Rich Con Steel: A case on IT Implementation (an HBR case)

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Rich Con Steel: A case on IT Implementation (an HBR case)

Rich Con Steel: A case on IT Implementation (an HBR case)

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  • 1. Rich-Con Steel : A case on Implementing IT Solution Rich Con Steel company was founded in 1857 in Kansas city. It distributes hardware and did no manufacturing or processing beyond cutting sheet metal. Later company expanded its operations by developing deep expertise in steel rolling or bending beams into desired configurations Marty Sawyer , an IT savvy manager who recently took the role of President of company from her father. She felt existing IT infrastructure as outdated and needs to be replaced. Disclaimer: Images are for representation purpose only and they do not represent any person or place in actual
  • 2. Status Quo of IT infrastructure
    • A legacy financial and inventory management software running on IBM System 3 computers
    • A reliable software to keep track of material and update general ledger.
    • System did not have the ability to keep track of orders. Orders were hand written
    • System could not generate the historical information as it lacked database. Custom programming required to extract data.
    • Cumbersome maintenance as spare parts were not available for the antiquated system.
  • 3. Marty’s Vision
    • Single Change Agent
    • Incapable of order management.
    • Incapable of generating historical information.
    • High failure frequency
    • Costly maintenance
    • Automated Order management capability.
    • Trend analysis capability.
    • Low maintenance cost
  • 4. Marty’s Selection Strategy
    • In house development:
    • Wasn’t working too many bugs.
    • Completion time indefinite.
    • Standard Package:
    • Catered most of unique requirements of steel industry.
    • Huge Order handling capability
    • Facility to Customize
    • Proven at other sites of similar
    • industry
    • GAP:
    • No clear goals were defined
    • Package did not fulfilled all the requirements specific to Rich-Con Steel company. Not suitable for Service centre
    • Software required multiple configuration
    • No maintenance contract
  • 5. Marty’s Implementation Process
    • Incomplete customization.
    • No User testing. Direct Implementation
    • Inadequate training to users
    • No standard methodology of Implementation
    • IT Vendor’s approach reactive
    • President of company as single change agent
    • Company mentally and emotionally not prepared for change. A too BIG transition for its people.
  • 6. Final Outcome !! Incorrect billing Incorrect Shipping Other management Issues Lost back orders Internal mess Employees sidestepping new System Customer Complaints Incorrect Invoicing
  • 7. Ideal Approach of Implementation
    • Firm Strategy:
    • Identify firms objective
    • Avoid cost thrift approach
    • Prepare people for upcoming change .
    • Business Process:
    • Hire external consultant to assess existing business process and IT infrastructure and map it with desired states
    • Design Implementation road map
    • IT Infrastructure:
    • Seek advice from IT experts on best available solution.
    • External Environment:
    • Get feedback from other similar industries i.e. Steel Service Centre
    • Organization Structure:
    • Create specific team and identify a leader (CIO) to implement IT solution.
    • President of company to play role of change management leader and not a role of change implementation leader
    • Culture:
    • Select IT vendor who have experience of implementing the solution in similar industry
  • 8. Ideal Approach of Implementation
    • A smoother transition.
    • Customize the software as per Rich-Con Steel company’s need.
    • Provide adequate trainings to users
    • Adequate amount of testing before implementation
    • A backup plan in case of failure
    • Ensure a proper maintenance and support contract
    • Optimum use of IT infrastructure to gain business advantage
  • 9. Rescuing Marty from existing quagmire
    • Go back to original legacy environment to restore day to day operations
    • As challenges of legacy environment still hold true, adopt following strategy to start with solution finding and implementation:
      • Hire an IT consultant to work in tandem with the vendor and IT team.
      • Marty Sawyer should limit her role a change management leader
      • CIO and IT team to take care of Implementation
      • Have planned User Acceptance Test and dry runs.
      • Bring Automated/integrated solution in practice
      • Ensure proper support contract is available
      • Phase out legacy system once all intended requirements of the new system are established
  • 10.
    • Group Member:
    • Abhishek Soni 004
    • Amit Kumar 006
    • Anuj Jain 010
    • Himadri Singha 019
    • Mrigank S. Adhikary 030