Managerial Issues Associated with Knowlege Management Systems

Managerial Issues:

1. Organizational Culture Change - how to change organizational culture so that people will contribute to and use knowledge from KMS. Strong leadership, clearly expressed goals, user involvement, and deployment of easy to use systems that provide real value to employees are a must in implementation and use of KMS.
   
2. How to Store Tacit Knowledge - storing tactical information that knowledgeable employees have is important. If an employee leaves they take their knowledge with them. This presents the issue of articulating the knowledge so that other employees can understand it. If the knowledge is not captured explained thoroughly and explicitly then it provides no value to the recipient.
3. Measuring Tangible and Intangible benefits of KMS - knowledge does present value to a company whether it be tangible or intangible. Management needs to find a way to measure and assign value to signify its importance.
4. KM Personnel Roles - just like any aspect or function of a business, KM needs to have designated positions and roles associated with those jobs. This will provide structure to the function and increase the efficiency of the area focus and purpose.
5. Understanding Importance - KM is extremely important and if done correctly can significantly impact a company for the better. Understanding this importance is key in management and communicating its value in enabling a company to effectively compete with its competition.
6. Fast Evolving Technology - as technology rapidly changes, the ability to implement KMS is becoming easier and more effective. In the future, using KMS will become more simplified and easier to implement. Because of this, overcoming the managerial issues is an important task to occomplish now due to the greater impact that behavioral and managerial issues have on success. By doing so the future implementation can be conducted more soomthly and effectiently.
   

Minicase 1: How Volkswagen Runs Its Supply Chain in Brazil

The Problem
In this case Volkswagen (VW) is a company that produces trucks through the manufacturing of many different parts. These materials were shipped to VW plants where employees would assemble the parts to create a finished product, trucks. Because there are so many different material and vendors associated with the materials, the supply chain was long and problematic for VW. This issue resulted in the need for a Computer-Based collaborative system.

Problems with Supply Chain Structure

• Plant problem caused downtime in waiting for a partner associate to come fix the problem.
• Late arrival of materials forced VW to hold large inventories for protection against material shortages.
• Compromised product quality

The Solution
In 2002, the VW plant underwent dramatic changes associated with its supply chain. The relatively small plant that creates jobs for 1,000 workers is made up of only 200 VW employees while the rest of the 800 workers are employees of the suppliers. The VW employees are responsible for and conduct the task of overall quality, marketing, research, and design. The supplier employees do the jobs of specific assembly work. The objective in making this change was to make the supply chain more lean and was to reduce number of defective parts, cut labor costs, and improve efficiency.
In the plant each supplier was given space but were responsible for managing and supplying their own components, supplies, and workers.

Results
The result of Volkswagen's innovative supply chain are that quality has been improved while cost have been reduced because of the supplier added reponsibility for its units and workers' compensation.

Interorganizational Information System (IOS)
Such IOS systems that might be necessary in supporting this change and arrangement between VW and its suppliers would be:

• B2B trading systems - because they facilitate trading among partners in a business. This VW plant and its associated suppliers located within the plant need to have ways to interchange data as well as communicate with each other so that smooth successful operations can continue.
• Electronic funds transfer (EFT) - are telecommunication networks that allow the transfer of money among the two companies. By implementing this type of IOS, VW can transfer payments to its suppliers much faster and more efficienctly.
• Shared database - a plant shared database could be benefiticial to the success of the operations in allowing each supplier along the assembly line to better cordinate its activities while reducing the time that it takes communication the particular information.
  

Customer Relationship Management

Customer Relationship Management (CRM) - is the enterprisewide effort to acquire and retain profitable customers. In order to generate long standing value, businesses must have a customer oriented strategy. CRM offers additional focus to this customer oriented strategy. Since there are different functions within a business, CRM can be defined differently between the departments. CRM, in essences, seeks to find a one to one relationship with customers. A basic idea behind this principle is different customers have different needs as well as value to the company.

Major Types of CRM

1. Operational - typical business functions. (ex. order management, customer services)
2. Analytical - activities that capture, store, extract, process, interpret and report customer data.
3. Collaborative - all the necessary communication, cordination and collaboration between vendors and cusotmers.

CRM Classifications

1. Customer-facing Applications - all areas where customers interact with the company. This basically automates the information flow
2. Customer-touching Applications - customers interact directly with the applications. Notable are self-serve and e-commerce
3. Customer-centric Intelligence Applications - Intended to analyze the results of operation processing to improve CRM applications. Includes data mining and data warehousing.
4. Online Networking Applications - refers to methods that provide the oportunity to build personal relationships. Includes chat rooms and discussion lists.

e-CRM
Using web browsers, the internet and other electronic touchpoints to manage customer relationships. There are three levels that are classify e-CRM.

1. Foundational service - includes minimum necessary services such as Web site responsiveness.
2. Customer-centered services - services that matter the most to customers such as order tracking, customization, and security/trust.
3. Value-added services - extra services such as online training and educations.

