Business Case Study

This assignment challenges students to formulate a professional response to in-depth issues contained in a real life Video(in this case, transcript already provided)
Students are encouraged to review the Background video segments for the Video Business. Case selected for analysis.
Students will act as an independent professional consultant reporting to senior managers of the company concerned. Students are expected to provide informed and robust advice to this business client. A sophisticated understanding of the critical aspects of this Video Business Case needs to be demonstrated. A succinct and high impact report is expected.The report is expected to be <2,000 words, including an Executive Summary (<300 words) but excluding References. Introduction, table of contents and appendices are not required and will not be marked. Assignments exceeding the 2,000 word limit will be penalised 10% of the total mark for every 100 words over length. But using fewer words won’t necessarily result in a penalty. Students are strongly advised to refer to a minimum of five relevant and credible sources. Extension In particular, refer to the Hosie, Forsyth and Baird (2014) paper on Researching and Writing a Video Business Case Students are strongly advised to read the relevant Assessment Rubric closely before undertaking this assignment. Suggested headings for Video Business Case Report EXECUTIVE SUMMARY (<300 words required) A) Issues Provide a brief introduction that summarises the main issues of the case. B) Causes Identify the importance of the Causes to the organisation concerned. C) Alternatives Develop a set of realistic Alternatives to address the Issues and Causes identified. D) Decision Criteria Develop a set of Decision Criteria to choose from the Alternative courses of action. E) Recommended Solution/s Decide on Solution/s to the Issues derived from the Alternatives. For each competing Alternative, justify why different Solution/s were chosen or rejected. A preferred Solution/s needs to be indicated. F) Implementation and Implications Provide realistic suggestions on how these Solution/s could be implemented in the organisation concerned within the industry context being scrutinised. Include the managerial and financial implications for adopting the preferred Solution/s. Issue(this is the transcript from the video) My name is Michael Horton I work for CSC in Australia. I am responsible for account management across the natural resources clients but also for government clients. The issue that we are looking at here is liability and around liability capping that is typically negotiated at the start of any contract. We have been deploying desktops to our client site. Initially the desktop deployment was done at the local corporate head office in the capital city. But our next phase of the project meant a renegotiation of the contract because we were now going to deploy out on site. This is an oil and gas organization. So onsite means their offshore locations. Because of the environmental risk if one of our employees were to do something wrong, the company is now asking for unlimited liability rather than an actual capping on the contract. Cause(this is the transcript from the video) The base issue here is around liability capping. The big issue here is that if you accept unlimited liability, you are allowing the customer, should the worst case scenario happen, to come after the entire worth of the company and if it is a large company it is a value that is way beyond what the risk is actually worth. So for the salesperson to close this deal and get agreement on liability capping he or she needs to negotiate to the lowest liability capping level that the customer will accept versus the highest level liability capping that the company will accept to take on board. It is really a risk return type scenario being worked out to get to a win-win scenario for the customer and the vendor. Background (this is the transcript from the video) 1.Can you tell us a bit about yourself and your career path to date? My name is Michael Horton. I am the vice-president for the natural resources sector for C.S.C. in Australia, C.S.C. Computer Sciences Corporation. We are an IT services organization. We predominantly do outsourcing systems integration for typically large corporate customers and government. My patch in Australia, I am responsible for about $400 million dollars worth of annual revenue and matrix responsibility for about 2000 employees. 2. Can you describe a typical workday for yourself? Every work day is completely different, but also the same, so although we are in a technology industry, what we are doing is selling people to people, so we get our revenue from people providing services, so my day is typically made up with meetings, a mix of internal and external meetings, and on my end, on days that I am travelling, which is quite regular, probably half of my working day, working life is spent travelling, they will be specifically built around client meetings, and then I fit in the internal staff meetings. When I am back here in the office, like I am at the moment, we catch up on the things we need to just to keep the business running, and the day to day stuff, and I need to weigh that also with some client meetings with local clients, so all day spent talking, basically. 3. Can you describe how your company created its mission and vision statements and how often they are reviewed? The mission and vision statements are not necessarily reviewed at the higher level very regularly. Our mission is to provide I.T. services to the corporates and to government entities, and has been for many decades. What is reviewed is where we focus our attention, and that will be in particular industries, or particular client sets, and that will change according to market shifts. 4. What does your organization do and how is it different? The difference is I.T. for large organizations can be very complex and we bring together economies of scale both in knowledge and thought leadership in that area, but also in a more simple economies of scale such as data centre and software licensing for large organizations. You know the key thing with I.T. is it is such a global business. People who have expertise, for instance, in S.A.P. in the U.S., equally useful in Australia, and so by bringing that together we can bring a good solution and a set of deliveries to the clients. 