Creating a Process-Driven Organization at Agcredit Essay
Background AgCredit, a financial institution focusing on agribusiness, is at a crossroads after an effort of three months of planning. Kate Longair is orchestrating critical restructuring in the IT system to support the company’s growth and operations. The current IT system lacks integrity and support from the many leaders and users in the organization. Project delays, bad information, customer complaints and managing human capital are contributors to the current environment. Kate faces a lack of time and appropriation of talent from the current organizational structure.
Kate must form a team, tackle multiple challenges and develop a path to achieve systems integration. The Structure Silos and barriers within organizations are often a result of employee comfort and security within their own department or specialty. Greater success comes from breaking down these barriers, sharing information and working as a team for a unified vision or goal. Decentralized structures can create control issues amongst business units, where managers feel they must own an IT function in order to effectively get the results they desire.
This also may lead to the purchase and design of incompatible systems within the organization. It may work for the particular area, but not for the entire company. A centralized IT structure would best meet AgCredit’s future transformation. A centralized structure supports a greater chance for more continuity and collaboration across all divisions. In contrast to the decentralized structure that AgCredit has experienced, the centralized structure should provide increased communication, leading to a greater sharing of knowledge.
This will further develop an understanding of the business as a whole and when issues arise, all areas can be alerted and involved in the solution. As a result, countermeasures can be addressed quickly and effectively, instead of recurring in separate areas. Under a centralized structure, the model should include a single Chief Information Officer, who reports to the CEO, to oversee all divisions. Functional Vice Presidents would support the CIO. The Vice Presidents would be accountable for their respective areas representing the major business functionalities.
Together AgCredit’s Chief Officers could define a goal and vision to lead the organization and eliminate competition between divisions. Project Selection Project selection is critical to any company. The use of funds and investment capital along with managing human capital is vital and should not be wasted. AgCredit’s past situation led to poor project selection supporting only the desires of independent divisions and failure to support the needs of the entire organization. By developing a Project Selection Committee, co-chaired by the CEO and CIO, they could avoid divisional issues.
The committee should include members from each division and not restrict participants to IT employees only. A cross-functional group would better represent the needs of the organization and support the direction of the business. It is vital that those serving on the committee understand the key business issues and vision of the company in order for the company to be successful with implementation. Projects under evaluation should align directly with the vision and goals that include both short-term and long-term plans.
The committee should develop and agree to standardized criteria, which all proposals must meet, at a minimum. Prioritizing potential projects would lead to developing a clear plan and allocation of proper resources. The meetings should give every member a chance to present and voice their concerns. The Case Paul Manley must get buy-in from the executive team at AgCredit if his case for the Service Oriented Architecture is to be successful. This starts by earning the support from the CEO. Buy-in from the top is key to any successful change in an organization.
The best outcome is when everyone involved understands, accepts and supports the change. The most direct approach for Paul to persuade the CEO and executive team is to expose the gaps of the current systems and the cost of maintaining this course. This should be coupled with the positive ideas and best practices from each division. The use of multiple information systems in the past has proven to create problems with data integrity, inefficient integration across divisions and costly processes. IT support, upgrades and replacement of multiple systems is a key issue of the current decentralized structure.
Often a platform or software application has the limitations of proprietary components or code. This eventually leads to additional cost due to specialization or scraping the entire system when modifications or upgrades are required. The Service Oriented Architecture (SOA) uses open standards that should reduce long-term costs, allow more flexibility and make projects manageable across the organization. SOA provides greater business flexibility through its use of web based applications. It will enhance IT services while reducing the cost in hardware and software found in proprietary systems.
SOA can help AgCredit respond more quickly and cost-effectively to changing business conditions. In some instances, AgCredit can use existing IT platforms that are found to be best practices within the organization to deliver services via the web. This is accomplished through the flexibility and openness of web code designed to move through different operating systems and hardware. Promoting SOA should encourage divisions to create services that other areas will use. Eventually, everyone in the organization should be aware of the goals and expectations once the course receives support from the executive team.
Internal Capabilities A single master data warehouse, the ability to mine the data and the benefits of an integrated IT system are all improvements, but AgCredit must also tackle the challenge of developing an IT department to support the future business architecture. Developing a centralized IT structure with a CIO and supporting functional Vice President positions is only part of the framework. AgCredit faces issues with current IT staff and the roles they play. For example, according to Dick Schader, Samantha Secord sounds like she could compliment the organization, but is currently in the wrong role.
To fully utilize the talent at AgCredit, a skills inventory could be used. This would address who is best suited for the right roles and where training may need to be applied to establish the skill level needed at AgCredit. The Transformation The introduction of SOA has many benefits, however the open sharing of data and programs can sometimes create trust issues across teams, and hence IT and SOA Governance must be addressed. This can become complex and very detailed. Going forward, communication and documentation would be shared across the organization.
A hardware and software procurement policy along with standards, must be developed to support the purchasing and managing of components and licenses. AgCredit must ensure compliance with regulations and risk management. User access restrictions should be implemented and enforced. Providing appropriate levels of security is a challenge related to implementing SOA. Security models built into an application may no longer suffice when an application exposes its capabilities as services that can be used by other applications.
Therefore, a concerted effort should include understanding the needs of the areas and testing the system on smaller scales before the rollout. Incremental changes on a small scale can also build trust from the users and the organization and help promote further change and support for a new system. Finally, a key to any successful implementation is the appropriate follow up. AgCredit must not assume everything is working properly once implementation is complete. Processes must continue to be evaluated and issues must be addressed promptly.