Important Success Factors of Target Systems - Case Study Example

Target Systems Company Table of Contents A case analysis and Q&A report 1 Background 1 Success Factors 2 Problems Facing the Organization and Probable Causes 3 Analysis of Alternative Solutions 4 SWOT Analysis 4 Porter’s Five Forces Model 6 Porter’s Value Chain Model 7 Recommendation 7 A case analysis and Q&A report Background Target Systems Company is a software maintenance and logistics system service provider. The company was founded in 1994 by the Kenyonscattoni and eight more close friends. Initially, the company had one government supplier. It had a contract with government to maintain software and logistics under the department of Navy. Kenyon determined the need to grow the company by sourcing other clients who included non-governmental departments. Having worked with the Navy, Mr. and Ms. Kenyon had a better experience with department than the other stakeholders. Due to the huge expansion of the company, they decided to employ the Electronic Health Information System. The consultants indicated the established strength of Target Systems in the field of IT and project management and its effectiveness in providing outstanding customer service would definitely be applicable in the EHI field. However, they also indicated the challenges of using Target Systems in addition to its opportunities in order to help the development teams to think about ways of overcome the challenges. This case highlights shaping the modern health care services along with information technology tools and techniques. These computer based facilities have simplified the pace of development, along with saving huge span of time, effort and money. The case is mainly related to the entry of the Target System into the Electronic Health Information. It highlights and analyses both the opportunities and the threats and challenges of Target Systems. Success Factors The factors that were most important to target Systems success during the first sixteen years of operation were organizational value and focus to deliver quality to its clients. Initially when they had a single client, they focused all their efforts towards providing satisfactory services. The company observes its organizational values which include equity, integrity, quality, credibility, humility and loyalty. The company won a second construct from the sole customer in the fourth year of operation, 1997. This led to its expansion as more programmers, logisticians and software developers were employed. The appointed Finance manager, Mr. Kenyon, identified reliance on a single client would possibly lead to business failure. This became a source of motivation to the organization. The company started to experience growth which was more rampant in early 2000s. However, the growth in revenues flopped in the year 2009. By 2010, most workers were more experienced in their areas of specialization such as logistics and business units. Problems Facing the Organization and Probable Causes The problem that the company is facing is related to its integration to the EHI systems. The company is to make an important decision about investing in the system with respect to the associated risks and opportunities. The company is required to choose whether to invest in internal development. Main problem of the company is based on decision making. Since it is a supplier, the company needs to consider a number of alternative investments for viability before remitting funds towards a project. Target Company is attempting to venture into EHI arena but is facing a number of constraints hindering such investments. Another problem that the company had was single customer that they serviced. The Chief Financial Officer Mr. Kenyon identified an opportunity to invite more customers who would expand the business and hedge against the risk of failure. After eleven years of establishment and five years of growth in revenues, the company’s growth flopped in 2009 and returns slowed down. The company’s paper based systems could no longer work due to its expansion in business operations. If the company was to enter the EHI arena, they had to select the most diverse region offering most preeminent opportunity representing Cumberland, Lancaster, Perry and Adams counties. The company would select among its many clients in the central region of Pennsylvania. According to the company, opportunities considered include physicians’ practices, exchanges of health information and systems supporting healthcare operations. Employees of the company in 2010 comprised of an inexperienced lot with younger personnel (atantuono & sarcone, 2012). Analysis of Alternative Solutions There is a reason why consultants suggest that the strengths that had enabled the company to achieve competitive advantage in its first 16 years of operations would be relevant in the new environment. Organizational value is what drives nits operations that determine its success. The company had the same values that the management improved over time. Since the business had expanded after sixteen years, competition also increased. Customer satisfaction and quality would give the company a competitive advantage. Consultants identify the need for previous success factors for current competitive advantage through analysis of the organization (Houben et al., 1999). SWOT analysis, Porter’s five forces model and porter’s value chain model approaches can be used to analyze the alternative solutions and determine opportunities, weaknesses and organization’s strength points that will support more investment. The analysis procedures provide solutions especially for decision making problems facing the company. SWOT Analysis Target Systems Company has strengths and weaknesses arising from the company’s operations and facilities. The business environment it operates in also has opportunities viable to the business and threats that are likely to affect the success of its projects. Strengths Target systems have been in operation for a long period of time. It has established strong links in its organization culture, external environment and strategies. The company’s strong organizational values such as quality, credibility, humility, loyalty and equity as stated by consultants contribute to its strengths. Since 2010, the workforce employed was in their twenties (Pg.3). This was unlike the previous group of employees. This provides the company with a higher viability in conducting projects since they handle more than one project at a time. Specialists in data bases, system engineers, specialists in certification and security service and programmers comprised of the new group of manpower. This group worked on both government and commercial contracts which expand the company’s revenue. Competitive strategy developed by the company gives it added strengths in its operation. They provide customers with distinguished services at the rates that are lower than the normal market rates (Houben et al., 1999). Weaknesses Costs incurred like transaction and high switching costs due to switching of services in different operators. The company was experiencing a downturn in revenues in 2009. There was a significant drop in revenues in 2009 and there was still reliance on the government’s contracts for generation of revenue. The revenue related weaknesses would compromise new projects intended by the company and reduce its viability. Opportunities The organization considers complex and large government contracts as opportunities to expand their business operations. The government made orders to its suppliers when new services were needed. This was possible if they could manage contracts precisely and which observed high quality standards that met customer expectations. Another opportunity for the company is the US