Business Case. Professor: Marek Hudon GROUP 9. Le Vu Linh. Tran Le Vu Chi Lang

Transcription

1 Business Case GROUP 9 Le Vu Linh Tran Le Vu Chi Lang Professor: Marek Hudon HCM, Apr 2012

2 Table of Contents Business Case Summary... 3 Company Overview... 5 ABOUT S3 Corp... 5 ORGANIZATION STRUCTURE... 6 KEY FIGURES... 6 Staffing... 7 Profit... 7 Problem Statement... 8 CHALLENGE... 8 BENEFITS... 8 SOLUTIONS... 9 Alternatives... 9 Alternative Alternative Alternative Alternative 4 (Status Quo) Conclusion... 22

3 Business Case Summary Learning objective(s) of the Group Corporate Governance Human Resources Management Leadership Strategy Research area General Business Management Company Sunrise Software Solutions Corporation (S3 Corp) Problem The problem is the sales and marketing department, especially the business development manager find difficulty in having technical resources to cooperate with him in proposal and technical solutions for Request For Proposal (RFP) phase. Opportunity statement The question is: what is the best model for RFP phase in S3 Corp to bring most effectiveness and efficiency of Sales & Marketing department? Identify the alternatives There are several organizational structures type which is applied to the company in different ways, the followings are the common ones. 1. Establish an expert and dedicated team and work under the business development manager 2. Define an efficient and effective process flow between departments sales & marketing and delivery department 3. Establish and foster R&D department to be part of RFP cycle 4. Outsource RFP to outside 5. The current model (status quo) Alternatives Short list 1. Establish an expert and dedicated team and work under the business development manager 2. Define an efficient and effective process flow between departments sales & marketing and delivery department 3. Establish and foster R&D department to be part of RFP cycle 4. The current model (status quo) Identify the data you will need

4 Current Organization structure of Sunrise Software Solution Corp. Sales number per year and sale revenue Sale metrics (sales, sale revenue, repeat sale, RFP success on the total RFP, customer satisfaction Experience level in terms of management in the current company Current processes/policy between department and project Performance on job of management level of current company Job description for supervisor levels Behaviors in terms of communication of current organization Identify the time frame Identify and analysis the alternatives: 20 days Narrow down and make a choice: 5days deliver the case and implement the case: 10days Preliminary analysis of the alternatives Elicit and elaborate the opportunity statement Pros and cons between organization structure Analysis the behaviors in terms of management level

5 Company Overview ABOUT S3 Corp Sunrise Software Solutions Corporation (S3 Corp) is one of the leading software outsourcing services provider based in Vietnam. It was founded in 2007 as an incorporated company by a group of four software engineers. Employing the scalable talent pool of resources with strong experiences in software outsourcing industry and various technologies and by applying proven process & standards into the operations and software project development, they are offering our valued customers extensive software development services that range from full software development, new features development, existing features enhancement, automation testing tool development, testing and maintenance support services, etc. Together they set the higher goals to offer the effective solutions, predictability of deliveries, and strong commitment along with valuable customer orientation. They differentiate by continuously innovate the strategies, processes, methodologies, business model, to deliver the highest quality and more value. S3 continues to focus on emerging and dominant domain technologies to ensure that we are always geared to offer services to our customers exploiting the latest & most up-todate technologies. Growing Together is their goal is to create S3 as a preferred destination for our employees, customers, and partners. After nearly five years in operation, regardless of the numerous challenges and difficulties, they have built up a strong foundation and environment to enable all of stakeholders to move up to the next level. For the mutual growth they continue to build the foundation of strong and stable partnerships. S3 Corp continues to enhance its capabilities and strengths of experienced and dedicated experts together supported by a modern organization and a strong leadership team. The team at S3 Corp is motivated and ready to join hands with its customers to take on the challenges of future.

6 The core business is providing software outsourcing services. There are three main kinds: Software Application Development Software porting and sustaining Software Application Verification ORGANIZATION STRUCTURE To be a leader of outsourcing services in the Vietnam software Industry, S3 Corp needs to operate within a structure best suited to its purposes. As same as many a large business in Vietnam, S3 Corp tends to divide their organization up into functional areas. Its functions include delivery, operation, human resources (HR), sales and marketing and finance. The chart below shows a hierarchical structure in S3 Corp. Source: Company Organization Chart of presentation of Sunrise Software Solutions Corporation In the picture above, the software delivery department has three layers of hierarchy: Directors, Managers and Engineers. This department takes majority employees in the organization; it is about 90% of total employees. HR & Admin department has two layer of hierarchy from manager to staff, about 5% of total employees, it s same to IT and Finance Departments which is about 5% employees. KEY FIGURES

7 Staffing Source: Company presentation of Sunrise Software Solutions Corporation Profit Source: Company presentation of Sunrise Software Solutions Corporation

