EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
Information Systems Management
Strategic Information System (SIS) + Usage of FOSS + Migration to Cloud
EGMP 26
June 2013 Submitted by Sriram Krishnaswamy Mid-Sized IT Consulting Firm Equipment Pooling Firm Logistics Services EGMP26171
Subhash Bhat
EGMP26172
The report represents our original work and does not contain any material that has been taken from any source, except as acknowledged.
Page 1 of 11 EGMP26 Information Systems Management: Exam Answers from EGMP 26171 and EGMP 26172
EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
Contents
Introduction ............................................................................................................................................................ 3 Strategic Areas and the Information Systems Used: ............................................................................... 3 IT Firm: ................................................................................................................................................................. 3 Information Systems Used ....................................................................................................................... 4 Strategic Advantages derived from these systems: ........................................................................ 5 Challenges faced in Sustaining this Strategic Advantage: ............................................................ 5 Pooling Firm: ...................................................................................................................................................... 6 Information Systems Used ....................................................................................................................... 6 Strategic Advantages derived from these systems: ........................................................................ 8 Challenges faced in Sustaining this Strategic Advantage: ............................................................ 8 Portions of Business not yet Enabled by FOSS: ......................................................................................... 8 IT Firm: ................................................................................................................................................................. 8 Pooling Firm: ...................................................................................................................................................... 9 Migration to the Cloud: .................................................................................................................................... 10 IT Firm ............................................................................................................................................................... 10 Pooling Firm .................................................................................................................................................... 10 Conclusion ............................................................................................................................................................. 11 Sources of Information accessed and used for this report................................................................. 11
Page 2 of 11 EGMP26 Information Systems Management: Exam Answers from EGMP 26171 and EGMP 26172
EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
Introduction
This is two member group which has attempted to answer the Questions in the Take Home Exam. Background of the organizations our group is representing: Sriram is representing his employer which is a mid-sized IT consulting firm with key focus on
custom software development and Information technology / process consulting. There is also a product division that provides product in the space of Agile PLM (Project Management, Continuous Delivery and Test automation suites) and help organizations adopt agile processes. This organizations has development centers in 10 countries across all the continents. We have named this organization as IT firm in our answers below. Subhash is representing his employer which is the Indian Subsidiary of the worlds largest Equipment Pooling organization. This organization operates in over 50 countries across the Globe and provides pooling solutions in supply chain equipments like Pallets, reusable Containers for various sizes to the FMCG, Retail, Automotive, Chemicals, Air Cargo, Fresh Food Products industry. Pooling business is unique in terms of the value of individual pooling equipments being very small, however the total Quantity being very large. This organization today manages about 250+ million units of equipment in the pool of 450 different products used by 0.5 million customers spread across 6 different industries we have named this organization as Pooling Firm in our answers below. We have not used the names of these two organizations in our answer sheet as we do not have official approval to do so. The official approval request process was not followed by two of us as this would have meant going to our Corporate Head Quarters and would have taken us anywhere between 3 4 months for getting a formal approval.
Strategic Areas and the Information Systems Used:
IT Firm:
Given the size of the organization and duration of project assignments that we do, it is important that we are nimble and have an efficient set of processes around various aspects of operations. E.g. Not lose a substantial time to place a person in a project to ensure no loss of opportunity. These efficiencies aim at providing stakeholder delight. One of the fundamental fabrics of the organization is the culture of openness amongst the employees. E.g., there is no hierarchy in the organization; employees have a say in defining different policies; employees are encouraged to share their thoughts about the way the organization is being run and their ideas on improving the same etc.
