IT in the Cookie Jar: BPR and Other Value Adding Propositions

Information Technology can give companies with the ability to be as fast and as fluid as they need to be by delivering the most up-to-date data, managing client and supplier contact information and messaging, multiplying the capabilities of human resources and providing sales and marketing with the numbers and subsequent strategy to be as productive and effective as possible. That is to say that IT has its hands in everyone else’s cookie jar… or, at least it should. In fact, there is no better way to improve a company’s focus on the needs of the business than in improving that company’s understanding of its own business operations. In doing so, the next most natural outcome is that the company will more completely view its utility for IT to effect change and increase the quality and efficiency of product and service delivery (among other essential functions). Surprisingly, many IT managers and CIOs do not see their role as an integral part of a well-oiled machine or in any way connected to the business’ overall operations. This lapse reveals an overall weakness in business strategy. IT must not fail to roll up its proverbial sleeves and observe the finite details of how the business actually works which requires a holistic look at the company’s competitive environment. Porter’s Five Forces will shape a re-evaluation of the functions and tasks that IT Managers present to executives as smart, profit-driving strategy. In effect, a redirection of IT will only sustain growth, profitability, competition and value chain support if it looks at opportunities among direct competitors, customers, suppliers, product and services and new entrants as an opportunity to gain insight and strategy while building on existing IT infrastructure (NetMBA, 2011; Porter, 2008).

Case Background

Everyday Accessories Ltd. is a private, medium-sized company based in Austin, Texas. The company specializes in cell phone stuff: Wilson Amplifiers cell phone signal boosters, cell phone cases, gadgets, widgets, cell phone news and much more! The company’s mission is to ensure that customer’s get access to and top quality and up-to-date information about all cell phone accessories.

The cell phone accessories market is very competitive. There are direct and indirect competitors ranging from massive chains, to suppliers, to mom and pop e-bay sales people and beyond. It would appear that companies can compete by driving down the per-unit cost and purchasing quantity; by having a significant online presence which means content on Twitter, YouTube, Facebook and all over the internet; and, by offering good customer service and product support for highly technical offerings like the cell phone signal booster offered by Wilson Electronics. Product support is something that practically none of other competitors can offer so we plan to increase our capabilities by becoming Wilson-certified support specialists and maintaining our Wilson certified dealer license and spot on their website.

Opportunities among Direct Competitors

Competition is about winning and you can’t win without being the absolute best at what you do. That mindset is true in every facet of our lives. Some might ask: if you’re not trying to win, why even bother to compete? And that’s a very good question! However, Michael Porter, celebrated author and management theorist noticed that competition is about more than just winning. In fact, according to Porter's Diamond, competition can be destructive as it focuses on the wrong thing. Rather than trying to make the “best” hamburger (“best” is subjective, after all), companies should just try to successfully differentiate their brand, services, product, offerings or way of offering from others. Our excellent product support, YouTube product videos and advice and images on Facebook and Twitter sets us apart (Porter, 2008; Berns, Townsend, Khajat, Bagopal, & Reeves, 2009).

Opportunities among Customers

Conventional wisdom does not naturally lead one to think of the customer as a competitor (Porter, 2008) but when you look at the customer’s power and how customer decisions can affect pricing, business strategy, marketing, sales and more – you see that there is no way to remain competitive without fully anticipating the customer’s mood, needs and whims and adapting products, services and strategies accordingly. IT can be instrumental in this because it can track buying patterns for products over the years and trends can provide important information.

IT and Internal Customer, HR

If IT becomes essential in business process redesign, then, IT can begin to see separate departments as internal customers who need consulting and assistance as well as the timely provision of one service over another. For example, over the last ten years, IT has maintained the following data in regard to new and temporary hires and shared the insights with HR:

• Multiple interviews – IT keeps in contact with prospective candidates through email, by phone and enables respective departments to easily and effortlessly schedule in-person meetings. Prior to saving them in our database of prospects, we assess candidates’ overall qualifications and consider other factors such as: adaptability, trainability, personality, leadership skills, communication skills and demeanor.