8 Problem Statement CHALLENGE Poor coordination among company stakeholders when responding for Request For Proposals (RFP) is the main showstoppers have been faced by S3 Corp since the day they started. At first glance, it may seem like the RFP handling process is running effectively with involving of Sale Department and Technical team. Currently, once sale team receives requirements from customer, they will send it to Technical team. The proposal will be send back to Sale team for modification before it will be sent to customer. If we continue to believe it is nice process, we ll never understand larger question of failed RFP. From sales team s perspective, they complain that technical team makes errors and gives grief every time sale team needs something with short notice. They also blame that the solution is always proposed with much more time than expectation. It was sometimes the reason that sale team lost the deal. Complaints from technical team are similar. The sales team gives them work informally and with little notice and ambiguous customer requests. Unless we change the processes to make Request for Proposal, we continue have the trouble with optimistic estimations by Sale team. The reason may be sale team either think technical team are more productive than it actually is, or they do want keep the competitiveness of solution in order to leverage sales performance. As the result, when the whole success of the company depends on estimates, someone must be blamed when the estimates cannot be reached. Usually the finger is pointed to the people, who could not keep up with the estimates: the technical guys. Consequently, it will create a very unhealthy work environment when technical guys always want to pad the estimates just to keep their jobs safe. Step back then look S3 Corp org. chart, the challenge that they is facing is also the achille heel of functional organizational structure. Because functions are separate from one another, employees may have little understanding of and concern for the specialty areas outside their own functional area. In this case the conflict between sale and delivery department is clearly defined. The narrowness can lead to barriers in communication, cooperation and coordination. Sale department is now developing their own focus rather than a company focus. Sale managers in a functional structure also become focused on their functional area. So, problems in RFP process are seen from one perspective, and individuals of both departments become isolated. The specialization does not give sale manager as well as delivery director a broad perspective on the company or other functional areas. BENEFITS

9 Reduced RFP operational costs by one-half Improved customer service levels Achieved faster, more predictable and reliable resolution of sale requests Overall, S3 Corp would achieve better service levels and cut operational costs, saving the company several hundred thousand dollars per year. The solution must be applied the best practices and IT business models to help companies mitigate risks, gain competitive advantage and improve bottom line results. SOLUTIONS By rethinking our approach to form up one dedicated team which specializes in writing technical solutions and support sale staffs, we can speed up the time to finish a proposal as the needs of Sale team as well as give technical team much more time to finish their job. On the other hand, the sale team should only set up the communication channel between technical team and customers. Then, the project manager will be in charge of proposal planning. He should be involved in the sales meeting and plan the resources required to complete each proposal and set deadlines to ensure work is completed on time and early enough to be quality checked and amendments made. This research will identify and evaluate the factors contributing to the needs of the company in order to find out the answer to above problem in terms of following metrics: 1. Successful RFP / Total of RFP 2. Successful RFP / Accepted RFP 3. Deliverable Proposal / Accepted RFP Alternatives There are couples of alternatives solutions are short list below after having interviewed and discussed with S3 Corp s Business Development Manager. 1. Establish an expert and dedicated team and work under the business development manager 2. Define an efficient and effective process flow between departments: sales & marketing and delivery department 3. Establish and foster R&D department to be part of RFP cycle 4. The current model (status quo)

10 We shall go analysis in detail for each solution to have better evaluation. Metrics and other financial factors are important data and info for final decision. Alternative 1 Establish an expert and dedicated team and work under the Business Development Manager (BDM) (sales & marketing department) As sale team has limited experience and expertise on technical side, they need advice and support from technical expert team, so as assumption; they will request to have a technical team to work under their supervisor. Since the company provides outsourcing services which requires a team with diversified technical skills so at least they need one to three expert members, one for web application, one for mobile application and one for low level system development or one for all. As this team works under BDM s supervisor, the organization chart and process and communication looks simple, team will be directed by Business Development Manager. Team organization chart Process flows

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12 Impacts With this solution, there are couples of impacts which can identify: Impact on overhead. it is increased if allocating such a dedicated team since in the current company, there is not much work for RFP team. Impact on team motivation and team orientation since the characteristics of the department is sociology-orient, if the orientation is not in right path as the technical experts are more prefer to develop their own career to stay in technical expert and therefore could lead to demotivate themselves in terms of promotion plus with the less work and challenge to them. Impact on co-operation between departments, especially the delivery department. If sale team won the RFP, the new project will be initiated by a team. Who know that the solution proposed by the sales team is accepted or understandable from this new team, it could be perfect or not right architect to follow. The conflict is happen. Pros Dedicated team to do proposal, prompt respond to customer request Task focus and team orientation Easy to manage and control Cons Overhead is high for small and medium business Limited in receiving good expertise and experience from delivery team Workload is not high

