When Your Website Crashes Constantly - InsuranceAgents - Case Study Example

Teacher Case Study: When Your Website Crashes Constantly I. Problem identification Lev Barinskiy and Seth Kravitz company InsuranceAgents.com nearly suffered bankruptcy after a phenomenal growth due to technical problems such as the website crashing. These crashes incur loses to the company that it nearly folded. II. Summary of facts The obvious problem of Lev Barinskiy and Seth Kravitz company InsuranceAgents.com is the technical aspect of the business which is its website’s inability to handle traffic and other issues such as untested codes that caused the system to crash. These technical issues are serious because it disrupts the operation of the company. The crashes caused sales to dropped by 60% and this translates to a drop in revenue that ranges from $1.2 million to $1.8 to a mere $400,000. The business cannot continue losing revenue at this rate. It even nearly folded had it been to $200,000 loan from a friend. The crashes also cause other intangible problems that sabotage the business. Its crashes undermine the brand of its company as it will lose credibility in the market. It is also losing the goodwill of its customers of which it already had hard time retaining them during the height of its technical problems. III. Analysis The website of InsuranceAgents.com is not just a mere website for the company to have an online presence of informing the public that it exists. Rather, its website is the platform where the company conducts its business. It is like its office, its store, that if it crashes, it is tantamount to an office or store to be closed that no business can be done. And since no business can be done, no revenues can be made. Meanwhile, expenses continue to incur even if there is no revenue coming in. it goes without saying that the company cannot afford the website to crash because every time it crashes, it will have an economic impact to the company’s bottom line. There are also other intangible loses that the company incurs that may not register on its financial statements every time it incurs a downtime. This is the tarnished image and brand of the company. It could also drive customers away to the competitor. In short, the company just cannot afford for its website to crash because it directly undermine the company’s business and reputation. IV. Alternative solutions a. Do nothing The company is back on the black and is no longer struggling. It is again a good time to consider growth. And since the tough times seems to be over, the company no longer has to bother with problem and just maintain how things are done. b. Hire an experienced and a competent CIO Hiring an experienced and competent CIO who will ensure that the company’s website will be up and running all the time. He or she can also immediately address any issue in the IT department without causing any damage of downtime to the company. Problems such as poor communication between encoders will be avoided because somebody will be overseeing the quality of their work. It will also free other executives who are already overburdened with responsibilities such as Nate Kropp from the burden of overseeing the critical aspect of the business which is its website. They can better focus on the core business which could result to a higher revenue for the company. This may cost a company but its benefits far outweigh the cost. c. Get the service of a third party vendor to handle the technical aspect of the company Third party vendor may be less costly to maintain than having an in-house or a full time CIO. They will be directly responsible for the maintenance of the website and other technical aspect of the company. This option may be less costly to the company but the response of a third party vendor to an issue may not be as swift and effective as having a full time CIO. d. Fire the encoders who caused the website to crash. Fire the employees who caused the problem is the easiest solution. It will not however solve the problem because the problem is in the management and not in the encoding of the website. V. Recommended solution The recommended solution for the problem that besets Lev Barinskiy and Seth Kravitz Insurance agents.com is to remove the IT Department from the company’s Chief Operating Officer Nate Kropp and instead hire a competent and experienced CIO who would supervise, oversee and ensure that the website of the company will not crash. The company had an experienced CIO earlier who quickly reorganized the department, creating systems to improve communication between the coders and the executive team and keeping everyone calm and focused amid the tension of the crash but is no longer with the company. Instead, the company’s Chief Operating Officer Nate Kropp took over CIO duties. This overburdened him with responsibilities and probably one of the reasons why there was a poor communication among the coders where each coder had worked on his own portion of code without anyone worrying about how it would interact with the rest of the site. This indicates that lack of supervision and quality control. Nate Kropp may have been preoccupied with a lot of responsibilities that he no longer has the time and energy to ensure that the codes written were checked and tested to work well with other codes. Nate Kropp may also not have the necessary background to administer an open beta test of the new system to ensure that it worked properly in the real world. Having a CIO whose sole responsibility is to ensure that the technological structure of the company is This is critical because the company is using the internet as a platform of its business. It is like its online presence, its store or office - that every time it crashes, it is tantamount to a closed store or office where the company cannot do business. The job of the CIO is to ensure that the company is always in business by keeping the website up and running all the time. Read More