Outsourcing and Offshoring - WW Distribution Company - Case Study Example

Outsourcing and Offshoring al Affiliation Outsourcing and Offshoring Introduction At WW DistributionCompany, competition has grown becoming a challenge that is faced day in day out. The company has been forced by its economic environment to diversify in terms IT development so as to maintain relevance in its operational market. Having various needs in most of its sectors, WW resulted to creating an IT department for its overall transition. The department was highly relevant considering that WW Company had structured itself to meet the rising need for IT infrastructure to facilitate development. Changes made have ranged from directing the business strategic objectives to be IT specific to restructuring the vision and mission statements to enable rooting of IT in the company. The changes at WW Company are in a bid to achieve 5% economic growth and cut down costs by 5%. The company believes that an incorporation of information technologies will enable it perform competitively in the transportation and distribution industry. In the restructuring process, WW has identified an area in service delivery and customer relationship that would highly benefit the company in achieving its goals. Firstly, the company has identified its existing operational systems as slow and duly lacking in optimal service delivery. Employees in various departments complain of too much work load in accurately feeding the systems with data. They say that the system is error prone due to the fact that most of the input work is done by the employees who are likely to make inaccurate entries. Additionally, employees complain that the existent systems are too slow in execution of tasks, thereby causing a hold up in work management and service delivery. The new changes in IT have seen a range of projects span up at WW. Among the projects includes the development of a Customer Relationship Management Software. Right before the introduction of the changes at WW, the management had a meeting where they decided to change the company’s strategic plan. The changes in strategic planning were essential in that they would suit the new direction that the company was taking, which involved incorporation of information technology. With the introduction of IT at WW, all systems would go upgrades and re-specification so as to ensure that they perform as expected. Additionally, the newly hired Chief Information Officer of WW was expected to introduce technological systems in areas where they had not yet been explored in the company. This includes the newly proposed Customer Relationship Management Software. The proposed project involves the development and setting up of a Customer Relationship Management Software within WW Company. The software is expected to tackle various needs within WW, major ones including the capability of the system to do sales management, customer interaction through a support system and inventory management. The system should boost the company in these areas enough to make impact for its economic growth. Additionally, profits margins tend to widen as most challenges get phased with IT solutions provided in the customer Relationship Management (CRM) Software. According to Bohling et al. (2006), several companies have in the recent years been investing in CRM Software Systems due to the realization that they increase and better the interactions between companies and their customers in all areas of their business (Santhanam & Hatono, 2003). The Customer Relationship Management Software is expected to increase performance, the company’s total turnover and reduce operational risks. From the proposal, the system is expected to draw the company to its customers, providing them with easy access to services and information. Additionally, the system majorly aims to improve on the interaction between the company’s employees and its customers. At WW, from the case study, it is seen that there are times when the company experiences delays or other avoidable inconveniences simply because there lacks a good communication system between the company’s employees and the customers. The case study shows that the truck drivers have the closest relations with the customers. Most of them have one on one interactions on frequent basis. This is good for the company in maintaining its customers’ loyalty: However, the truck drivers cannot be relied on to deliver heavy communication needs between the company and the customers. At times, delays in delivery or acceptance of freight by the customers may be experienced. It is in such scenarios where the Customer Relationship Management Software comes in handy. The investment in IT development does not necessarily guarantee that a company will grow immensely and experience impeccable returns. Various factors are included in the whole concept. That is, for instance investment in IT resources and working environment. A reliable working team is essential in the development of a competitively rated CRM system. Also, the management in charge of the project needs to be well knowledgeable with the field of business systems. From WW’s case study, Carol explains why IT had not thrived well in the company before she came in. According to Carol, the IT department consists of non-competitive stuff members. IT projects are rarely completed on time and when they are finally done, they do not meet the customer specifications or specificities in customer appeal. For WW Company to fully realize the benefits of the CRM System, it needs to be developed in a competitively advanced environment where the developers the right skill sets to complete the tasks. Most importantly, where a system needs to be integrated with other systems in the same working environment, the development team needs to be familiar with the existent systems. Take for instance if the system is expected to manage the inventory. It may need to be interlinked to the routing system which also uses information in the inventory to be able to facilitate the dispatches. Data to be used by the operational systems need to be retrieved from a single, or several similar repositories. It is more economical and a better systems development practice to reduce redundancies and make use of re-use where necessary. This is to say that, though the systems are different and at times independent of each other, they need to reference to the same company resources to ensure real-time synchronization of data and utilization of resources. Thus, in one way or another, the systems developed to function in WW’s business processes need to be linked. From the case study, it is clear that WW’s management was looking for better ways to conduct the company’s business. Part of the proposals that emerged was the restructuring of the company’s strategic plan. In the changes made, incorporation of IT approaches would be expected to include goals in the following three strategies; provision of warehousing services, increase on the distances covered by the pick-up and delivery trucks and accuracy in delivery. The CRM System can be used as a tool in meeting the set strategies. Under provision of warehousing services. The CRM, can be used as a link between a company and its customers, creating an understanding between the two. The understanding becomes possible since the CRM helps build communication between employees and customers both at ground and management level. Other than just creating good customer relations, the