Coke Freestyle

Now here is a win-win for both the consumer and the company. The Coca Cola company will make a huge innovation in soft drink dispensers which benefits both the consumer and the company. No longer will you have to hope that your drink of choice will be one of the 8 to10 flavors chosen, the new machine will dispense up to 130 different flavors. This extra capacity comes from the use of some super concentrated syrups used in the various flavors allowing more syrups to be contained in the dispenser machine.

This is accomplished by mixing flavors from 30 different on the spot per the consumers selection. According to the article in Information Week, this is the first time that Coke’s engineering and information technology teams have worked together. Kind of odd for an organization that has been around well over 100 years.

The new dispensers are called Freestyle and are equipped with a huge amount of technology and communications which quickly send sales information back to the corporate intelligence center. The machines include an RFID reader, a wireless Verizon card, SAP point of sale management, middle-ware from Tibco, as well as other various CRM and SAP systems. Put all this together and you have a huge data being fed back to the corporate servers.

The data from this new machine will give instant feedback to the marketers and advertising execs about what works and what doesn’t, what is a hit, and what is a miss. This will save a ton of money in taste tests, advertising, and focus groups.

I don’t’ know the specifics, but assume that the machines can be programmed from the central office with new mixtures. Imagine you run an advertisement in a limited area, instantly offering the drink in the vending machines in that area. You send the new programmed drink to the vending machines in that area and see if the advertisement had the effect as desired or if the new flavor is not what the public wants. This type of targeted advertisement and marketing is very valuable. Additionally, with these elements built into the dispenser, I can see an easy integration of local advertising through the Verizon network, discounts, new product rollouts all on the smartphones which will soon be the norm.

What a great time to be alive!!

References:

Bob Evans. (June 16, 2009). Global CIO: Six Lessons CIOs Must Learn From Coke's Dazzling Innovation. Retrieved June 20, 2009, from http://www.informationweek.com/shared/printableArticle.jhtml;jsessionid=0DO3SMRGYEYUSQSNDLOSKH0CJUNN2JVN?articleID=217801282

RFID Weblog. (June 9, 2009). Coke Redefines Business Intelligence with RFID based Freestyle Drink Dispenser. Retrieved June 20, 2009, from http://www.rfid-weblog.com/50226711/coke_redefines_business_intelligence_with_rfid_based_freestyle_drink_dispenser.php

Nestle and the All-For-One

2. What type of business and systems strategy did Nestle adopt? Was this strategy appropriate for Nestle business model?

Nestle adopted a multinational business strategy and model. This is the correct business model for this corporation. Nestle is a world brand and is the largest food and beverage company in the world. This is the kind of company that this a multinational strategy is designed around. They have operate across government and cultural lines requiring an understanding of local traditions and cultures in order to operate efficiently. The multinational strategy allows for the sales and marketing to be customized however it centralizes the internal business and reporting practices to ensure consistency to allow fair comparisons across business units.

3. What management, organization, and technology challenges did Nestle have to deal with to standardize it’s business processes and systems?

Nestle had to deal with many of the usual problems when trying to make a massive change. Senior management often doesn’t see the benefit and are not willing promoters of the change which the employees can sense. Often senior management is reluctant to change because they don’t see the benefit because the inertia that has to be overcome in making change. Nestle had to deal with identifying undocumented practices, the antiquated software and records over multiple systems as well as that data that was being kept. These are all massive things to overcome. Nestle also ran into the typical problem of not enough budget to try make all these changes in the timeframe estimated.

4. What strategies did Nestle management use to deal with these challenges? How successful were these strategies? Explain your answer.

Nestle management set these goals and as critical to their future success as they saw their large customers such as walmart demanding certain IT requirements from their supply chain. Because of that they focused on it in the boardroom and hired the right consultants to make it work. The book notes that the goals were consistently readjusted downward because of budget concerns but identified successes and continuing efforts towards further centralization of the IT resources.

Mr. & Mrs Chrysler Announce

Mr. & Mrs Chrysler Announce . . .

the marriage of their daughter Mable Chrysler to Mr. Sergio Fiat.