5. Can you describe the organization of your company and why does it take this form? There are probably two things there. The clearest one is the area that I am responsible for. I can give a very clear direction there on what we are doing, and it probably mirrors at the higher level, the corporate level, so it is as simple as we are looking to get ourselves into an area of the market where competition is lower and that we have expertise that is recognized in that area, so my area, natural resources, we supply I.T. services to mining companies and all the gas companies, and we currently have 56% of the market, for I.T. services here in Australia, so we are recognized in that market, and therefore reference ability is already there, so that when we go and bet on work with a mining company, it is often we are only competing against one or two other competitors and most usually we're sole source incumbent type, so we already have a relationship with the organization, so our strategy and direction is to push more into that niche part of the market, and therefore protect our incumbency and grow at that way and when you are not having to compete so heavily, obviously the margins are going to be better and you are selling more on a value proposition rather than a cost proposition. 6. Where is your company headed in this time of uncertainty and ambiguity? There are probably two things there. The clearest one is the area that I am responsible for. I can give a very clear direction there on what we are doing, and it probably mirrors at the higher level, the corporate level, so it is as simple as we are looking to get ourselves into an area of the market where competition is lower and that we have expertise that is recognized in that area, so my area, natural resources, we supply I.T. services to mining companies and all the gas companies, and we currently have 56% of the market, for I.T. services here in Australia, so we are recognized in that market, and therefore reference ability is already there, so that when we go and bet on work with a mining company, it is often we are only competing against one or two other competitors and most usually we're sole source incumbent type, so we already have a relationship with the organization, so our strategy and direction is to push more into that niche part of the market, and therefore protect our incumbency and grow at that way and when you are not having to compete so heavily, obviously the margins are going to be better and you are selling more on a value proposition rather than a cost proposition. 7. Can you describe any key events that occurred either in your life or that of the organization that were crucial to success over time? With this question, the answer is often there is a lot of good luck, but in some ways you create your luck, and an example here is I am located in quite a remote location, Perth, it is the most remote capital city in the globe, and there is a couple of, there is one key industry here at the moment which is booming, and that is mining and oil and gas, and luckily for me, I will say luckily, C.S.C. acquired B.H.P.I.T. back in 2000, and so for us here in Perth, in C.S.C., it put us in such a fantastic position to go forward and build on that and get our market share in a market that is growing, and one that there was very few competitors and very few companies that were based in our remote capital city that had global capability, so it is taking what you are given, that luck, and building on it, and enhancing it and going forward from that, and I think that has been a good reason for our success. 8. Who are the customers of your company and why do they buy its products or services? The customers are large mining companies, large oil and gas companies, an example is B.H.P., Rio Tinto, Woodside Petroleum, Impex; they buy our products because we have proven capability, we have got global capability, and at the worse case we have got, we can be sued, we can step up to liability, clauses that are expected in the contracts. Particularly in these industries, there is a lot of, huge focus on areas such as safety, and our staff have to be able to work to those stringent safety requirements and be best practiced within those areas, even within that organization itself. We have got people who are remotely located throughout Australia and also, they go offshore, to the offshore platforms, have the HUET certificates, which are helicopter safety surveil certificates, these are some of these examples; and that is not something that you can go and get from any old I.T. company down the road. And at the end of the day it comes down to relationships and trust. We have got great relationships with our customers at the levels that we need to and the trust has been built up there over many decades. 9. Can you comment on the role of project management in your company and offer any thoughts on what contribute to project success? Project management is, absolutely, a vital part of our organization. I.T. is very project driven. You usually break the I.T. into two clear areas: projects that are underway or being undertaken and then once a project is completed, are running the systems that are created during the projects. Success in project management has got a lot of inputs, obviously. With projects managers, you have got to have people with the right project management background, the right skills, in some respects technical skills, but I think the key component to success for project managers is they have got to have good people skills; they are dealing with ambiguity all the time, dealing with the conflict of time, time versus cost and changing requirements of clients. So, those guys have to be hot and good at negotiating, basically very good people skills. I think when we have got that, and a positive constructive attitude, they can overcome many of the problems that we have come up against. 