Management and Business
John Ottersbach Info I-303 Organizational Informatics June 17, 2009 Project # 4 This is the project report from evaluating the AgCredit mini-case (Textbook pages 131-134) 1. Synopsis This case focuses on an agriculture credit and loan company whose core competency is based around its customer knowledge. The organization’s IT structure and function does not suit the business well. The current setup is not enterprise architecture and staff issues are rampant. There has been a lot of preparatory work done in analyzing the situation and a new team was formed to chart a course of action to transform IT.
With much of the information gathering completed, the team now must convince the business leadership of the changes and be brought on board. Communicating the goals and future plans to involve the business will be vital for the company’s IT to become effective. 2. Key Issues 1. The company’s executives are very busy with day to day operations and new initiatives. IT competence has slipped over time and the structure was never aligned with organizational vision. 2. Although some backend tinkering has made company wide information accessible in some cases, the current systems are not compatible and interaction between them is poor. . IT does not have credibility within the lines of business. This is a know shortcoming and will be addressed in the reorganization of IT. 4. Business processes are not understood by IT staff and often the business itself lacks a thorough gasp on their processes. The interconnections of the processes are unclear to both sides of the organization also. 5. The divisions do not understand their role within the organization and they must figure out how they should support the enterprise. Aligning their individual goals with strategic drivers will need to be done.
There are four business divisions within AgCredit. 6. The company’s strategic drivers are continuous growth, expanse of customer relationships, ability to spend more time with the customers, ability to cross-sell services, and provide a consistent experience to the customer. 7. A CIO position was created to align IT and the business and to guide the IT transformation. The new CIO has run a successful campaign with e-business and comes to the position with fresh eyes, but a lack of formal technical experience. He is comfortable utilizing contractors and taking in multiple points of view. 8.
No IT governance or architecture is currently in place. Rather a divisional structure has existed and enterprise vision is shallow. IT decisions are made to fulfill short-term needs and initiatives. IT function is viewed as a support service for the business. 9. Some of the IT staffing issues are: low morale, high job ambiguity, unqualified staff filling positions, technical skills lacking in some areas, no senior IT manager positions, and many unfilled job roles. Part of retooling the IT architecture must be to sort out these staffing needs. 10. An application-centric attitude rules the company.
This has led to four separate databases, one per division, and huge data untidiness and redundancy. 11. An SOA approach has been suggested based on organizational needs, to transform IT. Those needs include integrating technologies and platforms without replacement. Vendor choices will have to be narrowed and an approval process put in place backed with execution metrics and processes. 12. The next steps will be consolidating the customer data and strengthening its foundation. A single set of customer information is the expectation and this will also help build trust and credibility toward IT, within the organization. . Case Evaluation Strategy that was used
This report looks at a “horizontal” slice of many interrelated issues (refer to Section 5 – later in the report – for further explanation of these issues). Mixing the details of the case with the general issues into a relevant and cogent analysis was the main concern and involved various methods. a. Setting the Context In order to formulate an organizational structure I role-played possible structures and looked for effective relationships. The case lent many good starting points and I just carried the ideas forward with an eye on the future. . Major Initiatives and Priorities of AgCredit After getting an idea of how the structure would look I applied knowledge from the other cases and best practices mentioned from the textbook to suggest a prioritization process for project selection. After developing textbook scenarios further for the new SOA model to test I looked at the possible outcomes and largest advantages. The recommendations are used in the answer section 4. c. Looking back Ideas for the capabilities and governance also came from the lectures, readings, and previous case work.
Although the specifics are much different in that the standardization of equipment is not common between them, the cases all need better business-IT partnerships and oversight. Looking for what makes them similar and different gave a unique perspective to each case. 4. Discussion Questions The following are the answers to the discussion questions on page 134 of the textbook. Propose an organizational structure for the IT department that you feel would support the transformation of AgCredit into a processcentric organization. Recognition of business ownership will be vital to the organizational structure.
Having the business sign on and join the conversation about IT and related projects will be instrumental. A steering committee will be need to be part of the approval process of all projects is needed to make sure an enterprise view is taken. The multidivisional committee will need to ensure all projects fit within a SOA framework. The CIO should be involved in the boardroom and have access to senior management, including the CEO. The CIO should hire senior management that can convey departmental and business objects and help guide IT employees.
Account managers for each LOB that reside in the business but report to senior IT management should be installed. The entire IT staff will need to be reassessed to ensure the proper people are in the right job roles. The IT function will need to be brought in alignment with the enterprise vision. One option is to try to promote internally for vacant IT positions and insource the roles that cannot be filled. Insourcing will have the distinct advantage of training IT personnel while getting the job done as well. Outsourcing IT functions that are not core competencies can also be employed if desired.