Talk about the large project to manage, how about the upcoming absorption of Chrysler by Fiat. The sheer complexity of the merger. The article in the April 20th issue of Business Week talks about the apparent bailout of Chrysler by the Fiat group. There are a lot of issues that will need to be addressed in this proposal. The management of this merger project has many facets that need to be watched and integrated.

The interesting part of this article is the statement that Fiat was laying groundwork to make another attempt at entering the US market. They have been absent from the US dealerships for 25 years, however they were looking to some of the other foreign car manufacturers to partner with them to produce the smaller Fiat models here in the US.

This project would have to manage mergers in different countries, with different laws, and different employee agreements. Besides this will come retooling of some factories, new and integrated IT systems, and different corporate cultures.

From only an information systems integration, this is a significant project management challenge. If I was to be the lead on this, I would start by identifying what the two current ERP systems have in common. After that, I compare the remaining parts however, I would most likely retain the Fiat model since that one has proven more successful over time. Chrysler I’m sure does not have a mature model yet having been recently divorced by Diamler Benz after a disastrous marriage. There may be some parts of the Chrysler IT infrastructure that might be beneficial. Since Fiat has no footprint in the US market, there may be aspects of the Chrysler infrastructure that could benefit.

Bottom line, no matter how many times I read chapter 14 I wouldn’t know how to start or manage a large IT project such as this. I’m looking forward to see how the merger of these two companies work out.

What do you think the main obstacles will be in making this merger work?

Chapter 14 Case Study

2. Evaluate the risks of the Medicaid claims processing system project and key risk factors.

The medical claims processing project in Maine had a high level of risk in all three of the major risk catagories.
Project size- This project was huge in the scope and dimension and programming effort. The many records processed each day and the volume of traffic is huge, thus a perfect system is required.
Project structure- This project will have significant structure associated with it. There must be multiple reports and formats with a huge number of transactions to process and document accurately as well as a logic process that is consistent with the current system.
Experience with Technology – Designing a system such as this is a huge undertaking. Not only does the programmer need to understand the database, he also needs to understand the Medicaid payment system inside and out in order to design a system from the ground up. Any less knowledge will only increase the risk of errors in the final product.

4. Describe the steps you would have taken to control the risk in the IT modernization project.

Personally, I would have made the transition in two phases. In phase one I would have followed the lead of other states and built a front end onto the existing database system. This would minimize any clerical errors in the behind the scenes processing and allow time for full development and testing of the new system. Obviously this will typically require a larger budget, however, the new system would not have to be funded all at one time nor would it have had the rushed timeframe to make it all perfect on such a short deadline.

5. If you were in charge of managing this project, what else would you have done differently to increase chances for success?

For me this is simple. I would have hired a firm with experience in writing for this type of process. I would have required more testing prior to implementation, both in a controlled trial environment and then on a limited basis with a select few providers in order to assure to the maximum extent possible, a trouble free system was deployed. I would have offered significant training to the office staffs on the changes and how to best work with the new system and then on a temporary basis hired additional staffing to man the trouble desk to deal with the changeover.

Health in the Clouds

The current administration has set a goal of having the federal government to invest in electronic health records so that all medical records are digitized within 5 years. This marks the same timeframe goal that was set by the previous Bush administration to digitize health records by 2014. This is a hugely ambitious undertaking considering that there is currently no standard for health records nor is the technology tested and ready for this massive of a project.

This will be a real test of the "cloud computing" that we are hearing so much about. The data will all be stored so that it can be accessed by health care professionals across the country in short order.

The anticipated benefit will be reduced costs and fewer mistakes because of comprehensive accurate records, however, this is certainly not guaranteed. As I have discussed before in my garbage in garbage out blog, the data would be suspect and no physician would trust it and risk his malpractice on it. Additionally they think it would reduce duplicate testing and other lab work, however, like I said, how the data is maintained is the key to the reliability of the data.
It is a lofty goal, and someday the data will be accessible electronically in some format, but until the mechanics are worked out, there is no way to get the data gathered. If transcription is required from hand written notes to the electronic format then there will be transcription errors. Scanning will be a huge undertaking and there are too many open issues yet to proceed.

