Shoot for the Middle Ground!

April 9, 2012 by

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?

Filed Under: centralized IT, computerworld, Corey Crawford, decentralized IT, Fox, Fox School of Business, HBR, innovation, IT, MBA, MIS, MIS 5001 - Course Takeaways, technology, Temple University, Wired, Wyeth

Disruptive Manufacturing

April 9, 2012 by

Our first article this week, IT governance, Stop the Pendulum!, is about companies’ tendencies to sway back and forth between a centralized and decentralized IT structure. The reality is that having a purely centralized or decentralized structure only works if a company is an ideal fit for such a structure. Centralized IT is viewed as too bureaucratic, resistant to change, and expensive. Company divisions, whether by geography or function tend to prefer a decentralized IT team, which is more responsive to local needs and whose costs are hidden within the department. In reality, costs are typically greater in a decentralized system because of redundancies and a lack of process parity with other departments. The solution for most companies is a hybrid system, which centralizes functions that enjoy economies of scale and do not require agility and decentralizing functions close to the customer that require responsiveness. The challenge for the hybrid system is the interface among functional unit IT and corporate IT. To mitigate the risks associated with this interface, an IT governance policy must clearly identify roles and responsibilities.

It governance ties into our second article this week, The Next Industrial Revolution, Atoms Are the New Bits, which refers to IT governance documents as a “secret sauce.” This article illustrates the disruptive innovation of crowd-sourcing with a story about Local Motors’ Rally Fighter vehicle. Local Motors has been successful by adopting a hybrid structure of crowd sourcing, which centralized functions such as performance and safety to professionals, while decentralizing shape and style by delegating those tasks to the community. This was a logical step as many of the country’s automotive design experts are underemployed, leaving a supply glut of talent. The result is a vehicle that will fill niche-sized voids in a market dominated by large centralized companies.

We have already seen the internet democratize publishing, broadcasting, and communication, now we are seeing the same thing with manufacturing. With this democratization, the range of participation and participants has increased. Crowd-sourcing differs from large companies not just by target market, but also by purpose. A company’s sole purpose is its fiduciary duty, to return profits for its shareholders, while an online crowd-source community exists solely for a project. Now the smartest people in the world can help with a variety of societal problems rather than be controlled for a company’s best interests. Of course, this assumes the intrinsic value of helping the online community is enough incentive to lure them away.

 

Filed Under: centralized IT, crowdsourcing, decentralized IT, disruptive innovation, Fox School of Business, IT, IT governance, Local Motors, MBA, Michael Blaszczyk, MIS, MyBlog, Strategy, Temple University

Business Intelligence

March 19, 2012 by

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)?

Filed Under: accounting, AR, business intelligence, CIO, Corey Crawford, FierceMarkets, Fox, Fox School of Business, IT, MBA, MIS 5001 - Course Takeaways, technology, Temple University

Knowledge Management at Katzenbach Partners, LLC

March 12, 2012 by

The introduction of a Knowledge Management system at Katzenbach Partners, LLC illustrates the need to develop systems that accomplish company goals, while at the same time are highly intuitive and user friendly. Katzenbach needed a system that was flexible and allowed its rapidly growing workforce to achieve synergy by connecting with other members, managing resources, and fostering intellectual capital development.  It was important that this system was designed to align with the values and goals of the company itself.  For example, this system provides a direct benefit on the company’s first goal of having a clear and lasting client impact. The knowledge center provides greater continuity to teams working with the same client, even if the members of that team change from year-to-year.

The biggest obstacle facing Katzenbach was the adoption of this system by partners. The system relies on the participation of partners to provide feedback and intellectual capital in order to be effective. Designing the system to be intuitive not only aids in early adoption, but also saves time uploading documents, allowing members to spend time on clients. Another feature that aided in adoption was the hybrid formal and informal elements which provided a minimal structure while allowing users to adapt the system as they see fit.  Additionally, Katzenbach sponsored fun events such as “Stump Niko” and a “Tagging Party” to create buzz and excitement over the new knowledge management system.  What I found most interesting about the public analytics displayed was the “Top Ten Inquiries with No Results,” which identified the white space in the system. This is a powerful tool because it helps managers identify the areas of weakness within the company’s knowledge center.

