The case study reviewed in this analysis refers to SleepSmart, a retail company distributing bed and bedding products to consumers. The company itself suffers from an ongoing lack of focus from a technology standpoint; readers are introduced to the study from the perspective of Greg Danson, the chief information officer of SleepSmart and Stan Bailey, the chief architect (ultimately the responsible mind behind the SleepSmart Strategic Technology Alliance). A crucial element of the case study emphasizes the alignment of information technology with long term goals of the business to ensure confidence with both investors and consumers alike.
This report will concern itself with planning around the scenario and the likely outcomes of such actions in the long term, for better or worse. As a small business on the rise SleepSmart has come a long way to its current position as a leader in bed and bedding items. As the years have gone by it can be said that SleepSmart has acquired a great sense of business ethics, albeit for one area that they have neglected terribly, their potential for the use of technology in day to day business operations.
It can be said this was a result of the company focusing its attention to everything but the effective use of their IT business group, highlighted by the attitude of senior management towards recommendations provided by both the CIO and Chief Architect (Stan Bailey). Initially the issues cited in the study involved the mismanagement and neglect of information systems used in different business groups, most importantly each system was not effectively communicating between each other.
This not only reduced confidence from consumers due to the conflicting information provided from each system’s output, but inevitably planted the seed of doubt in investors’ minds consequentially leading to a downturn in SleepSmart’s shares. Impartial analysis of the company from leading financial institutions also revealed this was a proverbial chink in SleepSmart’s armour which could lead to their eventual downfall; it was apparent that the technology present was out of date and required immediate attention.
Once the board of directors’ attention was caught by the issue SleepSmart’s purse strings were open to their CIO Greg Danson and his department to revise their current technology infrastructure within three years. The IT department’s focus would then lie on updating each business group’s systems to current technology standards and succinct use of information across the company; as a response to these demands Stan Bailey, the chief architect had opted not to outsource any of the work.
Instead his approach involved getting several IT vendors to band together and collaborate in order to formulate a unique blueprint with the allure of future business with SleepSmart. This would be known as the SleepSmart Strategic Technology Alliance (SSTA), an important aspect of the case study as many of these IT vendors had also been rivals in their own respective market; this also left Stan as the point of contact between SleepSmart and the SSTA.
Initially the SSTA appeared to be a great success, they had garnered the attention of the public with awards for innovation and excellence, and this was short lived as figures indicated that SleepSmart’s revenues were declining. This was an immediate response to the board of directors’ bottom line approach of dealing with their company; they had all been predisposed to thinking of their technology as an auxiliary utility rather than embracing it as a potential competitive advantage.
Splashing money on technology will not always yield results unless an alignment exists between the technology blueprint and long term business goals; since there was no support from any other executive of the business there is only so much the IT business group can do alone to avert this persistent problem. Unfortunately this long standing notion amongst the board that IT appears to be more of a waste of time and resources than an opportunity for change and capitalization of strengths across the business is a major issue when switching from a bottom line to top line approach.
Co-operation between the IT strategy and the business strategy is a fundamental step towards aligning the business for top-line growth. As such the relationship between the architect and senior management must be open and unbiased for the best results to be yielded. The SSTA has a glaring flaw in that vendors involved with this venture happen to be rivals. Whilst this incites innovation and may have been a great incentive during the business’ focus on the bottom line figures, competition is inevitable.
Another can of worms has been inherently opened through the collaboration of these vendors by making them aware of each other’s presence during the venture. This can cause a rift when attempting to negotiate future deals as vendors start to side with each other during long term decision making. To prevent this issue a thorough analysis of each vendors offer must be taken and contrasted against each other. Agreeing to have one vendor handle SleepSmart’s technological infrastructure for the next few years is understandably an approach with fewer adverse side-effects.
Coupling this approach with outsourcing the majority of this work off shore will also reduce costs providing the board with the benefit of positive figures at the bottom line (enhancing their perspective of IT additionally) as well as allowing the majority of the in house IT resources to focus on top line tasks such as marketing SleepSmart’s products and sales online efficiently, this is because an inherent benefit of outsourcing is re-deployment of your resources to greater effect.
In fact, since outsourcing provides the IT department with an array of specialists on hand, the business will essentially be able to cut costs by focusing their off shore resources on repetitious operations (or as they see fit). This may potentially be a problem if the business relies too heavily on outsourcing their work, due to the lack of engagement from internal resources which could eventually be made redundant. To explain, a bottom line approach will result in the business attempting to cover expenses rather than focus on growth.
This is an approach which limits the financial strength of the company and will in effect create dives in their shares. For SleepSmart to succeed it requires effective management between both bottom line and top line approaches to take advantage of the economy at the right time. Conclusively, SleepSmart is in a position to re-invent and sell itself in the market to greater effect should it choose to revise its approach to IT. Executives must understand that for SleepSmart to benefit, technology needs to be embraced as an asset to the business, rather than a blunt instrument used to provide short term gains.
Courtney from Study Moose
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