13 Alternative 2 Define an efficient and effective process flow between departments: sales & marketing and delivery department Compare sales people and project managers, S3 Corp does not want a project managers going out selling and writing bids as same as they doesn t want sales people running their biggest projects. Perhaps it is not fair for some outstanding staffs that step in both sale and project management shoes. However, writing proposal documents is a different type of writing that many internally staff is not familiar with. The point is that sales people are not often the best at planning and managing detail, especially when it relates to project plans so on so forth. In fact, they are often out on the road, visiting clients, managing relationships and don t have time to micro-manage a complex development project even if that project is a written proposal. Moreover, dealing with the detail isn t what drives sales people. So, if you don t have a proposal center behind you, what do you need to do? Small businesses often rely on the can-do, multi-skilled approach and attitude of their staff. On another word, understanding the knowledge area (KA) of each of staffs will be helpful in this case. Playing as a team makes you stronger. Find ways to help your proposals be from a structured, planned team and they will be better. This doesn t need to be a central bid team all the proposal development can be done by staff in their normal jobs. It s just leaving the project management to a professional. Appoint one of your project managers or administrators to be in charge of proposal planning. They should be involved in the weekly sales meeting and plan the resources required to complete each proposal and set deadlines to ensure work is completed on time and early enough to be quality checked and amendments made. Lightweight Proposal Process The first thing S3 Corp need to do is formalize its proposal roll-out process. As you have seen, they are having problems with out-of-control development resulting in proposal that didn t meet market needs. A process that would ensure that the offering definition met the needs of the target market segment and that during development information would flow from the developers to those responsible for implement, marketing, sales, etc., at the appropriate times in order for everyone to be prepared at product launch. Moreover, documenting the process eliminates reinventing the wheel each time the company has new request for proposal. It provides the frame work for a lessons learned session following the completion of a proposal. The proposal process must provide two important things:

14 Basic guidelines to tailor for each proposal Detailed checklist The basic guidelines should be trained to members who possibly join proposal team about these topics: Preparation schedule Detailed instructions/responsibilities Planned strategies/win themes Summary of proposal approach Writing/graphic guidelines Style/format guidelines (may vary according to RFP) Summary outline with a requirements matrix Organization/roles of staff Specific company work flow/communication standards and procedures

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16 Defined Proposal Major Players: Within proposal development, the roles and titles of the team will vary. There may be a large team or a proposal team of one. Proposal Manager: obtains all resources to produce the proposal Proposal Coordinator: supports manager with the development process Proposal Writer/Illustrator: works with the manager/section leader to provide text and graphics illustrating the solution Technical Section Leader: provides the technical information for the solution proposed Past Performance Section Leader: provides the past performance information for the solution proposed Management Section Leader: provide the management information for the solution proposed Pricing Section Leader: provides the cost information for the solution proposed Impact 1: Process change is culture change. Managers and leaders may not realize that they need to change the organization s culture, not just implement new process. Changing the way people think and behave is a lot harder than installing a new tool that runs twice as fast as the old one. It s very easy to achieve a zero return on your investment in process improvement. You simply invest in a process assessment, train the team, write process improvement action plans, and develop new procedures, but the people in the organization never actually change the way they do their business. Impact 2: A significant amount of confusion and conflict over roles and responsibilities between sale managers leading sale department and delivery program director overseeing project managers. Generally, the proposal manager could be a project manager who is not under control of sale manager. So, he has his own perspective on creating a technical solution whereas the sale team need more and more creative, adaptive solutions to exceed customer satisfaction. When the matrix structure is established, the delivery program director take a view that as long as he still had supervisory on his staffs, no decision could be made without his approval. As a result, project managers have limited authority over staff and, therefore, primarily plan and coordinate proposal project. Impact 3:

17 The dual authority of a matrix requires people who are adaptive and comfortable with ambiguity to prevent negative influences to motivation and job satisfaction. They are required strong communication skills and an ability to work in teams. All staff should be immediately trained in human relations training to coping with change, communication, and working in teams. This training focused on the personal and practical staff needs identified in the research literature in order for the organization to be successful in the new matrix structure. Pros: The alternative we are developing was to stop looking at process and the flow of deliverable at milestones and instead look at it as a series of goals and standards to be met. Instead of requiring a market segmentation plan containing specific information in a specific format, we required that sale managers show who the offering would be sold to and what the potential sales were. While it could be in any formation, this information had to meet certain standards, that could change depending on the circumstances (market size, whether the market/channels are already established, size of investment required, which business lines are involved, etc). Proposal Manager (typically a project manager or business analyst) was in put in charge of deciding whether the standards had been met in order to continue. Looking at a process as a series of goals and standards instead of manufacturing steps enabled S3 Corp to better adapt to the changing environment. It kept the team focused on doing what was truly needed, as opposed to what the process said they had to do. Cons: The truth is that any process can be corrupted, and this approach is no different. When you introduce change, the amount of training required will directly increase operation cost. There is an increase workload of management team, project manager. The problem of no free-resource to write proposal is not fixed. Discourage Sale team as they feel that they are losing their power to make final decision on every proposal. Alternative 3 Establish and foster research and development (R&D) department to be part of RFP cycle Currently in S3 Corp, there is no official R&D department, there is no resource pool which targeted to do some specific things related to technical expertise. What they are doing now is utilizing the existing skills and experience team to do the business.

