The most Common Elements in the Case Studies – Management Assignment Help

Assignment Task:

Task:

title: Individual Reflective Essay
Task: The aim of the assignment is for you to reflect on all cases that were presented throughout the course. Your reflections should focus on identifying the most common elements in the case studies and how the analysis of the cases contributed to your understanding about the importance of IT/IS Strategy and Governance impacting Business. You will also emphasise your one single most learning from the course and how it will impact any of your future practice in the area of IT/IS Strategy and Governance for Business.

• The case studies are all from: Smith, H. A., and J. D. McKeen (2015). IT strategy: Issues and Practices (third edition) Boston: Pearson, #1-L07-1-002, Queen’s School of Business, reproduced by permission of Queen’s University, School of Business, Kingston, Ontario, Canada
• Mini Case: IT Planning at ModMetersBrian Smith, CIO of ModMeters, groaned inwardly as he listened to CEO John Johnson wrapping up his remarks. “So our executive team thinks there are real business opportunities for us in developing these two new strategic thrusts. But before I go to the board for final approval next month, I need to know that our IT, marketing, and sales plans will support us all the way,” Johnson concluded. Brian mentally calculated the impact these new initiatives would have on his organization. He had heard rumors from his boss, the COO, that something big was coming down. He had even been asked his opinion about whether these strategies were technically doable, theoretically.
• But both at once? Resources—people, time, and money—were tight, as usual. ModMeters was making a reasonable profit, but the CFO, Stan Abrams, had always kept the lid screwed down tightly on IT spending. Brian had to fight for every dime. How he was going to find the wherewithal to support not one but two new strategic initiatives, he didn’t know. The other VPs at this strategy presentation were smiling. Taking ModMeters global from a North American operation seemed to be a logical next step for the company. Its products, metering components of all types, were highly specialized and in great demand from such diverse customers as utility companies, manufacturers, and a host of other industries. Originally founded as Modern Meters, the firm had grown steadily as demand for its metering expertise and components had grown over the past century or so.
• Today ModMeters was the largest producer of metering components in the world with a full range of both mechanical and, now, digital products. Expanding into meter assembly with plants in Asia and Eastern Europe was a good plan, thought Brian, but he wasn’t exactly sure how he was going to get the infrastructure in place to support it. “Many of these countries simply don’t have the telecommunications and equipment we are going to need, and the training and new systems we have to put in place are going to be substantial,” he said. But it was the second strategic thrust that was going to give him nightmares, he predicted. How on earth did they expect him to put direct-to-customer sales in place so they could sell “green” electric meters to individual users?
• His attention was jerked back to the present by a flashy new logo on an easel that the CEO had just unveiled. “In keeping with our updated strategy, may I present our new name—MM!” Johnson announced portentously. “Oh, this is just great,” thought Brian. “Now I have to go into every single application and every single document this company produces and change our name!” Because of its age and scientific orientation, ModMeters (as he still preferred to call it) had been in the IT business a long time. Starting back in the early 1960s, the company had gradually automated almost every aspect of its business from finance and accounting to supply chain management. About the only thing it didn’t have was a fancy Web site for consumers, although even that was about to change. ModMeters currently had systems reflecting just about every era of computers from punch cards to PCs.
• Unfortunately, the company never seemed to have the resources to invest in reengineering its existing systems. It just layered more systems on top of the others. A diagram of all the interactions among systems looked like a plate of spaghetti. There was no way they were going to be able to support two new strategic thrusts with their current budget levels, he thought as he applauded the new design along with the others. “Next week’s IT budget meeting is going to be a doozy!” Sure enough, the following week found them all, except for the CEO, back in the same meeting room, ready to do battle. Holding his fire, Brian waited until all the VPs had presented their essential IT initiatives. In addition to what needed to be done to support the new business strategies, each division had a full laundry list of essentials for maintaining the current business of the firm. Even Abrams had gotten into the act this year because of new legislation that gave the firm’s outside auditors immense scope to peer into the inner workings of every financial and governance process the organization had.
• After listening carefully to each speaker in turn, Brian stood up. “As many of you know, we have always been cautious about how we spend our IT budget. We have been given a budget that is equal to 2 percent of revenues, which seriously limits what we in IT have been able to do for the company. Every year we spend a lot of time paring our project list down to bare bones, and every year we make do with a patchwork of infra-structure investments. We are now at the point where 80 percent of our budget in IT is fixed.
• Here’s how we spend our money.” Brian clicked on a PowerPoint presentation showing a multicolored pie chart. “This large chunk in blue is just about half our budget,” he stated. “This is simply the cost of keeping the lights on—running our systems and replacing a bare minimum of equipment. The red chunk is about 30 percent of the pie. This is the stuff we have to do—fixing errors, dealing with changes mandated by government and our own industry, and providing essential services like the help desk. How we divide up the remain-der of the pie is what this meeting is all about.” Brian clicked to a second slide showing a second pie chart. “As you know, we have typically divided up the remaining IT budget proportionately, according to who has the biggest overall operating budget. This large pink chunk is you, Fred.”
• Brian gestured at Fred Tompkins, head of manufacturing and the most powerful executive in the room. It was his division that made the firm’s profit. The pink chunk easily took up more than half of the pie. Tompkins smiled. Brian went on, pointing out the slice that each part of the firm had been allotted in the previous year. “Finally, we come to Harriet and Brenda,” he said with a smile. Harriet Simpson and Brenda Barnes were the VPs of human resources and marketing, respectively. Their tiny slivers were barely visible—just a few percent of the total budget. “This approach to divvying up our IT budget may have served us well over the years”—Brian didn’t think it had, but he wasn’t going to fight past battles— “however, we all heard what John said last week, and this approach to budgeting doesn’t give us any room to develop our new strategies or cover our new infrastructure or staffing needs. Although we might get a little more money to obtain some new applications and buy some more computers”—Abrams nodded slightly—“it won’t get us where we need to go in the future.”
• A third graph went up on the screen, showing the next five years. “If we don’t do something now to address our IT challenges, within five years our entire IT budget will be eaten up by just operations and maintenance. In the past we have paid minimal attention to our infrastructure or our information and technology architecture or to reengineering our existing systems and processes.” A diagram of the “spaghetti” flashed on. “This is what you’re asking me to manage in a cost-effective manner. It isn’t pretty. We need a better plan for making our systems more robust and flexible. If we are going to be moving in new directions with this firm, the foundation just isn’t there. Stan, you should be worried that we won’t be able to give our auditors what they ask for. But you should also be worried about our risk exposure if one of these systems fails and about how we are going to integrate two new business ventures into this mess.” Tompkins looked up from his papers. It was clear he wasn’t pleased with wherethis presentation was headed. “Well, I, for one, need everything I’ve asked for on my list,” he stated flatly. “You can’t expect me to be the cash cow of the organization and not enable me to make the money we need to invest elsewhere.” Brian was conciliatory. “I’m not saying that you don’t, Fred. I’m just saying that we’ve been given a new strategic direction from the top and that some things are going to have to change to enable IT to support the whole enterprise better. For example, until now, we have always prioritized divisional IT projects on the basis of ROI. How should we prioritize these new strategic initiatives? Furthermore, these new ventures will require a lot of additional infrastructure, so we need to figure out a way to afford this. And right now our systems don’t ‘talk’ to the ones running in other divisions because they don’t use the same terminology. But in the future, if we’re going to have systems that won’t cost increasing amounts of our budget, we are going to have to simplify and integrate them better.”
• Tompkins clearly hadn’t considered the enterprise’s needs at all. He scowled but said nothing. Brian continued, “We are being asked to do some new things in the company. Obviously, John hopes there’s going to be a payback, but it may take a while. New strategies don’t always bear fruit right away.” Now looking at Abrams, he said pointedly, “There’s more to IT value than short-term profit. Part of our business strategy is to make new markets for our company. That requires investment, not only in equipment and product but also in the underlying processes and information we need to manage and monitor that investment.”
