Posted: November 27th, 2013
Building Shared Services at RR Communications
At RR communications, it is obvious there is a problem that needs to be handled if they are to avoid losing customers. The problem lies with the decentralized operations where each business unit has a mandate to operate independently. The business units have the power to make and implement new projects and make decisions without having to involve the whole firm. This has led to many problems such as customers complaining of having receipts for each of the four products offered by the company and would prefer having one receipt for all their transactions. Due to the division among departments, the company has been unable to meet reporting requirements for the Sarbanes Oxley Act. It has proved obvious that a shared IT service, which is standardized among all the units, is needed to ensure everything goes well.
The first problem we see at RR Communications is that there is a definite lack of centralized and concise IT governance. Currently all of the separate functions of the company have their own individual leadership with no central leadership. For this reason, each of the sections takes actions and makes decisions based only on how it affects their own particular departments. There is no coordination to ensure that the act of one area does not negatively affect the rest of the firm. This in turn has led to a significant lack of uniformity across the organization, which is hurting customer relations. There are unified databases and each section maintains their own set of records; this is causing great frustration among their customers who continually have issues when dealing with more than one area.
Much of the division of departments has been caused by a lack of central leadership. The CEO of the firm has failed to unify the department or assert any control over the individual IT vice presidents. Even though they reported to him, each had acted entirely independently. This continuous failure of leadership has caused the department heads to develop a sense of isolation and self-survival. Even though a new executive VP of IT has been appointed to bring unity to the firm, there has been severe resistance as each department feels it will suffer. The lack of centralized management for so long has caused significant discord between the departments that will take considerable effort to overcome.
In addition, this company attitude has filtered down from the VPs to the middle and lower management creating an overall atmosphere that is dangerously disjointed. Even the suggestion of bringing together the database systems and management has caused a near mutinous uprising and rejection of leadership. The current managerial atmosphere has been around so long, the attitude of individualism has been deeply imbedded in the corporate culture. While, individual thinking is useful to foster innovation and creativity, when the entire organization acts to satisfy only its individual requirements, the firm overall will suffer. Unless this attitude can be overcome, any attempt at bringing unity to the company will fail.
From the technical standpoint, RR Communications is suffering from a severely fractured information management system. Every section of the company maintains its own individual customer databases, which are in incompatible formats. If a customer maintains relationships with more then one division, they get bills from each individual area. Customer issues often fail to get resolved because the departments do not communicate or share information. This is causing problems with diminished customer satisfaction. In addition, without a centralized database, full customer information and statistics are impractical to collect. In addition to suffering by not being able to collect detailed records, the company is facing regulatory issues by not being able to provide complete information on the company’s activities, and significant resources are being wasted to assemble simple reports.
Currently management and associates at RR Communications believe that a collective solution is impossible, and any attempt to do so will cause them to suffer. While it may be true that the initial implementation of such a system will require a significant collective effort, the end result will be well worth it. It is also clear that much of the perspective of management is extremely short sided; projects are selected only based on a very narrow and limited benefit view with no regard for their long-term viability. As more and more systems have been patched together to fulfill immediate gaps, the overall collection of programs has become a cumbersome, inefficient, and unmanageable mess. A truly efficient system would be one that is all-encompassing and communicates across all facets of the organization to deliver a unified and fully integrated information system that can add real value to the firm.
One other major issue at RR Communications is the proliferation of rouge projects completed without oversight or regard for how they will affect the firm. In a large company every project should be examined to determine how it could provide value to the organization before being launched. At RR Communication projects are being launched that benefit only select areas and may in fact be causing a significant negative impact to the rest of the firm. The company currently does not have a steering or operating committee to oversee and exert control over these projects. Without any form of centralized control and governance, these rouge projects will continue to sabotage the effectiveness of the organization.
Lack of common information and enterprise IT strategy has caused several problems for the business and the IT departments of RR communications. Customer service has suffered and customer dissatisfaction has grown. Lack of common information has made it difficult for management to monitor the businesses as a whole. Business units are unable to exchange information and remain unaware of the other divisions’ work. There is little sense of how the divisions work together to meet the company’s overall goals. The accounting problems make it difficult to present shareholders with accurate financial information, and the system is not cost-effective in any case. Furthermore, each division working at individual level to attain its success makes them rigid and unable to adapt to changing requirements; under these circumstances even the implementation of new technology will be extremely difficult. The organization cannot operate efficiently as a whole or at division levels, and the costs are bound to keep increasing.
