Problem Solution for TerraTech - Case Study Example

Running head: PROBLEM SOLUTION: TERATECH Problem Solution: TeraTech Goes Here of Phoenix Problem Solution: TeraTech TeraTech is a provider of Customer Relations Management software for pharmaceutical customers. They are currently a major player in this industry, but have recently seen a slowing in their growth, which is a concern given that this is a relatively new technology. It has come to their attention that their customers' needs are not being met through their current technology and support systems. This has been brought to light through feedback received directly from their customer base in which they expressed dissatisfaction. The company is now at a point where they need to determine how they will move forward to meet not only the current, but future demands of the clients. In order to do this it will be important for the company to carefully implement a strategy to accomplish their goals. There is always the alternative to do nothing, but if TeraTech wishes to survive this is not an option. The current issues that have been identified are poor customer satisfaction reviews, slowing growth, and staffing concerns. Moving forward, the company will have to decide how to best address these issues. Describe the Situation Issue and Opportunity Identification TeraTech is a major player in the CRM solutions arena for the pharmaceutical industry. However, after receiving feedback from their customer base they have found that their customers are overall unhappy with the level of support provided for their current CRM technology, nor are they satisfied with the results that the software is producing for them. It has been identified that the current technology lacks the analytical capabilities that their customers need to realize a return on their investment in the technology. TeraTech has the opportunity to develop a new technology that would better meet the needs of their clients and help them to obtain a competitive advantage. Proper execution of a new product development and launch is imperative to the success of the product (Kerin, 2006, ch. 10, pp. 15-20). It is evident that in order for TeraTech to remain competitive they will need to implement a new technology that will meet the needs of their customer base. There is a major issue facing the company at the present time in the area of staffing. Management feels that they do not have the necessary talent and skills available in order to "develop and support an analytical product" (UOP, 2008, Scenario). In fact, with the resources available at the current time they are not able keep up an acceptable level of customer satisfaction and stand to lose business. Since the human resource department is insisting that the company does not recruit any new talent within the next year, TerraTech has an obvious staffing issue that must be addressed. Maximizing current human resources capital will prove to be quite a challenge. Perhaps the most important issue facing TerraTech is the fact that their customers are not satisfied and that they stand to lose the customer base that they have worked so hard to acquire. As mentioned above the first issue is that the current technology is not meeting their needs, but in addition to this a good percentage of customers are reporting that they are not happy with the level of support and customer service that they have received from the company since they have began using the CRM system. TeraTech must address this issue and they have a good opportunity to improve the level of service and support they are providing their customers. Stakeholder Perspectives/Ethical Dilemmas Anytime that a company seeks to make changes or branch out into unknown territory, there will be doubt and conflict within the organization. A lot of this comes from the tendency of human nature to resist change coupled with the fear of failure. According to the UOP, Scenario One - TeraTech, research has revealed that most new products fail and this fact "increases anxiety amount the different groups who must work together to bring a new product to market" (2008). This tendency has been shown through the concerns of the marketing and technology development departments as they have express doubts and concerns as to whether or not the company can even handle such an undertaking. They have stated that they do not feel that they have the proper resources or skills to develop or support a new product. At the same time the human resource department has already made it clear that are have already decided to execute a hiring freeze for the year. On one side the company is worried about increased payroll liabilities and on the other they are worried about meeting customer demands. An alternative to hiring new employees has been suggested by the marketing department which is the consideration of entering into a partnership with an outside company in order to develop the new technology. This idea has been shut down by the legal department as they feel that it would be too great a risk for the company to peruse this suggestion. The marketing team is searching for viable ways to reach the companies objectives while adhering to the hiring freeze, but the legal department has its own set of issues to consider. The conflicting views of the different departments as to how to appropriately meet the needs of their customers will have to be addressed and there will have to be some sort of resolution that will benefit the company as well as their customer base. Each department will have to keep in mind the financial, legal, and operational implications of their decisions. Frame the "Right" Problem TeraTech