• Skills Assessment/Verification – IT realizes that a good resume and strong references are only part of what makes a candidate good for hire. That’s why we employ testing, personal interviews, and, when required, custom-designed evaluations. We expect strong candidates to have scores on testing that are commiserate with their stated experience.

• Reference Checking – Though tedious and seemingly unnecessary, IT takes reference checking seriously. Not only do we contact references by phone, but, we also check into candidates’ (and their references) public online profiles on LinkedIn and other social networking sites. We understand that the company’s reputation is on the line and we take every step to ensure that candidates have not misrepresented themselves.

• Background investigation – A third-party agency works to identify criminal history or other issues that could expose a client to risk.

• Drug testing – Also conducted by a third party

Supply Chain and Systemic Layout Planning

One of the company’s key business units processes orders placed on E-Bay and Amazon and packs and ships those orders from a warehouse that is located on-site. Supply chain and logistics personnel have complained about efficiency and workflow in this department, so IT is working to transform the warehouse with open aisles, more step ladders and portable workstations with packing materials and computers. Currently, the warehouse is equipped with only one loading and unloading area; IT is working to secure another unloading dock for greater speed and efficiency (Ragowsky & Gefen, 2008; Eseyin, 2006).

Business Process Re-Design

Business process re-engineering is a business management strategy which focuses on the analysis and design of workflows and processes within an organization. BPR can help our company radically restructure supply chain, online content management, customer services, sales and marketing to position ourselves for growth (Spurway, 2010).

Enterprise Solutions

Enterprise applications are central to the company’s success. We rely on them to handle everything from payroll and financial systems to tracking our repeat customers. The company’s internal IT staff should include a small but dynamic expert consulting team which is skilled at applying accelerators and standards for the rapid realization of the company’s goals. One of the main areas where this is needed is in the way the system pulls orders from online platforms to be routed to the shipping managers and then pulled, packed and shipped. The system can intelligently update inventory rather than having managers do this manually. Also, the system can add-back returned items and notify sales and marketing of potential “sales” and special pricing for items that are overstocked in the warehouse. Collaborations with IT will help increase business agility and manage risks while shifting spending and driving improved decisions.

Business Process Challenges

Globalization, new environmental, social and ethical standards and fears about product safety create an environment where businesses are increasingly challenging and risky.

Conclusions

The number one aspect about what Porter calls competition to be the best is that it does not sum up business in any capacity. Looking at the business environment as a whole reveals that businesses can have many winners, who can all be profitable. Tech managers are smart to refocus IT departments on making the business more competitive, reduce the impact of budget cuts, drive performance improvement and enhance IT value. CIOs are in a unique position to refocus their IT departments in a way that makes the business more competitive and can thrive at reducing the impact of budget cuts on IT while enhancing the value of IT to the overall enterprise. The CIO's goal is to help reach overall business objectives (Alcan Cable, 2012).

References

Alcan Cable. (2012). Corporate sustainability offered increased commitment to product quality and safety. Retrieved from

http://www.cable.alcan.com/NR/rdonlyres/B3971AA9-F518-4140-9619-3204D20E625B/0/CorporateSustainability.pdf

Berns, M., Townsend, A., Khajat, Z., Bagopal, B., Reeves, M., et al. (2009). The Mini-cases: 5 companies, 5 strategies, 5 transformations. The Magazine MIT Sloan Management Review Special Report. Retrieved from http://files.meetup.com/1325336/MITSloan%20Mgmt%20Review%20The%20Biz%20of%20Sustainability.pdf

NetMBA. (2011). The value chain. Business Knowledge Center. Retrieved from http://www.netmba.com/strategy/value-chain/

Porter, M. E. (2008, January 1). The five competitive forces that shape strategy. The Magazine Harvard Business Review. Retrieved

from http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1

Ragowsky, A., & Gefen, D. (2008, May). What Makes the Competitive Contribution of ERP Strategic. Database for Advances in Information Systems, 39(2), 33-49. doi: 1500851881.

Spurway, K. (2010). The state of BPM: Perspective of an industry insider. BPM. Retrieved from http://www.bpm.com/the-state-ofbpm-perspectives-of-an-industry-insider.html