Hefty Hardware Case Study
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Hefty hardware store is one of the leading hardware stores in USA with 1000 stores. The business management is planning on developing Savvy stores to become first store in Northern America to integrate multimedia and digital information into each of its 1000 stores. Success of the company was built on its excellent supply chain logistics and the assortment of products in its stores. IT played a huge role in it. Company is planning on developing strategies like adopting some of the European initiatives like self service to improve check out, multi channel access to information inside the stores to enable browsing an extended product base and better support sales associates assisting customers, multimedia to engage customers with extended product knowledge. To develop new savvy store strategy IT would be very critical to make sure products were available when costumers wanted them and every store associate has proper information to answer customer questions. In order to efficiently achieve these goals business and IT departments should work collectively and collaboratively. In this case study the business and IT department are having problems like communication gap and are not working collaboratively towards the goal. (Smith & MCKeen, 2013). PROBLEMS
These are some of the problems listed in this case study: VP of retail marketing doesn’t understand how to communicate with IT department. She has a problem with IT jargon language. Though she has thorough knowledge of business, she is unable to communicate the needs of business to the IT people. She is not sure about the IT processes and reviews and seriously doubts about the completion of project. IT people are discussing their technical problems with business instead of coming up with ideas to fulfill business needs. IT account manager, Jenny Henderson seems to understand the business according to COO Glen Vogel, but he is not sure why IT people don’t even seem to understand the basic business functions. He thinks there is a serious communication problem between business and IT people. He admits to himself that he won’t communicate to IT people by himself unless it’s completely unavoidable and normally assigns this task to his subordinates. If such crucial person cannot communicate with IT people then how effectively can junior staff handle it?
Delivery of technology is taking so much time. Millions of dollars are being spent on IT. IT people should take priorities from business people for next project releases rather deciding project priorities themselves. Time had been spent working out new strategy using information and multimedia to improve customer experience in variety of ways and to make it more consistent throughout the stores. They had to figure out how to execute it and IT was a key player in this, but business and IT are having problem communicating with each other. Efforts to make strategies to work were not being made. IT chief architect explains how the R&D meeting between the IT and business went wrong. Business people rejected to make any investment in mobile app technology because they couldn’t really understand how that technology could help them gain edge over the competitors. IT people were communicating to non IT people in technical terms during meetings and people were unable to understand what they were trying to accomplish.
Company had been changing CIO for every couple of years and before a CIO could get acquainted with the working responsibilities they were being changed. It is likely to change the CIO before they develop a sense of responsibility and the major issues rather than being resolved were used to put blame on IT. COO comes up with a plan to take major IT people with him to field trip to one of the Hefty stores, so that they could understand better about the needs of business and stores. CIO is planning on excluding the major people from trip and plans on sending only IT relationship manger along with a junior intern. IT people though might be busy working on various project should make time to listen and understand business needs. CIM project best explains the lack of seriousness regarding working collaboratively. The infighting between the client divisions had resulted in dragging the project and inevitable spending of extra money for that project. This example explains the misunderstanding between the internal divisions. IT & BUSINESS ALIGNMENT
“IT and business alignment is the correspondence between the business objectives and the Information Technology (IT) requirements of an enterprise.” (Definition – Business IT alignment). These two key factors seems to contradict in this case, it is agreed by the experts that, alignment between these two departments is vital for success of the company. “Business-IT alignment involves optimizing communication between executives who make the business decisions and IT managers who oversee the technical operations. The implementations of flexible business plans and IT architectures, as well as effective cost allocations, are critical components of any business-IT alignment effort”. (Definition – Business and IT alignment, WhatIs.com).