Outline a project selection process for AgCredit to ensure alignment with the enterprise business vision. As mentioned in the last question, a steering committee that represents many LOBs will need to be formed and giving decision making capabilities. The process should begin by examining how a project ties to the overall vision of the company. Next the committee members should outline how the project effects their division and could be used to meet departmental needs if possible. Additionally it will need to make sure it fits within the SOA and is not duplicated by other software nodes or current processes.
If it is an enhancement or add-on to another project, communication with the end user to see potential benefits should begin. Making sure it can be modularized and standardized for the business will be vital for the organization’s architecture. Additionally making sure all project types are considered and funded through a tax upon all LOBs will be required to support SOA. How should Manley “make the case” for SOA to ensure that the executive team at AgCredit buys in? Manley will need to present the key strengths of SOA and make sure to focus on how it will support the company’s vision and goals. The transition will simplify the organization and speed up product implementation. * Current services and products will be available or modified for usability. * It supports web services that align with continuous growth opportunities, expanded customer relationships, and ability to cross-sell between the divisions. * It will immediately offer up opportunities for the divisions both in terms of possible financial gains and stretching development dollars. * Existing services can be purchased and implemented quickly within the SOA.
This increases our capabilities and ensures we stay caught up with the larger firms. In essence this can level the playing field providing valuable resources and systems. * Once the customer information is centralized, which is required for SOA, the savings from reducing database needs will be realized. * Having common processes will align the business as a whole and ensure value from increased communication and decreased uncertainty. * This kind of technology base may allow the way we work to change, for example working from home or on the road working through a VPN.
What new internal IT capabilities will have to be developed in order to create an IT department to support AgCredits future business architecture? The capabilities needed to support the SOA from the IT perspective are management tools, information management tools, Information delivery options, development cycles, and a customer service attitude toward the divisions. Role clarification will be important in setting up these capabilities. Management tools include visioning and business alignment processes, funding methods, measurement metrics and focus, and monitoring methods.
Information management tools include collection activities, organize process including schemes and taxonomy, process modules to use the information, and maintenance procedures that support business functions. Development cycles must conform to SOA standards and guidelines, using compliant hardware and software to make systems that breakdown the functionality, and complaint with regulatory needs, including system proficiency in creating reports for audit purposes. The customer service attitude will be needed to manage perceptions and keep close ties with the business.
What aspects of IT governance do you think would be important in supporting this transformation? Before governance structures are formalized the enterprise and divisional vision and objectives should be outlined. With IT working alongside the business some guiding principles must be drafted up. This may involve setting up account managers within the LOB and forming a multidiscipline steering committee with considerable decision power. This steering committee should work closely with the CIO and have high level approval and corporate sponsorship.
The governance system should focus on guiding the transformation process and keeping key issues in focus, such as sox and regulatory compliance. Stakeholder involvement in the steering committee will help the business and IT structures become partners and work together. It will ensure all voices are heard and considered in the decision making process. They should outline policy decisions that support the organization’s vision early on. 5. Issues I have Discussed I utilized the chart, Dr. Ramachandran offered, to find the connections between the subject matter we have studied and the case.
My analysis follows: From Lecture 4 and the Textbook reading assignment pages 37 – 50. * In this case IT often takes a backseat to other business concerns. The CEO having to be approached on the weekend to look at IT issues shows a lack of perceived IT value. * The company has a reputation of customer knowledge and that has allowed for competitive advantage. * The CEO believes IT supports the business. This belief is reinforced with the way IT is set up to function and furthermore with its failure to meet the minimum standards of competency and credibility.
The instinctual desire to outsource all of IT by Paul Manley is a good indicator of IT’s inability to deliver value to the business. * It commonly believed and accepted that IT and business are not aligned at a high level. The desire for the alignment exists and the CEO’s decision to promote a strong business head into the CIO position reflects this understanding. * IT possesses a low self worth due partly to poor organizational engagement and role ambiguity. Without high-quality, business-minded leadership the internal perspective of IT has suffered. OCBs are far less likely to occur in this weakened environment. Without a solid enterprise architecture in place IT lacks a unifying vision and single “brand”. This lack of oversight has not helped promote IT to the business. * With IT being viewed negatively at the executive level, as at the start of the case, IT is at a disadvantage when trying to return value to the organization. The increased bond between the CEO and CIO will dramatically increase a positive perspective for the IT transformation. * The competency and creditability of IT is still highly suspect. The new CIO has acknowledged and is addressing the deficiency.
There is an understanding that it will take time and energy to change the perception of the company. This is a prerequisite to having the business units buying into and taking a chance on IT. * The structural changes of IT should address perceptual issues as well at technical ones. The SOA will ensure the business, through their active role as data owners, views IT as a partner rather than just a service for the business. * The perceptual challenge ahead will involve a lengthy temporal component, the organizations view will not shift overnight. IT will have to build confidence and show the business that it adds value.
