Chapter 15 Article Review: When You Shouldn't Go Global

The article written by Marcus Alexander examines the obstacles and pitfalls which companies may encounter when going global. In today's economy and with the changes in deregulation policies over the past 15 years, many companies have been enticed to expand their operations globally. While this aggressive strategy exposes companies to global economies of scale, many organizations have been unable to capitalize on a global strategy and have made ill-fated mistakes. He attributes the failures both to the firm's deeply misguided global strategies and the execution was more difficult than anticipated. The author suggests considering three important questions when contemplating going global:

1) Are there potential benefits for our company?

2) Do we have the necessary management skills?

3) Will the costs outweigh the benefits?

"Before launching a global move, senior managers need to conduct a simple but rigorous self assessment to gauge the likelihood of success," according to Alexander. Many companies, such as Royah Ahold, a large Dutch supermarket operator, were able to identify the potential benefits of globalizing but they did not put themselves in a position to realize those benefits.

Chapter 15 Case Study: Nestle Tries for an All for One Global Strategy

2) What type of global business and systems strategy did Nestle adopt? Was this strategy appropriate for Nestle’s business model?

Nestle has not necessarily believed in the concept of the global consumer. None of Nestle’s products is considered a truly global brand, with perhaps the exception of Nescafe, of which 100 million cups are served around the world each year. Nestle does target the world market but does so by creating brand strength locally by each diversified region. Nestle's global strategy fits the multinational startegy which is characterized by decentralization of production, sales and marketing operations to units in other countries. This strategy works well for Nestle since they are in the food market which needs to take into consideration, differing business cultures and local market preferences. Nestle remains the leading food and beverage company in the world so their strategy is effective, however, their decentralization of operations makes it extremely difficult to mainstream IT systems.

3)What management, organization, and technology challenges did Nestle have to deal with to standardize its business processes and systems?

As complex as the challenge seemed, Nestle embarked on a program to standardize and coordinate its information systems and business processes through a system called GLOBE. The company initially installedSAP’s R/3 enterprise resource planning software to integrate material, distribution, and accounting applications in the United States, Europe, and Canada. Instead of technology managers, Johnson tried to build his team from a diverse group of business managers who had experience in a variety of business sectors including manufacturing, finance, marketing, and human resources. It became apparent to Johnson that the greatest challenge of GLOBE might not be technical, but was personal and organizational perhaps. Managers resisted the idea of giving up control over their business processes to particpate in a centralized solution.

4)What strategies did Nestle management use to deal with these challenges? How successful were these strategies?

The implementation of the GLOBE system was paramount to Nestle's global market approach and it required large scale company buy-in. By the end of 2005, Nestle had converted 30 percent of its business to GLOBE, and had the capacity for one major rollout every month. The 80 percent number by the end of 2006 was still looming but the company had learned how to operate as a single unit on a global scale. Nestle is much closer to achieving its goal of standardizing all processes, data, and systems. Chris Johnson was able to develop projections for his team that were both measureable and attainable. Such a large scale important project deserves adequate manpower, budget and time to allow for the system to be properly implemented.

Article Review: Microsoft Unveils Project Management Effort for Partners

On June 3, 2009, Microsoft announced that all of its US partners who utilize Microsoft Office Project Server 2007, will have access to share templates, project methodologies and other project-management assets associated with Office Project Server 2007 via a Web portal. They named this program, "Project for Workgroups." Project for Workgroups provides solutions built by Microsoft's partners to create enterprise project management systems. The aim is to reduce deployment costs associated with project management implementations.

There are so many aspects of Project Management to keep track of that a Manager with multiple projects must invest a great deal of time simply to follow each individual project. Depending on the number of projects running simultaneously, this process may be exceedingly time consuming. Since finding problem areas before they become critical is essential to effective Project Management, any delay could be costly.

Project Management tools that provide a global overview of all the projects in a company’s portfolio, are a time-saving solution that can positively affect the outcome of a project. Having the necessary information at the right time can make the difference between project failure and success. The right tool can also help you to leverage your resources (people, money, schedules and capacity).

Herb Torrens, Microsoft Unveils Project Management Effort for Partners, 6/05/2009

http://rcpmag.com/articles/2009/06/05/microsoft-unveils-project-management-effort-for-partners.aspx

Chapter 14 Case Study: What Went Wrong with Maine's New Medicaid System?

1. How important are information systems for Maine’s Department of Health and Human Services? Analyze the impact of its faulty Medicaid claims processing system.

Information systems play an important role in data management and claims processing for Maine's Dept. of Health and Human Services. Having worked with Medicaid billing and information systems in California, through their intermediary Electronic Data Systems, I am familiar with the importance that information sent through the system plays in claims reimbursement, eligibility verification and treatment authorizations. Thes information systems are very sensitive to data that passes through them and claims get rejected for the slightest of errors. Much of these functions are done through computerized systems such as those utilized by the Medicaid program in Maine. Maine relies heavily on information systems to accurately process over 100,000 claims per day and manage the privacy and medical coverage for over 260,000 of its low-income residents.