Fig 1: IT and Business Alignment – Holy Grail or Fools Gold? Owen McCall CHALLENGES IN IT & BUSINESS ALIGNMENT
1) Many IT decisions were taken by the business people who do not have any knowledge on the technology in the first hand. This business people include higher officials like CEO, COO and CFO. They expect technology to boost up business with various software solutions. Hence they are willing to spend millions of dollars for this technology. Sometimes though this really helps the business often the gains doesn’t justify the money being spent. 2) Many companies are led by IT organizations that are technology driven but do not have basic understanding of how a business runs. Without knowing the needs of business they cannot translate business needs into technology solutions. 3) Often who run the business and who run the technology cannot come into terms of alignment. In most cases solution for this problem can be found by the CIO who knows both business and technology. (Art Jahnke Jun 1, 2004). IMPROVING IT & BUSINESS ALIGNMENT
In order to achieve the IT and business alignment companies must integrate the IT and business departments to achieve mutual co-operation, trust and understanding between them. IT and business alignment can be improved in following ways: CHANGING VOCABULARY: Talking about technology in technical terms to non technical people doesn’t help anyone. It is important to learn to replace technical terms with normal words which normal business people can understand. Conversations should be tied to business goals and a business frame of reference should be used. If this was implemented by the chief IT architect in their R&D meeting with business people regarding their mobile app technology, explain how the investment could really help boost the business their funding to that technology wouldn’t have been rejected by the business owners. (Risa Fogel 02-25-2014)
CREATE BUSINESS RELATIONSHIP MANAGERS: In order to help the budding relationship between the IT and business many organizations are hiring business facing roles that can help establishing and maintaining relations between IT and business. The role of business managers and business analysts is to balance the communication of business needs and technology with clarity between these two departments. These roles need employees with knowledge of both business and technology. In the Hefty hardware case study Jenny seems to be the only person who can do this.
If she was given enough authority to communicate well between the heads of IT and business people it could have really helped the company. (Risa Fogel 02-25-2014). ESTABLISH GOVERNANCE PROCESS: An important credential to good communication is transparency. Implementing governance processes provide visibility into decision making in both the departments. “Good governance takes decision away from IT and puts them in the hands of those who have a vested interest in of the initiatives and projects”. (Risa Fogel, 02-25-2014). If this governance was established in case of Hefty hardware to check the communication and collaboration between the business and IT there wouldn’t have been as many problems.
Fig 2:360-Degree Business & Technology Alignment Assessment.
AVOIDING COMMUNICATION BREAKDOWNS: Setting up a system of communication is very important in maintaining an effective IT & Business alignment. The IT department needs to listen to business people and let them set the priorities for the project. Similarly the business people should keep its expectations from IT realistic and has to accept the knowledge and experience IT has to offer. Communicating throughout the process helps clear any misconceptions regarding the project (Leslie Kramer, 9-23-2005) CIO: CIO is a crucial person in any organization and he is the key person who can keep IT and business aligned. He is the person, who with his knowledge and ability can contribute towards meeting organizational goals (Risa Fogel 02-25-2014). Maintaining a consistent CIO is crucial to obtain maximum results from him. In case of Hefty Hardware, CIO is changed for every couple of years. In this case before CIO gets acquainted with the working conditions and the business needs he is getting changed. This is the reason CIO doesn’t seem to have knowledge of the business needs, but he still seems to be concerned about the disturbed IT and Business alignment in the company. ANALYSIS:
Hefty hardware case presents tow major problems. Which are: 1. Communication gap between business and IT
2. Failure to work collaboratively
BRIDGING COMMUNICATION GAP BETWEEN BUSINESS & IT
Business and IT people lack communication. Even COO of the business is not communicating with IT people until it’s absolutely necessary. If such a crucial person in a company cannot lead communication then how can his subordinates are expected to effectively deliver or receive messages? This should be avoided a good communication is key to better understanding of mutual needs. Business people instead of having fights between internal groups should get their priorities straight and reciprocate them with the IT people. IT people should be made part of their strategic planning and when IT people come with some better technological ideas for competitive edge over the competitors their ideas should be taken into consideration just like mobile app technology.
IT people should speak common words which business people can understand in their meetings. They should speak in terms of how a particular investment in technological advancement can benefit the company, rather than talking technically how it really works. They should strive to understand the demands of business and work accordingly; otherwise even a greatest innovation can end up being useless. IT account manager should be given more importance to her role. She should be made a major primary contact with business as she can understand both business and IT. WORKING COLLABORATIVELY
Business and IT should work collaboratively to achieve the goal of savvy store. More innovative steps like taking IT people to the store long with business people should be taken as this can result in better understanding of business needs by IT people. More employees like business analysts who can both understand the business and convey the very same needs to the IT in their own technical terms should be hired. These business analysts can educate the IT people how business basically operates. IT account manager should be given more importance to her role. She should be made reporting officer for the IT managers.