As many annoyed customers can probably agree, being transferred from one department of the company to another over and over again to resolve a simple issue is one of the main reasons many companies lose customers. This is certainly an issue at RR Communications. The main cause of the problem seems to be the division of the different business units. This lack of unity is caused by a faulty commission system that rewards individual performance over company profit. The fact that the four CIOs refuse to work together and resort to sabotaging the efforts of the others, serves to show that they are more interested in their own selfish financial goals. While the president of the company may have been a visionary and brilliant entrepreneur, he lacked the managerial skills to recognize the need to have a unified commission system which would foster participation in a common goal, and thus a common commission which is interdependent on all four business units would be most beneficial to the company.
Unifying IT Resources
The most important problem for RR Communications to correct is a significant deficiency of successful information management, reflected by the confused state of their customer information databases. Currently customer data is disbursed in separate databases for each section of the company, so that data from one department is not available to another. Thus, customers are forced to maintain relationships with multiple departments and receive billing from each. This separation means that valuable information resources are not being effectively utilized, hurting the firm’s productivity and efficiency. To improve the state of information capital at RR Communications, a complete overhaul of the current systems will be necessary, from both an IT and business standpoint.
Information represents a vital asset to any company. This can be in the form of customer accounts, sales records, research & development, financial statements, etc. However, in order to realize full benefits, the same information must be readily accessible by all individual units, so that the company can leverage it in the most efficient manner. The first step to correct the issues at RR Communications is to create a unified data architecture that combines all information resources into a central database that is accessible to all sections of the firm. By providing a centralized database clients will be better served by allowing complete access to customer records throughout the company. This will also improve reporting abilities, lower administrative costs, and greatly increase the value of information resources.
To achieve the greatest benefit to the company, RR Communications could consolidate its data from multiple silos into a unified enterprise data warehouse (EDW) (Smaltz, 2011). This architecture provides multiple benefits including a single location for all information storage reducing the amount of duplicated efforts. This also greatly improves the integrity of data by providing a ‘single version of the truth’ (Smaltz, 2011). When data is spread throughout multiple databases, invariable some of it will differ. For example, a customer’s address may have been changed in one department but not another. These differences can prove costly to a company. A centralized EDW means that only one record should exist for each customer and reduce data discrepancies.
Having such a centralized system would also satisfy customer needs in a more efficient manner and would help to cross-sell products, which in turn would result in higher profits and more profit for the company. By allowing customers to have a single point of contact, and sharing information by standardizing software and databases across the organization, information will flow more freely and readily available thus giving the employees the ability to communicate in real time with accurate data and maximizing customer contact to increase profits.
Having a decentralized IT function is not conductive to achieve an enterprise vision because by keeping the separate business units separated, it keeps pertinent information out of reach of other business units, and thus allows missed opportunities to maximize profit. Also, the lack of communication among the units creates chaos and disorganization in the organization and gives precedence to individual goals above company goals, which in turn will end up hurting the overall enterprise vision and may even spell the end of the enterprise altogether. Finally, having a decentralized IT function creates customer frustration such as in the case of getting several bills for different products. This frustration may cause the company lost customers and lost profits.
Information Stewardship & Information Management Policy
The difficulty in implementing this solution is the current state of the databases scattered about the firm; many are in incompatible formats, so that significant effort will need to be invested to bring together all of this data into a single, shared IT service system accessible to all. In addition, not all data is equally valuable to each unit. Efficiency necessitates allowing employees access to the information that is most pertinent without inundating the various departments with extraneous details. For this reason, whatever IT solution is implemented must be able to adapt dynamically to the storage and retrieval needs of each department. Another challenge to creating a centralized system is the role of information stewardship. Information stewardship involves the ownership and control of information to reduce discrepancies and redundancies. To maintain the consistency and accuracy of data, information stewards need to be appointed. “Information stewards are businesspeople. They should be responsible for determining the meaning of information ‘chunks’ and their business rules and contextual use. They should be responsible for the accuracy, timeliness, consistency, validity, completeness, and redundancy of information” (McKeen & Smith, 2009, p. 76).