desires to create a new technology that will better suit the needs of its customers. However, they have limited resources to accomplish their goals of providing a superior product and excellent customer service. Currently, the organization is not clear on whether or not they have the ability to realize their vision and the current structuring and utilization of the workforce will not suffice. Describe the "End-State" Vision It is the vision of TeraTech to become the leader in CRM systems by offering a product that meets the analytical needs of their pharmaceutical clients. In doing so, TeraTech will continue to grow and increase the level of satisfaction of its customers there by creating customer loyalty and a reputation as an innovative leader in the field of CRM technology. Optimally this will be done by creating organizational synergy and through efforts to maximize current resources. Identify the Alternatives and Benchmarking Validation There are three valid alternatives that have been identified in order for TeraTech to meet their vision of becoming the premier provider of CRM systems to the pharmaceutical industry. It has been determined that in order to achieve this goal the company must move forward with the development of the new software and that the alternative of doing nothing is not a viable option. These alternatives are to develop the new program by: 1). Utilizing the current resources they have available by finding ways to maximize those resources. 2). Recruiting new talent to help them reach their goals. 3). Working with an outside company on a partnership basis in order to reach their goals Choosing the best alternative will require that the organization performs a workforce analysis which will enable them to get a clear picture of the talents and skills that they have available as well as give them the ability to properly plan how they will utilize their resources (Cascio, 2006). At the current point in time, there is only speculation that the organization does not have the skills and talents necessary to reach their objectives. Therefore, conducting a workforce analysis will be an important step in implementing plans to develop the new technology. Once a workforce analysis is performed the leaders of the organization will have a better picture of whether or not they actually need to recruit new talent or solicited a partnership with an outside company. The company may find that they can implement some organizational structure changes and training programs that will enable them to achieve operational efficiency and develop a new technology. If it is found that this is not the case then the company can look at the alternative solutions of recruiting new talent or entering into a partnership with an outside company. The success of training and or recruiting efforts will be benchmarked against current profits and current customer satisfaction levels. In the Q4 customer it was revealed that 67% of the customer base views their satisfaction level with the product as being poor. This is not a satisfactory level of performance and this number needs to drop significantly - ideally, of course, as close to 0% as possible. Evaluate the Alternatives In order to meet the end vision for TeraTech, there are goals and objectives that will have to be met. These goals are to remain a dominate player in the CRM arena, improve customer service levels in order to improve customer satisfaction, and increase profits while gaining a competitive advantage. Each of the aforementioned goals can be met by reaching the major objective of developing new CRM software that has greater analytical ability and will provide a greater value for TeraTech's customer base. Meeting each of these goals will be important to the future of TeraTech and have therefore been assigned a high level of importance. Since it is unclear whether or not the company currently has the human capital resources available to meet these objectives it was necessary to consider the alternative solutions of recruiting new talent or engaging in a partnership. While there may be contention within the organization regarding these alternatives they may not have a choice in the matter if they want to maintain competitive in the CRM market. Identify and Assess Risks In each of the alternatives presented there are risks associted. The major risk that is presented to TeraTech in each alternative is that they will not be able to meet their objectives and that they will have poor market timing. There is the possiblity that no matter what they do, one of their competitors will beat them to the market and they will lose a portion of their customer base (Kerin, 2006, ch. 10, p. 19). To reduce this risk, TeraTech will need to act decisivly and remove any confilict or obstacles they may be facing. If it is shown through their workforce anlyasis it will be necesssary that they recriut new talent to meet their goals or consider partnering with another organization. Within these alternatives the company faces risks that can be mitigated through proper execution and planning. They will have to clearly define training programs and workgroups so that they can make the most of their resources and bring this product to the market in a timly fashion without sacrificing quality. Make the Decision Currently it is not clear as to whether or not TeraTech has the resources available to begin developing a new technology. To address this issue it will be necessary for the organization to conduct a full scale workforce analysis (Cascio, 2006). Next, it will be necessary to compare the skills and talents currently available to the requirements of the