• Harriet Simpson spoke for the first time. “It’s like when we hire someone new in R&D. We hire for quality because we want their ideas and innovation, not just a warm body. I think we need to better understand how we are going to translate our five key corporate objectives into IT projects. Yes, we need to make a profit, but Stan needs to satisfy regulators and Brenda’s going to be on the hot seat when we start marketing to individuals. And we haven’t even spoken about Ted’s needs.” As the VP of R&D, Ted Kwok was tasked with keeping one or more steps ahead of the competition. New types of products and customer needs would mean expansion in his area as well.
• Abrams cleared his throat. “All of you are right. As I see it, we are going to have to keep the cash flowing from Fred’s area while we expand. But Brian’s got a point. We may be being penny wise and pound foolish if we don’t think things through more carefully. We’ve put a lot of effort into developing this new strategy, and there will be some extra money for IT but not enough to do that plus everything all of you want. We need to retrench and regroup and move forward at the same time.” There was silence in the room.
• Abrams had an annoying way of stating the obvious without really helping to move the ball forward. Brian spoke again. “The way I see it, we have to understand two things before we can really make a new budget. First, we need to figure out how each of the IT projects we’ve got on the table contributes to one of our key corporate objectives. Second, we need to figure out a way to determine the value of each to ModMeters so that we can prioritize it. Then I need to incorporate a reasonable amount of IT regeneration so that we can continue to do new projects at all.” Everyone was nodding now. Brian breathed a small sigh of relief. That was step one accomplished. But step two was going to be harder.
• “We have a month to get back to the board with our assurances that the IT plan can incorporate the new strategies and what we’re going to need in terms of extra funds to do this. As I said earlier, this is not just a matter of throwing money at the problem. What we need is a process for IT planning and budgeting that will serve us well over the next few years. This process will need to accomplish a number of things: It will need to take an enterprise perspective on IT. We’re all in these new strategies together.
• It will have to incorporate all types of IT initiatives—our new strategies, the needs of Fred and others for the new IT to operate and improve our existing business, Stan’s new auditing needs, and our operations and maintenance needs. In addition, we must find some way of allocating some of the budget to fixing the mess we have in IT right now. It must provide a better way to connect new IT work with our corporate objectives. It must help us prioritize projects with different types of value. Finally, it must ensure we have the business and IT resources in place to deliver that value.”
• Looking at each of his colleagues in turn, he asked, “Now how are we going to do this?”
• Discussion Question
• 1. Develop an IT planning process for ModMeters to accomplish the demands as set out above.
• Mini Case from: Smith, H. A., and J. D. McKeen (2015). Mini Case “IT Planning at ModMeters” In McKeen, J. D., & Smith, H. (2015). IT strategy: Issues and Practices (third edition) Boston: Pearson, pp. 104-107#1-L05-1-008, Queen’s School of Business, reproduced by permission of Queen’s University, School of Business, Kingston, Ontario, Canada
• Mini Case: Delivering Business Value with IT at Hefty Hardware
• “IT is a pain in the neck,” groused Cheryl O’Shea, VP of retail marketing, as she slipped into a seat at the table in the Hefty Hardware executive dining room, next to her colleagues. “It’s all technical mumbo-jumbo when they talk to you and I still don’t know if they have any idea about what we’re trying to accomplish with our Savvy Store program. I keep explaining that we have to improve the customer experience and that we need IT’s help to do this, but they keep talking about infrastructure and bandwidth and technical architecture, which is all their internal stuff and doesn’t relate to what we’re trying to do at all! They have so many processes and reviews that I’m not sure we’ll ever get this project off the ground unless we go outside the company.”
• “You’ve got that right,” agreed Glen Vogel, the COO. “I really like my IT account manager, Jenny Henderson. She sits in on all our strategy meetings and seems to really understand our business, but that’s about as far as it goes. By the time we get a project going, my staff are all complaining that the IT people don’t even know some of our basic business functions, like how our warehouses operate. It takes so long to deliver any sort of technology to the field, and when it doesn’t work the way we want it to, they just shrug and tell us to add it to the list for the next release! Are we really getting value for all of the millions that we pour into IT?”
• “Well, I don’t think it’s as bad as you both seem to believe,” added Michelle Wright, the CFO. “My EA sings the praises of the help desk and the new ERP system we put in last year. We can now close the books at month-end in 24 hours. Before that, it took days. And I’ve seen the benchmarking reports on our computer operations. We are in the top quartile for reliability and cost-effectiveness for all our hardware and systems. I don’t think we could get IT any cheaper outside the company.” “You are talking ‘apples and oranges’ here,” said Glen. “On one hand, you’re saying that we’re getting good, cheap, reliable computer operations and value for the money we’re spending here. On the other hand, we don’t feel IT is contributing to creating new business value for Hefty. They’re really two different things.”
• “Yes, they are,” agreed Cheryl. “I’d even agree with you that they do a pretty good job of keeping our systems functioning and preventing viruses and things. At least we’ve never lost any data like some of our competitors. But I don’t see how they’re contributing to executing our business strategy. And surely in this day and age with increased competition, new technologies coming out all over the place, and so many changes in our economy, we should be able to get them to help us be more flexible, not less, and deliver new products and services to our customers quickly!”
• The conversation moved on then, but Glen was thoughtful as he walked back to his office after lunch. Truthfully, he only ever thought about IT when it affected him and his area. Like his other colleagues, he found most of his communication with the department, Jenny excepted, to be unintelligible, so he delegated it to his subordinates, unless it absolutely couldn’t be avoided. But Cheryl was right. IT was becoming increasingly important to how the company did its business. Although Hefty’s success was built on its excellent supply chain logistics and the assortment of products in its stores, IT played a huge role in this. And to implement Hefty’s new Savvy Store strategy, IT would be critical for ensuring that the products were there when a customer wanted them and that every store associate had the proper information to answer customers’ questions.
• In Europe, he knew from his travels, IT was front and center in most cutting-edge retail stores. It provided extensive self-service to improve checkout; multichannel access to information inside stores to enable customers to browse an extended product base and better support sales associates assisting customers; and multimedia to engage customers with extended product knowledge. Part of Hefty’s new Savvy Store business strategy was to copy some of these initiatives, hoping to become the first retailer in North America to completely integrate multimedia and digital information into each of its 1,000 stores. They’d spent months at the executive committee meetings working out this new strategic thrust—using information and multimedia to improve the customer experience in a variety of ways and to make it consistent in each of their stores. Now, they had to figure out exactly how to execute it, and IT was a key player. The question in Glen’s mind now was how could the business and IT work together to deliver on this vision, when IT was essentially operating in its own technical world, which bore very little relationship to the world of business?
• Entering his office, with its panoramic view of the downtown core, Glen had an idea. “Hefty’s stores operate in a different world than we do at our head office. Wouldn’t it be great to take some of our best IT folks out on the road so they could see what it’s really like in the field? What seems like a good idea here at corporate doesn’t always work out there, and we need to balance our corporate needs with those of our store operations.” He remembered going to one of Hefty’s smaller stores in Moose River and seeing how its managers had circumvented the company’s stringent security protocols by writing their passwords on Post-it notes stuck to the store’s only computer terminal.
• So, on his next trip to the field he decided he would take Jenny, along with Cheryl and the Marketing IT Relationship Manager, Paul Gutierez, and maybe even invite the CIO, Farzad Mohammed, and a couple of the IT architects. “It would be good for them to see what’s actually happening in the stores,” he reasoned. “Maybe once they do, it will help them understand what we’re trying to accomplish.” A few days later, Glen’s e-mailed invitation had Farzad in a quandary. “He wants to take me and some of my top people—including you—on the road two weeks from now,” he complained to his chief architect, Sergei Grozny. “Maybe I could spare Jenny to go, since she’s Glen’s main contact, but we’re up to our wazoos in alligators trying to put together our strategic IT architecture so we can support their Savvy Stores initiative and half a dozen more ‘top priority’ projects. We’re supposed to present our IT strategy to the steering committee in three weeks!” “And I need Paul to work with the architecture team over the next couple of weeks to review our plans and then to work with the master data team to help them outline their information strategy,” said Sergei.