As the government considers national health care, then some of these records will be standardized and this system could start. I think it would be wiser to just start keeping electronic records and let time make the database more and more complete vice trying to import generations of medical history and knowledge. We should look to the UK and watch them try to implement a simliar multibillion dollar system which has produced mixed results. Mixed results are not what the health profession needs to improve health care in this country.

One thing that really could be of benefit to the millions of health records is that the data could be mined for a treasure trove of data which could be then used in tracking and treatment of illnesses. This data is not centralized now and only the CDC gets scattered reports to try and identify trends and other health related issues that could be picked up earlier and thus have a better cure rate.

InformationWeek KC Jones January 12, 2009

Chapter 12 Case Study Questions

What problems are hospitals and physicians encountering in diagnosing diseases and prescribing medications? What management, organization, and technology factors are responsible for these problems?

Physicians and hospitals are suffering the same problems that they have for years and years. Even though they have put in some computer systems, for the most part they are still ultimately responsible for the diagnosis and the treatment of the patients. Most of the time they do that from experience and do not rely on information technology to assist. Seems that most medical offices use IT systems for scheduling and for recordkeeping. I think most of the problems stem from the egos of the doctors in not wanting to be second guessed in their assessment of the diagnosis. Certainly there is an art to it and physical factors are only a part of a patient condition that needs to be incorporated into a diagnosis. Additionally, since doctors are not pressing for it, management is not pushing it because of the up front costs associated with the system. The intial setup and programming is not standardized yet thus each system is very customized which costs a considerable amount of money. Pharmacies are much more computerized and better at checking medications for adverse interactions between medications.

Are CPOE and DDS systems appropriate solutions? Why or why not? What management, technology, and organization issues are involved in the use of these systems?

I think that CPOE and DDS systems are a part of the solution but not entirely. The human aspect of healing will always be a necessary part of the process. Once they become more accessible and less intrusive and obvious to the patient, a doctor can use them to reinforce his memory. The main issues are the privacy issues of the patient. It will take effort from all the various parts of the health care industry to implement a total solution. The current administration has high hopes in this area, but there are some huge hurdles to overcome before they return benefits equal to the costs.

What obstacles prevent computers systems from improving the medical industry? How can these obstacles be removed?

Right now there are two huge obstacles. First obstacle is the doctors who typically have huge egos and don’t want to be seen as one who needs help from a computer in front of his patient. The other are patients typically older and still view the doctor as all knowing. They will follow the diagnosis without questioning it regardless if it makes sense or not. As they die off, and the younger generation starts to be more customers of the health profession, they will be more open to computer aided diagnosis. Time will solve many of these obsacles as software becomes more advanced and more of the computer generation moves into the professions the old ways will go by the wayside.

The Squeeze in Online Ads

Everyone knows that advertising revenues are down significantly over the past year. The noticeable impacts can be seen at the many newspapers that have gone out of business from lack of revenue. The reality is that it’s not just hitting the newspapers but even web advertising is down from businesses holding back due to the slow economy.

Google has made many fortunes with it’s Adsense program and because of the size and success of Google they dominate a significant portion of the advertising space available online, however this article in the March 2nd issue of Business Week talks about a niche market that is getting the attention of the big names. Seems like many companies are starting their own advertising networks which are focusing on web pages and websites that have less traffic where advertising may not be found. The audience that is reaching these websites are smaller, however the content of the webpage may be of better quality and thus a more targeted reader.

Advertising today is typically done on the pay per click model so the goal is to get the clicked by the person who is best targeted for your market. The order of the listing is typically headed by those willing to pay the most per click. These prices are constantly bid on and the best search terms are often very competitive and expensive. These smaller advertising networks might not advertise on the highest traffic sites, but they may offer a more targeted customer and the article talks about the price being much less than the same terms on Google.

The article talks about sites like Yahoo and Martha Stewart starting their own advertising networks. This strategy certainly makes sense to a seach engine like Yahoo who has the traffic to make some serious money, additionally, this advertising strategy makes sense to the e-retailer because he/she can get a targeted customer to the site for less money, and that reduces overhead leading to higher margin.

