Posts Tagged ‘IT’
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.
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?
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.
- 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.
- 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)?
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.
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.
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?
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.