project in order to determine what training programs and or additional resources will be needed to reach the end vision of becoming the premier provider of CRM systems. Leaders of the organization will have to work together to communicate the end vision and the importance of realizing the vision to the survival of the company. To successful implement a major project such as developing a new product, the organization must be able to work together and minimize negativity that can be brought about with change. Communication channels should be set up so that there are clear and open lines of communication as far as concerns, suggestions, and ideas regarding the implementation of this project (Mullins et al, 2004, ch.1 p. 19). This will not only give employees a greater feeling of ownership in the project, but it will also generate an array of ideas that will be helpful in the implementation. Given the current financial state of the company, they will be best served by trying to maximize their current resources before adding to their financial liabilities. The best way to move forward from this point is to know what is needed to complete the project and determine exactly what resources are at the company's disposal to work with. Once areas are fully understood the company can begin implementation of the marketing strategy and focus its energy on reaching their goals and objectives. Develop and Implement the Solution To proceed with the implementation of the new product development it will be necessary for department heads to create various reports and analysis to be evaluated and acted upon. The items that will be needed include (see timeline on table six): A detailed report listing our clients' needs and specifications to be provided by the marketing department and customer service departments. An analysis of what technical skills and talents will be necessary to develop such a program to be provided from the technology development department. A workforce analysis that details the skills, talents, and personality traits of the workforce to be provided from the human resource department. Training needs and work team assessment to be performed as a joint project between executive department heads. Implement training programs to address needs. A preliminary marketing plan to be developed by the marketing department. Schedule of meetings to inform and educate employees on the importance of meeting clients' needs through the development of new software and better customer support programs. It has been noted that when implementing any strategy to improve customer satisfaction an effective leader must have the appropriate knowledge and know how to convert that knowledge into action. In addition it is imperative that leaders are able to create a sense of ownership throughout the organization so that each person feels they are accountable and important to the success or failure of the project (Angel, 2004). Following the steps provided above will allow the leaders in the organization to obtain the knowledge they need and convey the information to their employees in a manner that will ensure success. Evaluate the Results The success or failure of this strategy will be measure by how well the organization performs in the areas of increasing customer satisfaction, meeting marketing and product planning objectives, as well as whether or not they are able to sustain or increase growth. These factors can be measured against current data. Since employee buy in to the organizational goals is such an important issue another measure of success will be to gage the level of commitment from the members of the organization. This metric can be measured by conducting employee surveys and interviews; however it may be difficult to obtain true results due to the nature of employees to answer in a way that they feel they are expected to answer. Conclusion TeraTech has an excellent opportunity to provide software to meet the CRM needs of their pharmaceutical clients. In a competitive marketplace it is necessary for an organization to be flexible and constantly work toward meeting the needs of their client base. If they are not able to do this, they will fall behind and become a relic in the marketplace. Moving forward, the company needs to evaluate their current situation and determine the needs and resources required to meet the development of new programming. At the same time, they need to ensure that they are giving their current client base proper customer service and systems support, which they currently are not achieving. Implementing change in any organization can cause a certain amount of dissention and negativity that will need to be diffused by the leaders of the organization. While introducing the organizations plans, it will be very important to obtain commitment and support from everyone in the organization. In order to do this the leaders will need to effectively communicate how important this is to the survival of the company. Because TeraTech has limited resources available and executives would like to maintain status quo as far as employee head count is concerned prior to beginning any new product implementation it will be necessary for the organization to analyze and plan carefully in order to successfully meet their end goals and objectives. It will also be important for them to remain flexible and realize that they may have to take alternative courses of action once an organizational analysis is performed. References Angel, Robert. (2004). Sustaining profitable customer relationships requires real leadership. Ivey Business Journal, Online(1) Cascio, W. (2006). Managing human resources: Productivity, quality of work life, profits (7th ed.). New York: McGraw-Hill. Kerin. (2006). Marketing. (8th ed.). New York: McGraw-Hill. Mullins, J.W., Walker, O.C, Boyd Jr., & H.W. , Larreche, HJ.C. (2004) Marketing management: A strategic decision making approach. New York: McGraw-Hill. University of Phoenix. (2008). Read me frist. Scenario One-TeraTech. Retrieved December11, 2 008, from University of Phoenix, Week Three, MBA/570. University of Phoenix. (2008). Scenario: TerraTech. Retrieved December11, 2008, from University of Phoenix, Week Three, MBA/570. Table 1 Issues and Opportunities Identification Concept Application of Concept in Scenario or Simulation Reference to Specific Course Concept (Include citation) Personal Experience at your Organization Effective change management As state in Scenario One, many new product launches do not succeed, therefore when a new product is being launched it cause uncertainty and dissention in an organization (UOP, 2008). The leaders will have to provide a clear vision for their new product launch and diffuse negativity in order to foster creativity through collaboration. Effectively managing change requires providing a distinct set of goals and objective (Cacsio, 2006, ch.1, p. 9). Also it is important to seek input from the workforce as to what ideas and concepts they may have to add value to the project, facilitating communication across departments will help to improve the outcome of the end product (Mullins et al, 2004, ch.1 p. 19) Maximizing Resources An important part of bringing a new product to the market is ensuring that a company is properly allocating its available resources (Kerin, 2004, ch. 22, pp. 4-7). In doing so, TerraTech will need to evaluate their organization and determine what resources they currently have. available. A very important part of this assessment will be to determine what skills and talents are available to them through their workforce. This assessment will help to alleviate any concerns as to whether or not their team has what it takes to develop and market this new product. In order to gain competitive advantage, it is imperative for an organization to understand what "works for their organization and industry and allocating their resources effectively" (Kerin, 2004, ch. 22, p. 4.) Performing a workforce analysis will allows an organization to identify the skills and talents that are available to them as well as identify areas that need to filled and training programs that may be necessary to equip their workforce to accomplish the organizational goals (Cacsio, 2006, ch. 5). Meeting Customer's needs and improving satisfaction TerraTech has the opportunity to meet the needs of their customers while solving a customer service issue that they are facing. Meeting and needing the needs of customers is essential to the success of a business and is the key to marketing efficiency - matching a product or service with those that have a need, want , or desire for what you have to offer. "The essence of marketing is in developing products such as a new, technologically advanced adhesive to meet buyer needs"(Kerin, 2006, ch. 10 p. 6). Table 2 Stakeholder Perspectives and Ethical Dilemmas Stakeholder Perspectives and Ethical Dilemmas Stakeholder Groups with Competing Values List: Group X versus Group Y The Interests, Rights, and Values of Each Group Course Concept Human Resources Management vs. Technology Development Department Executive staff feels the need to maintain status quo or as far bring in new employees and the technology development department is concerned that they do not have the resources available to successfully develop a new product. Their staff is already overworked and meeting current upgrade and customer support demands. Analysis of a company's internal resources, such as the skills and availability of human capital is an important part of a marketing plan (Kerin, 2006, ch. 1, p. 15. This is causing a dilemma because human resources is insisting that the company operates without hiring any new talent and the technology management department does not see how they can accomplish this. Customer Base vs. Human Resources The customers of TerraTech have reported that they are not happy with the overall support or performance of the current CRM product. In order to keep loyal customers, the company must find a way to increase this level of satisfaction, if they do not they are sure to lose customers to the competitors. Because human capital is limited at TerraTech, they are stretched to limit trying to meet the current demands of their customer base and adding more work will most likely cause some area of the business to suffer. Creating a long-term relationship with customers is valuable to a company. The cost of obtaining new customers is far more costly than keeping customers. Creating a satisfied and happy customer base should be the objective of any strategic marketing plan (Kerin, ch. 1, p. 11). Human resources will have to find away to increase productivity and make the most of the skills and talents that they have available if the company wishes to achieve this goal. Legal Counsel vs. Marketing Team It is in the best interest of the legal team to protect the company from legal issues and possible legal problems that may arise from the company's decisions. Due to the perception that TerraTech does not have the resources available to implement a new product development effort the head of marketing feels it may be beneficial for the company to engage in a partnership with an outside company to accomplish their goals. However, the legal department is suggesting that this is not a good idea due to