Richard J. Bocchinfuso

Why Systems Fail?

It has been said that most systems fail because system builders ignore organizational behavior problems. Discuss the implications of this statement.

Organizational behavior and culture can determine the success or failure of just about anything, information systems are not immune from this key risk variable.  The reason books like “How to Win Friends and Influence People by Dale Carnegie”, “To Sell Is Human: The Surprising Truth About Moving Others by Daniel H. Pink”, “The Paradox of Choice by Barry Schwatrz”, “Enchantment: The Art of Changing Hearts, Minds, and Actions by Guy Kawasaki” and many, many others exist is because as human beings we know success or failure is greatly influenced by our ability to influence others, to change behavior and culture.

Information systems are often built and designed by technologists who for years ignored the end-user, crafting systems they felt would optimize the business from their perspective but never considering that these systems we complex and while logical to them were illogical to the end-user. Over the past twenty of so years, we’ve witnessed the emergence of B2C (business to consumer) organizations which have eclipsed B2B (business to business) organizations in many aspects.  These B2C organizations like Apple, Facebook, Google, Snapchat to name a few, focus on the end-user, they use agile development paradigms vs. rigid waterfall paradigms to rapidly pivot to meet the demands of a fickle consumer base.  The difference today is there is no concept of shelfware, the idea that Oracle or SAP sells you an application which you may or may not implement, adoption is paramount in the B2C world, customers have far more choice, they test drive and pilot applications, and initial commitment is far lower.  The most successful information system initiative today have bottom-up support vs. top-down mandates.  I think about the shift to cloud computing from traditional on-premise infrastructure, and this movement was driven by developers looking to simplify the process and become agiler by removing the painful processes built by the IT guy.  Five years ago IT organizations called this Shadow IT and resisted, but these grassroots information systems (IaaS, PaaS, SaaS, FaaS, etc…) have been some of the most transformative in the last thirty years.  IT organizations are having to learn how to apply governance to information systems which are widely deployed, the realization here is that the end-user wants to drive the experience, they don’t want the experience dictated to them.  The power of the developers and end-users (The New Kingmakers by  Stephen O’Grady) has fostered a positive culture shift inside many IT organizations who sadly have been so predictable for so many years that SNL parodied them in the Nick Burns sketches (https://www.nbc.com/saturday-night-live/cast/jimmy-fallon-14931/character/nick-burns-17301).

References

Jimmy Fallon. (n.d.). Retrieved March 05, 2017, from https://www.nbc.com/saturday-night-live/cast/jimmy-fallon-14931/character/nick-burns-17301

Laudon, K. C., & Laudon, J. P. (2016). Management information systems: managing the digital firm. Boston: Pearson.

Tang, E. (2011, January 22). Why Do Information Systems Fail? And how can managers/ IT managers reduce the likelihood of such failures? Retrieved March 05, 2017, from https://erictang711.wordpress.com/2011/01/23/why-do-information-systems-fail-and-how-can-managers-it-managers-reduce-the-likelihood-of-such-failures/

Identify Solutions

Identify solutions that allowed Canada Life Insurance Corporation to correct the main gaps in the CIM system and the errors caused by the excessive decentralization of IT development services.

• Canada Life Insurance over rotated on decentralization and recognized that not all steering activities could be decentralized, so some activities were centralized and made the responsibility of the Department of Actuarial Services for branches.
• All change management was centralized under Ghislaine Boulliance, with the exception of code tables which would be controlled by the users.
• A process was developed tracking changes requests as well as following-up on completed change requests.  This process ensures that change requests in the pipeline are appropriately prioritized and that one a change request is marked completed that there is a connection with the end-user to ensure the change is as expected, to take feedback and iterate if required.

Because Canada Life Insurance decided to outsource development and deployment of CIM to ITConsult they should have had developed a governance around exit management which would have outlined how ITConsult would transition post-development.  It’s implied that ITConsult’s departure left both a skills and culture gap that could have been avoided.

References

Laudon, K. C., & Laudon, J. P. (2016). Management information systems: managing the digital firm. Boston: Pearson.