As she could better understand the business needs, she can convey the same to managers who in turn can plan and execute their projects as per business needs. Business people may have greatest strategies for better business and IT can have world class technology people, but without putting both of them together business can never be successful. Cutting edge technology and business strategies should be developed according to business needs and their effective partnership helps collaboratively reach the goals and thus gain advantage over competitors. DISCUSSION QUESTIONS
1. How effective is the partnership between IT and the business at Hefty Hardware? Identify the shortcomings of both IT and the business. There are many issues between the IT and business at Hefty Hardware. Business people are not able to understand the IT processes and issues. At the same time IT people do not have basic knowledge of how the business actually works. The partnership is basically lacking strong information systems strategy. Business people are unable to reciprocate their business needs with IT. IT is unable to understand how the business works and what the business actually needs, this leads to delayed delivery of projects. Being unable to explain how the investment in technological advancement can benefit the business, IT investment proposals are being rejected by business owners and thus company is losing upper hand over the competitors in technology.
Without effective communication and working collaboratively with IT, business can never implement their business strategies and their goal of savvy stores can never be fulfilled. 2. Create a plan for how IT and the business can work collaboratively to deliver the Savvy Store program successfully. IT people should work together with business people to better understand the needs of business. They should encourage ideas like field trip with business people as this helps develop better strategies along with better understanding. Business should include IT people into their strategic meetings as early as possible because without their technology business strategies tend to fail. IT account manager should be made the primary key contact between IT and business. She can understand business better than any others in IT. Her ideas should be taken into consideration while planning strategies in both business and IT.
The leading people from both business and IT like VP, CIO, COO, IT account manger should have regular routine meetings to better communicate the mutual needs and develop better strategic plans for business. Business owners should get their priorities straight and convey the same to IT people without any tangling. At the same time IT people should leave their jargons and communicate in layman terms with business people while discussing about technology and projects. By following the above measures business and IT can work effectively and collaboratively to reach the goal of savvy stores and business improvement. CONCLUSION
Hefty Hardware is having two major issues, which include lack of proper communication between IT and business departments, issues working collaboratively towards the goal. By implementing solutions like bridging the gap between the IT and business, working collaboratively, and by reestablishing the IT and business alignment the company can achieve its business goals like savvy store. A company may have the greatest vision, but without finding effective ways to make business and IT, to work together strategic goals may not be achieved and even what seems like brilliant ideas can render to be useless.
Business Technology Alignment Group LLC. (nd )360-Degree Business & Technology Alignment Assessment, Retrieved from, http://www.btag.com/360.html
Fogel, Risa. 02-25-2014, Three Steps to Improving Business – IT Alignment, CIO Insight, Retrieved from http://www.cioinsight.com/it-management/expert-voices/three-steps-to-improving-business-it-alignment.html Jahnke Art Jun 1, 2004, Sound off – Why is Business and IT alignment so Difficult, CIO, Retrieved from, http://www.cio.com/article/2439612/business-alignment/sound-off—why-is-business-it-alignment-so-difficult-.html. Kramer Leslie, 9-23-2005, CIO Challenge – IT/Business Alignment, Information week Wall Street and Technology, Retrieved from, http://www.wallstreetandtech.com/cio-challenge—it-business-alignment/d/d-id/1257282? McCall, Owen. (nd) IT and Business Alignment – Holy Grail or Fools Gold?, Retrieved from,
http://www.owenmccall.com/it-and-business-alignment-holly-grail-or-fools-gold/ Smith, H. A., & McKeen. (2013). Delivering Business Value with IT at Hefty Hardware Retrieved from, IST 7100 IT policy and strategy Wilmington University (pp. 327-330). United States: 1 Pearson Learning Solutions.