IT Governance Case Study Analysis

Abstract

This paper answers five questions related to IT governance. The answers make reference to case studies such as RR Communication and P&Gs Global Business System (GBS). The first question discusses the advantages of a single customer service center. There are myriads of advantages ranging from helping in effective management of customers thus reducing instances of complaints. Secondly, a single customer service center allows for the integration of customer data and information. Third, a single customer service center facilitates centralized management of information for compliance purposes. Fourth, it reduces operational costs. The second question proposes the use of Kotter’s 8-step change model in soliciting the support of the divisional presidents. These steps are; create a sense of urgency, build a strong coalition, share a strategic vision, get people on board, remove barriers to change, create short-term wins, sustain the change process, and institutionalize the changes made. The third question reiterates the possibility of achieving a corporate vision using a decentralized IT function as it depends with the design of the organization. The fourth question acknowledges that lacking a common information and enterprise IT strategy cause problems such as lack of control over data and information, redundant data which increases costs of storing and retrieving data, and additionally, the organization needs complex systems to obtain information from across different platforms and systems that are not interconnected. The last question identifies governance mechanisms such as customer relationship management as being essential in creating a shared customer service center and common customer data. The most useful metrics for ascertaining the impact of governance mechanisms include comparing the actual performance with strategic goals and secondly, using process metrics.

IT Governance Case Study Analysis

1. Advantages of a Single Customer Service Center

As illustrated in the case studies of RR Communications and P&G, a single customer service center denotes a centralized contact center with a unified support system where customers can have access to all the services and products of a company without consulting with the respective divisions. A unified service center provides an organization with a range of advantages. First, it helps deliver a superior value proposition to customers thus reducing complaints. As seen at RR Communications, the customers constantly complained of double invoicing and proposed a unified system where they could be invoiced once for all the services and products they purchased from the company (McKeen & Smith, 2015). Secondly, a single customer service center allows for the integration of customer data and information. This move is advantageous since it enables the company to access all the customers’ information at a go especially when making follow ups, during marketing promotions, or when conducting customer relationship management activities. By bringing together these services, it becomes easier to efficiently and effectively serve customers from a centralized system.

The third advantage of a single customer service center is that it facilitates centralized management of information for compliance purposes. Organizations are required by regulators and government agencies to have all the data on its transactions. Such information is important in reconciling taxes and other legal requirements. In the case of RR, using divisional structure led to fragmented data and information which demanded the use of data cleansers to generate reports needed by the government in compliance with the Sarbanes Oxley requirements. Fourth, a single customer service center reduces operation costs. In the case of RR Communications, the organization had four divisions each having a DIO and other employees such as business unit leaders. All these employees were paid for the jobs that could have been integrated and done by one department. Likewise, the employees in each department had to be rewarded for their quarterly results (McKeen & Smith, 2015). This made it expensive to maintain the company’s rewards and incentives system. The increased freedom among the division DIOs meant more spending and increased bureaucracy which cost the company. Additional costs arose from duplication of files and data which perpetuated bad data. At times, the fragmented customer service centers led to loss of integrated information vital in monitoring and reducing total operational costs. All these dynamics amounted to increased operational costs which reduced the company’s profitability.

Apart from the advantages listed in the case study, Moth (2014) identifies additional advantages of a single customer service center. They include increased ability to identify, target, and optimize their marketing activities. This is because the customer database is centralized which increases the ability to cross-sale complementary services and products. The author further adds that a single customer service center could help firms improve their customer services. Basically, having customer’s information in one repository increases the ease of identifying customer needs and monitoring their complaints. The organization can then customize their services to suit the particular needs of the customer. Moth (2014) adds that businesses with a single customer service center can easily use the information to predict customer needs and behavior. Such predictions are essential in designing future products and services. They also enable the firm to increase the effectiveness of their marketing activities therefore optimizing conversion rates. In line with these advantages, Moth (2014) emphasizes that a single customer service center improves professionalism as it provides a customer centric approach to settling clients concerns. It further ensures uniformity of service provision since it emphasizes on consistent service provisioning. Lastly, it eases control since a single customer service center is easy to manage by using a single-sourced service management.

1. Implementation Strategy that Guarantees Support of Divisional Presidents for a Shared Customer Service Center

It is important that when introducing a shared customer service center, the proposal garners support from the divisional presidents. The best approach is by considering a change management model especially the Kotter’s 8-step change model. The first step is to trigger a sense of urgency not only among the divisional presidents but also all the other employees. They have to understand the disadvantages of the divisional culture and begin the mental process to anticipating a shared customer service center. The second step is building a guiding coalition to facilitate the realization of this goal (Barrow & Toney-Butler, 2017). The process entails bringing together a team of experts and employees who are fully supportive of the change process. Their primary role is to guide the processes, coordinate activities, and communicate to the others the necessity of a shared customer service center. The third step is formulating a strategic vision and initiative. A vision enables the team involved in the transition to a shared customer service center to document the future and explain how it will be different from the current state of the organization. On the other hand, the initiatives are supposed to be linked to the vision and facilitate its realization.