The faulty Medicaid claims processing system implemented in Maine had a significant negative impact on healthcare providers and Medicaid recipients. More specifically, providers serving Medicaid patients were not getting paid for services rendered and many were eventually forced to deny medical services to Medicaid recipients. Many healthcare providers who relied on revenue from Medicaid patients, were being faced with streneous financial challenges. Furthermore, once claims began getting processed, the system was error prone, causing an estimated $9 million in provider overpayments rsulting from payments for entire procedures rather than just those covered by Medicaid.

2. Evaluate the risks of the Medicaid claims processing system project and key risk factors.

The Medicaid claims processing project carried many inherent risks and risk factors. The largest risk that this project carried was the mismanagement of processing the data. Many healthcare providers render services daily to Medicaid recipients in the state of Maine and rely on Medicaid payments to support their practices. A major delay in claim reimbursement to those providers creates a large risk for an undesired chain of events which ultimately results in the lack of medical care provided to Medicaid recipients. Another risk for this project was that the state of Maine acquired a company with limited expertise in these sorts of claims processing systems. Although CNSI may have been able to develop an extraordinary claim processing system, they lacked the track record and experience necessary for such a project. Facing time constraints set by HIPAA regulatory compliance and receiving a lower bid from CNSI, the DHS took a big risk and rushed in accepting the RFP from CNSI.

5. If you were in charge of managing this project, what else would you have done differently to increase chances for success?

Intially, I would have done a little more research on the successful model's that other states have implemented and are running smoothly. Many other states outsource their claims processing to specialists, such as Electronic Data Systems, to manage their claims, eligibility, enrollment and treatment authorizations. I would then compare the financial feasibility and comparison of outsourcing versus enlisting a private contractor working with the current IT staff. Assuming, it was in the best interest for the residents of Maine to reject the option to outsource, I would have invested the taxpayer's money into a private contractor with a proven track record and significant history in the field. Upon deciding which contractor to use, I would require a minimum of four proposals to be submitted prior to granting any contractor the project. Once a contractor is selected and the system has been developed and completed, there would have to be a trial period of about two months, prior to complete conversion from the old claims processing, where sample claims would be processed to assure accuracy of the system

Sources: Management Information Systems Managing the Digital Firm, tenth edition. pgs. 589-591. Laudon, Kenneth C.

Chapter 12 Case Study: Can Information Systems Make Your Doctor Better?

1) What problems are hospitals and physicians encountering in diagnosis diseases and prescribing medications? What management, organization, and technology factors are responsible for these problems?

Hospitals and physicians are encountering medication errors which have led to injuries and death. Mostly resulting in inappropriate prescriptions, dosages and patient-monitoring strategies, these errors can be very costly and damaging to a hospital and/or physician. Research has found that most of these errors have resulted from human factors such as poor handwriting, memory lapses, fatigue and distractions, compounded by the sheer complexity of available medications. In addition to medication errors, physicians have been challenged with properly diagnosing medical conditions after gathering and reviewing diagnostic tests. Consequently, computerized physician order entry and diagnostic decision support software is being developed to reduce the occurrences of medication and patient diagnosis errors.





2)Are CPOE and DDS systems appropriate solutions? Why or why not? What management, technology, and organization issues are involved in the use of these systems?

CPOE and DDS systems should be utilized by nurses and physicians as an extra diagnosis and medication resource to insure that they have not missed anything. With the myriad of over the counter and prescription medications out there and the vast amount of diseases, a structured, computerized system can serve as additional knowledge/resources for a physician.

Once the CPOE and DDS technology is finely tuned and the glitches have been worked out, it can serve as a tool to reduce liability associated with medical malpractice and can make healthcare delivery more efficient. Successful implementation of these systems has many advantages such as improved communication between nurses and doctors, saves time for doctors, clarity of medication orders resulting in an estimated 25% less occurrence of adverse drug reactions.





3) What obstacles prevent computer systems from improving the medical industry? How can these obstacles be removed?

A couple of obstacles prevent computer systems from improving the medical industry. First off, many physicians, proud as they are, may not be inclined to allow computer systems to make decisions for them. Their pride, egos and expertise may get in the way of the implementation of such systems, especially for older, less computer savvy doctors. Another obstacle that complicates the implementation of such a system is that it requires significant amounts of time to input all the medical data for a given hospital. This data entry aspect is also prone to human error and is very time consuming.


These obstacles can be overcome by implementing rigorous training programs to doctors, nurses, administrators and data entry personnel. A sustained training effort for appropriate staff prior to its implementation at a hospital may build confidence in their users and reduce the likelihood of errors. Furthermore, comprehensive training and educational programs for physicians should emphasize that the computer systems should act as a tool to compliment their art.