Additionally perceptions will need to be continually managed with IT’s rocky history. From Lecture 6 and the Textbook reading assignment pages 72 – 85. * A good exercise before starting the restructure or even the consolidation to a single customer service file would be to get with the business and develop a technology roadmap. The entire process does not need to be completed before beginning other initiatives but this will give the organization focus and set current expectations. This will involve the business greatly and will open the lines of communication for IT and business operations.
Since a large part of a technology roadmap is how technology will be implemented to support the enterprise vision, strategy, and objectives this will help ensure the divisions are working toward organizational unification. * Once the enterprise and divisional vision and objectives are lined out the process can begin. Working alongside the business some guiding principles must be drafted up. This may involve setting up account managers within the LOB and forming a multidiscipline steering committee with considerable decision power. IT staffing cannot be done correctly until business needs are communicated.
It will be important to make sure the guiding principles map to the vision. * The vision from the textbook would consist of: continuous growth, expanse of customer relationships, ability to spend more time with the customers, ability to cross-sell services, and provide a consistent experience to the customer. Additionally implementing an SOA environment would need to be considered in the process. * Taking an inventory should be split into two sections. The first is coming up with a classification schema, which should work well with planning the SOA objectives.
The second is assigning a technology custodian which will help build credibility by increasing transparency of responsibility. * A gap analysis of the current technology to required technology will also need to be completed. This will help build the relationship to the business and show competency for IT if done well. The level of business involvement must be high so an opportunity to influence perception is created. After identifying the missing links a scan of the available technology will need to be undertaken. SOA design will play a vital role in deciding on which software and hardware need to be developed or purchased. In order to get from point A to point B, point B being an SOA for the company, a solid migration strategy must be created.
This will affect the projects that have been put on hold within the organization and future projects as well. This will need input from the business since they will be severely impacted. The steering committee should be well established and able to make informed decisions on this type of endeavor. A governance body will need to be installed that oversees this process and its future revisions. From Lecture 7 and the Textbook reading assignment pages 98 – 126. In order to succeed in the organization vision AgCredit has an Information Management system needs to be instituted. This will be housing the single customer information file. Visioning exercises will help develop policies to support the IM. * The IM will be a great first step toward changing the culture to acceptance of IT function and the partnership role in the organization. A SOA will be supported by this move also and will bring the company focus together. * Shaping the culture to accept the responsibility and a steering committee’s authority will take time to develop especially with such a weak IT role in the current organization.
Bring them on board will be vital to success though. With all of the expected growth and centralizing of information security policy will have to become standardized and thorough. If any of the IT functions get outsourced this move will help make the transition and usefulness operate more smoothly and efficiently. * The initial SOA will be created through a process that needs full organizational representation and support. The final acceptance will need to be at the senior level though. * Adjusting the perspective and culture toward acceptance will be instrumental to the initiatives success.
Paul Manley will need to take an active role in convincing the business to sign on and support the initiative. 6. Organization Chart CEO Jim Finney CIO Paul Manley COO Steve Stewart Kate Longair Samantha Secord Dirk Schader 7. Further Issues From Lecture 2 and the Textbook reading assignment pages 14 – 25. * IT and the business are not aligned. The business is not even aware of how the different divisions come together to work for the organization. The business will have to sort itself out as well as build a partnership with IT. * They have begun to revisit the business model and are aware there is a lot of work to be done.
Since the business is aligning itself that leaves IT in a good position to tie itself to all LOBs. Strategic themes have not been capitalized upon but with the SOA the chances of identifying and being able to act on them will be greater. Getting strong leadership in place within IT and partnering with IT will be a major task that needs to be undertaken. * The different project types are currently not broken up and funded appropriately. The architecture projects seem to be falling behind and definitely not aligned with business strategy. The focus on all dimensions of IT strategy will need to be a priority for the new steering committee.
Building these processes and methods alongside the business will ensure commitment and success. This has not been the case with AgCredit in the past but in order to get IT working for the company it will have to be adopted and maintained. * Account managers that report to the CIO or senior IT managers will need to be hired or found internally. IT and the business’s disconnect between must cease and they should unify. From Lecture 9 and the Textbook reading assignment pages 230 – 244. * IT has not kept pace with were it needs to be for the organization.
They are not prepared to take on the expanded roles IT is expected to recently. The company will need to correct the IT organizational structure and then figure out what competencies they possess. They will need to chart the maturity and make sure they teach or hire staff that can fill the roles the company wants to keep internal. The notion of outsourcing all of IT was raised at the start of the case, but the executives need to get together and chart a course for the organization. After getting an idea of where they want to be they can actually start to consider what IT functions can be outsourced.
Customer service functions and capabilities will need to remain in-house since this is the business’s competitive advantage in the environment. * The staffing issues in the company are a direct result of not realizing which IT functions the business needs to cultivate and rely on. There are too many functions for this company to be able to turn around perform well so something will have to give and other alternatives, either insourcing or outsourcing, need to be considered. Without knowing how the business divisions and processes fit together it will be hard to complete, but IT and the business need to work together to create a solution.