casadellibro.com

This is likely to be the final Information Systems related entry into this blog. I sincerely hope that I can continue updating this blog as frequently now that the Info Systems course is coming to an end......Anyway , Casa Del Libro awaits...

casadellibro.com is an online book retailing division of the Spainsh group, Planeta. The case is set in 2002. Basically, the company has invested a large amount on a Unix based online platform on the basis of optimistic growth projections. However, the platform is very complex and cannot be integrated to support operations under it's current design. In addition to this, the dot com bubble has just burst and projections have decreased dramatically. Now the question we face as incoming CEOs is: "Would you stick to the previously developed UNIX platform, or switch to a new, cheaper but less scalable Microsoft Solution?"

I would stick to the scalable Unix offering and initiate the required redesign of the platform. The criteria for my decision are:

• Long Term profitability. While the Microsoft solution would save costs in the short term, the platform would need to be redesigned to enable large scale growth in the long term. Hence, I think it would be better to implement a complete solution that would not be a barrier to growth once the market picks up.

• The recession is temporary. All recessions are temporary. Once the recession begins to fade, we need to be in the best position to take full advantage of resurging consumer demand. Our best chance of doing so is by having a platform that will be a catalyst for exponential growth, not a platform that could be hinderance to exponential growth.

• Demand is limited during the recession and investors expect company performance to decrease. The unix platform needs to be re-designed and the best time to initiate this re-deisgn is during a recession as the demand for online services will be limited. In addition to this, while the re-design of the unix server is an expensive exercise, I think it is best to swallow this bitter pill early on. Rather than wait for growth to return to re-design the Microsoft server, I think it is best to re-design the Unix server early in anticipation of growth once the recession is past.

So, till next time - adios.

The Tesco's Competitve Advantage

So here we go again, another Information Systems blog. This time we have been asked to examine the competitive advantage that Tesco has gained through IT.

Tesco has a history of using technology and innovation to gain market share and achieve growth. However, does Tesco have a sustainable competitive advantage delivered by IT?

The success of the Clubcard program, introduced in 1995, was the catalyst that catapulted Tesco to the top of it's industry in terms of market share. Through the Clubcard, Tesco was the first UK retailer to implement a technology based loyalty program. The success of this loyalty program was driven by Tesco's ability to gain insight on customer profiles and preferences and to deliver an offering that was catered to multiple consumer segments.

Tesco did not stop innovating despite the success of the Clubcard program. Tesco has made an aggressive foray into the online retailing space by making strategic acquisitions. This has opened up a new, highly profitable division for Tesco but this new division also has it's fair share of competitors. While the online business is lucrative for Tesco, it only accounts for a small portion of it's revenue. Tesco now has to discover a method of growing it's online business while not cannibalizing on it's traiditional retail business.

IT innovation has definitely been a key factor behind Tesco's escalation in the UK retail market space. However, the innovation that it has done so far will not be able to sustain it's growth in the long term and the key for continued long term growth will be continued innovation. For example, Tesco could incorporate technologies like FourSquare into it's loyalty program. This would enable Tesco to continue to gather information on it's customers as the concept of a loyalty card becomes obsolete in the eyes of Generation Y.

In conclusion, while IT innovation has been key in enabling Tesco to gain a Competitive Advantage, the only way to keep this advantage is to continue to innovate in a way that adds value to customers.

The ERP Quandry

The Information Systems blogs are flowing thick and fast !! This time we've been summoned to write on:

• Should companies adapt to ERP or should it be the other way around ?

The basic purpose of ERP is to have a central system that co-ordinates resource planning for the entire organization. In addition to handling resource allocation issues, this system can also be used for reporting purposes. That is, the finance and accounting department can use the system to calculate exact labour costs and the management of the company can use the reporting functions to monitor company performance and make accurate forecasts. However, quite often these systems have been quite expensive and difficult to use and they have also been accused of not delivering tangible value to the organization.

So who should be the one adapting ? Well, I think the key issue lies in choosing the right system for the organization. If the CIO and his team make the correct decision on the ERP system, there shouldn't be too much adapting required from either side. However, I also believe that what adapting there is to do in this case should be done by the software vendors and the people customizing it.

I do not believe in the "one-size-fits-all" type of ERPs. All organizations are different and choosing the ERP system that best fits your organization is a critical business decision that needs to be taken by the CIO. It is critical for the CIO to choose a system that will enhance the efficiency and productivity of the organization. If there do happen to be deficiencies in the solution, I think it is up to the CIO and the software vendor to enhance the system such that it meets the needs of the business and delivers value.