Roy, V., & Aubert, B. (2006). The CIM Project. HEC Montreal Centre for case studies 14 pages,4(1). Retrieved March 5, 2017.

CIM Project Opinion

In your opinion, do you think the project was a success or a failure? Give your reason(s).

IMO the project was not a success.  Canada Life Insurance attempted to do too much with this project.  They were taking on the development and deployment of a transformative information system and at the same time attempting to shift their management approach for technology project.  This new management approach for IT projects seemed to be aimed at decentralizing decision making, increasing end-user involvement in how technology solutions were architected and deployed and moving from a traditional waterfall based project methodology to an agile or hybrid based project methodology.  Canada Life Insurance was just trying to do too much, they further compounded the issues by engaging ITConsult (outsourcer) for the development and deployment of CIM.  ITConsult ended up controlling the direction of the CIM project which negated most of what Canada Life Insurance was trying to accomplish and also introduced new issues around organizational behavior and knowledge management.

It seems that the application was prototyped but never tested for scale, a common issue with rapid prototyping (Laudon & Laudon 2015 p 523).  Once the CIM system went into production they experienced massive scale issues and over fifty change requests.

Canada Life Insurance worked to rectify the issues post-production deployment but the project at production roll-out was a failure.  CanLife should have taken a more phased approach to development and deployment addressing application requirements and organization behavior modifications using and approach that provided a higher probability of success.

References

Laudon, K. C., & Laudon, J. P. (2016). Management information systems: managing the digital firm. Boston: Pearson.

Roy, V., & Aubert, B. (2006). The CIM Project. HEC Montreal Centre for case studies 14 pages,4(1). Retrieved March 5, 2017.

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The Internet may not make corporations obsolete, but the corporations will have to change their business models. Do you agree? Why or why not?

The internet and internet business models have already made some pretty sizable corporations obsolete.  Remember Palm, how about Blockbuster Video, Kodak, Garmin, etc…, etc….  General technology advances hurt these companies and forward thinking internet connected business models produced by companies like Apple, Amazon, and Netflix essentially made it impossible for these legacy businesses to compete.  The world is a bit different today than it was when these titans virtually evaporated.  New internet-based business models, but the Internet goliaths like Amazon are still eating legacy businesses unable to adapt to new Internet led business models, retailers like Borders and Circuit City are just a few of the retailers who have bid farewell at the hands of Amazon.  Massive legacy retailers like Walmart are also feeling the pain and trying to make up ground by acquiring companies like Jet.com to help them morph their brick and mortar businesses into efficient E-tailers.  The internet has changed the game completely with paths to revenue, marketing, customer service, customer acquisition, and scale strategies all very different than they were for brick and mortar businesses.  The biggest challenge corporations have to overcome is selling themselves too hard on their “unique” value proposition without adapting, convincing themselves they can carry on like they always have and survive.  In a wired world, people are shopping 24x7x365, and Black Friday has been replaced by Cyber Monday.  While Black Friday only lagging behind Cyber Monday by approximately one hundred million dollars in online sales, shoppers spent 12.1% more online in 2016 than they did in 2015 with retail store foot traffic dropping 10.4%.  “Corporations” will not be obsolete but the companies we consider cultural icons like Sears and General Motors will continue to be challenged by new entrants like Amazon and Tesla.

I agree 110% that legacy businesses who have been slow to adapt to a connected world will be very challenged to sustain and grow their businesses.  Corporations who consider themselves as data-driven organizations need to think about the data driving their companies.  Last quarter’s sales figures while important do not depict consumer sentiment, for instance, the sentiment analysis using the #GrabYourWallet hashtag may provide some valuable indicators on how a retailer should adjust their inventory, etc…  Many legacy corporations are mining historical structured data as an indicator of the future because they haven’t yet made the shift to what IDC calls the 3rd Platform (http://www.idc.com/prodserv/3rd-platform/), this lag is natural, but every organization needs a 3rd platform strategy because it represents the future.

