers have nearly eliminated the need for secretaries.  In order to better market the IT function within a firm, IT professionals should promote the department as a strategic partner that supports the company in eliminating costs and driving revenues as opposed to a cost center that completes varying levels of complex technological tasks.

This article is reminiscent of the HBR article on Marketing Malpractice: The Cause and the Cure.  Harvard marketing professor Ted Levitt is quoted saying “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”  This urges marketers to focus on the job they are doing as opposed to the specific process currently being used to complete the job.  As innovation runs its course, the current process will become outdated and the job will be completed in a different way.  If the firm wishes to remain in the business of completing that job, they must also innovate.

The IT department does manage the technology of the firm and generates expenses, but it also supports nearly every function of the business and streamlines tasks in order to increase revenue and make the firm more efficient.  This latter job of the IT department is the “quarter-inch hole” and the learning that the IT department can take from the mistakes of railroad business.  Railroad tycoons defined themselves as being in the “train” business, instead of the transportation business, thus when trucks entered the scene, the railroad tycoons failed to view them as competitors.  This allowed the trucks to slip under the radar of the railroad tycoons (see Judo strategy) and eventually steal a significant portion of their profits.

In the case of the IT department, the general public’s growing knowledge of technology is the truck that the IT department needs to watch.  Unless the IT department is able to rebrand itself as a revenue generator and cross-functional, strategic partner, it runs the risk of suffering the fate of the railroad tycoons.

Disruptive Technology

This Wikipedia page was quite interesting.  What jumped out to me the most was the logic of the existing firm being aware of the new technology, but not valuing it enough to disrupt operations in order to pursue it.  As a result, a start-up will be able to steal market share from the existing company by utilizing the disruptive technology.  In this scenario, the existing company often takes a “me too” strategy, which will never allow them to regain the lost market share, in fact, the best case scenario is that it stops losing market share.  This really makes me wonder, is there a more preemptive approach for existing companies to take?

 

How could a start-up company utilizing a Judo strategy take advantage of disruptive technology?

STARS Air Ambulance

Information Systems are extremely important in nearly all businesses, but since this is a relatively new development, there is often a lack of structure and organization within the functional silo.  Often times, this work is outsourced, which results in inconsistencies between systems exorbitant costs and a lack of ownership/leadership.  I found it interesting that by adding one strong IS leader, a company can overcome these issues and drastically affect the structure, cost and efficiency of the company’s IS operations.