I got some questions on the Stars case in an email and wanted to post them here so that everyone can see them. Please whenever you have questions about the class materials, ask them by posting on this site. That way, everyone who has the same questions can see the answers. My thanks to Xiaodi Ji for being the first one to ask a quesiton.
Dear Richard,I have some thoughts and confusions about the first case, Stars Ambulance. I am a full-time student so I do not have rich experiences about the company or management. Could you help correct them?First, What is the most important issue in the company?They do not have IT governance or CEO does not give them enough for developing IS department. It about more than the CEO and money. There needs to be an agreement from the board, through the senior executives and down to the CIO about what the role of IT is in the company. Is it to provide low cost administrative services, or to transform the existing business to become a digital business. Everyone in the organization needs to understand what IT’s role is and how they are expected to interact with IT.Then, in this case, it shows us each department hires their own consultants. I think this is not good. The first reason is that each department builds their own program which may cannot connect to the main database smoothly. Then departments may duplicate functional people when actually, they just need one. Thus, building a tech center is a good method to solve this problem, especially for the STAR. Your analysis for STARS is fine but recognize that it doesn’t necessarily fit everywhere. Think of a holding company that has three businesses: one is an online shoe store, one makes specialty sauces for Italian food and one publishes a newspaper. These three businesses are so different that they will need very different things from IT. Trying to centralize everything would be a big mistake. Again, this should be thought abut at the very top of the organization, a decision taken and communicated to all about what they can and can’t do.However, I remember that someone said that building a tech center is not necessary because the consultant who works for the department may know their system well. Is this good or not? Could you please tell me why? It all depends on the types of business involved. In my old company we had one line of business with a 4% profit margin and another with at 75+% profit margin. They needed, and could afford, very different things.Finally, how to decide “right thing”?You give us an example about 7-people company build a 1 million CRM system. I know it is to expensive for a small company. However, it is also necessary for them because even they just have 7 people, they need organize their information to ensure that they never lose anything. Meanwhile, they can form a complete system for managing employee. If we do not form complete rules in the beginning, it would be hard for us to build in the future. Are they do a right thing or not? I think at beginning, they spend a lot in building a system will help solve many problems in the future, which means save more money. I think you misunderstood. The example was a business a $1 billion business with only 7 customers (Intel, Samsung, IBM, etc). There were teams of 10-30 of our people (mostly technical service people) at every one of their chip foundries. We didn’t need a CRM system to see who was buying what from which channel or saying things online about us, success in this industry was about getting you chemical specified during the development of a chip (scientific systems) and then never letting them run out of product (supply chain systems).Thank you for your help!Xiaodi Ji