Mini case assignment

  

Read the mini caseBuilding
Shared Services at RR Communications, then complete a well-written 3 page
(minimum) paper responding to the questions presented at the end of the mini
case. RR Communications Case.pdf
rr_communications_case.pdf

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MINI CASE
Building Shared Services
at RR Communications
Vince Patton had been waiting years for this day.
He pulled the papers together in front of him
and scanned the small conference room. “You’re
fired,” he said to the four divisional C IOs sitting
at the table. They looked nervously at him, grinning weakly. Vince wasn’t known to make practical jokes, but this had been a pretty good
meeting.. at least relative to some they’d had
owr the past fiw ye.lrs. “You’re kidding.” said
Matt O,lves, one of the more outspoken members of the divisional CIO team. “Nope,” said
Vince. ” I’ve got the boss’s OK on this. We don’t
need any of you anymore. I’m cre.lting OIlE’ en-
terprise IT organization, and there’s no room for
any of you. The HR people are waiting ou tside.”
With that, he picked up his papers and headed
to the door, leaving the four of them in shock.
”That felt good,” he admitted as he strode
back to hisotfice. A big man, not known to tolerate fools gladly (or corporate politics), he was
not a cruel one. But those guys had been thorns
in his side ever sina’ he had taken the new executive VP of IT job at the faltering RR Communications five years ago. The company’s stock had
been in the dumpster, and with the dramatically
increased competition in the telecommunications industry as a result of deregulation, his
friends and family had all thought he was nuts.
But Ross Roman, RR’s eccentric but brilliant
founder, had made him an offer he couldn’t
refuse. ”We need you to transform IT so that we
can introduce new products more quickly,” he’d
said. “You’ll have my full backing for wha tever
you want to do.”
Typically for an entrepreneur, Roman had
sketched the vision swiftly, leaving someone
else to achmlly implement it. “We’ve got to have
a more flexible and responsive IT organization.
Every time I want to do something, they tell me
‘the systems won’t allow it.’ I’ m tired of
customers complaining aixlut getting multiple
bills for each of our products. It’s not acceptable
that RR can’t create one simple little bill for each
customer.” ROIThln punctuated his remarks by
stabbing with his finger at a file full of letters to
the preSident, which he insisted on reading personally each week. “You’ve got a reputation as a
‘can do’ kind of guy; I checked. Don’t bother Illi’
with details; just get the job done.”
Vince knew he WI!S a good, proactive IT
leader, but he hadn’t been prepared for the
he inherited … or the politics. TIlere was no central IT, just separate divisional units for the four
key lines of business-Internet, mobile, landline,
and cable lV servict’—-each doing their own
thing. Every business unit had bought its own
hardware and softvvare, so intrcducing the common systems that would be needed to accomplish Roman’s vision would be hugely difficult;
that is, assuming they wlllllcd them, which they
didn’t. There were multiple sales systems, databases, and customer service centers, all ot which
led to customer and business frustration. The
company was in trouble not only with its customers, but also with the telerommwlications
regulators and ,lith its software vendors, who
each wanted information about the company’s
activities, which they were legally entitled to
haw but which the company couldn’t provide.
Where should he start to untangle this
mess? Clearly, it wasn’t going to be possible to
provide bundled billing, responSiveness, unIfied customer care, and rapid time to market all
at once, let alone keep up with the new products
and services that were flooding into the
telecommunications arena. And he hadn’t exactly been welcomed with open arms by the d ivisional CIOs (DIOs), who were suspicious of
him in the extreme. “Getting IT to operate as a
single enterprise unit, regardless of the product
involved, is going to be tough,” he admitted to
himself. ”This corporate culture is not going to
take easily to centralized direction.”
And 50 it was. nle DIOs had fought him
tooth and nail, resisting any form of integration
of their systems. So had the business unit leaders,
Building Shared Servicesat RR Communications
127
themselves pfE’Sidents, who wert> rt>wardt>d on
the basis of the performance of their divisions
and, thefE’fort>, didn’t giw a hoot about “the entt>rprise” or about anything othff than their quarwrly rt>stilts. To them, centralized IT meant
increased bureaucracy and much less fret>d.om to
pick up the phone and call their buddy Matt or
Larry ur Ht’lt’n ur Davt’ and gt’t that
tu
drop everything to deal with their l1tt’St moneymaking initiative. The fact that eVffY time they
did this, it cost the enterprise more and more
didn’t concern them- they didn’t cart> that costs
racked up: testing to make stue changes didn’t affect anything else that was opt>rational; creation
of duplicaw data and files, which often pt>rpetuated bad data; and loss of integrated. infomlation
with which to run the entt>rprise. And those didn’t
even cover the fact that the company needed an
army of “data cleansers” to prt>pare the rt>pOrts
needed for the govemment to meet its regulatory
and Sarbanes-Oxley rt>quirt>ments–wasn’t their
concern. EVffyone beliE’Ved his or her needs were
unique.