A serious challenge to the consolidation of data at RR Communication will be consolidating all of the disparate information from around the firm into a single enterprise data warehouse. It is very likely that there will be duplicate information, conflicting records, incompatible data formats, and other inconsistencies that will not lend themselves to easy integration. However, the reduction in duplicate and conflicting information will be vital to the success of RR Communication. Duplicate data means an increase in administrative work and overhead, and conflicting and inconsistent information means the company is not performing at optimum levels.
The reduction of duplicate data, or data deduplication “can improve the performance of virtual systems, reduce network traffic and cut the costs associated with data protection. In addition, deduplication allows backup data to be replicated more efficiently to other sites for disaster recovery” (Symantec, 2011). Duplication increases the amount of data a corporate network must process, reducing efficiency and increasing costs. Storage costs increase as the same information may be stored and backed up across multiple databases, again wasting resources. Finally, duplication of data significantly increases the amount of labor required to utilize it in any useful manner. Clearly, RR Communication will need a significant amount of data deduplication to create a useful, consolidated enterprise data warehouse.
To facilitate the proper stewardship of information, an information management policy needs to be created that addresses these issues in a way that prevents such confusion and disarray. An information management policy will dictate the rules and guidelines for how information is handled, who is responsible for maintaining and updating it, and outline the policies and practices to do so (McKeen & Smith, 2009). To begin to unravel the data mess at RR Communications they should define an encompassing information management policy that will effectively address the issues of what information is retained, who is responsible for updating it, how it is to be maintained, and who should have access to it. Critical to the success of this policy will be the involvement of management from all functional areas of the company. Each should be given the opportunity to contribute to the policy, and each individual needs should be addressed.
In addition, the problem with this solution will be gaining acceptance from the different functional areas of the business. There will obviously be conflicts of ideas and differences of opinion in how the policy should be created and enforced. To improve the effectiveness of the policy it needs to be thoroughly enforced from top management down. This means to gain compliance, RR Communications’ CEO needs to set the example and pressure all levels of management below to do the same. Another strategy to encourage the support of the divisional presidents for the shared customer service is by creating awareness that the free information flow would be beneficial for all and would simplify business processes, thus allowing then to increase their bottom line, and thus their bonuses. Finding opportunities to demonstrate small success would help show the support being given to the divisions. To aid in compliance, a large corporate training program should be initiated to ensure the policy is well known by all associates. Gaining compliance by all of the business areas will be the most difficult part of this solution; the ingrained attitude of self-preservation that exists at RR Communication will be difficult to overcome. However, change is not impossible, but only by dedication of management. The initial implementation period will be the most difficult, and if enforcement waivers the policy may fail.
Creating Useful Information from Raw Data
One characteristic of an enterprise system is ensuring seamless integration of a company’s information among all divisions, including financial and accounting Markus, M.L., & Tanis, C. (n.d.). Hence, to achieve a successful enterprise system, a company must have its IT systems centralized to ensure information runs smoothly and is relevant among all divisions, especially the financial and accounting information. Considering the accounting problems brought up at the final meeting, the company obviously needs to implement a centralized IT function. Moreover, it will be far more expensive to have an enterprise system with a decentralized IT function, which is contrary to the aim of achieving an enterprise system.
While a centralized information management system will indeed offer benefits at RR Communication, if there is no way to utilize and interpret that data, it is useless; this is analogous to being data rich and information poor. Just because a company has loads of data does not mean that is fully informed. A company such as RR Communication collects vast quantities of data, but having the resources to convert that into useful information can be an extreme challenge. At RR Communication, they are facing a double-sided problem; they have neither a collective data warehouse, nor do they have any effective information management. Once the problem of centralization has been addressed, information management can be.
One potential way to improve the use of massive amounts of data is using a metadata repository. A metadata repository functions much like the card catalog of a library; while it does not specifically contain the information, it provides an index of what is available, including the relevant points on what it contains, as well as a pointer to locate the information (Moss & Brodie, 2002). This index provides an extremely valuable resource tool to quickly locate pertinent information. In addition, the metadata repository should be designed with the ability to hook into other systems that are developed to provide information to mother systems as necessary. Establishing this framework now will offer increased benefits as more systems are built off the central repository.
