Introduction
With the economic growth and the increasing competitive pressure, companies need to deal more today with their business processes and adapt its structure accordingly. Business process redesign or business process reengineering aims to streamline the various processes and hierarchies of a company in regards of “lean production” and “lean management”. BPR means analyze the design of the operational and organizational structure of enterprises in terms of their orientation towards business processes, to question and discover deficiencies immediately to deal with organizational transformation (Turban et al. , 2010).
Elemica is sourcing its entire IT infrastructure within the company, as well as all of the development of the software, testing, rollout, maintenance, etc. Below is a set of recommendations that needs to be considered when Elemica extends the business into new industries and countries. With this change also the business processes need to be adapted. Elemica is not as flexible as required for the new endeavor, new service provisioning have a long lead time and for the clients it means a long time-to-market span with the opportunities Elemica services are promising. Every industry is different to each other with different requirements and needs, Elemica need to accommodate this and review the business processes for this industry accordingly.
Outsourcing of ICT Infrastructure
Expanding the business is in most cases connected with monetary investments, hence a risk that needs to be reviewed carefully. It is recommended for Elemica to search a global IT partner who is present in a lot of countries, reliable, trustful and capable to fulfill the requirements of Elemica. It would not be recommended just to host outsourcing as this would not bring too much benefit in terms of flexibility, time-to-market and financially. The overhead would be still the same, the maintenance and upgrades would still form a major part of the work performed by the IT staff of Elemica. Elemica should consider getting Infrastructure as a Service (IaaS) or even Software as a Service (SaaS) from the provider.
It means Elemica can concentrate on the core business of its IT, the development of the software and the integration with the clients. It is recommended that part of the products like the trading hub is converted to run on a cloud network. Cloud computing brings a lot of advantages such as deployment on a grid without changing any code, scalability of applications from a fraction of a server up to the whole grid, handling hardware failures automatically without losing data, adding and removing servers and storage without disrupting applications. It brings also a lot of flexibility in terms of “you get what you need and you pay what you get”. If more or less resources are needed, it can be added or removed “on the fly” and within several hours.
Modern management systems allow measuring the deployment footprint at all time and respectively the costs are charged as per what is really used. Since Elemica is fostering the concept of community, a community cloud per industry is recommended to separate the markets. An IT manufactory is not interested to see how many tons of vinyl acetate is being requested, nor isn’t the chemical industry interested to know transistors are short on market. Community clouds can run in an outsourced model, but they are dedicated for the business purpose Elemica is designing.
IT staffing requirements
In addition to the ICT Infrastructure, also the development of the products should be considered for outsourcing. Keeping the knowledge within the ompany and adapting the business processes accordingly, development in low cost countries such as India is substantially bringing down the cost in that area. It needs more controls to coordinate the outsourced development, but brings also more flexibility in case more developers are required for a short term. Every system and application needs support and this sometimes more than one can think.
Basic incident management task, change management tasks, reconciliation and deployment task can be defined as internal IT services with KPI’s and outsourced to a low cost country. For complicated, high risk and complex tasks, the internal IT resources can take these. This is making the job more attractive and keeps the knowledge within the company. They will become so called subject matter experts (SME).
This will reduce the turnover of staff and motivate them to work harder. IT experts are used to be actively engaged in the global growth of the company when IT systems and applications become more complex.
Hardware, Software and Security
Software needs to be adapted for other industries as they might follow different processes. Experts from these industries are needed as this is lacking within Elemica. The strategy with the modular components should be kept, and it is recommended to force the ability for companies to start small but have the possibility to move to a full blown product suite managed by Elemica. If clients don’t have an ERP system or any of the other systems such as procurement, print, etc. or if they have issues with their own ones, clients have to be able to get these services easily from Elemica.
Again, outsourcing as SaaS should be considered as an offering to the clients. Clients should be able to order these services online with none or low interaction required from Elemica. Real mobile computing has just started and it is wise to invest in this area as well. Software has to be re-written to run as an app on mobile devices such as smartphones and tablet pc’s. Elemica must aim to keep the services available at all time. Outages and data loss will damage the image of the company and lead to financial losses as clients are reliant on the services.
Hence Elemica needs a disaster recovery plan and a business continuity plan. Both must also be part of the SLA’s that Elemica has with its clients. Services can have scheduled downtimes (greenzones) for normal maintenance and upgrade reasons, these have to be written down and agreed in the SLA’s as well. Security is one of the highest priorities Elemica needs to take care of. Common tools and software such as Firewall protection, data encryption, SSL, IP tunneling, virus scanner must be standard and maintained very carefully on a daily basis. Cloud computing brings a new issue of security as normally it is not known where the application is running.
Intelligent new software is required to cope with this issue, this must go into the vendor selection process for outsourcing. Having the security under control is increasing the reliability of the systems and the company, hence increasing the trust and good relationship with the clients.
International legal and ethical issues
Understanding the political and legal forces in the countries a business operates, regardless whether a brick-and-mortar or e-Business model is employed, is another crucial element in International Business (Wild, Wild & Han 2010). The political environment may or may not be favorable for the business, as the domestic lobbying can be a strong hurdle to overcome for foreign investors.
Equally, the legislation may not offer sufficient protection for investors. From the perspective of Elemica, interested in introducing technology into the country, there are some fundamental aspects that need to be observed. Among others, whether business processes can be serviced outside the country or imported; how countries fosters the private sector and the protection of industrial property rights; and how are the bilateral relationships between the country Elemica is operating from and the countries they would like to deal with.
List of references
- Bennis W. G. 1989, Journal of Organizational Change Management, MCP UP Ltd.
- R, Trueman, M, and Ahmed, A. M. 2002, A cross-industry review of B2B critical success factors, “Electronic Networking applications and Policy”, Volume 12, Number 2, 2002, pp. 110-123, Emerald Insight Elemica. com, 2011, viewed 14 May 2011, <http://www. elemica. com>
- Farhoomand, A 2005, Managing (e)Business Transformation: A Global Perspective, Palgrave Mcmillan, New York, USA
- Hanson, WA and Kalyanam K 2007, Internet Marketing & e-Commerce, Thomson South-Western, USA Indeed. com, 2011, viewed 15 may 2011, <http://www. indeed. com/cmp/Elemica>
- Javalgi, RG, GJ, Radulovich, LP, Pendleton, G & Scherer, RF 2005, Sustainable competitive advantage of Internet firms: A strategic framework and implications for global marketers, “International Marketing Review”, vol. 22, issue 6, pp. 658-672,