Unfortunawly, while he had Roman’s backing ill theory, in practice Vince’s position was a
bit unusual because he himself didn’t have an
enterprise IT organization as yet and the DlOs’
first allegiance was clearly to their division
prt>sidents, despite having a “dotted line” reporting rt>lationship to Vince. The result was
that he had to choose his battles very, very carefully in order to lay the foundation for the future. First up was redesigning the company’s
internal computt>r infrastructurt> to use one set
of standard technologies. Simplification and
standardization involved a radical reduction of
the number of suppliers and centralized procurt>mt’Ilt. The politics wert> fierce and painful
with the various suppliers the company was
using, simultaneously cotuting the DIOs and
business unit leaders while trying to sell Vince
on the merits of thd r brand of technology for the
whole company. Matt Dawes had done everything he could to undermine this vision, making
sure that the users caused the maximum fuss
right up to Roman’s office.
Finally, they’d had a showdown with
Roman. “As far as I’m concerned, moving to
standardized hardwart> and softwart> is nondiscussable,” Vince stated bluntly. “We can’t even
beg;’1 to tackle the issues facing this company
128
St>ction II
IT Governance
without it. And furthermore, we are in serious
noncompliance with our softwart> licensing
agreements. We can’ t even tell them how many
users we have!” This was a potentially serious
legal issue tlmt Imd to be dealt with. “I promised
our suppliers that we would get this problem
under control within eighteen months, and
lhey’ve standardization is going to improve our
business fleXibility,” he’d growled, “but if you
say so, let’s do it! ” From that point on, Vince
had mowd steadily to consolidate his position,
centralizing the purchasing budget; creating an
enterprise architecture; establishing a standardized desktop and infrastructurt>; and putting
tools, metrics, and poliCies in place to manage
them and t’Ilsure the plan was respected by the
divisions.
Dawes and Larry Hughes, another DIO,
had tried to sabotage him on this matter yet
again by adopting another manufacturt>r ‘s customer rt>lationship management system (and
yet another database), hoping that it could I:e
up and running befort> Vince noticed. But Vince
had mowd swiftly to pull the plug on that one
by rt>fusing the project access to company Imrdware and giving the divisional struchlre yet another black mark.
11ml episode had highlighted the net>d for a
steering committee, one with tet>th to make sure
that no other rogue projects got implementt’l.1
with “back door funding. ” But the company’s
entrepreneurial culturt> wasn’ t ready for it, so
again, foundational work Imd to be done. “I’d
have had a riot on my hands if I’d tried to do
this in my first few years hert>,” Vince reflected
as he walked back to his office, stopping to
chat with some of the other executives on his
way. Vince now knew everyone and was
videly respected at this le”el because he understood their concerns and interests. Mainly,
these wert> financial-delivering mort> IT for
less cost. But as Vince moved around the organization, he stressed tlmt IT decisions were
first and fort>most busilless decisions. He spoke
to them in business terms. “The company
wants one consistent brand for its organization
so it can cross-sell services. So why do we need
different customer service organizations or
back-end systems?” he would ask them. One
by one he hJd brought the “C” -level executives
around to at least tllillkillg Jbout the need for
an enterprise IT orgJnizJtion.
Vince hJd Jlso taken JdvJntage of his
weekly meetings with RomJn to demonstrJte the
crilicallink’lge between IT and ROIllrmine what projects we need to launch in
order to support the business and then Jllomte
resources and budgets Jccordingly.”
Phil Cooper, President of Internet Sen’ices,
spoke up, “But what Jbout our specific propcts?
Won’t they get lost when they’re all mixed up
with everyone else’s? How do we get funding
for whJt we need to do?”
Vince had a r&ldy answer. ”With J stE'{‘ring
committee, we will do what’s best for the orgJnization as a wllO/e, not for one division at the expense of the others. The first thing we’re going
to do is undertJke a visioning exercise for ·,vhat
you all want our business to look like in three
years, and tlwn we’ll build the systems and IT
infrastructure to support thJt vision.”