• “If we don’t have the infrastructure and integrated information in place there aren’t going to be any ‘Savvy Stores’! You can’t send Paul and my core architects off on some boondoggle for a whole week! They’ve all seen a Hefty store. It’s not like they’re going to see anything different.” “You’re right,” agreed Farzad. “Glen’s just going to have to understand that I can’t send five of our top people into the field right now. Maybe in six months after we’ve finished this planning and budget cycle. We’ve got too much work to do now. I’ll send Jenny and maybe that new intern, Joyce Li, who we’re thinking of hiring. She could use some exposure to the business, and she’s not working on anything critical. I’ll e-mail Jenny and get her to set it up with Glen. She’s so great with these business guys. I don’t know how she does it, but she seems to really get them onside.”
• Three hours later, Jenny Henderson arrived back from a refreshing noontime workout to find Farzad’s request in her priority in-box. “Oh #*!#*@!” she swore. She had a more finely nuanced understanding of the politics involved in this situation, and she was standing on a land mine for sure. Her business contacts had all known about the invitation, and she knew it was more than a simple request. However, Farzad, having been with the company for only eighteen months, might not recognize the olive branch that it represented, nor the problems that it would cause if he turned down the trip or if he sent a very junior staff member in his place. “I have to speak with him about this before I do anything,” she concluded, reaching for her jacket. But just as she swiveled around to go see Farzad, Paul Gutierez appeared in her doorway, looking furious. “Got a moment?” he asked and, not waiting for her answer, plunked himself down in her visitor’s chair. Jenny could almost see the steam coming out of his ears, and his face was beet red.
• Paul was a great colleague, so mentally putting the “pause” button on her own problems, Jenny replied, “Sure, what’s up?” “Well, I just got back from the new technology meeting between marketing and our R&D guys, and it was just terrible!” he moaned. I’ve been trying to get Cheryl and her group to consider doing some experimentation with cell phone promotions—you know, using that new Japanese bar coding system. There are a million things you can do with mobile these days. So, she asked me to set up a demonstration of the technology and to have the R&D guys explain what it might do. At first, everyone was really excited. They’d read about these things in magazines and wanted to know more. But our guys kept droning on about 3G and 4G technology and different types of connectivity and security and how the data move around and how we have to model and architect everything so it all fits together. They had the business guys so confused we never actually got talking about how the technology might be used for marketing and whether it was a good business idea. After about half an hour, everyone just tuned out. I tried to bring it back to the applications we could develop if we just invested a little in the mobile connectivity infrastructure, but by then we were dead in the water. They wouldn’t fund the project because they couldn’t see why customers would want to use mobile in our stores when we had perfectly good cash registers and in-store kiosks!” “I despair!” he said dramatically.
• “And you know what’s going to happen don’t you? In a year or so, when everyone else has got mobile apps, they’re going to want us to do something for them yesterday, and we’re going to have to throw some sort of stopgap technology in place to deal with it, and everyone’s going to be complaining that IT isn’t helping the business with what it needs!” Jenny was sympathetic. “Been there, done that, and got the T-shirt,” she laughed wryly. “These tech guys are so brilliant, but they can’t ever seem to connect what they know to what the business thinks it needs. Sometimes, they’re too farsighted and need to just paint the next couple of steps of what could be done, not the ‘flying around in jetpacks vision.’ And sometimes I think they truly don’t understand why the business can’t see how these bits and bytes they’re talking about translate into something that it can use to make money.”
• She looked at her watch, and Paul got the hint. He stood up. “Thanks for letting me vent,” he said. “You’re a good listener.” “I hope Farzad is,” she thought grimly as she headed down the hall. “Or he’s going to be out of here by Thanksgiving.” It was a sad truth that CIOs seemed to turn over every two years or so at Hefty. It was almost predictable. A new CEO would come in, and the next thing you knew the CIO would be history. Or the user satisfaction rate would plummet, or there would be a major application crash, or the executives would complain about how much IT cost, or there would be an expensive new system failure. Whatever it was, IT would always get blamed, and the CIO would be gone.
• “We have some world-class people in IT,” she thought, “but everywhere we go in the business, we get a bad rap. And it’s not always our fault.” She remembered the recent CIM project to produce a single customer database for all of Hefty’s divisions: hardware, clothing, sporting goods, and credit. It had seemed to be a straightforward project with lots of ROI, but the infighting between the client divisions had dragged the project (and the costs) out. No one could agree about whose version of the truth they should use, and the divisions had assigned their most junior people to it and insisted on numerous exceptions, workarounds, and enhancements, all of which had rendered the original business case useless. On top of that, the company had undergone a major restructuring in the middle of it, and a lot of the major players had changed. “It would be a lot easier for us in IT if the business would get its act together about what it wants from IT,” she thought.
• But just as quickly, she recognized that this was probably an unrealistic goal. A more practical one would be to find ways for business and IT to work collaboratively at all levels. “We each hold pieces of the future picture of the business,” she mused. “We need to figure out a better way to put them together than simply trying to force them to fit.” Knocking on Farzad’s door, she peeked into the window beside it. He seemed lost in thought but smiled when he saw her. “Jenny!” he exclaimed. “I was just thinking about you and the e-mail I sent you. Have you done anything about it yet?” When she shook her head, he gave a sigh of relief. “I was just rethinking my decision about this trip, and I’d like your advice.” Jenny gave her own mental sigh and stepped into the office. “I think we have a problem with the business and we need to fix it—fast,” she said. “I’ve got some ideas, and what to do about the trip is just part of them. Can we talk?” Farzad nodded encouragingly and invited her to sit down. “I agree with you, and I’d like to hear what you have to say. We need to do things differently around here, and I think with your help we can. What did you have in mind?”
• Discussion Questions
• 1. Overall, how effective is the partnership between IT and the business at Hefty Hardware? Identify the shortcomings of both IT and the business.
• 2. Create a plan for how IT and the business can work collaboratively to deliver the Savvy Store program successfully
• Mini Case from: Smith, H. A., and J. D. McKeen (2015). Mini Case “Delivering Business Value with IT at Hefty Hardware.” In McKeen, J. D., & Smith, H. (2015). IT strategy: Issues and Practices (third edition) Boston: Pearson, pp. 98-101, #1-L10-1-001, Queen’s School of Business, reproduced by permission of Queen’s University, School of Business, Kingston, Ontario, Canada
• Mini Case: Investing in TUFS
• “Why do I keep this around?” Martin Drysdale wondered. “It infuriates me every time I see all that satisfaction over something that is now the bane of my existence.” He looked gloomily at the offending photo, which showed the project team happily “clinking” pop cans and coffee cups in a toast: “Here’s to TUFS!” The Technical Underwriting Financial System (TUFS) was the largest single investment in IT ever made by Northern Insurance, and it was going to transform Northern by streamlining the underwriting processes and providing strategic e-business capabilities. The TUFS team had brought the project in on time and on budget, so the party was a thank-you for all of the team’s dedicated, hard work. But it was two years ago when the camera captured the happy moment for posterity, and Martin, CIO for Northern, had celebrated with the rest. “Yeah, right,” Martin grimaced as he turned from the photo to the e-mail message on his computer screen, summoning him to a meeting with his boss that morning to discuss TUFS.
• The system had turned into a nightmare in its first few months of operation. Now his job was on the line. What was supposed to have brought efficiency to the underwriting process and new opportunities for top-line growth had become a major corporate money pit. TUFS was still eating up the vast majority of Northern’s IT budget and resources to fix the underwriting errors that kept appearing, and resistance to the system had grown from sniping and grumbling into calls for Martin’s head.
• “No wonder we’re not saving any money, though, with senior underwriting managers still insisting on receiving some of their old reports, even though TUFS lets them look up the same information online anytime they want,” Martin fumed. The meeting with the CFO was to discuss TUFS and the company’s “very significant investment in this system.” Feeling like a condemned prisoner on his way to the gallows, Martin grabbed his suit jacket, straightened his tie, and headed up to the seventh-floor executive suite. An hour later Martin was feeling very well grilled as he was confronted with a long list of the problems with TUFS.