The fourth step in garnering support of the divisional presidents for the shared customer service center is by enlisting a team of volunteers. Barrow and Toney-Butler, (2017) specify that large scale change can only be successful when there are groups of people rallying for it. These people must be brought together to emphasize the need for change. In addition, they have to show their commitment to the project. This way, it becomes easier to convince the presidents to support the introduction of a shared customer service center. The fourth step is enabling action by eliminating barriers. At this point, the IT leader has to identify and eliminate all the possible barriers to change. This includes firing troublesome divisional leaders. In the case of RR Communications, Vince fired the four divisional CIOs since they were the major barriers to the introduction of a single customer service center. Other barriers to eliminate at this point include hierarchies and inefficient processes. Doing this reduces resistance to change and increases the possibility of success. The sixth step to winning the support of the divisional presidents is by designing and introducing short-term wins. A system for tracking progress has to be introduced. Divisional presidents will be more supportive of the changes when they witness the short term wins. The seventh step to guaranteed support by the divisional presidents is sustaining the acceleration of change (Barrow & Toney-Butler, 2017). Once the change process has been introduced, the IT leader should ensure that the project is consistently undertaken to attract the credibility it deserves. This includes improving policies, structures, and systems to facilitate the success of the project. The leader should ensure that the changes are consistently. At this point, the divisional presidents will automatically support the project. This allows for the eighth step of the change process which is institutionalizing the newly adopted shared customer service center. This step entails embedding the new processes into the organizations culture.

1. Possibility of Achieving an Enterprise Vision with a Decentralized IT Function

Yes, it is possible to achieve a vision with a decentralized IT function. RR Communication continued to be successful in realizing its enterprise vision despite having a decentralized customer service center. This example shows that it is possible for enterprises to achieve their vision even when using decentralized IT functions. However, they might realize the vision more effectively and efficiently if their IT functions are centralized than decentralized. Cramm (2018) argues that the best way to decide whether to centralize or decentralize IT functions is by analyzing the organizational design. If the design allows for sharing of functions, then a centralized function is advisable, on the other hand, when the functions are unrelated, a decentralized IT function would be more beneficial to the organization (Cramm, 2018). In the case of P&G’s Global Business Services (GBS), it was important to centralize and decentralize some functions to achieve increased efficiency and desirable levels of autonomy.

1. Business and IT Problems Caused by Lack of Common Information and Enterprise IT Strategy

The most common IT and business problems resulting from lack of common repository for information include; lack of control over data and information, redundant data which increases costs of storing and retrieving data, and additionally, the organization needs complex systems to obtain information from across different platforms and systems that are not interconnected. The most common reason for the lack of common information is inability for the different databases and systems within an organization to interconnect and communicate with each other. This leads to lack of common information. According to High (2014), lacking either a common enterprise IT strategy or common information could potentially lead to difficulties in achieving integration at all levels of the organization. This forces the organization to use data cleansers whenever specific information is required. In the case of RR Communications, cleansers are required to sort information and generate compliance documents. McKeen and Smith (2015) add that lacking a common information and enterprise IT strategy reduces the ability of the organization to capitalize on the power of data analytics. Normally, accurate information about the customers and the different processes is required to conduct accurate data analytics. In the event that such data is missing, then the organization will have inaccurate perception of its processes and customers. Additionally, failure to have information means the organization will be unable to compete effectively thus increasing chances of organizational failure. High (2014) presents a more critical and interesting perception noting that the lack of common data and a unified enterprise IT strategy increases chances of data insecurity. It is much harder for an organization to secure data that is dispersed across different IT systems. Therefore, having divisional systems of data means the organization is prone to losing some of its information. In the event that the organization has to safeguard all its systems, then it will be extremely expensive.

1. Governance Mechanisms to Ensure Common Customer Data and Shared Customer Service Center

It is important that organizations have super-good governance mechanisms. One of the mechanisms proposed by Gregory, Kaganer, Henfridsson and Ruch, (2018) is that the IT organizations need to foster relationship management. This has to be done at the different levels of the organization namely; the middle, frontline, and senior management level. All these levels contribute towards effective governance and the realization of superior value. Apart from relationship management, there is a need for management of the layers of governance. The type of governance adopted should ensure control of the projects is retained internally in order to ensure to ensure that the employees have the necessary skills to operate a shared customer service center and common customer data. Taking these steps ensures that the organization perfectly interacts and understands its customers since subcontracted agents will not cannot care enough for the interests of the customers. In fact, in-house management of customer data and shared customer service centers is recommended when dealing with international customers from different countries. It is important to set up local development centers that ensure that the customers have a personal touch with the organization and not the offshore outsourcer agencies. In extreme cases where outsourced agencies have to be used, then an internal manager should be made to lead the team and act as a champion for quality assurance. The most useful metrics for ascertaining the impact of governance mechanisms include comparing the actual performance with strategic goals. Budgets for the customer data and shared customer service center have to be compared to the actual spending. Results from the comparison will depict the effectiveness of spending and the contribution margin of the centers to the revenues accrued by the organization during a given period. The second useful metric is assessing the processes. Gregory et al. (2018) defines this approach as measuring process metrics. It entails measuring the specific aspects of processes such as the number of changes and IT rollbacks made in a month, percentage of timely employee attendance to task, average time taken to complete a process, and average time used to complete a process.