In conclusion, I think it is the ERP systems that should be made to adapt to organizations.

Till next time - caio.

Dell Hell.....

This week our Information Systems assignment is on Dell Hell. Basically, in July 2005, a blogger named Jeff Jarvis caused serious damage to Dell's reputation by blogging about his negative experiences. Basically, he bought a Dell computer which turned out to be a "lemon". Jeff had also purchased 4 years of premium support, but his experience with Dell's customer service was quite terrible.

Our assignment is to blog about what we would do if we were acting as the CEO of Dell.

The Dell business model is centered around keeping a low inventory and manufacturing personal computers (just in time) after the order for the computer has been made. Dell has also been very focused on giving the customer what they want. This has been through the product customization methodology which has enabled customers to customize a solution for their needs.

However, through the blogs of Jeff Jarvis, it has become evident that the company has not been placing sufficient resources on satisfying it's customers through quality customer service. As the average consumer replaces their personal computer every 3 years or so, customer service is critical in generating brand loyalty. Brand loyalty is essential in retaining customers and retaining customers is essential in sustaining sales over the long run.

In addition to this, negative publicity has driven negative market sentiment about the Dell stock and this has lead to a significant decline in the stock price.

Hence, my plan for resolving the situation would involve the following 3 components:

• Enhance the company strategy to ensure that the customer is not forgotten after the product has been delivered.

• Engage with customers using Web 2.0 technologies.

• Attempt to hire Jeff Jarvis as a Public Relations Officer.

I think it is critical that when such public relations disasters occur, the company under the spotlight reflects upon itself and makes the necessary changes to it's business. In this instance, it is quite clear that the customer service provided by Dell was not up to the mark. Hence I would attempt to try and make the mid-level managers and customer service professionals believe that long lasting customer service is indeed crucial for the long term sales of the business. I would attempt to do this by making a series of speeches that would be sent to our employees through the company's intranet. In addition to this, I would also make these speeches available on You Tube as this would show the world that we are changing.

Secondly, I would hire an IT service provider to deliver a system that would enable Dell to engage it's customers through Web 2.0 technologies. By that I mean that I would implement an online platform where users would be able to provide their thoughts on Dell and would be able to interact with other customers on their thoughts and experiences. They would also be most welcome to provide any ideas and solutions that they might have. In addition to this, I would also have a constant update on this platform mentioning how Dell is improving it's focus on customer service. I would also encourage my employees to blog about their experiences at Dell and I would encourage them to link their blogs to the new platform.

Finally, I would also attempt to hire Jeff Jarvis. Jeff has been hugely critical about Dell and he has also made some elementary suggestions. At one point he made a comment in jest where he said that he would provide additional services for a fee. I would take him up on this offer. I would also encourage him to continue blogging about Dell. As an employee, it would be his responsibility to improve the customer service of the company. Jeff's blog already has a lot of visibility and using his blog as a communication channel to send out positive messages about the company would definitely improve the image of the company in the eyes of the skeptics. I also think it would be in Jeff's best interest to blog positively about the changes in the company as this would make him appear to his followers as the "hero" who turned Dell around.

So, that is what I would do if I were running Dell during Dell Hell.......till next time, Caio.

MyFace and SpaceBoook

So here is another Information Systems related post, this time on where we think FaceBook will be in 2 years. For our last Information Systems class, we had the country head of Google Spain, Portugal and Turkey come into class and we had a very engaging discussion on Google, it's business model, strategy and challenges. The guest speaker was brilliant and very well spoken. For our next class, we have the country manager of FaceBook coming into class and hence we need to articulate our thoughts on where we think FaceBook will be in 2 years time.

The two issues that I have chosen to discuss are probably not overly surprising:

1. FaceBook's privacy issues and how they will be dealt with.
2. FaceBook's acceptance in conservative countries.

Lately, there has been an uproar in the online community about the privacy of information on FaceBook. After receiving a torrent of complaints over the last few months, FaceBook finally decided to change it's security settings page to enable users greater control over the privacy of the information they post on the site. Now the question is how this knee-jerk response will affect the business of FaceBook in the short and long run.

