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CIS 4710 Case Analysis p.87, Ecologix Technologies Lance Lawson
Background facts:
Ecologix Technologies began it’s start in the 1940’s as a grain warehousing organization. In 1979 the owner had passed away and left the firm to his brother. The brother, Myron was also of age and had no desire to take on this position. However, his son (Gregg) which had a formal education and had proved himself in business received half the stock of the company from his father, Myron. Gregg’s success was in retailing products in the supermarket arena and he had worked himself up to president. Shortly after accepting this position from his father, he purchased a controlling interest in the supermarket chain. The acquisitions had begun and in a short time, the organization had became a conglomerate with nine subsidiary units. The different divisions compliment each other except for the oil and gas company which is owned. A new executive vice president was hired (Jay) which also had a successful background and in turn he had hired his past associate (Glenn) from his banking experience. Glenn is the director of information services and faces the task of turning IS from a support division to a strategic division.
Follow up to Problems:
Glenn immediately made his presence known buy purchasing a additional main-frame computer which would increase processing capability by sixty percent and doubling personnel in the department of information services. Even with this action, the IS department had a hard time keeping up with the necessary tasks. Data entry still took the required 40 hour week and overtime was taking another 20 hour a week. Still everything was classed as OK and top management saw no problem.
The director and the managers of the different accounting departments do not have degrees in accounting and the more Jay (executive vice president) learned about the situation, the more concerned he became.
The books had never balanced, and with the rapid growth that took place, the problems had
been multiplying. Jay decided a house cleaning was in order and begun by hiring a formally trained accountant named Doris Hill. Doris’s position was chief accountant. Doris reorganized the department and made accounting training mandatory for all department heads. Doris made new reporting features and the operation seemed to be OK.
The employee turn over rate was brought up, however Jay saw no problem with it and the issue was dead at this time.
The books had been balanced by putting overflow in the category of fixed assets. This problem must now be dealt with.
During the next few days it was decided to form a committee and solve the problem. Before the committee could meet, Richard’s had a discussion with his friend and decided on a package already.
Problems: Round 1
The decision on the software was actually not a decision, since there was no actual choice.
None of the supervisors had much experience with computers.
There was no training for the new system.
There are internal politics between management units.
Bob Cornish (in charge of installing new data) leaves for over three weeks, project stoppage.
Upon restarting the project, they hire a inexperienced college student.
Now, mistakes made by previous employees and temps come into the picture.
Problems: Round 2
This new college student, had little actual background, and no work experience
Upon restarting the project, coding mistakes are found which were caused by using the temps which were hired.
There was no help for Helen (new hire) and soon she made mistakes.
There were problems getting information from clerks, due to their perception of losing their jobs.
The class codings of the system had had mistakes made by upper management.
The whole project actually has a low priority to information services.
Problem Analysis.
When the business was a single entity, problems could be covered up. Now with the organization numbering hundreds of outlets, the problem has became a nightmare. When Gregg (the CEO) took over, the first thing to do was to analyze the books. If Gregg did not think about it, surely Jay (second hire) should of done it. This mistake not only filters down a organization but each time it does filter down the problem multiplies. Planning is the problem here and it reaches basically every decision made in this case study. First, the computerized system used did not match the organization needs from the beginning (used for a single company). The new system actually had no analysis made for it’s purpose. Second, errors were made from the CEO to the department heads. The new formed CEO should of did analysis on the firms accounting status when beginning. The department heads should of voiced their concerns about their lack of experience with computers to upper management.
Communications skills are not only bad, but nearly non-existent. Over and over again concerns are either passed up or simply covered by "don’t worry about, I’ll take care of it". Employee turnover looks to be a sign of communication problems but, once again, the "gate’s left open". The selection of personnel for the discussions ( which actually never took place ) were once again done on the fly without much input or analysis. Training was non-existent not only with operators but with their own department heads. ( the company deserves to fail at this time). The users were seldom asked for input and when they were, they were little passive beings.
Alternatives :
Plan 1 : Continue with implementation.
One option would be to continue. With class-coding corrected, there is a possibility of fulfillment with company objectives. Another analysis is needed to back up the above sentence. Maybe the code can be modified or other modules added. The problem is not so much a software problem as it is the internal operations of the corporate structure. Even with the continuos choice of this project, a complete analysis should be done by perhaps both an internal employee and a out-sourced consultant.
I believe that a budget of 10,000 dollars could easily be afforded by this organization and bring fresh data and information to bear for upper management.
Plan 2 : Scraping of the project.