18 As outsourcing services required a range of expertise on Information Technology (IT) domains strategy provided by the company. This is a crucial activity to maintain and develop the existing and new business, it s necessary to form up a R&D team to research the new/emerge technologies and update/develop the existing ones along with the clear strategy and plan. This is definitely, i think, helpful to be utilized and co-operated with sale team in doing proposal phase. What we need is to be very strategic and clear in defining an efficient process flows between R&D and Sale & Marketing department, be clear in roles and responsibilities, who is doing and responsible for what are necessary to well define. Organization chart Process Flows

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20 Pros Has an expert team to provide estimation and solutions proposal New and emerge technologies are up to date by the team Cover most of business request ad R&D team is more closed with services of business strategy on technologies domains Cons Not dedicated team to work on RFP Estimation and solution provided is not practical The co-operation between two departments at same level sometimes got trouble due to the individual aspects The information and business strategy might not well transparent and understood by R&D team Alternative 4 (Status Quo) Alternative 4: Status Quo This is an existing alternative that the problem happens in the Sales and Marketing department where the business development manager (BDM) find difficulty in cooperating with technical experts at the Request For Proposal (RFP) phase. The current organization does not have or be clear define any person or team to delicately co-operate with BDM for proposal development. The current ways they are doing is utilizing the delivery engineering team who are dedicated and work under other supervisor, it s just a borrowed resources on demand which cause by less time support as there is not always resource pools there available and there is no well defined process flow. What they are doing somehow looks like as follows (not all the time): When receiving a RFP, sale team looks at it and have some quick evaluation BDM forwards it to technical team to ask for estimation and solution proposal If it is worth to bid, then the technical team perform an analysis the requirements, organize for QA by themselves, come up with the list of QA if any then send it back to sale team The sale team scan the QA list (if any) and send it to customer for clarification Once getting clarification from client, sale team forward it back to technical team This process is a back and forth procedure until technical team has necessary information Technical team come up with estimation and propose a solution as well as an architect of the system then send it back to sale team

21 sale team scans and works on price strategy, complete proposal and deliver to customer The process flow looks like this: From that, we ve figured some main things are: There is no clear or written process flows defined for this co-operation Not clear roles and responsibilities for sales and delivery team

22 BDM didn t understand well what is the request before forwarding the RFP No official meeting between the stakeholders Technical team was not involved to sale process for Q&A discussion No standard or well forms templates defined for each of business domain No expertise team to review the estimation and solution for final proposal No retrospective review for better improvement for a long time This definitely impact to the performance of sales team as well as time schedule and quality output from delivery team. We should look at the historical data in 2011 base on the following metrics which is necessary to evaluate the status quo for Sales department 1. Successful RFP / Total of RFP: 7/38 2. Successful RFP / Accepted RFP: 7/35 3. Deliverable Proposal / Accepted RFP: 35/35 4. Average cost per successful Proposal: 80K USD The result from historical data shows the inefficiency in this process, the low number of RFP success is not determined and have appropriate actions so far. Conclusion From the alternatives analysis result, no matter which one is the best, but which one is more efficient and effective to apply to current organization. It s about the process, the co-operation with roles and responsibilities and transparent information between departments. Comparing to the status quo and other alternatives, the second one Define an efficient and effective process flow between departments: sales & marketing and delivery department is best fit and apply to S3 Corp. S3 Corp should adopt a matrix structure like for part of departments. Especially, Sales & Marketing, Delivery and R&D department. This one is often referred to as the project team structure. The impetus for these kinds of teams that are so pervasive in organizations today is similar to what drove many to create the matrix form in the first place a business need to be more nimble and to move quickly, to get people with different disciplines to work effectively together, and to get around the issues of hierarchy. The matrix structure like is not an alternative to functional management but works alongside it. In this approach, team leaders manage specific tasks and projects. Each team will consist of members from different departments, each with their own specialisms and expertise related to the project. It takes employees out of their usual functional areas to work with other employees with different expertise and specialisms. This ensures the project has all the skills it needs to achieve its target. It also means the employees may benefit from each other s abilities.

23 The RFP team should only form for a short period of time. They disband when their duties have been completed and the team members are redeployed/continues on the current or other projects. Other teams have a longer or sometimes permanent remit end of document