FaceBook's main source of revenue is online advertisements. Hence, FaceBook's revenue is directly dependent on the amount of traffic it generates and the amount of information people share. As people share more information, ads get more relevant, users increase their click-rate on these ads and FaceBook makes more money as a result. It seems as though the privacy concerns have caused a lot of people to complain about FaceBook but it certainly does not seem to have reduced the number of users on FaceBook. Reports suggest that the number of users on FaceBook is approaching 500 million. 500 million !!! If FaceBook were a country it would be bigger than the United States or Europe !!

So while privacy issues on FaceBook have been discussed heavily in the media, I don't think that they will cause a significant dent to the growth of FaceBook. Especially because I see the major growth of FaceBook happening in emerging economies and developing countries. And that brings me to my next point.

Bangladesh and Pakistan recently banned (and subsequently un-banned) Facebook. The objection in these countries was based around some caricatures drawn of the prophet mohammed. I must admit, out of curiosity I visited the FaceBook page that was causing all this uproar and the content there was so despicable I felt my skin crawl. I am not a muslim and I don't have any strong religious affiliations but I was still shocked to see the level of grime that some individuals are capable of.

Xenophobia should never be tolerated and FaceBook was right in moderating this content for Bangladesh and Pakistan. I feel that such content should be removed from the site and from the internet altogether, however, this does bring up a freedom of speech issue. One of the main drivers for the success of FaceBook is that it gives it's users a voice. Does FaceBook really have the right to control what people say ? If not, how will FaceBook penetrate markets like Pakistan, Bangladesh and of course, China ? For FaceBook to continue it's phenomenal growth rate, is it not essential for it to enter these markets ?

In summary, I think that FaceBook will continue to grow over the next 2 years but I am not convinced that the company will be able to sustain the growth rate of the last 1 year or so. I don't think that privacy issues will have a major curbing force on the growth rate of the company but I think acceptance and penetration in conservative countries like Bangladesh, Pakistan and China will be the most critical driver of FaceBook's continued growth.

Finally, here are some personal thoughts on the evolution of social media. People of my generation can still remember life without the internet or even the personal computer. (Just to be clear, I am turning 27 this year, so Im no old prune....:)). People of the generation after me will not know what life is like without the internet. Perhaps, in the generation after that, people won't know what life without social network. The new trend of today, is likely to become the new normal very very soon......

Just Google it........

As promised, a post on Google this time. Essentially, our Information Systems professor has asked us to blog on the 3 main issues one would consider if they were going to invest in Google. Google has had quite a journey over the last 11 years, it has gone from being an internet start-up to being possibly the world's most information-rich organisation to being the center of a political row between two of the world's biggest economies. However, in my opinion, the 3 most pertinent business related issues for Google are:

• The data privacy and censorship problems faced by Google. In the past, these problems have directly translated into relationship issues with governments.

• Google's battle with Apple. In the past, titanic battles such as this one have shaped the structure of the technology universe.

• Google's ability to continue with it's creative culture as it matures.

Over the past few years, every so often, Google has run into issues with governments and government bodies regarding it's data privacy and censorship policies. I believe how Google handles these conflicts and how it adapts its products to appease the fears of various governments will be one of the keys of Google's continues success. More fiascos such as the "China-gate" in Jan 2010 will certainly be detrimental to the long term profitability of the company as it will begin to restrict Google's market share in various economies. Over the last week, Google has gotten itself into some hot soup......firstly it admitted that it has snooped information transmitted over unencrypted networks for a period of 3 years and then it refused to return sensitive information it collected using Street View to the German Authorities. It will be interesting to see how Google deals with these problems as it may be a pre-curser for how google is going to handle data privacy and censorship issues in the future....

Over the last year or so, two technology behemoths have been preparing for battle. In August last year, Eric Schmidt, Google's CEO, resigned from the Apple Board. A few months later Google launched the Nexus One Google phone, a product that is in direct competition with Apple's flagship product, the iPhone. In return Apple has made some strategic acquisitions (e.g. Quattro Wireless) aimed at claiming a share of the advertising pie. The two technology sub-sectors with the greatest appeal appear to be the smart-phone and the advertising market. If Google can conquer the Smart-Phone market, or if Apple can conquer the advertising market, Google or Apple could become the undisputed champion of the technology domain. So the stage is set for a gladiatorial fist-fight and I think the technology world is watching in anticipation.