Filed Under: consulting, Fox School of Business, Information sharing, IT, Katzenbach LLC, knowledge management, knowledge sharing, MBA, Michael Blaszczyk, MIS, MyBlog, Strategy, tacit knowledge, Temple University

The Reprocussions of Google Search Perceptions

February 27, 2012 by

In this week’s reading we learned about the research that recruiters perform during the interview process and how the younger generations have grown up in a world with a digital spotlight on them. Part of life is growing up and in that process, making mistakes and learning about yourself. We iron out ideas and reevaluate ideologies from our younger, less mature, and more capricious life as a young adult. At the same time, these ambitious job applicants need to be mindful of their digital footprint. As the “We Googled You” case illustrates, even benign information about someone can have dire consequences if the context is taken at a certain perspective.

In the case of Mimi Brewster, her activist work was documented in newspapers, which are notoriously difficult to eradicate from the internet. Her anti-World Trade Organization activism from college may simply be youthful capricious behavior, or it may be a reflection of a deeper belief. More important than her beliefs, is the perception she gives to others. Fred Westen and his hiring manager are concerned enough about this information that they need to meet to discuss it. Sure, as Fred notes, the material against Mimi could be much worse, but can the company take a risk with entering into such an important market such as China?

China’s business environment requires collaboration with the government, which in this case will surely learn of Mimi’s history and more than likely will take exception. This has the potential to derail Hathaway Jones’ entry into the lucrative Chinese market, where the growing middle class has an insatiable appetite for luxury brands. However, Mimi does appear to bring some value. Her creativity and motivation could be useful in turning around a stagnate brand and her knowledge of Chinese culture could help to market the firm’s products in a way that exploits the dichotomy between the Chinese’ Confucian ways and a young trendy society. For this reason I would not hire Mimi for the Shanghai position, but rather for product management in China. The risks associated with having her as the main interface between Hathaway Jones and the Chinese government are too great.

Filed Under: China, Fox School of Business, Google, Hathaway Jones, IT, MBA, Michael Blaszczyk, Mimi Brewster, MIS, MyBlog, recruiting, social media, Strategy

Online and Over Exposed

February 27, 2012 by

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?

Filed Under: Corey Crawford, Facebook, Fox, Fox School of Business, Google, IT, MBA, MIS 5001 - Course Takeaways, online profile, over connected, social media, technology, Temple University

Disruptive Technology and Organizational Innovation

February 20, 2012 by

Apple, Inc. and Amazon are two great examples of companies that have exploited opportunities by offering disruptive innovations. However, each company has exploited these opportunities in different ways. Amazon has targeted non-consumers, people who have traditionally hired other people to manage storage capacity and software to enhance customer relationships.  On the other hand, Apple, Inc. has targeted both non-consumers and undershot consumers, those who are frustrated with the limited functionality of existing devices. Additionally, undershot consumers are willing to pay more for enhancements along dimensions that are most important to them. These companies were able to offer disruptive technologies because each had the values, processes, and resources necessary to exploit these opportunities.

Amazon’s Web Services (AWS) are helping developers and businesses do more than what they previously could and at a lower cost. These services are a great match for Amazon, who already has vast amounts of storage capacity and technical expertise.  Once the functionality of web services had become good enough for consumers, AWS succeeded by focusing on improving convenience, customization, and price. AWS offers ease of use, pricing, scalability, performance, and the ability for developers to get up and running quickly. However, AWS differentiated itself by allowing businesses to get to market faster while not hiring additional people. The most attractive aspect of AWS is its low cost; there is no significant capital expenditures and the service is priced as pay-as-you-go.  A great deal of Amazon’s success can be attributed to their organizational structure, which fostered collaboration. For example, Small teams were organized with a blend of business and technical backgrounds and were responsible for defining the service, building it, operating it, and running it like a business. Lastly, the company continues to focus on long-term goals and the needs of individual developers so that adoption and widespread use can drive revenues.