References

Chronicle, B. E. (n.d.). How ‘Amazon factor’ killed retailers like Borders, Circuit City. Retrieved February 22, 2017, from http://www.sfgate.com/business/article/How-Amazon-factor-killed-retailers-like-6378619.php

Laudon, K. C., & Laudon, J. P. (2016). Management information systems: managing the digital firm. Boston: Pearson.

Male, B. (2009, December 11). 21 Things That Became Obsolete This Decade. Retrieved February 22, 2017, from http://www.businessinsider.com/21-things-that-became-obsolete-this-decade-2009-12?op=1%2F#undaries-20

MSG Management  Study  Guide. (n.d.). Retrieved February 22, 2017, from http://www.managementstudyguide.com/impact-of-internet-revolution-in-business.htm

O’Neill, M. (2011, March 01). How Netflix Bankrupted And Destroyed Blockbuster [INFOGRAPHIC]. Retrieved February 22, 2017, from http://www.businessinsider.com/how-netflix-bankrupted-and-destroyed-blockbuster-infographic-2011-3

Stelter, B. (2013, November 06). Internet Kills the Video Store. Retrieved February 22, 2017, from http://www.nytimes.com/2013/11/07/business/media/internet-kills-the-video-store.html

Taylor, K. (2017, February 01). An anti-Trump movement is calling for the boycott of these 33 retailers. Retrieved February 22, 2017, from http://www.businessinsider.com/trump-boycott-retailers-sell-trump-products-2017-1

Walmart Agrees to Acquire Jet.com, One of the Fastest Growing e-Commerce Companies in the U.S. (n.d.). Retrieved February 22, 2017, from http://news.walmart.com/2016/08/08/walmart-agrees-to-acquire-jetcom-one-of-the-fastest-growing-e-commerce-companies-in-the-us

Should all companies use Facebook and Twitter for customer service and advertising? Why or why not? What kinds of companies are best suited to use these platforms?

This is an interesting and somewhat loaded question.  I think the key question that every corporation needs to answer here with regards to should they have a social media presence (Facebook, Twitter, Instagram, etc…), is:  will a social media presence positively or negatively impact the business? I am not just talking about should an organization worry about a positive or negative reaction (tweet) from the social community, it’s about more than this.  Organizations need to consider if they can accurately represent who they are in the social sphere, do they have the time and inclination to curate content which is representative of their brand?  Having NO twitter presence is probably better than a twitter profile with one tweet from two years ago that says “Hello”.  From a customer service perspective, it’s hard to imagine that a company would have a social presence and not have a clear understanding of how social media is impacting the organization, I am implying that you can’t decouple specific aspects of social media.  Once you have a social media presence IMO you’re in the social media customer service business by default.  Of course, a company can attempt to take the censorship approach, but this usually doesn’t go well, and this organization is probably better served steering clear of social media.  Corporations who leverage social media today also need to leverage the vast amounts of data which can be mined from social media platforms, this data is not a straightforward as sales figures neatly organized into tables, columns, rows, and fields but it can be incredibly powerful for performing predictive analytics.  Many organizations who do this successfully outsource the analytics and machine learning because while social media is important to their business, they don’t possess the internal expertise to execute.  Other organizations who consider social media a path to competitive advantage may choose to directly mine this data as they perceive it as core to their business.  With 42% of customers who complain expecting an answer in sixty minutes or less you better have a (ro)bot leveraging machine learning algorithms responding to customers because a human response is probably not realistic given the scale of twitter.

I do believe that most companies need to explore social media for customer service and advertising.  Social media can be a great way to drive customer intimacy (Laudon & Laudon 2015 p 361) but it can also be an excellent way to alienate customers.  Social media is an incredible platform, but companies should clearly understand their audience, they should have a clear vision of how they want to present their brand.  By engaging in a social media initiative, organizations need to understand that they are making a commitment because engagement followed by abandonment can be harmful.

References

Baer, J. (n.d.). 42 Percent of Consumers Complaining in Social Media Expect 60 Minute Response Time. Retrieved February 22, 2017, from http://www.convinceandconvert.com/social-media-research/42-percent-of-consumers-complaining-in-social-media-expect-60-minute-response-time/

Gunelius, S. (n.d.). 10 Laws of Social Media Marketing. Retrieved February 22, 2017, from https://www.entrepreneur.com/article/218160

Laudon, K. C., & Laudon, J. P. (2016). Management information systems: managing the digital firm. Boston: Pearson.