Addressing Corporate Culture
As seen in RR Communications, lack of common information and enterprise IM strategy can cause several problems to the business and the IT department. RR Communications has encountered serious customer service problems, due to lack of common information and enterprise strategy. In addition, lack of common information makes it hard for the overall management to monitor the businesses. Business units are unable to exchange information, and none is aware of the other divisions’ work. The company is not in a position to strengthen its brand since no divisions work together.
To remedy this, a unification of the firm needs to take place from more than just an IT standpoint. The disjointed nature of the firm’s information assets reflects a deeper separation of the personnel at RR Communications. Departments work for their own ends with naught but passing concern for their effects on the company as a whole. This lack of cohesion manifests itself in the behavior of the CIOs, divisional managers, and even the employees, and has resulted in the severe fragmentation of corporate culture. The fragmented IT systems are only a symptom of a much larger problem.
Before addressing the IT problems at RR Communications, the underlying culture of the business needs to be transformed. This begins at the very top, with the president of the company and the highest leaders; they need to be the first to set the example, and it is clear their current attitudes have set the company on the disastrous course it is on. Removing the CIO team which has hampered the company’s efforts at unification up until now was a good step, but serious considerations now need to be taken to prevent things from getting worse. Other associates could easily see firing the CIOs as a usurping of departmental sovereignty; however, they need to use this as an opportunity to show that the company can be brought together without sacrificing any of their needs.
To capitalize on this opportunity the president and vice president should bring together the next level of management into a council of members to set the direction and culture of the firm in a way that promotes unity and mutual respect. This council should be responsible for creating and fostering an atmosphere that shows the benefits of the firm functioning as one. They need to prove to the management and associates that their departments will have a say in decisions, and their needs will not be overlooked. To improve the odds of acceptance, the council should be selected from leaders that have proven themselves as examples of good leadership and who are respected in the firm.
Key to the success of this council will be keeping everyone on equal footing and ensuring that no one area is given preference over another, especially in the beginning. It is obvious that certain departments will have greater needs then others, and sometimes priority will need to be given to one area; however, if this behavior is present from the outset they will receive much resistance from the firm, as this will reinforce existing fears. Once a unity of the firm has been established, people will be more flexible to accept changes after they see the benefits. It will be up to the president and vice president as leaders to maintain these policies and be the example. As demonstrated in previous cases, the president has been lax in demonstrating himself as a leader and this could prove damaging to any such plans to unify the firm. Leadership must begin at the top, and the success or failure of a company often reflects the abilities of its leadership.
The advantages of a shared IT system eliminate some of the above-mentioned problems. A single centralized and standardized IT operating system will enhance quick decisions across all the departments, since all units will be looking at the same data. Furthermore, with a shared service, customers will not have to visit different databases for the same company; rather, all their queries and purchases can be done from one site that will serve them with all that they need from the company. Another advantage will be easy monitoring of the divisional units—their individual performances as well as their contributions to the whole company. Another advantage for the company will be the ability to monitor financial operations, since all operations will be reflected on one database centrally (Amces, 2010).
To implement the shared service strategy, it will be important to seek support of the divisional presidents, considering they will be in charge of the units, which are the moneymaking branches. Their willingness to participate in the construction of the shared service will benefit the whole company. The first step to the implementation of this strategy will require assurances that it will benefit the whole company far more than the current system that is facing opposition from not only the customers but also other stakeholders such as the suppliers. In turn, since employees’ remuneration is awarded on performance, improved performance for the whole firm will be an added advantage. Since the divisional heads are used to being in control, it is important to remind them that having a shared service will not mean the imposition of decisions from above. Rather, the shared service will make the operations of the whole organization work in harmony for the purpose of easy monitoring customer convenience.
They should be included as part of the implementation team, so they can offer input on what they may not want to change. For instance, many are worried they will have to do away with specific projects. Ensuring them that these projects will continue after implementation of the shared service would increase their support, as would helping them understand that the new, shared system will enhance the harmony and efficiency of whole organization; eventually they will come to see that their roles will remain mostly the same.