And HIGHER MARGINS, is what business is about.

Chapter 9 case study - Limited Brands Inc

2. Describe the supply chain management problems encountered by Limited Brands in this case. What was their business impact?
The supply chain management became unwieldy and ineffective due to lack of attention of the supply chain throughout the growth spurt. As a result, Limited Brands found themselves being pushed out of the locations by the discount retailers who were able to better compete for the prime locations. Ineffective supply chain management caused slower response to market changes that negatively impacted retail operations. For a trendy store like The Limited, this is delay is a significant issue and may force the store into chasing trends rather than setting them. Trendsetting is critical to a higher end retailer to keep margins higher.

3. What management, organization, and technology factors were responsible for these problems?

Limited brands had 2 major problems in their supply chain however both were caused by the fast rate of growth that the company had experienced. This problem was more complex because of the way that this growth occurred. The mixture of pure growth and strategic acquisitions made supply chain growth a challenge to manage. The first problem is that there was a lack of management attention and resources that were paid to the supply chain during this phase of rapid growth. It seemed the management was so focused on growth through acquisitions that they did not pay enough attention to the integration of the acquired companies into the Limited Brands family. This is what caused major problem number two. Trying to merge, marry, and manage multiple software and hardware configurations without resources or guidance from leadership a nightmare for the information technology infrastructure and employees as they tried to make it all work with limited resources and no corporate guidance.

4. How did Limited Brands solve these problems? What management, organization, and technology issues were addressed by the solution.

Limited Brands finally addressed this after a catastrophic day on the loading docks pointed out a significant weakness in their supply chain operations. Non-coordination between supply chain information resulted in 400 truck showing up trying to unload cargo at a facility that could only handle 38% of the trucks. Following this fiasco, Limited Brands management purchased consulting services to integrate the 60 or so varied supply management configurations that had accumulated over the years due to acquisitions. Not only was the consultant tasked with integrating these processes, they were tasked with creating scaleable software to allow integration and growth by both future organic growth and future acquisitions. In addition, Limited Brands formed a wholly owned subsidiary tasked with maintaining the logistics and supply chain management for the stores.

Data on Data Theives

Information Security
Information Week April 20th 2009

This article was interesting in discussing the results from a study completed for Verizon’s Business risk team. The study results were based on field findings from mostly banks and retail companies. Some of the results were surprising to me.

- 99% of breached records were accessed by servers and server applications, not by computers at the direction of a user. OK so this says that the data is mostly protected from a user asking for it, but if it’s an application located on another server, then the book is open. That is such a weakness because server applications are simple to write and if the data is not protected from servers, then a simple server application could copy any item of data that the server application wishes to know.

- 74% of breaches were from external sources. This is probably the most feared type of data security breach because the data is taken by an outsider and no one knows what they might do with the data and there is no reasonable explanation for the data being taken other than for illicit use. That being said, the study showed that the biggest breaches were internal where the average number of records breached were 100,000 per breach compared to 37,000 when the breach came from an external location.

- 69% of the breaches were discovered by 3rd parties. WOW OK so this means don’t rely on your IT department to discover that you’ve been compromised. This makes sense because most IT professionals in your department will do what they can to protect your network from any intrusions that they are aware of, however they can’t protect the network from accessibility issues that they do not know about.

This take away from this article is that it’s very critical to protect the data as well as to try protect and secure the systems from undesired intrusion.

Chapter 8 - VA Case Study

Question #1 - List and describe the security weaknesses at the Department of Veterans Affairs.
The VA had two major security weaknesses in the way they protected their data. There were poor physical security measures and information security measures were both to blame for this incident.
Institutional guidelines for physical security should have not allowed the entire database to be copied to a laptop. There is seldom any need for a centrally managed database to be transferred to a laptop since any changed made to the data by working off site will not be incorporated into the main database. Synchronization of such a massive database would not be reliable and thus the need for the data to be transported would be minimal.
The information should have been encrypted and password protected if there truly was a need for this employee to carry this data with him.