Newton, C. (2016, November 01). Twitter introduces customer service bots in direct messages. Retrieved February 22, 2017, from http://www.theverge.com/2016/11/1/13488472/twitter-dm-welcome-messages-quick-replies-customer-service

Pangan, A. (2014, October 23). Social Media Analytics: Is It Worth Outsourcing? Retrieved February 22, 2017, from http://www.infinitdatum.com/blog/social-media-analytics-is-it-worth-outsourcing/

Parrish, C. (2015, July 08). How To Use Social Media To Market Your Business. Retrieved February 22, 2017, from https://www.fastcompany.com/3047232/ask-the-experts/how-to-use-social-media-to-market-your-business

Using Social Media Analysis for a Competitive Advantage. (2015, January 06). Retrieved February 22, 2017, from http://www.fathomdelivers.com/blog/social-media/using-social-media-analysis-competitive-advantage/

Part 1: Thinking about the organization that you are working for currently, which enterprise application do you think your organization will benefit from the most: ERP, SCM, CRM, or a combination? Why and how? Explain your answer.

I work for a mid-sized technology integrator, currently ~ 750 million a year in revenue and growing.  We use ERP, SCM and CRM applications within our enterprise today.  Some of these systems are tightly integrated, some of these systems leverage EDI to move data between our systems, our suppliers and our vendors.  We also have many other operational systems which we use such as ITSM (IT Service Management) for incident and CMDB, ITOM (IT Operations Management) and ITBM (IT Business Management) applications.

• For inventory and order management and finance and accounting activity we currently use NetSuite (http://www.netsuite.com).
• For CRM (Customer Relationship Managment) and SFA (Sales Force Automation), we currently use Saleforce.com  (SFDC) (https://www.salesforce.com/).
  • We also use SFDC for certain aspects of PSA (Professional Services Automation) including things like tracking project milestones against opportunities, tasks like time tracking and accounting are done in SFDC.
• For SCM (Supply Chain Management) we have developed a homegrown platform which leverages data from NetSuite, Salesforce, and ServiceNow (ITSM, ITOM, ITBM).  The core of the platform is built on ServiceNow because it allows us to easily facilitate EDI between our organization, our customers, and our suppliers many of whom also use ServiceNow for ITSM (IT Service Management), ITOM (IT Operations Management) and ITBM (IT Business Management).
• For HRM (Human Resource Management) we leverage the ADP platform  (https://www.adp.com/solutions/services/human-capital-management.aspx) and iCIMS

We also heavily leverage cloud-based applications like Smartsheets, Tableau and others tools for data analysis (BI) and visualizations.

In addition to these systems, we bi-directionally integrate with many other systems such as Pardot (http://www.pardot.com/) for B2B marketing automation, Xactly for Sales Commissions and Compensation Tracking (https://www.xactlycorp.com)  ChatOps, discrete ITOM platforms, CI/CD tools, etc… all via API integration.

Almost all of these systems facilitate and automate core business operations like lead-to-cash, order-to-fulfillment, and procure-to-pay processes.

There is an active initiative working to consolidate ERP applications (Finance and Accounting, CRM, SFA, and SCM onto a single platform, Infor (http://www.infor.com/).  The cost of this project is significant as is the timeframe.  The endstate will leave us with a consolidated ERP platform which will hopefully ease the amount of integration and EDI we need to do between internal systems.  At the end of the rainbow we hope to be left with two key platforms we will use to operate our business, these systems will be Infor for ERP and Service Now for ITSM, ITOM, and ITBM.

I am an engineer, with a heavy focus on incident, change, problem and knowledge management so the ServiceNow platform adds the most value for me.  I also rely heavily on pipeline and backlog reporting, and this data is all housed in SFDC with bi-direction EDI with NetSuite.  Pipeline and backlog management and reporting are critical for me to run my business.