Most technology companies are known to have flamboyant cultures, but I think in this regard, Google really stands out. Unlike the employees at Apple or Microsoft, Googlers have a free reign to pursue their passions in the company. It is this culture that enables Google to continue to attract top talent. Everyone knows about Google's 20% personal project initiative (employees can spend 20% of their time pursuing their own projects / interest). One other organizational trait that I find fascinating is that at Google, employees often interview their prospective manager !! Another fantastic organizational innovation is that at Google, technical employees can move up the ladder and can be compensated as well as (or better than) their business focused counterparts. This is a great structure as this prevents the technically gifted employees from being drawn to the business side. However, I have heard from my friends at google that there are people in the organization that are taking advantage of Google's laxness and the company culture is slowly changing as a result. Continued innovation is key to the continued success of Google and Google has to be able to foster innovation even with the new culture that is emerging in the company.

In summary I find Google a fascinating company but I would very carefully examine and contemplate the 3 issues above before I invest into the organization. (With a long term investment outlook).

Till next time - Caio.

I used the following sources for research:

http://news.bbc.co.uk/2/hi/technology/10172146.stm

http://www.google.com/finance?q=NASDAQ:GOOG&fstype=ii

http://news.bbc.co.uk/2/hi/asia-pacific/8460129.stm

http://seekingalpha.com/article/207339-the-google-apple-race-can-google-buy-apple-competitiveness-can-apple-be-ad-giant?source=nasdaq20100527152556z_207339_sa&title=the-google--apple-race-can-google-buy-apple-competitiveness-can-apple-be-ad-giant

Brainstorming - Richard Branson style....

I came to IE with the intention of moving into Strategy Consulting and I viewed the Entrepreneurial Management subject as a subject that I had to do. While I am still 100% focused on Consulting (and I will write a post about the Consulting Club elections shortly), the Entrepreneurial Management subject has perhaps become my favourite subject. The idea here is to create a business, the better the business idea and the more realistic the business plan, the better your chances of getting a good grade.

In the MBA, we are divided into workgroups of 6 or 7 people. Each workgroup was given free reign on choosing whatever idea they wished. So we decided that each person in the group would come up with an idea and we would then discuss the merits of each idea and then choose the best one - little did we know this what an explosive cocktail our idea discussing method would be !!!

4 out of the 6 of us (including me) are reasonably similar in terms of personality. We are a bunch ambitious, driven, hard-headed and strong minded guys, and each of us fell in love with their own idea. And discussing the ideas caused a tremendous amount of friction in the team.......and the team meetings seemed to drag on forever as we discussed and re-discussed the merits of our ideas. Finally after about one and a half weeks of intense discussions we came to a semi-forced consensus. Pretty much because we had to. However, a couple of people in the group did not have belief in the idea and each criticism of the idea almost seemed like a personal attack on the idea's champion. This atmosphere of skepticism and lack of belief continued to be detrimental to the workings of the team, until last night........

Last night (Friday night) we decided to have a casual meeting on the topic at the pub "Lateral". We decided that despite the amount of time we have spent discussing/debating about ideas and the amount of time we spent working on the chosen idea the best of our options available was to start again. And this time we decided to come up with an idea "together". In my mind, this session was an outstanding success !!!! I reminded the group that Richard Branson came up with his first idea of the Virgin Business in a pub and wrote it down on a beer mat. Just like we were about to.

It was fascinating to see the group brainstorming about an idea together. I think we came up with some fantastic ideas. One person would mention a thought, someone would add to it, a third person would continue adding to it and eventually we would get the package of a strong idea....!!! We were working as one cohesive unit and we were leveraging on the strengths of each other - it was fascinating. At IE they said we will "Form, Storm, Norm and Perform"....Well we definitely had the Form and Storm.....and now we're Performing ....I'm delighted !!

I have come to view EM as a subject that pretty much ties together the concepts of all the different subjects. (In the 1st term we have 7 of them). We will be using concepts of quantitative analysis for forecasting sales and decision making, accounting for measuring profitability, marketing for understanding and reaching out to our customers, Organisational Systems for group cohesion and efficiency, Information Systems for making us visible and Economics for Market Sizing and testing demand. Im loving this.

I was extremely excited when I came home and I could not stop telling my housemate about what a fantastic session we had just had !!! Our pitch is due in less than a week - so I will let you know how our feasibility report and pitch presentation turns out.......but now its time to get back to the crunch...

By the way our next Information Systems assignment is to write a blog on Google, so you will be hearing for me pretty soon.

Till next time....