While this may be done anyway, an analysis would be done basically to get more information and decision making data. A project does not need to be scrapped if not necessary since a stigma will exist for the personnel involved which may never be corrected. This purpose alone is why a study must be performed.
Plan 3: OutSource the project.
Do to company lack of computer knowledge, this is a viable option. The size of the company will prevent any quick fixes in the traditional ways ( a hire here and a hire there ). My first thought is that a outside team be used for 1.5 to 2 years while internally the solution of illiteracy of computers is dealt with. With little formal training of tactical management, it will have to either 1. Be brought in or
learned. Either way, training for the operational management stills needs to be done. And this is another time-scale which needs to be addressed.
Plan 4 : A combination of outsourcing and internal operation.
Perhaps internal networking could be used for each division and the corporate assimilation of information be done by outside consultants, ~ Oracle , etc… With the size of the company at hand and the responsibilities of the top management and their lack of computer usage, I believe an outside corporation specializing in information gathering be brought in. Of course there is concern of operating methods which will be made public to an outside force, however they might not have a choice in this area ( non- disclosures agreements are only partially en-forcible ).
Plan 5 : Complete new system with training and more training.
I do not know about the budget available however, with the CEO background and past work experience, along with his chief vice president I also see this as a n option. Since things are already screwed up, they could run the existing system with the new system in parallel until training and usage was up to "code". One benefit here is keeping the operation’s in house and "under wraps".
For any of these alternatives to work, I believe their attitude about lower employees will need to change (keeping their salary low and letting them move on…). It will be hard to foster young potential with this method of operation. Then again I could be wrong.
Analysis of alternatives:
Continue implementation of existing system.
Pro
Save existing money on software already purchased. Training also, although ~ nil
Save management from embarrassments of poor decision making, or lack of.
Con:
System might not be fixable and could be wrong from the beginning.
Throwing more money down a "rat hole".
Being fined by a government agency for improper bookkeeping.
Error building up until a major problem exist and is inescapable. ~ to late.
Plan 2 : Immediate scrapping of project.
Pro:
Save money and get pass the disaster which occurred.
Get on with the solution to the problem.
Get a fresh start with the "new methods" of the organization.
Con:
Inside distraught employees whose have now faced failure.
Acknowledgment of failure by upper management.
Politics inside the organizations which can last forever.
Plan 3 : OutSource the project.
Pro:
Experience personnel.
Letting operation do what it does best.
A custom solution which cannot be bought "shrink wrapped"
Additional resources not required for implementation.
Con:
Outside people knowing the inside business.
Carrying salary for the employees as well as the OutSourcers.
Not as much control as inside solution would offer.
Plan 4 : Combination of OutSourcing and internal department solution.
Pro:
Releasing resources that otherwise would be needed elsewhere.
Getting expertise that the organization lacks internally.
Getting second opinions from outside consultants.
Cons:
Bringing outsiders in and losing some control.
Additional moneys would initially be required.
Unforeseen problems occurring from splitting up teams.
Plan 5 : Complete new system.
Pro:
Fresh start with the analysis process.
Better end solution for the organization.
Include project with strategic viewpoint.
Make IS dept. a strategic player in decision making.
Con:
Process must begin over, with additional moneys and time required.
Stigma of failure by the ones involved, employee readjustment.
Recommendation.
Let me first say that whatever decision they make, it should start with a in depth study of the existing needs as well as future needs. With a organization of this size, a strategic system should be mandatory along with the department itself. Since the beginning of the article states the competency of top management I believe they should start from scratch.
I also believe in a combination of strategies with each division using ex. Access and outsourcing the corporate system perhaps to a major vendor. If the outsourcing is done, there must be a limit on the time that the outsourcer is used (they need a long term plan to be self-operating).
From what the article tells me, I am going with a combination strategy which will give the organization time to educate it’s workforce. The mistakes previously made seem quite simple and doesn’t fit the CEO method of operating. I going to state the reason here, that once the company got out of it’s market of expertise, all hell broke loose.
Going on what is stated in the case this would be my conclusion. Employee training must begin immediately with terminology and vocabulary being the first fronts of attract. A corporate help-desk can be set up with one local person at each branch taking the initiative.
First 30 days would be education of computer terms and processes, going to sixty days if required.
Second 30 day period ( or 60 ) would be the operating system and the peripherals that are used.
Third section of time would be education of the software that will be used if known ( additional knowledge can be fitted in about accounting, operations, marketing etc… if the software selection is still unmade).
Forth period would be implementation of the system while running in parallel with the old.
Feedback is allowed at all times, and should be mandated.
If the users help make the
selection, they will be open to it. If they believe that they made a difference
it will be better for all.
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