Business Development: IT Focused Business Analysis
Assessment description - Following on from the business research and analysis work of Assessment as well as the customer and new business analysis of Assessment it is time to focus on the company's key result area, IT.
Procedure
1. Read the Case Study
2. Analyse current IT framework,
3. Document and cost possible IT solutions
CASE STUDY
You have been hired as the Chief Information Officer (CIO) for a small company "Hosted Desktop Solutions" (HDS), which provides hosted "open-source" IT solutions to small and medium sized businesses.
Due to internal IT constraints and issues, the founders, Bob and Jeff have asked you to undertake a thorough business IT analysis and to suggest solutions to resolve these constraints and issues.
HDS was started by Jeff and Bob, with a laptop each, and not much else! While they have devoted time and effort to meeting their clients IT needs, their own IT infrastructure has become an ad-hoc affair unable to meet the demands of current growth.
Networking capacity is underdone, with one 4 year old server being used for networking, storage, file sharing, as well as some legacy hosted applications for customers. The server box lacks sufficient processing power or RAM, and the server set-up has become unstable over the years, as the founders and the senior technician implement quick remedies when something goes wrong. Staff computers are becoming old, with a messy jumble of hardware, operating systems, and software versions. Email is hosted through Google Apps, and the website is externally hosted.
Customer management systems are also a mix of paper based and Excel files from the company's beginnings, together with an initial but undeveloped CRM system. Mistakes with customer's records are inevitable because of the mix of systems. Telephony has also become inadequate. As well, helpdesk email monitoring and response management is under increasing pressure.
While many of the hosting services supplied to customers are externally hosted, older clients are still managed using the company's own IT. Most client IT system monitoring and maintenance is still undertaken through internal IT.
There is a separate application development "box", however, but as with other systems it is not being optimally maintained and application development has slowed significantly.
It is a classic case of a small owner-operated business, where the hands-on approach of the founders is no longer capable of managing all arising issues. As the company grows, amidst whatever organisational systems are in place, company operations can no longer be effectively managed. For example, Bob and Jeff used to look after all internal IT but when the senior technician was employed he was given the task of managing internal IT. However, with customer growth, all 3 are often out of the office on a daily basis, so who does internal IT fixes, and when these are done is unclear and unsystematic.
Client Service Needs and New Business Opportunities
Your research of client service needs and new business opportunities has found the following:
- Customers who have been with HDS for some time prefer to deal with staff who they have come to know and trust
- They do not like dealing with new IT staff, particularly if they are inexperienced. Older clients generally have a good idea of the issues and have more knowledge than junior support staff.
- Older customers want to talk directly to support staff.
- Older customers want staff to be working when they are working.
- Service emails need to be to be acknowledged as quickly as possible. If a auto responder is used there must be a service ID number included.
- Older clients expect to be recognised/acknowledged when contacting HDS by phone. (Does HDS need to implement phone/computer based CRM?)
- More IT literate customers want highly customisable solutions, or the ability for changes to made efficiently and effectively with little additional cost.
- The clearest area for new business is in social media delivery. However, while clients would like to manage their social media activities more effectively, it is not an area they wish to devote resources to, often thinking that a young staff member can do this for them.
- There are always opportunities to develop "extranets" and "intranets" for clients. However, most clients think that having a website is good enough. Frequently they lack the knowledge about these kinds of implementations and the costs involved, often thinking they will be larger than what they would be in reality.
- Changes to project timelines and costs are also difficult for customers, as they are for the business. (How can HDS better manage timeframes and costs without impacting on delivered quality?)
Internal Analysis
- Informal policies and procedures are not managing the increased growth.
- Roles and responsibilities are more and more ill-defined, so that some key outputs are overlooked.
- The website, for example, a key result area for the business, has not been updated for some time, resulting in outdated key marketing and communication information. Everyone seems too busy to fix it, and who would do it anyway?
- Additionally, administrative response turn-arounds are getting longer and becoming inaccurate, with client and project documentation not being kept uptodate, impacting on client invoicing.
- IT client service response turnarounds are also getting longer, placing customer relationship pressures on old clients as the needs of new clients is prioritized. New clients require more attention and, as resources are stretched, new and old clients are becoming frustrated
- Project margins are therefore declining.
- Systems to manage client services (both in administration and IT) are frayed
- Cash flows are under pressure due to late payment due to late client delivery while outgoings are increasing trying to deliver client projects on time
- Research and development, a key result area for future revenue streams is falling behind
- Internal infrastructure is over-used, under-maintained and is struggling to meet performance demands
- Strategic settings have become unclear impacting staff's understanding of what is trying to be achieved. This is affecting organisational culture, causing it to become directionless: "What are we doing? Where are we going"?