Another way to improve the odds of success to a centralized data structure is by appointing a team to oversee the maintenance of the data warehouse from an enterprise level. Ideally the members of this team should be comprised of analysts from the important functional areas of the company. This can help gain buy-in from the company due to the fact that the members of this team have already proven themselves to be knowledgeable and capable in their previous environments (Smaltz, 2011). In addition the benefit of incorporating these individuals is that individual departments will feel that they have representation in the new system, and that their interests are protected. This will increase the potential for global acceptance in the program.
Another way to increase compliance with the new systems is to implement an incentive program that would drive associates to achieve the best results. Incentive programs drive people to reach specific targets by offering them tangible rewards beyond their current compensation. At RR Communications, an incentive program could be implemented to increase compliance and adoption of a new centralized system. For example, the company could offer monetary bonuses to departments that lower their operating costs using the new system the most. Another more abstract idea would be to have a small bonus program for departments that offer ideas to enhance the productivity of the system. Many of the departments have complained that a shared system would cause them to be overlooked; however, offering this type of inventive would both encourage them to make enhancements of the system while simultaneously demonstrating that their opinions count. Positive reinforcement, such as an inventive program, help gain the compliance of the workforce in a much more efficient way then punishment or negative reinforcement.
There are governance mechanisms and metrics that can be used to encourage the implementation and use of a shared enterprise data system. The governance that needs to be put in place is the alignment of divisional units with the IT department. The metrics must be aligned with transparency to ensure that IT is in congruence with business operations. The governance mechanism should involve all departments focusing on regulatory issues, risk alleviation and opportunity enhancement. The metrics used should be concerned with making divisional data fit into an enterprise system. These metrics will identify areas of weakness and avenues of improvement. To quote an analogy, “Rome wasn’t built in a day;” and it will take significant time and effort to remedy all the problems at RR Communications. Close governance and metrics will aid in any improvement plan.
It is evident that RR Communications need an intervention in its customer service center. The lack of a centralized customer care center is making it hard to provide unified services to customers. More so, a lot of time is wasted by customers who have to be referred to different department for billing. Customers are forced to have several accounts with the company for each division since each division is held with its independent operations including billing (Smith & McKeen, 2007). This makes it hard for customer care provision. Considering consumer service is very crucial for any business, RR Communications need a centralized customer service center. A centralized service center will have many benefits to the whole organization such as cost reduction, time saving, good management of customers’ data or information, and customer satisfaction. I recommend a centralized customer service center for RR communications for its advantages as predetermined below.
The divisional IT service means having separate audits for every division. Having each division with an individual audit is expensive for the company since several auditors will be needed. Eliminating the divisions will save some costs that would otherwise be used for the services of the auditors at every division. With a single it department, data can be fed there and only one audit team will be required for the whole company. This also means reduced time for audits since with divisions audits have to be put together after each department has completed its audit (Smith & McKeen, 2007). Coordination among the auditors will be efficient since information is collected from one point where all information concerning company accounts is stored. Therefore, having a centralized service center will enhance such operations across the whole organization.
In addition, with a centralized customer service center as well as IT, it will ensure information is collected at one point making it easy to access information concerning any department from any point within the company without having to refer to the division in charge. Hence, for the auditors, complying with the set Sarbanes Oxley act will be easy since information about customer billing and accounts of the whole firm will be centralized ensuring accuracy. Having the customer service centralized enhances business operations and processes, ensuring best practices such as timely audits are realized.
With data consolidated in one central place, information can be exploited to breed new opportunities for the company. When data is at one place for all the divisions, it is easier to have a broader picture concerning how the divisions can create a new opportunities. Exploiting these opportunities jointly among the divisions is better than going individually. Moreover, security can be more enhanced with a shared service center since monitoring will be done by one entity. This will further reduce costs associated with having each division taking responsibility of storing and maintaining its own data. Considering that RR communications is currently having several softwares, consolidating information together for the whole company is hard. Smooth flow of information across departments to ensure easy sharing is vital; not only for the whole company, but for divisions too, considering information consolidation is a fundamental instrument for doing business.
Consolidating the IT services to one centralized structure will require removing of service center hardware from each division to one central department that will mitigate risks and have a common structural design as well as policies that are easily reviewable for updating. A common security procedure will reduce risks associated with information breech. Through the same procedures and practices, the company can reduce file systems redundancy within the organization and enhance efficient document retention as well as reduce costs.