• The CFO, Melissa Freeman, had done her home-work. Before her was a binder full of TUFS documentation, stretching back almost three years from when the project had been first identified. “According to my calculations, Northern has spent almost $4 million on this system, if you include all of the resources dedicated to fixing the problems identified after implementation,” she noted. “And I have yet to see any cost savings in the underwriting department. Why?” “It’s true that there have been some unanticipated changes to the system that have cost us, but the underwriters have never bought into the system,” Martin conceded. “They insist on following their old procedures and then using the system at the last possible moment as a double-check. What can we do if they won’t use the system the way it was designed?”
• “Could there possibly be a reason why they don’t like the system?” Freeman asked. “It seems to me from looking at these change reports that the system hasn’t been meeting our basic underwriting needs.” Martin acknowledged that there had been some problems. “But my guys are technicians, not underwriters. They didn’t get much participation from the underwriters in the first place. The underwriting department wouldn’t take the time to bring my people up to speed on what they needed and why. As well, we were facing a very tight deadline, which meant that we had to defer some of the functionality we had originally intended to include.
• That was senior management’s decision, and everyone was informed about it when it was made.” He added that they were now asking for a TUFS training program and a help desk to handle questions that underwriters might face while using the system! “A help desk and training program weren’t in our original plan,” Martin reminded Freeman. “These extras are eating away at the system’s benefits.” According to the business case prepared by the users, TUFS was supposed to pay for itself over its first two years of operations from savings realized from the underwriting process. The system’s problems certainly accounted for some of the extra costs, but the users hadn’t made any of the process changes that would help those savings be realized. “They think we can just plug in the system and cost savings will appear like magic. And other parts of the system are going to take time to deliver benefits.”
• The “other parts” he was referring to were the e-business capabilities that TUFS provided. “If you will recall, this system was approved in the days when we had to have e-business or we were going to be dinosaurs. In retrospect, we could have cut back on this functionality more easily and left some of the underwriting functionality in, but who knew?” “Well, as you know, our financial resources are very limited at present.” Freeman leaned forward. “I’ve been asked to make some recommendations to the executive committee about whether or not we should put more money into this system. TUFS has been our number-one priority for two years now, and quite a few people are saying that enough is enough—that we need to make some major changes around here.” Martin took a deep breath, waiting for the axe to fall. Freeman continued, “What I need to know now from you is this: What went wrong with our TUFS investment, and what can we do to prevent these problems in the future? What do we need to do to realize the benefits that were projected for TUFS? How can we measure these benefits? And how can we best decide how to apportion our IT budget between TUFS and these other projects?” As he slowly exhaled and felt his pulse resume, Martin nodded. “I’ve got some ideas. Can I get them to you in writing by the end of the week?”
• Discussion Questions
• 1. What went wrong with the TUFS investment, and what can be done to prevent these problems in the future?
• 2. What does Northern need to do to realize the benefits that were projected for TUFS? 3. How can Northern measure these benefits?
• Mini Case from: Smith, H. A., and J. D. McKeen (2015). Mini Case “Investing in TUFS” In McKeen, J. D., & Smith, H. (2015). IT strategy: Issues and Practices (third edition) Boston: Pearson, pp. 102-103, #9-L05-1-003, Queen’s School of Business, reproduced by permission of Queen’s University, School of Business, Kingston, Ontario, Canada
• Mini Case: Building Shared Services at RR Communications
• Vince Patton had been waiting years for this day. He pulled the papers together in front of him and scanned the small conference room. “You’re fired,” he said to the four divisional CIOs sitting at the table. They looked nervously at him, grinning weakly. Vince wasn’t known to make practical jokes, but this had been a pretty good meeting, at least relative to some they’d had over the past five years. “You’re kidding,” said Matt Dawes, one of the more outspoken members of the divisional CIO team. “Nope,” said Vince. “I’ve got the boss’s OK on this. We don’t need any of you anymore. I’m creating one enterprise IT organization, and there’s no room for any of you. The HR people are waiting outside.” With that, he picked up his papers and headed to the door, leaving the four of them in shock. “That felt good,” he admitted as he strode back to his office. A big man, not known to tolerate fools gladly (or corporate politics), he was not a cruel one.
• But those guys had been thorns in his side ever since he had taken the new executive VP of IT job at the faltering RR Communications five years ago. The company’s stock had been in the dumpster, and with the dramatically increased competition in the telecommunications industry as a result of deregulation, his friends and family had all thought he was nuts. But Ross Roman, RR’s eccentric but brilliant founder, had made him an offer he couldn’t refuse. “We need you to transform IT so that we can introduce new products more quickly,” he’d said. “You’ll have my full backing for whatever you want to do.” Typically for an entrepreneur, Roman had sketched the vision swiftly, leaving some-one else to actually implement it.
• “We’ve got to have a more flexible and responsive IT organization. Every time I want to do something, they tell me ‘the systems won’t allow it.’ I’m tired of having customers complaining about getting multiple bills for each of our products. It’s not acceptable that RR can’t create one simple little bill for each customer.” Roman punctuated his remarks by stabbing with his finger at a file full of letters to the president, which he insisted on reading personally each week. “You’ve got a reputation as a ‘can do’ kind of guy; I checked. Don’t bother me with details; just get the job done.” Vince knew he was a good, proactive IT leader, but he hadn’t been prepared for the mess he inherited—or the politics.
• There was no central IT, just separate divisional units for the four key lines of business—Internet, mobile, landline, and cable TV service—each doing its own thing. Every business unit had bought its own hardware and software, so introducing the common systems that would be needed to accomplish Roman’s vision would be hugely difficult—that is, assuming they wanted them, which they didn’t. There were multiple sales systems, databases, and customer service centers, all of which led to customer and business frustration. The company was in trouble not only with its customers but also with the telecommunications regulators and with its software vendors, who each wanted information about the company’s activities, which they were legally entitled to have but which the company couldn’t provide.
• Where should he start to untangle this mess? Clearly, it wasn’t going to be possible to provide bundled billing, responsiveness, unified customer care, and rapid time to market all at once, let alone keep up with the new products and services that were flooding into the telecommunications arena. And he hadn’t exactly been welcomed with open arms by the divisional CIOs (DIOs), who were suspicious of him in the extreme. “Getting IT to operate as a single enterprise unit, regardless of the product involved, is going to be tough,” he admit-ted to himself. “This corporate culture is not going to take easily to centralized direction.” And so it was.
• The DIOs had fought him tooth and nail, resisting any form of integration of their systems. So had the business unit leaders, themselves presidents, who were rewarded on the basis of the performance of their divisions and, therefore, didn’t give a hoot about “the enterprise” or about anything other than their quarterly results. To them, centralized IT meant increased bureaucracy and much less freedom to pick up the phone and call their buddy Matt or Larry or Helen, or Dave and get that person to drop everything to deal with their latest money-making initiative. The fact that it cost the enterprise more and more every time they did this didn’t concern them—they didn’t care that costs racked up: testing to make sure changes didn’t affect anything else that was operational; creation of duplicate data and files, which often perpetuated bad data; and loss of integrated information with which to run the enterprise. And the fact that the company needed an army of “data cleansers” to prepare the reports needed for the government to meet its regulatory and Sarbanes–Oxley requirements wasn’t their concern.
• Everyone believed his or her needs were unique. Unfortunately, although he had Roman’s backing in theory, in practice Vince’s position was a bit unusual because he himself didn’t have an enterprise IT organization as yet and the DIOs’ first allegiance was clearly to their division presidents, despite having a “dotted line” reporting relationship to Vince. The result was that he had to choose his battles very, very carefully in order to lay the foundation for the future. First up was rede-signing the company’s internal computer infrastructure to use one set of standard technologies. Simplification and standardization involved a radical reduction of the number of suppliers and centralized procurement.
• The politics were fierce and painful with the various suppliers the company was using, simultaneously courting the DIOs and business unit leaders while trying to sell Vince on the merits of their brand of technology for the whole company. Matt Dawes had done everything he could to undermine this vision, making sure that the users caused the maximum fuss right up to Roman’s office. Finally, they’d had a showdown with Roman. “As far as I’m concerned, moving to standardized hardware and software is non-discussable,” Vince stated bluntly. “We can’t even begin to tackle the issues facing this company without it. And furthermore, we are in serious noncompliance with our software licensing agreements. We can’t even tell how many users we have!”
