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John Ottersbach Info I-303 Organizational Informatics June 10, 2009 Project # 2 This is the project report from evaluating the ModMeters mini-case (Textbook pages 55-57) 1. Synopsis This case is about a company at the very beginning of some huge expansion initiatives. A feasibility analysis from all departments is just starting to get under way. We will be looking at IT’s role in the analysis, which will include all department’s participation. The departmental executives meet to take account of their current budget needs and to see what departmental initiatives to be instituted to adopt the new strategic plans. . Key Issues 1. The company has grown before do meet demand. 2. Strategic initiative 1: Go from North American operations to global operations. 3. The plan involves opening new plants in Asia and Eastern Europe. 4. Some proposed countries lack the infrastructure the operations will require. 5. IT funding within the organization is tightly controlled and hard to get. 6. Strategic initiative 2: Set up direct-to-customer sales. 7. This will place new web driven demands on the company. 8. The current architecture is a large range of technologies, layered on top of each other, that do not work together well. . Outside auditors are given new authority and will be demanding new information. 10. The IT budget is cut up with 50% going to support current operations and 30% towards maintenance. The rest of the budget is based on the ROI of the individual departments. Most of which is allotted to manufacturing. 11. For the most part infrastructure and IT architecture needs are ignored with new projects. They are maintained but little else is done for them. 12. The new strategy is focused on growth in new markets and supplying markets quicker with offshore operations. 13.
Marketing’s budget will need an increase with the second initiative. 14. A new process of IT planning and budgeting is required. 3. Case Evaluation Strategy that was used This report looks at a “horizontal” slice of many corresponding issues (refer to Section 5 – later in the report – for further explanation of these issues). Mixing the details of the case with the general issues into a relevant and cogent analysis was the main concern and involved various methods. a. Setting the Context The organization does not have enterprise architecture or common vision; IT is departmentalized.
Senior management is invited into the board room discussions but only to test the feasibility of the strategies that were decided upon by higher level executives. IT is not integrated into the departments fully instead the departments bring their projects to IT staff for completion. There is recognition of the system’s shortcomings and it is being addressed by the executive team. b. IT Planning Process After looking at the key points and horizontal slice of the case I prepared a plan that included best practices from the Textbook. Additionally I did some further research to examine the way organizations reached their IT plans.
SWOT analysis from my other business course seemed to be an appropriate tool for this kind of task. This case had a lot of issues to sort through and put into order. One major aspect was that the organization as it currently exists lacks many of the fundamental elements that need to be employed before growth can be planned. c. Looking Forward After finding the major themes I decided to look at aspects that would need to be examined before taking any steps toward the new strategic initiatives. Specifically implementing a GAP analysis is a strong first action towards “putting the house in order”.
By looking forward and taking the current IT investments into perspective the organization is better suited to put into operation a better IT architecture and infrastructure. Also linking the projects to business metrics is important. For this I looked at the textbook examples and role-played some scenarios for each of the three. 4. Discussion Questions The following is the answer to the discussion question on page 57 of the textbook. Develop an IT planning process for ModMeters to accomplish the demands as set out above. ModMeters is suggesting a major shift in its growing plans.
Shifting from meeting demand it is looking to expand operations and create new markets. These aggressive plans will rely heavily on IT to pave the way and aid in the ventures. IT and business heads have met to develop a planning process that will look at the organizations conversion process and outputs. New markets and expanding operations will take time to develop and require significant investments. This new business model will provide an opportunity to get the IT planning process right and make sure it is dynamic enough to work with the overall business.
In order to leverage IT for the benefit of the whole organization enterprise architecture must be developed to oversee IT strategy. Centralizing IT strategy at the start of the new business strategies will be important to make sure IT and business are working together with common goals that deliver the most value. The following steps are to be completed within each department: 1. Complete a SWOT analysis with a focus on IT core competences. 2. Survey business employees on what technologies they use and how they utilize them. 3. From within the business locate key workers that are capable of becoming account managers.