CRM system gives a provision for sales management. In WW Company, sales management would be applicable in the pick-up, warehousing and delivery of clients’ products. With a reliable system that ensures goods are well accounted for, and their pick-up and delivery times are well identified, the CRM system can be really helpful in distributing trucks to efficiently cover large distances under a short period. With a proper time and distance track management systems, tracks can be selectively allocated delivery addresses using formulas considerate of time management. With such a system, a company can be assured of saved time, enough for trucks to cover extra mileage per day. Also, costs are cut down as the trucks are able to deliver more in a day. For the CRM System to be reliable and usable, it needs with accuracy as the main priority. In WW Company, assuming that the system is already in use: If for example a truck is expected to deliver in an hour and be back for another delivery, it should be able to get the right address for the delivery or any other necessary information so as to keep on schedule. If there is an error in the address information, or a delay, the truck might be forced to work inefficiently for its subsequent deliveries. Before developing a system, it is imperative that the requirements be identified, both functional and non-functional. This gives the system a purpose and a framework for which it is to be developed. Understanding a system’s requirements helps the development team, and the company’s management as well, know the scope of the project, the cost, the duration it is expected to take and the overall layout for its development. Additionally, with a set out list of requirements, it is possible to have a close-to-accurate estimation of the size and operational dynamics of the system. The CRM System for the WW Company has various software aspects incorporated in it. Since the system is expected to cover management of sales all through to customer interaction, it needs to be diversely segmented to specifically perform functions for each area as an integrated unit. The CRM System to be developed with include several high-level requirements, which are placed into five categories. First, one needs to identify what the system is expected to do so as to define the specific requirements. The CRM in this case has four purposes: sales management, provision of a customer support system, enablement of advertising through the system and a unit for management of inventory for the workers at the terminals. For the purpose stated above, the system requirements fall under: Functional Requirements, Business Requirements, Non-Functional Requirements, Feature Requirements and the System Design requirements. The functional requirements include the detailed functions that the system carries out. In these requirements, a notion of “System does” is use. For instance, having a system auto-calculate the time a truck is expected to deliver goods depending on the distance covered, the time required to load and offload freights and unanticipated factors such as times when there is heavy traffic. This requirement form the basis of the system, enabling the achievement of the business systems. The business requirements hold the business solutions to the analyzed challenges in an organization. It’s basically an indication of what a problem is in a company and how it is expected to be solved by the system. With business requirements, plans are set as future goals. At WW, for instance, one business requirement could be to create a system that solves the problem of communication between the company and its employees at the time of delivery. The solution solves the problem of stalls and or wrong freight delivery. Day (2002), explains non-functional requirements as those that provide the structure for the entire operations of a software. In this case, the non-functional requirements depict the qualities of the CRM System. These are such as, constraints within the system. These type of requirements make it possible for maintenance, testing or addition of features. Additionally, it is through the non-functional requirements that developers may be able to judge the scope and size of the project. System design involves the development of the specifications of the software. It is basically the blueprint of the final system. The system design indicates what is included in the system and its overall operational features. In this project, The CRM System can be developed through the iterative waterfall methodology for systems development life cycle. In the planning phase, the development team will need to identify the sub-systems inclusive in the CRM. Also, there needs to be conducted a feasibility test which will ensure whether the development process is worthwhile starting. If all the proposed features are examined as feasible, then the team can progress to development of the project’s plan. This plan should act as the layout for the entire project. Iterative reflections should be made to the project plan on every stage of the project’s development process. The analysis phase follows, with a clear study of the requirements presented. Here, all system requirements are analyzed so as to identify what the CRM System is going to look like. After the analysis stage, a conceptualization of the system should begin to form. Here, the relevant developers perform various analyses that compare between factors so as to produce the right system under the given circumstances. One example of the analyses performed is the ‘buy-vs.-build analyses’. Through such, the team can determine cost, duration, urgency, number of developers required, amongst other factors. After the above phases, everything else becomes pretty much straight through. The design phase involves the scribing of certain operations and features depending on the companies preferences. The IT infrastructure and the working models are developed at this point. For instance, WW may prefer having an automated response and recording for the customer support unit. They may however be edited depending on the growth of the requirements later in the development stages or simply the company’s preferences. This is so since the whole process is iterative. The process then moves on to the development of the system. After all considerations have been made, the right team sets to work with the already laid out IT infrastructure so as to produce the customized CRM for WW Company. All through the development stage, until the end, various kinds of tests are performed for the software under various test conditions. This ensures that the system being developed is reliable and performing as expected. After the development, implementation takes place. Maintenance may be essential after the implementation, but may not be a problem since WW has an IT department (Coltman, 2011). References Bohling, P. et al. (2006). CRM Implementation: Effectiveness Issues and Insights, Journal of Services Research, Volume 9, Issue 2, p. 184-194. Coltman, T. et al. (2011). Customer Relationship Management and Firm Performance, Journal of Information Technology, Volume 26, Issue 3, p. 205-219. Day, S. et al. (2002). Superiority in Customer Relationship Management: Consequences for Competitive Advantage and Performance, Cambridge, MA: Marketing Science Institute. Santhanam, R. and Hatono, E. (2003). Issues in Linking IT Capability to Firm Performance, MIS Quarterly, Volume 27, Issue 1, p. 125-153. Read More