• This was a potentially serious legal issue that had to be dealt with. “I promised our suppliers that we would get this problem under control within eighteen months, and they’ve agreed to give us time to improve. We won’t have this opportunity again.” Roman nodded, effectively shutting down the argument. “I don’t really understand how more standardization is going to improve our business flexibility,” he’d growled, “but if you say so, let’s do it!” From that point on, Vince had moved steadily to consolidate his position, centralizing the purchasing budget; creating an enterprise architecture; establishing a standardized desktop and infrastructure; and putting tools, metrics, and policies in place to manage them and ensure the plan was respected by the divisions.
• Dawes and Larry Hughes, another DIO, had tried to sabotage him on this matter yet again by adopting another manufacturer’s customer relationship management (CRM) system (and yet another database), hoping that it could be up and running before Vince noticed. But Vince had moved swiftly to pull the plug on that one by refusing the project access to company hardware and giving the divisional structure yet another black mark. That episode had highlighted the need for a steering committee, one with teeth to make sure that no other rogue projects got implemented with “back door funding.”
• But the company’s entrepreneurial culture wasn’t ready for it, so again foundational work had to be done. “I’d have had a riot on my hands if I’d tried to do this in my first few years here,” Vince reflected as he walked back to his office, stopping to chat with some of the other executives on his way. Vince now knew everyone and was widely respected at this level because he understood their concerns and interests. Mainly, these were financial—delivering more IT for less cost. But as Vince moved around the organization, he stressed that IT decisions were first and foremost business decisions. He spoke to his col-leagues in business terms. “The company wants one consistent brand for its organization so it can cross-sell services. So why do we need different customer service organizations or back-end systems?” he would ask them.
• One by one he had brought the “C”-level executives around to at least thinking about the need for an enterprise IT organization. Vince had also taken advantage of his weekly meetings with Roman to demonstrate the critical linkage between IT and Roman’s vision for the enterprise. Vince’s motto was “IT must be very visible in this organization.” When he felt the political climate was right, he called all the “Cs” to a meeting. With Roman in the room for psychological support, he made his pitch. “We need to make all major IT decisions together as a business,” he said. “If we met monthly, we could determine what projects we need to launch in order to support the business and then allocate resources and budgets accordingly.” Phil Cooper, president of Internet Services, spoke up. “But what about our specific
• projects? Won’t they get lost when they’re all mixed up with everyone else’s? How do we get funding for what we need to do?” Vince had a ready answer. “With a steering committee, we will do what’s best for the organization as a whole, not for one division at the expense of the others. The first thing we’re going to do is undertake a visioning exercise for what you all want our business to look like in three years, and then we’ll build the systems and IT infrastructure to support that vision.” Talking the language of business had been the right approach because no one wanted to get bogged down in techno-jargon. And this meeting had effectively turned the tide from a divisional focus to an enterprise one—at least as far as establishing a steer-ing committee went.
• Slowly, Vince had built up his enterprise IT organization, putting those senior IT managers reporting to him into each of the business divisions. “Your job is to participate in all business decisions, not just IT ones,” he stated. “There is nothing that happens in this company that doesn’t affect IT.” He and his staff had also “walked the talk” over the past two years, working with the business to identify opportunities for short-term improvements that really mattered a lot to the divisions. These types of quick wins demonstrated that he and his organization really cared about the business and made IT’s value much more visible. He also stressed accountability. “Centralized units are always seen to be overhead by the business,” he explained to his staff. “That’s why we must be accountable for everything we spend and our costs must be transparent. We also need to give the business some choices in what they spend. Although I won’t compromise on legal, safety, or health issues, we need to let them know where they can save money if they want. For example, even though they can’t choose not to back up their files, they can choose the amount of time it will take them to recover them.”
• But the problem of the DIOs had remained. Used to being kings of their own king-doms, everything they did appeared to be in direct opposition to Vince’s vision. And it was apparent that Roman was preaching “one company” but IT itself was not unified. Things had come to a head last year when Vince had started looking at outsourcing. Again the DIOs had resisted, seeing the move as one designed to take yet more power away from them. Vince had offered Helen a position as sourcing director, but she’d turned it down, seeing it as a demotion rather than a lateral move. The more the DIOs stonewalled Vince, the more determined he became to deal with them once and for all. “They’re undermining my credibility with the business and with our suppliers,” Vince had complained to himself.
• “There’s still so much more to do, and this divisional structure isn’t working for us.” That’s when he’d realized he had to act or RR wouldn’t be able to move ahead on its next project: a single customer service center shared by the four divisions instead of the multiple divisional and regional ones they had now. So Vince had called a meeting, ostensibly to sort out what would be outsourced and what wouldn’t. Then he’d dropped the bombshell. “They’ll get a good package,” he reassured himself. “And they’ll be happier somewhere else than always fighting with me.”
• The new IT organizational charts, creating a central IT function, had been drawn up, and the memo appointing his management team had been signed. Vince sighed. That had been a piece of cake compared to what he was going to be facing now. Was he ready for the next round in the “IT wars”? He was going to have to go head to head with the business, and it wouldn’t be pretty. Roman had supported him in getting the IT house in order, but would he be there for the next step?
• Vince looked gloomily at the reports the DIOs had prepared for their final meeting. They documented a complete data mess—even within the divisions. The next goal was to implement the single customer service center for all divisions, so a customer could call one place and get service for all RR products. This would be a major step forward in enabling the company to implement new products and services. If he could pull it off, all of the company’s support systems would, for the first time, talk to each other and share data. “We can’t have shared services without common data, and we can’t have good business intelligence either,” he muttered. Everything he needed to do next relied on this, but the business had seen it differently when he’d last tried to broach the subject with them. “These are our data, and these are our customers,” they’d said. “Don’t mess with them.” And he hadn’t … . but that was then. Now it was essential to get their information in order. But what would he have to do to convince them and to make it happen?
• Discussion Questions
• 1. List the advantages of a single customer service center for RR Communications.
• 2. Devise an implementation strategy that would guarantee the support of the divisional presidents for the shared customer service center.
• 3. Is it possible to achieve an enterprise vision with a decentralized IT function?
• 4. What business and IT problems can be caused by lack of common information and an enterprise IM strategy?
• 5. What governance mechanisms need to be put in place to ensure common customer data and a shared customer service center? What metrics might be useful?
• Mini Case from: Smith, H. A., and J. D. McKeen (2015). Mini Case “Shared Services at RR Communications.” In McKeen, J. D., & Smith, H. (2015). IT strategy: Issues and Practices (third edition) Boston: Pearson, pp. 178-181, #1-L07-1-002, Queen’s School of Business, reproduced by permission of Queen’s University, School of Business, Kingston, Ontario, Canada
• Mini Case: Enterprise Architecture at Nationstate Insurance
• Jane Denton looked around at her assembled senior IT leadership team waiting to hear what she was going to say. Most were leaning forward eagerly, though some appeared more cautious. They were a good team, she knew, and she wanted to lead them well. A seasoned CIO, with a whole career behind her in IT, Jane was the newly appointed global CIO of Nationstate Insurance. This would be her last job before retirement in three years and she wanted to find a way to make a lasting difference in this company.
• Nationstate was an excellent company—Jane had done her homework. It was one of the largest in the United States, with a worldwide presence in personal and commercial insurance, and had recently been voted one of Forbes’ “Best Big Companies.” It had good systems, good user–IT relationships, and good people. But the company aspired to be great and Jane wanted to help them by taking IT to the next level. She knew that the world was changing—largely as a result of technology—and she knew that IT and its traditional approach to systems development was also going to have to change. “Our IT function needs to become more cutting edge in adopting emerging technologies,” she had told the CEO shortly after she was hired, “and we need to become more flexible and agile in our approach to development work.” Now she had this time and this team to accomplish her goals. However, it was much easier said than done.
• Like almost every large organization, Nationstate had a hodgepodge of different systems, data, and processes—most serving just one of its six business units (BUs). Nationstate’s decentralized structure had served it well in the past by enabling individual BUs to respond quickly to changing market needs but a couple of years before Jane’s arrival, recognizing the need for some enterprise thinking, the CEO had created a federated structure with some centralized functions, including parts of IT. So some of IT was now centralized and shared by all the BUs (e.g., operations) and reported directly to Jane, while the rest (e.g., system development) was decentralized. Each BU had its own CIO and IT staff who reported jointly to the BU’s president and to Jane.