Page 3 of 11 EGMP26 Information Systems Management: Exam Answers from EGMP 26171 and EGMP 26172
EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
Information systems play an important role in enabling both the above aspects, efficiency in operations and people engagement. The impetus to have strategic information systems started gaining significance only in the current decade. We are still evolving with respect achieving the SIS (Strategic Information System) roadmap. Below are the key areas in operations that requires strategic information systems along with the reasons
Information Systems Used Demand and Supply Management: It is the bread and butter of any IT services organizations. Ability to forecast demand in terms of the number of projects for various clients across geographies is important (sales pipeline) in helping the sales team plan their strategy for targeting potential customers. Providing a sales pipeline view also helps manage the supply side effectively and help take strategic decisions on hiring and resource planning. Managing the Invoice to Cash cycle: Given the nature of our organization (cash based), managing the cash flows efficiently is key to our sustenance. Given that most of our engagements are on a Time and Material basis, invoicing the customer on time is important. Any delays in invoicing the customer have a serious impact on the cash flows of the organization. Thus, information system that efficiently captures the time to be invoiced in a seamless manner is important and strategic in nature. Payroll & Accounting system: This system forms the backbone of the organization providing the key stakeholders (Management Team and Finance department) information on the financial health of the organization. Social @ Work: Given the open / social culture at work, it is also important to provide a platform that resonates with the same. This platform should provide an opportunity for the employees to engage amongst each other and also provide vital feedback to the management team that helps define the future direction of the organization. This platform should also the one stop shop for all the information about the organization, the projects, clients, people etc.
Applications used in these areas are listed below Demand Management: salesforce.com Supply Management: Customized version of Avature to manage recruiting, custom application to manage resource assignments Page 4 of 11 EGMP26 Information Systems Management: Exam Answers from EGMP 26171 and EGMP 26172
EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
Time & Expense System: Custom built application to process time and expense claims and invoice generation Payroll & Accounting: PeopleSoft financial management solutions. *Payroll services are outsourced. Social @ Work : Customized version of JIVE Social Intranet (www.jivesoftware.com)
Strategic Advantages derived from these systems: March towards implementing the strategic solutions was started only during the past three years although our employee strength was not far below the current one prior to the same. Moving on from excel based offline solutions to the above strategic systems provided the following fundamental operational efficiencies Ability for the operational managers to look at demand / supply across different offices in one place. Earlier, they had to depend on conference calls and data in emails/excels in shared workspaces for this information Reduction of slack time to get a billable work for a consultant now that all the stakeholder including the consultant have a view of various work happening in different geographies Customized jive.com improved the collaboration across the employees sans hierarchy, the very thing that the organization is known for
Challenges faced in Sustaining this Strategic Advantage: Given the size of the organization and the age of these strategic systems (less than 3 years), we do not see a lot of challenges as of now in sustaining the strategic advantages from these systems. However, there is a significant desire to enhance these systems to cater to the changing operational processes. This brings back the question of whether enhancing these existing systems is beneficial vis a vis implementing a new product. One such example is as below 1) With our organization promoting BYOD (Bring Your Own Device), a lot of employees prefer using their smartphones to bill their time or book their expenses (by scanning the relevant bills) especially when they are constantly on the road. The existing systems ability to support this is unknown.
Page 5 of 11 EGMP26 Information Systems Management: Exam Answers from EGMP 26171 and EGMP 26172
EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
Pooling Firm:
The Pooling Firm provides an important logistics service function to the Supply Chain function in various industries by hiring reusable transferable pooling equipments like Pallets, Plastic Foldable Container, Intermediate Bulk Containers, Airline Cargo Hold equipment etc. The business model of the Pooling organization is schematically reproduced below
How pooling works:
Pooling Firms Service Center
Manufacturer
Pooling Firms Service Center
Service Center 1. Pooling Firm issues ready-for-use pallets and containers to manufacturers and growers for use and movement through the supply chain. Manufacturer 2. Upon receipt of Pooling equipment, manufacturers and growers load their important products and ship them through the supply chain using a Pooling firms pallet or container. Distributor/Retailer 3. At the end of the supply chain, the receiving retailer or distributor off-loads the goods and returns the Pooling firms pallets or containers to the nearest Pooling firms service center.
Distributor / Retailer
Service Center 4. Pooling firm conditions all returned pallets and containers to ensure they meet the quality standards. These are then made ready-for-use for the next customer.