Reasons for CRM Failures

• Difficulty measuring intangible benefits
• Failure to identify specific business problems
• Lack of active non-IT senior management support
• Poor user acceptance
• Trying to automate poorly defined processes

Effective CRM Development and Implementation

• Create a customer based company culture
• Appoint managers to effectively assess satisfaction
• Develop an end - to end process
• Recommend questions to ask customers to help solve their problems
• Track all aspects of selling to customers

There are three areas of CRM which should be given priority to realize the full benefit and value that it brings to the company:

1. Marketing
2. Sales
3. Service
   

Managerial Issues Associated w/ E-commerce

Electronic commerce has brought about significant changes in the way companies conduct business. This new method has allowed companies to modify and make additions to their business models furthering their ability to sustain themselves. However, the strategy, implementation, and deployment of this initiative must be well executed in order for it to be successful for the company. Many managerial issues arise in these areas that are associated with conducting electronic commerce.

An underlying issue that is associated with all management is ensuring success of a business model and preventing failure. Within this broad issue are the specific issues related to deployment, strategy, and implementation.


Deployment issues

1. Alliances - joining an alliance or consortium to explore the use of e-commerce.

2. Choosing Strategy of E-commerce - there are three strategies that a company can take in deciding how to achieve e-commerce. (1) Lead: this requires the company to conduct large-scale innovation e-commerce activities. (2) Watch and Wait: this strategy say that the company does nothing but closely watches the e-commerce industry to see when is a good time to enter the market. (3) Experiment: this strategy says the company experiments with e-commerce and learns by doing.

3. Cost Benefit - it is important to conduct research to determine the cost benefit of implementing an e-commerce initiative. One of the goals of the e-commerce business model is for the company to ultimately sustain itself resulting in increase in profits.

Strategy issues

1. Resistance to Change - with any change their is resistance that is experience from different areas. Because e-commerce in many cases results in a fundamental change in how business is conducted, resistance can be expressed from employee, vendors, and customers. If this issue is not addressed and resolved then success can be compromised. The company must educate, train, and publicize inorder to counteract this effect.

2. Integration into Business Environment - in adding e-commerce into a business it is necessary to carefully integrate the addition with the existing business. This requires that careful planning be conducted which may include necessary funding and interfacing new initiative with current IT infrastructure or making the necessary additions.


Implementation issues

1. Lack of Qualified Personnel - when a company decides to incorporate e-commerce into its business plan it may not have the right qualified workforce to efficiently implement the new plan. Instead of hiring employees to implement the activities, it may be beneficial to outsource these activities to specialist that know what to do. However, outsourcing can raise issues of its own.

2. Implementation Plan - because putting this plan into action is so complex it is advisable to have a well thought out plan of implementation. This plan should include actions to take for anything that may arise during implementation. Examples include goals, budgets, timetables, contingency plan, legal issues, technological issues, organizational issues, and ethical issues. (Payment Card Industry (PCI) Compliance)

3. Managing Impacts - impacts of e-commerce can be severe on the different aspects of a business. It is important to keep an eye on the activity in order to manage efficiently.

Technology Optimization From Wide Area Networks to Data Center Storage

Increasing efficiency and productivity of organizations is a constant concern that IT managers are faced with every day. The news article "Riverbed Holds VisionDay 2008 in San Francisco" gives an explanation of how this company is advancing in information technology to increase the efficiency of business. Riverbed is a company that has extended its technology optimization for customer by adding the Atlas appliance while building on its Wide Area Network optimization technology. This appliance focuses on optimizing data center storage and server infrastructure by allowing organizations to better streamline the manipulation, movement and storage of information. The application of these technologies will reduce if not eliminate inefficiencies in managing data, allowing the smooth flow of information throughout the organization from the point of creation to communication to storage of information.

Riverbed's vision of optimizing data will lead to lower costs, enhanced user experience, improved manageability, scalability, and great productivity. Riverbed has used WAN extensively and effectively but this new appliance will allow Riverbed to increase optimization of data for their customers. The amount of data that is collected in business today is enormous. This dramatic increase in data and inefficient storage puts extra strain on IT organiztions applications, network server and storage infrastructure. The handeling and management of data or information is essential to the dristribted and collaborative nature of business. Reducing restrictions and bottlenecks will allow increased efficiency and productivity through collaboration.

This Atlas appliance will increase storage capacity and designed to allow organizations to increase their existing primary file storage capacity without any changes in the storage infrastructure. This appliance is to scale existing file storage by allowing the file servers already in place to serve more users and deliver more data per device.
Source: http://money.cnn.com/news/newsfeeds/articles/marketwire/0433884.htm

Minicase 2

1. What were the major reasons the company had to use SOA?

TrueCredit had to adopt SOA because it needed to quickly develop applications to maintain a competitive advantage over its competitors. To do this they needed to be able to support 50,000 simultaneous users, reduce response time down to 1 second, and also reduce application development for use down to 90 days.