• This potentially unwieldy structure was made more palatable by the fact that the business unit CIOs had great business knowledge and were well trusted by their presidents. In fact, it was central IT that was often seen as the roadblock by the BUs. She had never led an IT organization like it, she reflected, and in her first few months, she had made a considerable effort to understand the strengths and weaknesses of this model and how responsibilities had been divided between centralized enterprise services and the decentralized IT groups (each quite large themselves) in the business units.
• Now she thought she had a good enough handle on these that she could begin work with her senior leadership team (the BU CIOs) to develop a plan to transform IT into the kind of technology function Nationstate would need in the years to come. “I know you are both enthusiastic and apprehensive about transformation,” she said. “We have a great organization and no one wants to lose that. We need to be responsive to our business needs but we also need to incorporate new development techniques into our work, do a better job with emerging technologies, and begin to rationalize our application and technology portfolios. We have duplicate systems, data and software all over the place. Our CEO and the BU Presidents want to see us use our technology resources more efficiently, but more than that, they want our leadership in using technology effectively for the organization as a whole. We can’t do this if we’re all working in separate silos.”
• Heads began nodding around the room as she continued. “At present, every business unit has its own IT architecture and architects and each of you believe you are making the ‘right’ technology decisions but you are all doing it differently.” The head nodding stopped and a mood of wariness took over. “No one in our organization has the big picture of what we have and where we need to go. We have to learn what makes sense for us to do at an enterprise level and what’s best left in the business units. Architecting our technology, information, business and applications properly is the key to doing it right.” “What exactly are you proposing?” asked Owen Merton, CIO of the Casualty Division. “I think you’re right that we need an enterprise architecture, but I don’t want to lose the good work we’ve done at the BU level.”
• “Well, I really want to centralize all architecture,” said Jane. “I think that’s what works best in other organizations and that’s going to be the most effective way to make it work here. BUT . . .” she added, “I’d like to speak with each of you individually and with your senior architects before I do. I’m open to your ideas as long as they address the needs that I’ve just outlined.”
• Over the next two weeks, Jane listened carefully to what the divisional CIOs had to say. They all agreed with Merton that the relationships with the BUs were extremely important and centralizing architecture had to be done carefully. All of them had heard horror stories about the “architecture police” in other companies—hard-line techies who set standards and created blueprints and insisted on them being followed in spite of the difficulties their policies caused for the business. “Architecture can’t live in an ivory tower,” explained Vic Toregas, CIO of Claims. “It has to be rooted in the reality of our business and it can’t be seen to slow things down.” Jane agreed. “We must make sure that our architecture function is designed and managed to ensure rapid delivery to the business.”
• On the other hand, Nick Vargo, CIO of Group Health, was concerned that without a strong enforcement mechanism, standards wouldn’t be followed. “What’s the point of having standards if we don’t enforce them?” he asked. Jane’s head whirled. It wasn’t going to be easy to strike the right balance between developing a good, sustainable process that would provide a blueprint for where the company needed to go and enable the company to build the common capabilities it would need for the future, while delivering solutions quickly and flexibly for the BUs. “What we don’t need is a ‘Winchester Mystery House’,” she reflected, recalling the famous local house whose owners kept adding to it over many years with no overall plan.
• She became more worried when she began to speak with the BU architects, with an eye to appointing one of them as her chief enterprise architect. They seemed to be technically competent but were not what she would call “relationship people” or business strategists. The job, as she envisioned it, would combine strong leadership skills, a good understanding of the business, and excellent communication skills to translate why the business should care about architecture, with strong technical skills. Her day became a bit brighter when she began her final interview with Seamus O’Malley, the senior architecture manager of the commercial BU.
• As they spoke, Jane was impressed with his vision and pragmatism, as well as his strong communication skills. By the end of the hour she knew she had found her new chief enterprise architect. “I’d like you to take this new job,” she told him. “I think you are the right person to ensure we have the standards, tools and practices in place to develop a common architecture for Nationstate.” Seamus thought for a moment before replying. It was a great offer but he had his doubts that Jane’s plan would work and this situation had to be carefully handled. “Thank you for your faith in me,” he began diplomatically, “but I would like to suggest a slight modification to your plan. You see, I’ve been an architect in centralized organizations and there has always been an ‘us versus them’ mentality between the architecture group and both the rest of IT and the business units.”
• Jane recalled the horror stories of the “architecture police.” “So what I’d like to propose is a com-promise. I would become Chief Enterprise Architect but I would also remain Senior Architecture for Commercial and involve the other BU Senior Architects in creating a strong enterprise architecture that works for us all. That way, no one will see me as just ‘the enterprise guy’ and whatever standards we set and decisions we make centrally will affect me in Commercial, just like they’ll affect all the other BUs. When the other business units see that I’m willing to eat my own dog food, I think they’ll be more ready to accept the standards and changes we’ll be introducing.” While not sure the compromise would work, Jane agreed to try it for a year and Seamus set out to build a centralized architecture function from scratch.
• With the authority given to him by Jane, all of the BU senior architects now had a dual reporting relationship—to their CIO and to him as the chief architect. At their first weekly meeting with the BU senior architects, Seamus outlined his role and agenda. “As you know, each of us has been individually responsible for developing an effective IT architecture for our business units but we haven’t done any coordination between them. That is no longer good enough for our business needs and I, with your help, have been given the job of establishing an enterprise architecture that will create an enterprise technology blueprint for Nationstate, which we will all have to follow in the business units. I want to work collaboratively with you so that we come up with a plan and processes that will work for each of us in the business units, as well as for the enterprise as a whole. We will need to build our enterprise architecture slowly but steadily so that people will trust us, and that means having good governance, good processes and a collaborative approach to this work,” he stated.
• “Our first priority is building strong relationships with both Jane and the other CIOs and our BU Presidents. Enterprise Architecture sits in the middle between these groups, so good relationships are essential.” “However,” he continued. “We are going to need a way to establish and enforce standards—enterprise ones, not the ones you have now—and this is going to be difficult to explain.
• “I’ll say,” remarked Sarah Jensen, the senior architecture manager from Personal Insurance. “What do we say when the business asks why they can’t do something that’s important to them because our ‘standards’ won’t let them?” “That’s a good question Sarah,” said Seamus. “And it gets right to the heart of why architecture is important. We need to present architecture in ways that are easy for the business to understand, without scaring or threatening them. For example, we need an application reduction strategy designed to eliminate duplication, reduce complexity and save money. The business already understands the pain of having to jump from system to system and knows that owning two cars is more expensive than one. If we explain it to them in this way, they will understand the advantages of having a single system and a single workflow.”
• “But isn’t good architecture about more than cost savings?” asked Michael Lee, senior architecture manager from Claims. “We need to develop a foundation of com-mon information, tools and processes so that we’re not reinventing the wheel going into the future. And someone needs to decide what new technologies we’re going to need and where we’re going to use them. There are so many new applications and devices coming out every day now, we’re going to be in a real mess if we don’t do this properly.” “You’re exactly right,” said Seamus.
• “These things do have to be managed for the good of the enterprise—both to make it more effective and more efficient. But it’s how we manage them that’s important. If we put lots of bureaucracy in place and don’t add value, no one is going to support us and they’ll find ways to undermine what we are trying to do. We can’t take a ‘field of dreams’ approach to architecture. We need to attach our work to real business value and real projects. Once our leaders understand this, we’ll get their support.” “So here’s our challenge,” Seamus told his assembled team a few minutes later.
• “We need to design an Enterprise Architecture function that does all these things. It’s got to be a process that comes up with the standards and guidelines that each of you can live with and support in the BUs. And, as you know, I myself will have to live with them in Commercial as well.” “Here’s what I believe we need to accomplish as soon as possible,” he stated, flashing a PowerPoint slide on the screen:
• 1. An enterprise governance process to set architecture strategy, policies and standards for technology, applications, and information that reflects the federated structure in the organization.