Pooling Firm owns all the pallets and crates and its customers rent this equipment from it as needed. The Pooling Firm deliberately has decided never to sell its equipments to ensure that its ownership rights are not compromised. Information Systems Used Demand and Supply Management: The demand and supply side management in a pooling business is of paramount importance. Demand is generated by its customers, based on their throughput of finished products or inter-unit movement of raw material and semi-finished goods. The pooling firm has robust software for its customers to transmit the demand to the service Centres and these service centre then fulfill the same. Page 6 of 11 EGMP26 Information Systems Management: Exam Answers from EGMP 26171 and EGMP 26172
EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
The supply side of this business is managed through a ERP module and this is combined with externally developed specific software which helps in rebalancing the equipment flows in an efficient and optimal manner Asset Management for equipment on Hire: The Asset management piece is the most vulnerable in a pooling business, as the hire rate earned per day is not even 1/500 th of the value of the asset and any loss of asset will result in the Gross Margin earned on 500 + transactions going up in one go. The Pooling Firm has used its internal resources to customize the ERP to provide for a web based Asset Management System, which is the bedrock of its operations and is linked directly into the billing mechanism as the Business model is based on Pay Per Use concept. This Asset Management System provides an un-assailable advantage to the Pooling Firm in this business and this is described in detail later. Managing the Invoice to Cash cycle: Like any business, the operating cycle of invoice to Cash is managed by the Pooling Firm using a combination of a CRM system and the ERP linked into the Asset Management customization to ensure the customer gets billed an accurate amount and the same gets collected in an effective manner as soon as it becomes due. Record to Report and Procure to Pay system: The pooling firm uses standard SAP ERP to manage both its Procure to Pay and Record to Report system requirements.
Applications used in these areas are listed below Demand Management: Siebel for Pipeline Tracking, SAP customized for allowing customer input of their order either Manually or through EDI interface Supply Management: SAP MM module along with Manugistics for planning relocation of equipment to the right Service Centre to avoid unnecessary relocations of equipment Asset Management: SAP MM + FI CO + SD modules customized for Web interface where Customers are allowed to update their transactions in the pooled equipment amongst themselves using dispatch and receipt data. Record to Report and Procure to Pay system: SAP MM + SAP Pur + FI CO modules are used by the Pooling firm to manage its requirements.
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EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
Strategic Advantages derived from these systems: The Pooling Firms pre-eminent position in the pooling business worldwide is derived from its Strategic use of the Asset Management System on which it has invested a lot of time, employee resource and money to ensure it is up to date. The Asset Management system which allows its customers to move the pooled equipment in its supply chain and just intimate the pooler about their whereabouts and linkage of this into the invoicing system which generates the invoice for the pooler on its customer periodically. This strategically places information system as one which provides significant entry barrier to any new entrant to the system and ensures the competition faced by the Pooling Firm is always a localized one and not extendable to the entire economy. The proof of this strategic advantage is shown by the recent acquisition and assimilation of its competitors in major geographies by the Pooling Firm. The Asset management system also allows the Pooling Firm to track its assets in the supply chain of its customers and pinpoint the exact responsible customer in case of any Asset loss. This Strategic Advantage is maintained by the Pooling Firm by having an in house SAP ERP consultant team, which constantly works on the upgrading and maintenance of the entire SAP and its linked modules. Challenges faced in Sustaining this Strategic Advantage:
The Challenges faced by the Pooling Firm in maintaining this Strategic Advantage are linked to employee attrition. The Pooling Firm understands it is costly to maintain an in-house SAP consultant team, however the uniqueness of the customization of SAP and the linked software does not allow it the ability to take this outside the IT organization. Newer version release of SAP brings its own challenges to this firm as the strategic advantage has been created by excessive customization which makes the upgrading of software a costly and risky project. Upgrading SAP to the latest version (being used currently) was done at the fag end of the maintenance cycle of SAP for the previous version and this will continue to be so in the future.
Portions of Business not yet Enabled by FOSS:
IT Firm:
The IT Firm as an organization has been an active supporter of open source software. We even convince a lot of our clients to go the open source way (approximately 90% of our projects are built on open source software and tools. These are customers who have no concerns around having open source platforms / using OSS to build their platform). Quite a number of our employees are active core-committers on different open source software initiatives. Page 8 of 11 EGMP26 Information Systems Management: Exam Answers from EGMP 26171 and EGMP 26172
EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
However, when it comes to demonstrating the same (use of FOSS) in our internal application, the rate of adoption is fairly low barring the custom software solutions that were built using open source technologies. There has not been a specific reason attributed for the same. This has been clearly acknowledged by the senior management. Below excerpts of an email by our CxO is a testimony to the same As we all also know, we aren't always as good as we would like -to-be in demonstrating our support to OSS. For example, the use of OSS within our own internal systems is surprisingly low. While there are increasingly high-quality open-source Office-type products, we still use Microsoft Office as standard. It is, we think, time we look at changing some of this. There is now been an active intent right up from the CEO to make changes to embrace FOSS more actively and the following steps have already been taken Use of LibreOffice in place of Microsoft Office and contributing the license fee which we would otherwise paid for Microsoft Office to LibreOffice community Look at openERP as alternative for PeopleSoft with a target to implement by end of the year Replace salesforce.com once a suitable FOSS alternative is available This is just a beginning and I am sure more FOSS will be embraced in the future.