2. In what ways did they gain competitive advantage by using SOA?

TrueCredit was able to gain competitive advantage because they were a company that pioneered the application of SOA. This allowed them to become a step ahead of their competition by quickly and easily collecting and analyzing data from multiple sources.

3. What specific “services” can you identify in a business like this?

TrueCredit is a business that provides credit reporting, credit scoring, related financial services on its own and its partners Web sites.

4. Why is it so important to serve 50,000 simultaneous users?

Internet access is reaching the point to where it is accessible from just about anywhere. This means that large amounts of customers can use TrueCredit’s services at the same time because they are available online. As the number of users increases the ability of the service to handle those requests also must increase. The server must have the capacity to allow customers to use the services if not then this can slow down processing and ultimately cause problems. These problems may result in customers becoming unhappy with the service which would be detrimental to the company.

5. Classify this application using the material in Section 2.2.

This application can be classified as an interorganizational system because it connects TrueCredit to its other partners through the internet. But because the data is collected, monitored, stored, and processed this application can be classified as a transaction processing system. The transaction occurs when a customer makes a request for the service.

How Information Technology Can Be Used in Business Activities

In the developing stages of a company, a mission statement and goals are formed to guide their actions in conducting business. These two descriptions of the company act as the foundation on which the entire makeup of the organization performs. Though goals may change through the life of a business, the mission statement and goals relate and correspond to the multiple levels of strategy, management, and operations in a company.

Patagonia

Patagonia is an international outdoor apparel and equipment retail company. Because of the nature of their business the company is very conscious of the environmental concern that is present in today’s society. Patagonia’s mission statement: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. Patagonia’s love of wild and beautiful places demands participation in the fight to save them, and to help reverse the steep decline in the overall environmental health of our planet. We donate our time, services and at least 1% of our sales to hundreds of grassroots environmental groups all over the world who work to help reverse the tide. Patagonia’s strategic plan is encompassed in their mission statement and values and gives management within the company direction in how to conduct business. This direction allows management to align operations that will allow them to achieve their goals. “We know that our business activity – from lighting stores to dyeing shirts – creates pollution as a by-product. So we work steadily to reduce those harms. We use recycled polyester in many of our clothes and only use organic, rather than pesticide-intensive, cotton.”

Patagonia uses information technology to assist in their efforts to achieve their goals. The internet acts as a communication and collaboration system that Patagonia utilizes. This technology allows all employees and even customers to communicate, ultimately allowing work to be done more efficiently. One of its main purposes is used for marketing products which allows them to reduce printed material. An active blog is set up on their website so that anyone can post material or opinions to be viewed publicly. This allows the company, employees, customers, and members of society to quickly communicate among each other allowing them to learn from one another on common topics of concern. The company can then use the obtained knowledge by applying it to operations which will allow them to advance toward meeting their goals. This is very efficient use of technology because it allows direct communication with important stakeholders while reducing the amount of time that it takes between the two groups. Patagonia can also use information technology to assist in their efforts of research and development. Not only can they use technology to find new and innovative ways to make products more environmentally sustainable, but they can extend their research to help in the documentation of the environmental crisis. This information can then be publicized to aid in their efforts to minimize harm.


Blackbaud

Blackbaud is a company that produces technology solutions for non-profit companies. Because their focus on the non-profit market they are devoted to developing solutions that allow organizations to stretch their resources further. Blackbaud’s mission statement is make the world a better place by working with the nonprofit community to improve lives. They also show an importance in their values that employees make them great, customers are at the heart of everything they do, being good stewards of their resources, innovations drives success, actions are guided by honesty and integrity, and service to others makes the world a better place. Blackbaud’s mission, values, and goals direct the path of their strategic activities and plans. Because of their desire to help non-profit companies and influence their ability to improve lives, they focus on what they know how to do best and that is developing technological software solutions. Management transforms this desire into the ability to create useful products that allow efficient use of resources that different organizations maintain. The creation of these products is done through investment in the means to create such products but also heavily investing in the employees themselves.
Blackbaud has several information technologies set in place to help facilitate activities that will allow them to fulfill their mission and goals. Blackbaud has an intranet set in place that allows many actions to take place. Communication is one of those actions which include email and instant messaging. This communication allows employees to be working at their workstation while directly communicating at real time with another employee that may have vital information to solve a problem. Remote access through the internet also eliminates the constraint of physical distance allowing those who cannot be in the physical building to still be able to contribute. Because this company has such a strong value for its employees, they allow this intranet to act as a location for employees to post information of value to other employees. In response to Blackbaud’s value of customers, a database for product support allows customer support technicians to search the database based on questions from customers to quickly resolve product related problems. This quick response to problems will ultimately result in better customer satisfaction.