• 2. A means of monitoring that all new projects comply with the agreed-upon architecture while ensuring that this process doesn’t present an obstacle to getting IT projects completed quickly.
• 3. A process for allowing “variances” to the current standards, if necessary, and a way to manage them back to the agreed-on standards.
• 4. A means of identifying important new IT capabilities and services that should be shared by the enterprise.
• 5. A means of evaluating emerging new technologies and setting standards for them. 6. Identifying roles and responsibilities for the enterprise architecture function and the LOB architecture functions.
• 7. Developing a means of incorporating feedback and continuous improvement into our work.
• “I want to blend and weave our work into the architecture teams we already have in the business units as much as possible,” Seamus concluded. “This will keep us close to business needs and enable us to get enterprise value from the teams we have in place. And I don’t want to add any more process than we need to at an enterprise level. For example, if the Claims group needs a new technology, their architecture group could do the preliminary evaluation and make recommendations for what we should do. But we need to ensure that the resulting decision is a good one for the entire enterprise.”
• “I’ve got to report back to Jane in a month, so I’d like you to think about what might and might not work for your division and for us as an enterprise. I’ve scheduled a couple of working sessions for us over the next two weeks so we can hash this out. We have an exciting opportunity to take IT to the next level at Nationstate if we do this right, so let’s not mess this up.”
• Discussion Questions
• 1. List and describe all of the potential benefits (and costs) that Nationstate would realize from the establishment of an enterprisewide architecture as envisioned by Jane Denton?
• 2. Build a business case for Seamus O’Malley to present to the senior management team at Nationstate in order to get their buy-in. In addition to benefits and costs, the business case must answer the “what’s in it for me” question that the BU 3presidents all have.
• 3. Seamus O’Malley is rightfully worried about governance (i.e., making sure that the enterprise architectural standards are adopted by all BUs). Both he and Jane are wary of forced compliance because such measures lead to “architecture police.” What governance procedures could they put in place that would win “hearts and minds”; that is, BU architects would comply with the enterprise architecture standards because they believe in them—not because they are forced to comply with them?
• Mini Case from: Smith, H. A., and J. D. McKeen (2015). Mini Case “Enterprise Architecture at Nationstate Insurance.” In McKeen, J. D., & Smith, H. (2015). IT strategy: Issues and Practices (third edition) Boston: Pearson, pp. 182-186, #1-L11-1-001, Queen’s School of Business, reproduced by permission of Queen’s University, School of Business, Kingston, Ontario, Canada
• Mini Case: Innovation at International Foods
• Josh Novak gazed up at the gleaming glass-and-chrome skyscraper as he stepped out of the cab. “Wow!” he thought to himself. “I’ve hit the big time now.” The International Foods Group (IFG) Tower was a Chicago landmark as well as part of the company’s logo, which appeared on the packages of almost every type of food one could imagine—breakfast cereals, soft drinks, frozen pizza, cheese, and snack foods, to name just a few. Walking into the tower’s marble lobby, Josh could see displays of the company’s packaging from its earliest days, when its dairy products were delivered by horse and wagon, right up to the modern global entity it had become.
• After signing in with security, Josh was whisked away to the 37th floor by an efficient attendant who walked him down a long hall of cubicles to a corner office overlooking Lake Michigan. On the way, Josh passed display photos of the company’s founder, old Jonas Wilton looking patriarchal, and several of the family scions, who had grown the company into a major national brand before the IPO in the 1980s had made IFG a public company. Josh, having “Googled” the company’s history last night in response to this summons, knew that IFG was now the largest purveyor of food products the world had ever known. While many decried the globalization of the food business, IFG kept right on growing, gobbling up dozens of companies each year—some because IFG wanted to stomp on its competition and others because it wanted their good ideas. Josh’s own small company, Glow-Foods, a relative newcomer in the business, was fortunately one of the latter, but Josh was a little puzzled about this command performance.
• After all, he himself wasn’t anyone important. The owners of the company all received multiple millions and were sticking around—as per contract—during the transition. The next level, including Josh’s boss, had mostly jumped ship as soon as the “merger” was announced. “This isn’t my thing,” drawled Nate Greenly over beer one night at the local pub. “Corporate America isn’t going to let us stay as we are, no matter what they say. Get out while you can,” he advised. But Josh, with a freshly minted MBA in his pocket, thought differently.
• And so here he was, walking into the CIO’s office hundreds of miles away from the cramped loft in Toronto where Glow-Foods was headquartered. As the office door swung open, two people dressed in “power suits” turned to meet him. “Uh oh, I’m not in Kansas anymore,” thought Josh as he mentally reviewed his outfit of neatly pressed khakis and golf shirt, which was a big step up from his usual attire of jeans and a T-shirt. A tall man with silver hair stepped forward with his hand held out. “You must be Josh,” he boomed. “Welcome. I’m John Ahern, and this is my associate, Tonya James, manager of IT marketing. Thanks for coming today. Please, have a seat.” Josh complied, slinging his backpack over the corner of the leather chair while taking in the rich furnishings of the office and the panoramic view.
• After a bit of chitchat about the weather and the prospects of their respective baseball teams, John pulled out a black leather folder. “Well, we won’t keep you in suspense anymore, Josh. As you know, when we took over Glow-Foods we decided to completely align our processes, including IT. It doesn’t make any economic sense to run separate data centers and applications, so we already have a team in place to transfer all your hardware and software to our centralized corporate systems over the next month. We’ll be replacing your Macs with PCs, and everyone will get training on our ERP system. We’re going to keep a small team to deal with the specifically Canadian issues, but other than that we see no need for an IT function in Toronto any more.” Josh nodded glumly, thinking about his friends who would be losing their jobs and all the fun they’d had during those all-nighters brainstorming new ways to help Glow-Foods products go “viral.” Nate was right, he thought glumly. They don’t really get us at all.
• “That said,” John continued. “We are very impressed with the work you and your team have done in using social networking, mashups, and multimedia to support your marketing strategy. Your ability to reach the under-thirty demographic with technology is impressive.” He turned to Tonya, who added. “Here at IFG, we have traditionally marketed our products to women with children. We have a functional Web site—a place where customers can find out about our products and where to buy them. More recently, we’ve added their nutritional content, some recipes, and a place where customers can contact us directly with questions, but it’s really unidirectional and pretty dry.” Josh nodded in agreement with this assessment. The difference in the two companies’ approaches was night and day.
• Although not everything they had tried at Glow-Foods had worked, enough of it had succeeded that demand for the company’s products had skyrocketed. Young adults and teens had responded en masse to the opportunity to post pictures of themselves drinking their Green Tea Shakes in unusual places on the Glow-Foods Web site and to send a coupon for their favorite Glow-Foods product to a friend. Serialized company mini-dramas popped up on YouTube and viewers were asked to go online to help shape what happened to the characters—all of them using Glow-Foods products extensively. Contests, mass collaboration in package design, and a huge network of young part-time sales reps linked through Facebook all contributed to making the brand hip and exciting—and drove sales through the roof. John adjusted his French cuffs.
• “We want to tap into the youth and young adult market with IT, and we think you’re the one who can help us do this. We’re going to give you a team and whatever resources you need right here in Chicago. With our global reach and much larger budgets, you could do great things for our company.” John went on to outline a job offer to Josh that sent tingles down his spine. “I really have hit the big time,” he thought as he signed the documents making him a team man-ager at IFG at a salary that was almost double what he was earning now. “I can’t wait to get started.”
• Six weeks later he was being walked down the same hall by Tonya, now his immediate boss, and into her office, a smaller version of his with a window looking onto another high-rise. “What’s next?” he asked. “I’ve booked a meeting room for you to meet your new team at ten-thirty,” Tonya explained. “But before that, I want to go over a few things with you first. As the manager of IT Marketing, I am personally thrilled that we’re going to be experimenting with new technologies and, as your coach and mentor at IFG, I’m going to make it my job to see that you have the resources and support that you need. However, you may find that not everyone else at this company will be as encouraging. We’re going to have some serious obstacles to overcome, both within IT and with the larger company. It will be my responsibility to help you deal with them over the next few months as you put your ideas together. But you need to know that IFG may have different expectations of you than Glow-Foods. And you may find you will get a better reception to your ideas if you look a bit more professional.”