contractual problems and the effort to protect proprietary information. It is the responsibility of the marketing managers to devise a plan to meet marketing objectives. This consists of scanning the current external and internal environments and seeking alternative solutions (Kerin, 2006, ch. 1, p. 14). In an effort to provide a viable option to coordinate this project, the marketing manager has proposed partnering with another company as a way to avoid hiring new employees and taking pressure of the current staff. However, the legal department has shut this idea down due to their view of the situation. Table 3 Analysis of Alternative Solutions Table 4 Risk Assessment and Mitigation Risk Assessment and Mitigation Alternative Risks and Probability Consequence and Severity Mitigation Techniques and Strategies Develop Analytical Software utilizing current resources Further decline in customer service - high Unable to complete project due to lack of proper skills and talent - medium Employee burn out and loss of productivity - medium Competitors may beat them to the market with new technology - high Each of these risks would be bad for the TerraTech as they would cause the quality of service and production to deteriorate. This is something that the company cannot afford as a good portion of their customer base is already unsatisfied with their performance. Conduct an organizational analysis (to include employee input), to determine current skills and talents available. Implement training and employee development programs to better equip their team to handle demands. Identify ways to work more efficiently in order to reach goals and alleviate stress. Develop Analytical Software, recruiting new talent Increased expenses, with no immediate gain in profits - high Inability to meet payroll demands - medium With the added staff, customer satisfaction may still not improve - low Competitors may beat them to the market with new technology - medium Obviously the financial standing of a company is vital to its survival. If the company is unable to support additional staff financially, they risk insolvency. Identify ways to increase profits given the current resources available. Implement appropriate orientation and training programs. Consider replacing those without sufficient skills with people that possess the necessary skills to meet company objectives. Develop analytical software utilizing outside sources Contractual Violations - medium Increased legal expenses - medium Expose proprietary information to outside company - medium Competition may beat them to the market with new technology - medium Contractual violations can cause the company's focus to be diverted away from its purpose. They can also cost money in legal costs. Both implications are a drain on valuable resources. This risk of losing proprietary company information could damage the company's efforts to gain a competitive advantage and severely hurt their future. Carefully select outside companies to work with. Ensure that contracts are drawn in a way that parties understand their obligations and that recourse for contractual violations are clearly defined. Ensure that there are provisions in agreements to protect proprietary information. Table 5 Pros and Cons of Alternative Solutions Alternative Pros Cons Develop Analytical Software utilizing current resources No increase in payroll obligations No cost incurred due to new employee orientation No recruiting costs Risk of being unable to meet current and future customer demands Possibility of continued deterioration in customer service Risk of not being able to meet company's goals and objectives Increased training cost for current employees Develop Analytical Software, recruiting new talent Ensure proper resources to meet company's goals Increase the ability of the company to improve customer satisfaction Alleviate stress to current employees from being overworked, therefore increasing productivity. Increased payroll expense Incur recruiting expenses Resources diverted to new employee orientation and training If in fact TerraTech does not have the resources available to develop this new technology, recruiting new talent may reduce the risk of competitors beating them to the market with the new technology Develop analytical software utilizing outside sources (partnership) No immediate costs incurred Provisions for additional resources and talent would be provided by partnering company TerraTech would have the ability to concentrate more efforts on making current customer base happy, while developing new product TerraTech would not have total control over the project TerraTech would have to share in profits The risk of contractual violations and the diversion of resources to handle these matters If in fact TerraTech does not have the resources available to develop this new technology, utilizing a partnership may reduce the risk of competitors beating them to the market with the new technology Table 6 Optimal Solution Implementation Plan Action Item Deliverable Timeline Who is Responsible Report detailing customers' needs and specifications 1 Week Customer Service Analysis of technical skill required for software development 2 Weeks (one week following receipt of report from customer service) Technology Development Workforce analysis 2 Weeks from assignment Human Resources Training Needs Assessment 2 Weeks following receipt of requirements and workforce analysis Joint assessment performed by all department heads Preliminary Marketing Plan 3 Weeks Marketing department Schedule organizational meetings Immediately CEO Table 7 Evaluation of Results End-State Goals Metrics Target Read More