10. Why are some work place tasks in your industry best performed by individuals and others are best performed by teams? I would go as far to say there is very few that I think are done well just by individuals. I think just about everything we do is accomplished by a team. We've got such huge tasks to perform, I do not think no one person can do it. Everyone is supported by a team and is part of a team. 11. Can you describe the industry within which your company operates and how and why it is changing? Western Australia, at the moment, has around about 200 or more billion dollars worth of capital projects underway at the moment, or about to start, so it is an extraordinary amount of work in the natural resources area, and our population is very small, 1.8 million people. That number of people cannot execute those projects, and once those capital projects are complete, the things that are being built have to be run, so the oil and gas platforms, the mines have to be run, and again, we do not have the resources to do all of that, so what our industry, the I.T. industry and in particularly my area, natural resources sector, needs to do is work with these companies to enable them to automate a lot of their prices both in the build and also in the run, and the automation will mean that we can do a lot more with those 1.8 million people than we possibly would have done with doing things the traditional old way, and at the same time, help with the safety issues that we face on, you know, in these dangerous environments in mining and oil and gas, but also with the environmental issues, so with automation you can better control the environmental controls that need to be put in place, so I think the work that we are doing and need to do needs to push into that automation supported by the I.T. side of things and I think it is the only way for it, that we are going to achieve all the work that has got to be done, and effectively help Western Australia and Australia grow their G.D.P. going forward. 12. How do firms collaborate within this industry? Quite often, we compete against the same organizations that we collaborate with, so there are many situations where we have subcontractors who outwardly compete with us on some deals, and we also subcontract to other organizations who we also compete with. Collaboration, obviously, if we are talking in the sales sense, is the best way to go. If you can team up with an organization that you would have competed against, obviously you’ve just eliminated a competitor, but collaborating with the right organization will strengthen yourselves if you can cover up a weakness with their strength and vice versa, so, and then there are some situations where you have got to compete. 13. Can you offer any insight about how an organization might develop its human capital? People development comes and goes with time and the flow of, are things going well in the company profit wise, and I have been with the company here for 17 years and I do not think we are any different to any other company, but when times are tough, the first thing to get cut is the training budgets, and it is not often done with any malicious intent, it is just an easy target, but also when things get tough, the time being spent developing people is also more easily put aside, and it is actually the time that we need to go the other way around and concentrate on developing our high performance high achievers, and looking forward, so what naturally happens we have to fight, and do the unnatural approach of developing people, and so I think that comes back to leadership at our level to make sure that we do that. 14.How can a company address a situation of failure, where an internal project is failing or where demand for its products or services is declining or disappearing? Well you know, obviously, in a large organization like ours, we have, we do a lot of projects, at times have even in my section had many hundred projects running at any one time, and we have gone through patches where projects have gone bad, or a whole series of projects have gone bad, and there was one particular point, it would have been about four years ago where that was occurring, and we were not easily able to find the reasons, so what I did is I actually went back and sat with the project managers and went through a life cycle, a typical life cycle of a project, so I was sitting down with a customer gaining the requirements and working right through the whole life cycle. I actually went and did the training with them, sat on their training to see what they were being taught, or what we were teaching them, and a lot of learning came out of that, and probably the biggest learning was that we were training our guys to stringently follow process at the expense of listening to the customer and listening to things that were changing, so what we have been doing and what we further need to do is give them the very solid disciplines of project management and then step back and take them through leadership training and teach them about leadership and people skills to overlay that over the 15. Can you offer any more insight about how companies compete in this industry? There tends to be, probably three sorts of organizations that we compete against, so we call, we layer them tier one and tier two organizations, and then I think there is a third set of organizations. So tier one organizations tend to be the global I.T. services organizations, and typically it is the IBM , CSC or HP type organizations, and then the tier twos, local companies that exist in your market, and first of all, so I will speak about those two distinctions and how they compete, and then talk about the third set. The main distinction between tier ones and tier twos, typically, is around cost. A tier two has less overhead costs and therefore will have a lower price, that is the for, they are against these, they do not have the global capabilities so if you are after a solution that goes outside your geographic location, unless they team up or collaborate with someone else than they struggle to deliver that, but also they do not have the ability to step up to have some of the liabilities regimes that are in place. You basically could not sue them for the amount that sometimes we have to step up to because the company is not worth that much, so that is the main difference between the tier ones and tier twos. Within the tier ones, the competition there, we will compete on price, we will compete on reference ability, but usually the competition is around who has got the best relationship and the trust with whichever the target organization is. I think it comes down to it as simply as that. Unless you can get yourself to the fortunate point where you have got a differentiation where you are recognized as being the best in a particular niche market, which in, that is utopia. The third set of organizations that end up in our market competing are, and you could probably call these tier ones as well, but not the traditional tier ones, and that is the Google’s and the Microsoft’s and the Amazon’s, so these are new entrants into the markets, they typically compete in the commoditized services part. We are starting to see them show up in the actual I.T. services or systems integration areas, so a new set of competitors there with a different value proposition, and one that we have got to come up with, otherwise to combat that, so that is the main competition.

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