Part 2: If a company wants to implement an enterprise application, it had better do its homework. Discuss the implications of this statement.

“Enterprise applications are difficult to implement.  They require extensive organizational change, large new software investments, and careful assessment of how these systems will enhance organizational performance” ((Laudon & Laudon 2015 p 373)

Architecting and deploying an enterprise application is a costly and lengthy process, and the deployment is just the beginning.  Once an enterprise application is deployed adoption and assimilation need to be facilitated, this means getting people to use the system, the biggest challenge of any enterprise application deployment.  When deploying an enterprise applicaiton it’s inevitable that you will encounter a crossroads, regardless of how much due diligence you do before choosing a platform.  Do you customize the platform to match the process or do you change the process to meet the platform?  Everyone has a different perspective on this question, and there are pros and cons to either approach, the reality for most is the process is the process will change to meet the platform and the platform will be customized to meet the process.

References

Doig, C. (2015, November 19). Calculating the total cost of ownership for enterprise software. Retrieved February 15, 2017, from http://www.cio.com/article/3005705/software/calculating-the-total-cost-of-ownership-for-enterprise-software.html

Laudon, K. C., & Laudon, J. P. (2016). Management information systems: managing the digital firm. Boston: Pearson.

Schiff, J. L. (2014, July 30). 9 Tips for Selecting and Implementing an ERP System. Retrieved February 15, 2017, from http://www.cio.com/article/2458889/enterprise-resource-planning/9-tips-for-selecting-and-implementing-an-erp-system.html
Other options which I did not respond to:

Case 1: What do you think Hilton leadership should do after the Blackstone acquisition? Should they further invest in CRM or simply maintain the status quo? What aspects of Hilton’s CRM should be strengthened, if any, and how?
Case 2: If you were asked to become the successor of the current managing director, what would you try to do in order to extend current levels of ERP systems use?

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The WestJet case study clearly states that WestJet executives possessed no understanding of the level of competence of the organizational structure of the IT organization (Munro and Khan, 2013, p. 5).  Cheryl Smith was hired as the CIO (Chief Information Officer) figure out what WestJet possessed in terms of people, process and technology.  Prior to Smith’s arrival at WestJet and engagement with IBM had been underway, the result of that engagement was for WestJet to establish a PMO (Project Management Office), Smith requested that any recommendations resulting from the IBM study be placed on hold until she had a chance to assess the organization.  Smith determined that she need to benchmark the WestJet organization against comparably sized organizations in the transportation industry to understand if cost structures and skills sets relative to industry standards.

Smith’s benchmark assessment found WestJet’s cost structure to be inline with industry standards from both a headcount and cost structure perspective.  WestJet’s IT team was comprised of talented people but many of these people only understood “the WestJet IT way” (Munro and Khan, 2013, p. 5) which may this could bring a small minded approach to solving complex problems, additionally there was an imbalance of skills when compared to industry standards.  WestJet’s IT organization was organized as a shared services model where IT functions were consolidated into a monolithic IT organization organized by operational function, planning, building, operating, maintaining and governing.  Only about 50% of WestJet’s systems for operations and procedures were “industry-standard”, there was a high sense of pride by WestJetters in having created these systems and procedures from scratch and some protectionism and potential resistance to change because of this strong sense of pride.  This would likely be a cultural and organizational challenge as Smith worked to transform the IT organization.  The assessment identified that the current IT organizational structure provided no direct connection to the business units they were serving, this created a situation where business units were constantly competing for IT resources while where IT had little to no accountability to the business unit and little to no visibility to their impact on the business.

It was clear that the WestJet was using the Federal decision making archetype (Weill and Ross, 2004, p. 4) where business unit VPs would meet monthly with the VP of IT to negotiate (and likely renegotiate) priorities and resourcing.  Smith quickly moved to change this process to an annual process where business unit leaders and IT leadership would meet to discuss capital projects and make decisions and commitments for the the year.  Smith did not remove the Federal system but increased the importance for BUs to determine was important to them for the coming year rather than providing the opportunity renegotiate direction each month, in return IT would commit resources to competing the projects.