Another reason to have one service center is to match the technical capacity of the company with its vision. At the current divisional independence, the divisions exploit their own visions that are not in congruence with the organization’s vision and mission. Considering the company’s vision is to have a consistent brand across all the divisions, it is necessary to have cross-shared services across all divisions to achieve this vision. The vision can be achieved through cross- sales of all the company services to its customers, as opposed to each department having its selling strategy. Having a shared sales service will serve to reduce the costs incurred when divisions do it individually hence creating a better chance for profit across all departments. Having a central service center will ensure that the overall vision of the company is followed since the central service center will be inclined towards the vision of the whole company. This way, each division can have a chance of benefiting form other divisions, hence the company as a whole (Smith & McKeen, 2007).
Having a single service center will allow easy outsourcing for the organization. Currently, businesses are outsourcing majority of their operations to other professional companies for reductions of costs. With independent divisions and IT strategies for each individual division, outsourcing will be quite complicated. Having a central service center to oversee all requests will enhance efficiency as well as value. More so, through the consolidation of IT services and information at one common place will reduce security risks associated with outsourcing services. This will further ensure reliability and security of information.
A consolidation of information and IT services will enhance cross-services for customers such as billing (McKeen & Smith, 2011). The company divisions at current circumstance hold their information secret from each other, making it a competition within the divisions that raise the problem of billing where customers have to be referred to other divisions for other services. With the consolidated information, customers will only need to visit one department from which other information concerning other divisions can be met. This will improve the perception of their whole company as a brand and the standing of the company can be improved as well as customer satisfaction. There is need for the company to realize that in the current world information is one of the drivers of businesses, which all businesses need to survive. Having each division with its own information center reduces the chances of the company improving in the future since the harmonious climate needed among the divisions for this achievement is minimal.
Having stipulated the advantages bound to arise or reasons why a central service center should be achieved, it is important to consider how RR can be able to implement this recommendation with ease and least resistance from the divisions. This is the first most likely problem to arise during implementation. Hence, the first step should be generating support form all divisions, which has been quite hard up to now especially from the managers who are self centered and concerned with their earnings that depend on their performance. The managers also have a negative attitude towards merging of information and data among the divisions through one central service. A three-point strategy can be used to gain their support. It includes financial strategy, mitigation of risks associated and compliance to regulation. Financial point can emphasize the advantages the shared service is bound to raise, which will for the benefit of all the divisions and organization as a whole. Risk mitigation will arise from security of information through monitoring by one entity in a standardized way, while regulatory will be concerned with abiding to set accounting rules of the Sarbanes Oxley act which the company has been having problems with (Schwartz, 2007). The next step would be to lay out the vision of the company and show why it cannot be achieved with division of operations among the divisions. This will impart some reasoning among the leaders, and support fore all divisions should be ensured. The main aim is to make everybody in the divisions aware of the role they will play and their stake to ensure thee is compliance and acceptance of the strategy to build a one services center (McKeen & Smith, 2011).
One of the problems that could arise after implementation of a shared service center is ease of adoption. Some employees who have been used to the old system will require to be trained how to work harmoniously with a single service center. Many will be required to handle more information concerning not only their divisions, but also other divisions. Hence, there will be need to have them trained to provide a central service to the customers. Another problem would arise for the culture set by the independent divisions prior to the implementation of a single service center. The current culture is of rivalry among the divisions considering they have been competing among themselves. Killing the culture will be a little hard. To deal with the problem the company will have to start early through brining people together and coming up with tasks that can be incorporated in all divisions that allows all members to interact. The shared tasks will enhance cooperation among the different divisions.
RR is having problems because of lack of a common service center. All divisions are held with their own operations that aim at achieving divisional goals at the expense of corporate goals. The company is lacking a strong unified brand to sell to customers since all divisions are accounted for independently. This has made it obvious that a shared service will be the best for solving these issues.
RR needs to put in place an alignment of their IT services with the business units. Transparency must be encouraged and joint responsibilities of IT ad businesses to achieve shared service center (smith & McKeen, 2007). The company should also have a common enterprise vision for their systems. All the departments should be included with emphasis on joint business opportunities and risk mitigation. The top management should be in forefront to creating an atmosphere of improvement continuously with a key focus on customer service to ensure the shared service center is successful.
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