- Jeff and Bob are so preoccupied that their interaction with staff, once warm, friendly and consultative is now short, swift, demanding and directive.
- Everybody is aware that something has to be done, but nobody knows what, and this instability is further eroding organisational performance.
Background
You have been hired as the Chief Information Officer (CIO) for a small company "Hosted Desktop Solutions" (HDS), which provides hosted "open-source" IT solutions to small and medium sized businesses.
HDS is a small full service company located in the Sydney IT hub of North Ryde. It will install hardware, software, configure and manage systems, create websites, intranets and extranets. Clients currently come from design companies and other individual companies who do not see a need to internally manage their IT infrastructure as it is not a core result area.
The company's two founders (brothers Bob and Jeff) are still very hands on in all aspects of the business, including still looking after foundation clients.
There is a small 2 person administration team, a senior and junior IT technician. Marketing and Customer Relationship Management are still handled by the founders.
The company is still delivering some hosted services from equipment within the premises. As well as developing open source solutions for clients, the company has also started to develop and deploy its own applications. Again most of this work is carried out by the founders.
The company is undergoing significant growth as "cloud" computing is becoming more acceptable, and affordable, for businesses small and large.
The company has indentified significant opportunities to expand the depth and breadth of its "cloud" computing services, particularly into the education sector. These services are expected to increase revenues from current customers, increase the company's market share, and create opportunities to enter other markets.
However, other larger more well known competitors are also making inroads into these markets. While these companies do not offer the same level of high quality customer service that HDS is renowned for, they can offer very competitive pricing, and are often preferred by the bigger customers that HDS is trying secure.
Additionally, while the market for cloud computing services is expanding, actual IT expenditure is not. So while the company is having resource capacity issues across all areas of the business (knowledge management, planning, human, IT infrastructure, organisational, budgets) revenues are not increasing sufficiently to enable additional resource investment; staff are feeling the strain.
HDS still operates under a "small family business" culture. Roles and responsibilities are ill-defined. Strategic planning is ad hoc at best. So, while Jeff and Bob have some idea where they are heading, staff generally feel uncertain about where the company is going and their future in the company. Tactical decision making is also often usurped by pressing operational service delivery requirements, which adds to the current sense of instability in the workplace culture.
There are only two levels of skills and capability within the company, most staff are in junior to mid level roles (apart from the senior technician, who nevertheless, does not have significant management responsibilities) with Bob and Jeff performing all the higher level management functions across the business.
As the founders deal with increasing operational workloads, research and development activities are becoming stymied and delayed and development milestones are not being met. In addition, Jeff and Bob's ability to maintain industry currency, awareness of future directions, understanding the market through industry and competitor analysis is declining by the constant operational pressures. For an IT company, not understanding, or being able to meet market requirements can signal impending failure, (just think of Nokia and its delay into smart phones resulting in a huge drop in market share from what was once the world's top selling mobile phone manufacture). Additionally, budgets are becoming stretched due to establishment overheads for new, larger clients, who, as yet have not returned sufficient income to cover their establishment costs.
As the company tries to maintain organisational performance levels, and as resources become more and more strained to manage the increasing workloads, staff morale is declining and the once warm family work culture is starting to fracture.
With the company's growth, and the founders growing capacity management issues impacting customer service quality and Service Level Agreements (SLAs), Bob and Jeff have decided to bring in to the company a senior resource, the Chief Information Officer (CIO), to assist the company's growth into a larger company. Additionally a mid-level cross-functional support role is also to be created, reporting to the CIO.
The new Chief Information Officer will have key internal and external strategic, tactical, and operational responsibilities to help enable the business to manage growth sustainably. The role is primarily focused on:
- Alleviating some of Bob's and Jeff's tactical and operational decision making
- Managing internal operations across all areas
- Contributing to IT deployment into larger companies
- Contributing to application development
- Assisting the founders with strategic planning
The idea is give Bob and Jeff the opportunity:
- To focus on internal strategic activities to enable the business to continue to grow and innovate while still maintaining a culture that is caring and supportive, whilst still being effective and efficient.
- To focus on strategic activities to take advantage of industry developments and market opportunities/conditions
- To focus on the application development strategy which is often delayed and interrupted by newer, larger, and ever increasing service delivery requirements that only the founders currently have the experience to efficiently and effectively manage.