Smith also looked at facilities, staffing and process to determine any potential risks and how to address.  It was determined that WestJet’s data center was at risk given its current location and that WestJet needed to make disaster recovery / business continuance a priority.

WestJet clearly valued the role of IT and many of the industry leading programs that IT pioneered, such as electronic ticketing.  IT principles, architecture and infrastructure had allowed WestJet to grow from a small regional carrier to a major codeshare airlines serving 85 destinations in 18 countries.  As other competitive organizations matured WestJet needed to fuel the next cycle of innovation and Smith felt that this required focus on business application needs, strategic IT investment, project and resource prioritization.  Smith was focused on transforming the IT organization to bring IT closer to the business.  Smith’s plan would create BU-CIO role for each BU and realign existing IT resources with business units.  The BU-CIOs would be an IT leader who also possessed intimate knowledge and experience relevant to the BU.  Smith would also focus on tackling facilities, personnel and process issues such as WestJet’s data center facilities, disaster recovery and 24×7 IT operations.

The changes that Smith planned to institute represented a significant cultural shift for the IT organization and Smith recognized that communication would be a key aspect to a successful transformation.  Smith felt that the IT organization would need to move from a reactive “hero” culture (Munro and Khan, 2013, p. 9) to a proactive culture where heroes were no longer required.  Smith wanted to transform WestJet’s culture of individualism into an organization fueled by technical excellence, accountability and transparency from the BU to the IT organization.

I believe that Smith had considered key factors for IT decision making (Weill and Ross, 2004, p. 4):

• IT Principles
• IT Architecture
• IT Infrastructure
• Business Application Needs
• IT Investment and Prioritization

I also believe that Smith did a good job aligning her vision of the organization structure with WestJet’s strategic objectives.

• Strategic Driver
  • Straddling the line between Asset Utilization and Growth
  • Smith planned to align half of the IT resources (120 of 240) with the Business Units to fuel growth while the other half of the IT resources will continue to be assets focused on shared infrastructure services.

• Key Metrics

• This area of IT governance was where I saw a gap in the case study.  While the transformation challenges seemed to be well understood and there was implied reasoning for the need to transform the IT organization there were no clear metrics on how success would be measured.

• Key IT Governance Mechanisms

• Smith’s hybrid approach to IT governance balances profit, asset utilization, and growth.

• IT Infrastructure

• Felt that Smith was straddling the line to manage both asset utilization and growth.

• Key IT Principles

• Felt that it was clear that the IT organization was being transformed to fuel growth.

• Governance

• Smith was positioning what appeared to be a Blended organization, with a slant towards growth.  Smith reduced the opportunity for federal style decision making to once per year and introduced the duopoly by adding BU-CIOs and allowing tactical decisions to be made but the BU-CIO and BU executives.

Smith outlined a solid plan for implementing a hybrid approach to IT governance, with a clear understanding of the challenges as well as the reasons for why a change was required.  It was was easy to understand where Smith wanted to take the organization and why.  The area that I think required some additional thought was how this transformation would impact to the business, how would the IT organization be measured post transformation.  How would Smith empirically demonstrate success to C-Level executives?

With regards to the “lost sense of identity and the diminished opportunity to regularly commune with people of similar technical interests” I believe this is an organization behavior hurdle, people don’t like change, change threatens stability and I believe that Smith and her newly appointed BU-CIOs will need to over communicate and show some quick wins to settle the human spirit.  Smith and other IT leadership will need to be aggressive in how they address members of the team who cannot make the transition.  Even though a significant portion of IT assets are being realigned with business units it’s very important that Smith and the newly appointed BU-CIOs communicate that the IT organization is a unified organization and that the goal is to align IT initiatives with business initiatives, to improve focus and transparency but the IT organization is still a team.

References

Munro, M. C., & Khan, S. (2013). WestJet Airlines: Information Technology Governance and Corporate Strategy. London, Ontario: Ivey Publishing.

Weill, Peter and Ross, Jeanne W. (November 2004). IT Governance on One Page. MIT Sloan Working Paper No. 4517-04; CIS Research Working Paper No. 349.

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