Their initial focus is on understanding how the department uses technology in the current environment. After gathering the initial data about core IT competencies and departmental capabilities the account managers should document and present their findings to the executives and other account managers. From this the governance body can look for existing strategic themes and interoperability. After this, guiding principles that link to the new corporate strategies must be developed into a core vision for IT. This will be formed by the executives in conjunction with the business account managers.
The focus will be on expanding operations globally and direct-to-customer sales. We must be careful not to ignore current business needs and maintain operations. The biggest hurdle is the prioritization process that approves projects. This reaches in all aspects of the business and effects their ability to operate. With the large picture in view we will need to take a portfolio approach that can be used across the organization to increase value in chunks. We will need to set up funding buckets for the different dimensions of IT strategy and make sure they are all funded appropriately.
With the account managers all weighing in with equal say this should remove the focus on ROI and begin to show other value measurements. Initially on each proposed project every account manager should discuss and examine how their department can leverage the technology. Of course this hinges on the large problem of having a poorly designed IT architecture. We should focus on infrastructure projects that allow the businesses to get rid of outdated software and hardware that can be replaced with standard equipment that strengthens for enterprise decisions. Those projects should also align with the new strategies proposed.
This move will also help reign in the spending on maintenance and regulatory issues in the future. To further increase our IT system’s flexibility and capabilities we will need to make sure the portfolio approach covers the following: * Business improvement: This can be linked with expanding globally with a focus on putting the best practices in the new plants. * Business enabling: The direct-to-customer sales initiative will be the bulk of these projects in the near future. * Business opportunities: The new strategies and Stan’s new auditing needs can be aided by these projects. Opportunity leveraging: These projects are different than looking for strategic themes as discussed earlier. This will be implementing the opportunities from other projects. A key to succeeding in the new corporate strategy. * Infrastructure: These will be a major hurdle but will help free up the budget in the future. If we build a strong intranet that is on a standard architecture it will also support the operations globally. One advantage to funding and looking at these project types individually is that we can develop a way to measure their impact and value.
Not all of them will generate revenue but they will all create value if done well. As a first step, when the account managers meet for project evaluation, the value and objectives of a project must stated and agreed upon. 5. Issues I have Discussed I utilized the chart, Dr. Ramachandran offered, to find the connections between the subject matter we have studied and the case. My analysis follows: From Lecture 1 and the Textbook reading assignment pages 1 – 13. * The case is centered on an organization that defines value by ROI numbers.
The new strategic plans will need to focus less on immediate results and plan for a long term investment that will not pay immediate returns. * In the case, decisions about IT are made at a departmental level. There is a central IT part of the organization but they are not set up to look at the enterprise level. The onion is peeled and needs to be put back together before the global plans can bear fruit. The company will need to get an overview of what is in each department, what is working well, and what needs upgrading to avoid maintenance. No mention of account managers was made in the case and since the executive were bringing in their wish list of IT projects there is probably not a strong connection between the business and IT. During specific projects this may differ but corporate sponsorship will need to be a primary focus in the upcoming plans. * The strategic plans will have to take a long term view on all fronts – infrastructure changes, IT architecture changes, IT strategy, global growth, and direct-to-customer sales. IT has been driven by the business needs and advancements have not been incorporated well leaving the used systems in a chaotic state.
Having a longer term view means bringing in technologies, software, and hardware that will work together with existing systems and position the organization for the future. The small IT budget and the way it gets doled out reflect a short term view that focuses on revenue generating expenses. * The new process will require IT and business to work in conjunction to form a strategy and plan. Putting enterprise architecture in place can put a strain on organizations that are used to having their demands met for departmental gains. Ideas and reasons will have to be communicated and understood for this to work.
ModMeters will get backlash from the manufacturing sector due to their proportionally large budget going to other ventures. * One of the biggest failures of the company has been to set up standards and identify potential value from interoperability. Having enterprise architecture will help identify strategic themes for the business departments. * A formal process to prioritize the available projects has been lacking and all projects are currently measured on ROI only. Each project will need to identify its value, which will not always be monetary, and then can be assessed individually.