Talking the language of business had been
the right approach because no one wanted to
get bogged down in techno-jargon. And this
meeting had effectively turned the tide from a
divisional focus to an enterprise one—-at least as
far as establishing a steering committee went.
Slowly, Vince had built up his enterprise IT organizJtion, putting senior IT managers, reporting to /lim, into &lch of the business divisions.
“Your job is to participate in all business decisions, not just IT ones,” he stJted. ‘There is
nothillg that happens in this company that dcesn’t
affect IT.” He and his staff had also “walked the
talk” over the past two years, working with the
business to identify opportunities for shortterm improvements that really mattered a Jot to
the divisions. These types of quick wins demonstrJ ted that he and his organizJtion r&llly cared
about the business and made IT’s vJiue much
more visible. He also stressed accountability.
“Centralized units are a/ways seen to be overh&ld by the business,” he explained to his staff.
‘That’s why we must be accountable for everything we spend and our costs must be transparent. We also need to give the business some
choices in whJt they spend. While r won’t compromise on legal, safety, or health issues, we
need to let them know where thE’)’ can Sdve
money if they want. For example, while they
can’t choose not to back up their files, they call
choose the amount of time it will take them to
recover them.”
But the problem of the DIOs h.ld fE’1Th1ined.
Used to being kings of their own kingdoms,
everything they did appeared to be in direct oppc6ition to Vince’s vision. And it was appafE’l1t
that while Roman was prelching “one company,” IT itself was not unified. Things had COIl1E’
to a head last year when he’d started looking at
outsourcing. Again they had resisted, seeing the
move as one designed to take yet more power
away from them. He’d offered. Helen a position
as sourcing director, but she’d turned it down,
seeing it as a demotion rather than a lateral move.
The more they stonewalled him, the more determined he became to deal .vith them once and for
all. ‘They’re wldermining my credibility with the
business and with our suppliers,” he’d complained to himself. “There’s still so much more to
do, and this divisional structure isn’t working for
us.” TIillt’S when he’d realized he had to act or
RR wouldn’t be able to move ah&ld on its next
project- -·.a single customer service center sharE’l.i
by the four divisions instead of the multiple divisional and regional ones they had now.
So he’d called a meeting, ostenSibly to sort
out what would be outsourced and what
wouldn’t. Then he’d dropped the bombshell.
‘They’ll get a good package,” he reassured himself. “And they’ll be happier somewhere else
than always fighting with me.” The new IT organization charts, creating a central IT function,
had been drawn up and the memo appointing
his management team had been Signed. Vince
sighed. That had been a piece of cake compared
to what he was going to be fJcing now. Was he
r&ldy for the next round in the “IT wars”? He
was going to have to go head-to-head with the
business, and it wouldn’t be pretty. Roman had
supported him in getting the IT houSE’ in order,
but would he be there for the next step?
Building Shared Services a t RR Communications
129
Vince lookoo gloomily at the l’l’ports the
DIOs had pl’l’pared for their final meeting. They
docwnentoo a complett> data mess–even within
the divisions. The next goal was to implement the
single customer St’rvice center for all divisions, so
a customer could call one plaa> and get St’n’ice
for all RR products. This would Ix> a major stt>p
forw,ud in elld. El’crytllil1g he needed
to do next relied on this, but the business saw it
differently when he’d last tried to broach the subjt>ct with them. “This is our data, and theSt’ al’l’ our
customers,” they’d said. “Don’t mess with
them.” And he hildn’l … but that W,lS then. Now
it was eSSt’ntiaJ to get their information in order.
But what would he have to do to convina> them
and to make it happen?
DISCUSSION QUESTIONS
1. List the advantages of a single customer
St’rvice center for RR Communications.
2. Devise an implementation stratt”gy that
would guarantee the support of the divi·
sional pl’l’sidents for the shared customE’f
St’rvice center.
3. Is it possible to achieve an enterprise vision
with a dec{‘n traliz{‘d IT function?
130
Section ll
rr Governance
4. What business and IT problems Ciln be
cauSt’d by l1ck of common information and
an entE’fprise 1M stratt>gy?
5. What govE’fnance mechanisms need to be
put in plaa> to ensure common customer
data and a shared customer St’rvice center?
Wha t metrics might be useful?

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