The Role of Technology for Big Business - Coursework Example

?Technology, despite its obvious visibility and influence, continues to play the role of the elephant in the room for many big businesses because itseffects seem horrifying. When technology is allowed to take a firm hold of business, heads are cut off, everything is downsized, and talents are displaced. However, it might also be that the radical change that technology offers brings with it the power to cut cost of operations and facilities, anticipate customers’ needs, maximize current talents, and find the best ones in the industry. It’s not like businesses have a choice. Technology is catching up with humanity. Microsoft (2010) studied a business model called the hybrid organisation. It is a company designed to maximize their human resources through smart design of buildings, adopt a flexible approach to where work gets done, seek long-term goals rather than fill in short-term scorecards, and reject (or at least question) outmoded practices such as rigorous groups and roles. The findings indicate that the organisation is best positioned to take whatever the economy and other external stimuli had to throw at them. The case of Hydro-Quebec’s radical IT management change in the last two decades is reflective of such case. More out of necessity, rather than choice, it restructured its IT Management to adapt to the new government rules and customer demands. Fortunately for them, they did it early and they did it successfully. Not only were they able to retain their leadership, they were also able to stay ahead of any threat in all its core businesses. IT Management is highly affected by internal and external factors but the two are often hard to segregate. Bullish Globalization Globalization refers to the increased integration and fusion of economy and society between countries that result to a better flow of international finance. By opening up markets, organizations get access to a variety of business products and services which allows them to have superior competitive position with lower operating costs, to gain greater numbers of products and services. The end beneficiary is supposed to be the consumers. Hydro-Quebec experienced the first blow of globalization when the U.S. electricity market was deregulated, the Federal Energy Regulation Commission (FERC) required that companies wanting to sell electricity on the American market must open theirs to American suppliers. Their leadership on the production and distribution of electricity in Quebec was threatened so they were forced to reorganize. They set up five divisions: Production, TransEnergie, Distribution, Equipement, Petrole et gaz, and Technologie et developpement industriel (Dube, Bernier, & Roy, 2007). Each division was responsible for its own profitability but they were still to work under the same company. They decided to set up Shared Services Centre (SSC), a unit responsible for the procurement and services as well as the IT department. They decided to keep 100 percent of their IT management and operations within the company. They didn’t yet see the need to go out or outsource. Their business didn’t go beyond Quebec and America anyway. Other companies didn’t have that luxury. Procter & Gamble, DuPont, Cisco Systems, ABN Amro, Unilever, Rockwell Collins, and Wyeth Pharmaceuticals are some of the companies that enjoy the benefits of globalization. While they remain a US company, their manufacturing center, clinic operation, research and development, customer service, and Business Process divisions are all in Asia (Engardio,2006). When labour cost is Asia is less than a twentieth of the labour cost in their home country (Bureau of Labor & Statistics, 2011), there really seems no other intelligent option but to shift operation. There will be infrastructure changes, of course, like setting up high speed connection between countries, training new people, and buying new software but even if you multiply those costs by two, you still wouldn’t come close to the efficiency you will get. Efficiency of Technology Accenture’s Navitaire can manage reservations, plan routes, assign crew, and calculate optimal prices for each seat if you want to start a budget airline without additional cost of running a back office. They can assemble a team of patent attorneys, engineers, and business analysts, start mining global databases, and call dozens of U.S. experts and wholesalers to provide an independent appraisal if you want to do a market research to test your newly developed product – for less than $5,000 (Egardio, et al). That is the speed by which technology is moving, that is also the speed by which technology is allowing business to move. You can buy almost any service, technology and processes off the rack and when you are a business whose primary customers are also businesses, you have no choice but to keep up. Hydro-Quebec proved that to be true when in 1999, Hydro-Quebec Distribution (HQD) was put in charge of secure electricity supply throughout the province. They found themselves dealing directly with customer ranging from corporations to individuals. Head HQD Sales and Customer Service, Ghislaine Larocque realized that there were no information systems leading the company nor where there any IT systems strategy. They spent $50 million on more than 200 IT system and they still don’t have any so she put together a team to come up with one but they couldn’t find any that could implement their IT strategy. They were forced to make modifications one of which is forgoing the development of their own software and just buy existing platforms for their different needs. They also decided to tap SSC with the help of a third party provider that develops software and business solutions, CapGemini. It process was faster, more cost efficient, and strategic (Dube, Bernier, & Roy, et.al). Customer Expectations John Cridland (2005) led a survey among multimillion companies and determined that as early as 2005, two thirds of companies deal with their customers online and half use remote access technologies and teleworking. It is but a response to what their customers are demanding and their customers are demanding everything ‘here and now’. Just take a look at Google who have mastered “Customer Self Service’. Their customers, like Hydro-Quebec, are corporations, households and individuals. They earn earned nearly $30 billion in 2010 (Google, 2011) and yet anyone can set up a global multi-media full marketing, sales and advertising campaign with no human contact seamlessly in less than an hour. This is the kind of service available to customers all over the world and this is the kind of service customers will be expecting. What I Would Change The case of Hydro-Quebec is an ideal one in showing how restructuring IT Management according to the demands of the time could benefit the company. What it is missing is the effort to make technology word for them. They have an entire continent filled with people who can develop solutions, platforms, services, processes, software, and even hardware to make their business process more efficient, aid them in improving their core business, anticipate customer demands, and stay ahead of market trends. They need to utilize it. They involve IT planners and developers in their business planning and determine what else other technologies are there that they haven’t utilized yet and what are the aspects of their business they can improve using IT. References (2010) Google for Investors. Retreived from http://investor.google.com/financial/tables.html Bureau of Labor & Statistics (2009) International Comparisons of Hourly Compensation Costs in Manufacturing Retrieved from http://www.bls.gov/news.release/ichcc.nr0.htm Dube, L., Bernier, C., & Roy V. (September 2007). Information Resource Management at Hydro-Quebec. International Journal of Case Studies Management. Engardio, P., Arndt, M., & Foust, D. (30 January 2006). The Future Of Outsourcing Retrieved from http://www.businessweek.com/magazine/content/06_05/b3969401.htm Hulme, M., Ross, P., (2010) Creating The Hybrid Organisation. Microsoft Hybrid Organisation.14 Read More