A portfolio approach should be adopted to help in this process. Additionally funding will need to be allocated for different project types that supply different value. Previously infrastructure has been lacking with ModMeters project selections. * Since most of the organizations projects relate to the profit arm of the business they are somewhat easy to measure the success of. As growing the market becomes the primary concern the measurement process must be devised for other project types. Measurements must be put in place and followed up on to ensure projects are achieving value for the organization. The departments are competing with one another by bringing their projects to the budget meeting separately and sharing from the same budget. Seeing if there is a way to combine different department’s projects into a holistic orientation could also improve the feeling of joint ownership. With the change in organization strategy it is a chance to compare and combine projects and get departmental liaisons working together. From Lecture 2 and the Textbook reading assignment pages 14 – 25. * ModMeters’ view of IT is still one that assumes the business should drive IT strategy.
Since IT does not have a true voice in the decision making process they are not able to lead strategy but merely follow. There may have been a better time to start implementing technology projects for direct-to-sales but since they were not aware the company was heading in that direction the time is less opportune. * ModMeters has a system architecture that limits its flexibility and capabilities. This is partly due to the fact that its leadership can only react to decisions that are being made at the top. * Strategic themes are being missed because IT gets developed at the departmental level.
Successfully establishing themes will make the infrastructure and architecture more reliable and departments will be able to communicate better. This will be instrumental in developing and completing a global strategy for the business. * The new strategy will need to have support from the leadership rather than just being able to support the strategy and advise if it is feasible. They need to give input into the vision and make sure initiatives are supporting the business objectives. This direct communication is lacking with the company at present as the COO passes along strategy information to the CIO but does not have a stake in it himself. The dimensions of IT strategy are not considered in a productive way with the organization. There is a focus on ROI measurements that support business improvement mostly. All five of the dimensions need funding and attention. The new process must address this key weakness of the organization’s IT. * The planning process needs to include locating important communicator for the role of account managers, regular interaction of those account managers about IT plans, funding buckets for all five dimensions of IT strategy, and a way to value and therefore prioritize the different types of IT projects with the help of a portfolio.
From Lecture 3 and the Textbook reading assignment pages 26 – 36. * Until now the organization measures a department’s contribution by ROI and rewards them with a larger portion of the overall budget. We can see ModMeters’ lack of appreciation for IT by allotting only 2% of the budget. * The company does not have a team environment in place. This makes strategies less effective since not everyone understands what is important for the business to succeed. The need to design a system that puts the new strategic focuses at the forefront is apparent.
This will also give focus to the IT projects that come up for review and implementation. * A valuation program will have to be put in place and the organization will have to educate the workers on how it works. This will influence the Human Resources budget also. * Utilizing surveys within the company are a good way to get a pulse on how the company is doing with employee satisfaction. With no mention in the case about what is currently in place an outside company could be hired to perform this which would increase the confidence in the results. * Link strategic imperatives to the new business goals.
This will additionally focus the IT and business employees to propose projects that support those goals. 6. Organization Chart Board of ModMeters CEO John Johnson COO CFO Stan Abrams CIO Brian Smith Fred Tompkins VP of HR Harriet Simpson VP of Marketing Brenda Barnes VP of R ; D Ted Kwok 7. Business Impact assessment To: Brian Smith Business Impact Summary: ModMeters’ infrastructure is hampering its growth and regulation compliance. There is little communication between departmental systems due to this patchwork of software and hardware technologies.
This setup reduces the organizations response abilities and flexibility as well as increasing maintenance and storage costs for an array of systems that can fail and need hard to obtain materials on hand. Compiling a thorough set of documentation for processes that exist on multiple software packages can be very challenging. This is more than a chance to clean house, this is an opportunity to position the company for the future. Recommendation 1: Make a smooth transition likely by hiring and creating an internal change management team.
They should be able to document processes and enable different parts of the business to communicate effectively. Recommendation 2: Bring into the fold a third party organization to upgrade and standardize your infrastructure. They can also help create documentation and financial reports that will help comply with new government regulations. By enabling fewer systems to do more work you will have an infrastructure and processes that will adapt to new business demands and make value more visible. Word Count: 198 Author: John Ottersbach