Apple, Inc. meanwhile has been able to target non-consumers with a new-market disruptive technology, the iPhone, which changed not only the context of its use for smartphone users, but also the basis for competition within the industry. Now, smartphones not only serve as a way of communicating, but also as a small computer, camera, and PDA.  Additionally, smartphones are no longer evaluated according to cost or voice services, but also high-touch attributes such as applications. Products such as the and iPod can be considered radical, sustaining up-market innovations in that each is an improved product introduced to existing customers.  Apple’s integration has allowed it to focus on improving those dimensions that were not yet good enough for consumers of MP3 players. In this case, storage capacity and accessibility were improved by creating an iPod that can store 1000s of songs and manage content via iTunes. Apple’s integration of controlling both hardware and software has allowed it to thrive in recent years. Additionally, Apple vertically integrated by purchasing micro-processing manufacturers, outsourcing flash memory components that were already “good enough”, and controlling distribution through retail outlets. Lastly, Apple horizontally integrated with its “digital hub” strategy by using iTunes, applications, and accessories. Both companies have seen robust growth in recent years and it will be interesting to see which company will create the next disruptive innovation.

Filed Under: Amazon, Apple, cloud computing, disruptive innovation, Fox School of Business, Google, IT, MBA, Michael Blaszczyk, MIS, MyBlog, Strategy, temple

Steve Jobs, Predictor of Industry Change

February 20, 2012 by

 

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?

Filed Under: Apple, Christensen, Corey Crawford, disruptive technology, Fox, Fox School of Business, innovation, iPhone, iTunes, MBA, MIS 5001 - Course Takeaways, Steve Jobs, technology, Temple University, Tim Cook, Washington Times

How IT Influences Strategy: Google, Inc. and Volkswagen AG

February 13, 2012 by

During this week’s readings, my key takeaway was how much IT can influence company-wide strategic decisions. For example, Volkswagen’s IT head, Uwe Matulovic, faced several obstacles with a growing business, high exchange rates, worldwide auto industry overcapacity, and escalating oil prices. The biggest challenge of all was the view point from within the company that IT was an increasing expense and an obstacle for people looking to improve operations at the business unit level. Matulovic established a prioritization of proposed projects based on company-wide objectives. Unfortunately for many business units, several projects were not approved due to budget restrictions. The multitude of proposed projects exceeded $210 million in funding. However, parent company VWAG allowed an initial budget of only $60 million.  $30 million went to parent company mandated projects, $16 million went to essential “stay-in-business” projects, leaving only $14 million at the discretion of Matulovic’s department. Despite Matulovic’s transparency in the decision making process and his willingness to involve all stakeholders, many business units were disappointed when they realized none of their proposals would be approved. In Volkswagen’s case strategy was clear, but implementation was a problem because of legacy IT architecture, financial constraints, and bureaucracy limited IT’s ability to execute. Even with a clear strategy from corporate headquarters, IT was limited in the projects they could undertake to advance those goals. The prioritization process implemented by Matulovic demonstrates IT involvement in strategic decisions that affect each unit of a complex business.

In contrast to Volkswagen’s clear strategy, was the ambiguity of Google Inc.’s. Initially considered a search engine and web-based advertising company, Google, Inc. has now branched out into a variety of areas such as cloud computing, third-party video content, email, and mobile applications. Once competing solely with Yahoo, Google now competes with companies such as Microsoft, Apple, eBay, Amazon, and the Washington Post. While these new venture present great opportunity for Google, it risks losing it’s dominate competitive advantage in search and advertising. Again, IT is limited, but in this case by the amount of human capital available to pursue company goals. Google must choose which areas to pursue and how best to allocate these resources. Regardless of the strategy Google, Inc. chooses to pursue, IT management will greatly influence the execution of company-wide strategy.

Filed Under: Fox School of Business, Google, IT, MBA, Michael Blaszczyk, MIS, MyBlog, Strategy, Volkswagen

Keep innovating, Google!

February 13, 2012 by

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.

Filed Under: Corey Crawford, don’t be evil, Fortune, Fox, Fox School of Business, gmail, Google, innovation, IT, job based branding, MBA, MIS, MIS 5001 - Course Takeaways, technology, Ted Levitt, Temple University
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