Pooling Firm:
The Pooling Firm does not use any Free or Open Source Software in its Strategic Applications as it believe that business continuity is protected by going for Closed source software, where its contracts with the software vendor provides an assumed safety net for continuity. This safety proposition is partially true as it can been seen from the amount of investment the firm had to carry out in moving the newer version of SAP to ensure its version does not go off the maintenance list from SAP. The Pooling Firm in our view has not moved on to any FOSS software due to its inability to develop internal talent to manage complex asset management models that it operates in. However, recently there have been some exceptions to this rule of not using FOSS and we have seen that it encourage use of Mozilla Firefox for its internal web based portal and also encourage use of Cute PDF for creating PDF documents, rather than going in for licensing of Adobe PDF writer. This seems to be a slight openness now coming into the IT department of the Pooling Firm towards FOSS
Page 9 of 11 EGMP26 Information Systems Management: Exam Answers from EGMP 26171 and EGMP 26172
EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
Migration to the Cloud:
IT Firm
Given the size of our organization and the number of business applications that we have, it made better financial sense for us to move to Infrastructure-as-a-Service for hosting of all the strategic applications and for other project development requirements. We had transitioned to this model (against leased servers) completely the past 3 years and use the services of Rackspace, Amazon and a few local providers in India for the same. As regards to adapting Software-as- a service (SaaS), we have taken baby steps towards the same. Wherever there are applications available that match the requirement and also offer the option of SaaS, we would adapt to them at the earliest as it provides a good financial benefit to do so. As far as our current adoption of SaaS goes, we do the following Salesforce.com As mentioned in the previous section, We use salesforce.com for our demand management aspects Google Apps We migrated to Google apps for our corporate emails three years back. With Google Apps, one also has a benefit of using collaborating effectively amongst each other with Google Docs Provided there are no concerns exhibited by our customers, we also insist on using the document sharing portals on the web (box.com, Dropbox etc) for project communications. One of our product on AgilePLM is also available as SaaS to our clients. This service is hosted on the Rackspace cloud hosting. We, as an organization, are pretty pragmatic in adopting cloud services provided it gives the optimal business benefit and meets the requirements.
Pooling Firm
The Pooling Firm has just about started looking at the option of moving to Cloud architecture for its data storage requirements. The line of business in this logistics service industry is shaped largely by this pooling firm as it is by itself a substantial part of the industry that it operates in Currently the email system have been migrated to the Cloud, through the Microsoft web email service line and this has certainly helped the employee to connect to the email server without having go through the hassle of a VPN tunnel. The future of cloud computing looks very bright for the Pooling Firm as the success of its migration of email server has provided it with enough confidence to move a few of its other non-strategic data locations to the cloud for ex the internal web portal is now maintained in the cloud. We need to look at this movement to cloud base architecture as a requirement that has been forced on this firm due to employees following the BYOD (Bring Your Own Device) to work policy. The employees have now started using their own smartphones and tablet to access the email and web portal meant for the organization and inability of the Pooling Firm to work out its VPN tunnel policy for this variety of devices has forced it to move its services to the Cloud. Page 10 of 11 EGMP26 Information Systems Management: Exam Answers from EGMP 26171 and EGMP 26172
EGMP26 Information Systems Management : Exam Answers from EGMP 26171 and EGMP 26172
Conclusion
Through this paper, we have analyzed the what Strategic IT systems mean to our respective organizations (IT Firm and Pooling Firm) and also about their keen ness to move more towards FOSS and Cloud based solutions. The Strategic IS for IT firm is well within their core competence where it is not the core competence for the Pooling Firm. The Pooling Firm uses IS System to strengthen its Core competence in Asset Management Process. The level of acceptance of the FOSS and Cloud based solution is also inferred based on the core competencies that each of the firm has.
Sources of Information accessed and used for this report
1. Internal documents of both the organization and the strategic implication of the IT policy.
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