health care sector. The health care landscape in United States transformed its operations from manual to electronic information systems. Target could come in and improve quality of services which was thought of to be below expectation. Threats There are also threats in the business environment that Target Company operates in. first threat is competitors. The Company’s collaborators in one government contract awarded became competitors in another contract that it is awarded. Target systems therefore required its image in professional competence and integrity to deal with the dynamic business setting. Porter’s Five Forces Model The model comprises of threat of new entrants, determinants of supplier power, Rivalry among existing firms, determinants of buyer power and threat of substitute products. The business is faced by threat for new entrants. As the market for IT services expands, government policies also increase. Being a supplier of the government department, Target systems Company is prone to government regulations especially from the Navy sector. Lit is also prone to switching cost like in the case of developing competitive strategy against its rivals and market rates. Determinants of supply power in the case of Target System are the buyer’s switching cost to other input, their threat of backward integration and the company’s product differentiation. The company is facing rivalry from existing firms who are collaborators in some contracts and rivals in others. In order to cope with rivalry, they practice product differentiation and strategic stakes such as competition mitigation procedures like cost switching to rates lower than market rates. The buyer power refers to number of buyers with respect to sellers. This involves switching cost to use other products, sellers’ threat of forward integration and buyers’ volume. Threats of substitute products can only be solved by switching of costs to buyers and the relative prices and quality substitutes (Roy, 2011). Porter’s Value Chain Model The model describes organizational activities that help the organization to create value thus develop a hedge against its competitors. This includes inbound logistics, operations and outbound logistics which targets on customer value in deliveries. Services, sales and marketing promote customer awareness and sensitization. Support activities such as firm infrastructure, HRM, technology development and procurement offer support to the main organizational activities. Coordination of all the activities creates value to the company. Recommendation If Target Systems business development team was to venture into the EHI system, it could provide and maintain software and applications to the RHIOs. This would facilitate electronic health information exchange. They would also provide software applications that are IT and management oriented to exhibit interoperability. This would apply to regional information organizations set of customers. The consultants’ recommendation for physicians’ practices, rather than on regional health information organizations (RHIOs) or hospitals did not make sense since there was high resistance of technology in that area. According to the survey conducted in United States, many people did not appreciate the technology and were rigidly withdrawn to the old systems. Target Systems Company should venture into the EHI arena. It will be in a better position to expand the scope of its business operations by getting into the new system. Considering physician’s practices, hospitals and healthcare systems, regional health information organizations (RHIOs) will be a better option for the organization among the other three options. It provides exchange of health information electronically in health facilities. Since it has been introduced to a larger geographical coverage, the company will be able to serve a variety of people. It also provides a broad coverage of governance structures, information technology initiatives and stakeholder participation. It involves interoperability, data exchange accuracy and increased communication ability to improve the operations in health environment. The RHIO market contained a sole producer of the facility, Keystone health Information Exchange (KeyHIE). It provided sophisticated operations extensively throughout the central region of Pennsylvania in 2010. Although there were competitions such TECHQuest that sponsored business supporting projects, it was not congested. This offers an opportunity for investment. Q and A Question 1 The factors that were most important to Target System’s success during the first sixteen years of operation are organizational value and focus to deliver quality to its clients. The company observes its organizational values which include equity, integrity, quality, credibility, humility and loyalty. Target Systems’ experienced workforce contributed to its success. Organization values of the company give it an upper hand in dealing with the community. Most of its 85 employees were old and experienced from their military career. Initially when they had a single client, they focused all their efforts towards providing satisfactory services. Question 2 Organizational value is what drives its operations that determine its success. The company had the same values that the management improved over time. Since the business had expanded after sixteen years, competition also increased. Customer satisfaction and quality would give the company a competitive advantage. There is a reason why consultants suggest that the strengths that had enabled the company to achieve competitive advantage in its first 16 years of operations would be relevant in the new environment. Since the business still deals in software, same success factors will apply for both the government and commercial arena. Looking ahead to the possible entry of Target Systems to the new arena, consultants to suggested that the strengths that had enabled the company to achieve competitive advantage in its first 16 years of operations would be relevant in the new environment. Question 3 Targets Systems would provide software applications that are IT and management oriented to exhibit interoperability. This would apply to regional information organizations set of customers. The consultants’ recommendation for physicians’ practices, rather than on regional health information organizations (RHIOs) or hospitals did not make sense since there was high resistance of technology in that area. According to the survey conducted in United States, many people did not appreciate the technology and were rigidly withdrawn to the old systems. The consultants suggested to the business development team that if it did move into the EHI systems arena, the first question they would have to answer was: What services would Target Systems provide, to which set of customers? The consultants recommended Target Systems focus on physicians’ practices, rather than on regional health information organizations (RHIOs) or hospitals. This recommendation did not make sense. The health care information arena is best set of customers for the company. If Target Systems business development team was to venture into the EHI system, it could provide and maintain software and applications to the RHIOs. This would facilitate electronic health information exchange. References Fratantuono, M.J & sarcone, D.M. (2012). Target syatems: Opportunities and challenges in the electronic health information system arena. Richard Ivey school of business foundation. Roy D. (2011). Strategic Foresight and Porter's Five Forces: Towards a Synthesis. NY: GRIN Verlag. Houben G., et al. (1999). A knowledge-based SWOT-analysis system as an instrument for strategic planning in small and medium sized enterprises. Decision Support Systems 26; 125–135 Read More