• Josh winced and nodded. He’d already ramped up the wardrobe for his first day with a sports jacket, but clearly he needed to do more. “Finally, I’d like you to come up here every Friday afternoon at four o’clock to go over your progress and your plans. My schedule is usually fully booked, but if you have any questions you can always send me an e-mail. I’m pretty good at getting back to people within twenty-four hours. Now let’s go meet your new team. I think you’ll be happy with them.” An hour later Josh and his new team were busy taking notes as Tonya outlined their mandate. “You have a dual role here,” she explained. “First, I want you to work with Ben here to develop some exciting new ideas for online marketing. We’re looking for whatever creative ideas you have.”
• Ben Nokony was the team’s marketing liaison. Any ideas would be vetted through him, and all proposals to the individual product teams would be arranged by him. “Second, I need you to keep your eyes open and your ears to the ground for any innovative technologies you think might work here at IFG. These are our future, and you’re our vanguard.” Josh glanced around at his team, an eclectic group. They seemed eager and enthusiastic, and he knew they were talented, having had a say in choosing them. With the exception of Ben, all were new to IFG, experienced in using a variety of new media, and under thirty years old. They were going to do great things together, he could see.
• The next couple of weeks were taken up with orientation. Ben introduced each of the major product divisions to the team, and everybody had come back from each meeting full of new possibilities. Tonya had also arranged for the team to meet with the chief technology officer, Rick Visser, who was in charge of architecture, privacy and security, risk management, and the technology roadmap. Rick had been pleasant but cool. “Please remember that we have a process for incorporating new technology into our architecture,” he explained as he handed over a thick manual of procedures. “In a company our size we can’t operate without formal processes. Anything else would be chaos.” The team had returned from that meeting full of gloom that their ideas would all be shot down before they were even tried. Finally, they had met with the IT finance officer. “I’m your liaison with corporate finance,” Sheema Singh stated. “You need to work with me to develop your business cases. Nothing gets funded unless it has a business case and is approved through our office.” Finally, having dragged some chairs into Josh’s eighteenth-floor and marginally larger cubicle and desk, the team got down to work. “This is ridiculous,” fumed Mandy Sawh, shuffling her papers on her lap. “I can’t believe you need to book a conference room two weeks in advance around here. Who knows when you need to get together?” “Okay, team, let’s settle down and take a look at what you’ve got,” said Josh. One by one, they outlined their preliminary ideas—some workable and some not—and together they identified three strong possibilities for their first initiatives and two new technologies they wanted to explore. “Great work, team,” said Josh. “We’re on our way.”
• The problems began to surface slowly. First, it was a polite email from Rick Visser reminding them that access to instant messaging and Facebook required prior approval from his group. “They want to know why we need it,” groused Veejay Mitra. “They don’t seem to understand that this is how people work these days.” Then Ben got a bit snippy about talking directly to the product teams. “You’re supposed to go through me,” he told Josh’s team. “I’m the contact person, and I am supposed to be present at all meetings.” “But these weren’t ‘meetings,’” Candis Chung objected. “
• We just wanted to bounce some ideas around with them.” Next, it was a request from Sheema to outline their proposed work, with costs and benefits, for the next fiscal year—beginning six months from now. “Can’t we just make up a bunch of numbers?” asked Tom Webster. “We don’t know how this stuff is going to play out. It could be great and we’ll need lots of resources to scale up, or it could bomb and we won’t need anything.” Everywhere the team went, they seemed to run into issues with the larger corporate environment.
• Tonya was helpful when Josh complained about it at their Friday afternoon meetings, smoothing things over with Rick, helping Josh to navigate corporate procedures, and even dropping by to tell the team they were doing a great job. Nevertheless, Josh could sense his own and everyone else’s frustration as they prepared for their first big project review presentation. “They want us to be innovative, but they keep putting us in a straight-jacket with their ‘procedures’ and their ‘proper way to go about things,’” he sighed to himself. Thank goodness, the presentation was coming together nicely. Although it was only to the more junior executives and, of course, John and Rick, he had high hopes for the vision his team was developing to get IFG out and interacting with its customers.
• “And in conclusion, we believe that we can use technology to help IFG reach its customers in three new ways,” Josh summarized after all of his team members had presented their ideas. “First, we want the company to connect directly with customers about new product development ideas through an interactive Web site with real-time response from internal staff. Second, we want to reach out to different communities and gain insights into their needs and interests, which in turn will guide our future marketing plans. And third, we want to implement these and other ideas on the ‘cloud,’ which will enable us to scale up or down rapidly as we need to while linking with com-pany databases. Any questions?”
• There was a moment of stunned silence, and then the barrage began. “What’s the business value of these initiatives?” asked Sheema. “I can’t take them upstairs to our finance committee meeting without a clear commitment on what the benefits are going to be.” Ben looked nonplussed. “We don’t really know,” he said. “We’ve never really done this before, but we like the ideas.” “I’m concerned that we don’t bite off more than we can chew,” said John thoughtfully. “What if these customers don’t like the company or its products and say bad things about us? Do we have any procedures for handling these types of situations?” “There’s definitely a serious risk to our reputation here,” said Rick, “but I’m more concerned about this ‘cloud’ thing. We haven’t even got cloud in our architecture yet, and this plan could make company intellectual property available to everyone in cyberspace!” Sheema spoke again. “I hate to mention this, but didn’t we do something like this community project about ten years ago? We called it knowledge management, and it flopped. No one knew what to do with it or how to handle the information it generated.” On and on they went, picking holes in every part of every idea as the team slumped lower in their seats.
• Finally, Tonya stood up. “I’d like to thank you all for raising some legitimate and important concerns,” she said. “And I’d like to thank Josh and his team for some fine work and some excellent ideas. Marketing was looking for creativity, and we have delivered on that part of our mandate. But now we have a more important job. And that is innovation. Innovation is about more than good ideas; it’s about delivering the best ones to the marketplace. We’re in a new world of technology, and IT can’t be the ones to be saying ‘no’ all the time to the business. Yes, we need to protect ourselves, and we don’t want to throw money at every half-baked idea, but we’ve got to find a way to be open to new ideas at the same time. We know there’s value in these new ideas—we saw it work at Glow-Foods. That’s why Josh is here. He has a proven track record. We just have to find a way to identify it without taking too much risk.”
• The room sat in stunned silence as Tonya looked from one to the other. At last, John cleared his throat. “You’re right, Tonya. We want creativity and innovation, and we need a better way to get it than we have now. I think what we need is a process for creativity and innovation that will help us overcome some of the roadblocks we put in place.” As Josh mentally rolled his eyes at the thought of yet another process, Tonya replied. “I think you’re partially right, John. Processes do have their place, but we also need some space to play with new ideas before we cast them in concrete. What I’d like to do over the next two weeks is speak with Josh and his team and each of you and then develop a plan as to how we can, as an IT department, better support innovation at IFG.”
• Discussion Questions
• 1. In discussion with Josh, Tonya foreshadows “some serious obstacles to overcome.” Describe these obstacles in detail.
• 2. How can Josh win support for his team’s three-point plan to use technology to help IFG reach its customers?
• Mini Case from: Smith, H. A., and J. D. McKeen (2015). Mini Case “Innovation at International Foods.” In McKeen, J. D., & Smith, H. (2015). IT strategy: Issues and Practices (third edition) Boston: Pearson, pp. 256-260, #1-L09-1-002, Queen’s School of Business, reproduced by permission of Queen’s University, School of Business, Kingston, Ontario, Canada
• Length: 1,000 +/- 100 words (excluding Appendices, References, Table of Contents and Figures).
• References: None required other than reference to the six (6) cases discussed and analysed in the course. 
• The report should be formatted as follows:
• 12-point typeface.
• 1.5 line spacing.
• Margins 2.54cm (standard setting).
• All pages are to be numbered in the footer.
• All sources used in the compilation of your report should be cited appropriately using the RMIT College of Business and Law style
• .Retain a copy of the report in case of loss through transmission. It is recommended that you save a record of confirmation of submission via Turnitin too.