Sources: Management Information Systems Managing the Digital Firm, tenth edition. pgs. 505-507. Laudon, Kenneth C.

Article Review: Amazon vs. Sony: E-Book Reader Face-Off

With the advancement of e-commerce and technology as a whole, companies are introducing more innovative and sophisticated technological devices. An example of such a device is the e-book. An e-book, short for electronic book, is an e-text that forms the digital media equivalent of a conventional printed book, often protected with a digital rights management system. E-books are usually read on personal computers or smart phones, or on dedicated hardware devices known as e-book readers or e-book devices. Many mobile phones can also be used to read e-books. The article written by Melissa Perenson in the May 2009 edition of PCWorld, explores the second iteration of Amazon's e-book device, the Amazon Kindle 2 and Sony's Reader Digital Book PRS 700.

On February 9, 2009, Amazon announced the Kindle 2. It features a 6-inch display and became available for purchase on February 23, 2009 for the price of $359. The Kindle 2 features improved battery life, 20 percent faster page-refreshing, a text-to-speech option to read the text aloud, and overall thickness reduced from 0.8 to 0.36 inches (9.1 millimeters). The Kindle 2 has 2 GB of internal memory of which 1.4 GB is user-accessible. Amazon estimates that the Kindle 2 will hold about 1500 e-books. Unlike the original Kindle, Kindle 2 does not have a slot for SD memory cards. On March 3, 2009, Amazon.com launched an application entitled Kindle for iPhone in the App Store for iPhone and iPod Touch owners to read Kindle content. Through a technology termed "Whispersync," customers can keep their place across Kindle hardware devices and other mobile devices. Amazon typically sells downloadable e-books on its e-commerce site for $5-$10 per book.

A competitor of the Kindle 2 is the Sony Reader Digital Book PRS 700. Sony's latest release of its e-book reader costs $400 and differs dramatically from the Kindle 2. The most obvious differences are the absence of a keyboard, in return for a more compact shape. Additionally, like the iPhone and other next-gen touch-screen phones that have been appearing lately, the Reader incorporates some gesture-based commands. You can swipe your finger across the display to page forward or back (you can choose between a left or right swipe to advance pages in the settings menu). Swiping and holding your finger down at the end of the swipe allows you to advance or rewind through pages at a fast clip. With the included stylus or your finger you can highlight words and add annotations via a virtual keyboard. The Amazon Kindle offers this feature via a Blackberry-style keyboard. However, the Kindle doesn't have a touch screen.

Reference:

Perenson, Melissa (May 2009). Amazon vs. Sony: E-Book Reader Face-Off. PCWorld, 42-45

Chapter 10 Case Study: Can eBay Continue Growing?

1) eBay is a virtual marketplace for the sale of goods and services for and by individuals. eBay's business model and mission is to connect people — rather than selling products to them. They have created a person-to-person marketplace on the Internet, where sellers list items for sale and interested buyers bid on these items. Thier success relies mostly on revenue generated from fees and commissions related to its trading services. Their business model has been extremely successful and they were able to attract more than 200 million users by 2006 and were expected to surpass 2 billion items listed in 2006.

2) eBay faces several challenges which will test their ability to continue in their growth stage. On the international front, they face stiff competition from Yahoo!. Yahoo! is positioning themselves in the online auction site industry in the asian markets. Furthermore, another online giant, Google, dominates the online advertising industry and eBay is attempting to penetrate that market by offering its own online contextual ads and auction promotions on linked Web sites.

However, their greatest problem is their difficulty in providing their users with a secure and honest online trading environment. Their rapid growth and enormous amount of transactions that occur daily, has made it extremely difficult for eBay to monitor and control fraud, identity theft and unethical/dishonest transactions. Many users who have been victimized by these unethical practices, do not feel confident in the efforts that eBay has made to prevent dishonest transactions and thus, question eBays ability to ensure integrity in their auctions. This is a great obstacle for eBay to overcome. To battle this problem, eBay relies mostly on customer feedback through a rating sytem.

4) According to a Fortune article published on January 23, 2008, eBay has undergone a management change which will bring forth organizational and technological changes. More specifically, Meg Whitman has been replaced by John Donahoe as CEO of eBay. While Whitman was central to eBay's growth and success, she felt that the company needed fresh eyes and a new perspective to continue to drive its growth.

Donahoe promised big changes in his first several weeks to help revive eBay’s core business. He discussed his plan to offer fixed-priced goods and an improved customer rating and support system to lure buyers. In addition, he has promised to lower fees for sellers to list items hoping this attracts more sellers and thus more transactional sales revenue.

References:

http://techland.blogs.fortune.cnn.com/2008/01/23/new-ceo-uncertain-future-for-ebay/