Question #2 – What management, organization, and technology factors contributed to these weaknesses?
Management – While one may not think of it as a weakness, the management’s reluctance to report the stolen laptop and the contents of the hard drive contributed to the difficulty in finding the laptop before the data was compromised.
Organizations – VA operations should have limited the data accessible to the employees to only the data needed in order to effectively do this job. Lack of promoting the sensitivity of the data led to a careless attitude regarding the protection of the data.
Technological – At a minimum the data should have been encrypted and password protected. As a practical measure, the laptop should have been protected at the BIOS level if that sensitivity of data was contained.

Question #4 – What solutions would you suggest to prevent these security problems?
As stated before, I cannot envision a need when this data retains any value once it is removed from the main database. It quickly becomes outdated as maintenance is done to the main database. If after hours access is required to complete the work on such a regular basis, then the agency needs to consider hiring another individual to allow the work to be completed during regular business hours thus eliminating the need for the data to be removed from the facility. If access to the data is required remotely then I would recommend an online system with the most secure connection possible.

Time to believe in Private Clouds

Information Week April 13, 2009

This article takes us to the next step in emerging technologies as outlined in chapter 5 of the book. Cloud computing appears to be the next big advancement in technology integration. The focus of this article is how many companies are eager to utilize the cloud computing concept for their own business enhancement. Companies like Salesforce.com have shown that using cloud computing as an IT infrastructure can work so many companies are taking a look at how to adapt it to their business models.
The advantages of cloud computing are significant to a company. The fast increase in computing power and communications speed has allowed the concept to grow into a viable IT resource. The concern that companies have with the cloud concept is sharing the data storage with the many other clients of the cloud. Data security of any company is critical to the success of the company. Trusting data storage and security to another company as the primary caretaker of the data can be difficult, especially if the service is priced so low.
That being the case, many companies are looking into the concept of private clouds where they can have customized software operate in a cloud environment with their own servers and security systems in place. This seems to make the data managers of the company feel more comfortable with control of the data. While private clouds might make sense for the sharing of customized software, thinking that private clouds will enhance data security is a false sense of security. I say this because I suspect a company that is offering cloud computing resources will be much more diligent and have more resources to maintain security in a cloud environment. I believe this because they have a much more vested interest in maintaining their reputation in order to stay in business. This reputation is much more important to a company who’s business is cloud computing than to a company who just utilizes the capability therefore the motivation of the specialty company would be higher and more likely to focus resources on their security as a core business.

Panasonic and It’s Data Problems

2. How did Panasonic’s information management problems affect it’s business performance and ability to execute it’s strategy. What management, organization, and technology factors were responsible for those problems.

Panasonic was too big for their IT system. This is often the case with older companies that have not updated business processes as the communication capabilities of the internet have increased. Because of this lack of maintenance and updating of processes, data was being poorly managed and not cross checked between corporate networks thus there were many inconsistencies from one database to another leading to incorrect and inconsistent information being shared with the business partners of Pansonic. The responsibility for this problem is due to legacy outdated inventory systems that different between the locations. These data and inventory management systems were probably state of the art when they were first installed, however, global communication has dropped in costs significantly and it appears that Panasonic did not use that fact in their data management, nor does it appear that they gave centralized data management guidance to the various business units. I don’t see that it was a technological factor that caused the problem, it was more of a management problem by not managing the corporate data and information in an uniform way across business units.

3. How did master data management address these problems? How effective was this solution?

Master Data Management software is designed to marry data which has discrepancies to try create a most accurate database and then modifies the processes to maintain that data as the authenticated source. This allowed Panasonic to better provide consistant data to their customers and distributors which reduced any conflicting information giving the impression of a well run company. Furthermore, this more accurate data allowed Panasonic to share this data with their retailers which allowed them to improve their inventory management and saved them money. According to the article, the implementation of the MDM software was a vast improvement over the previous inventory process. This improvement helped not only Panasonic give a much better public profile to the customer, but also enhanced the profits of it’s retail partners.

4. What challenges did Panasonic face in implementing this solution?

Panasonic faced not only the typical technical challenges of trying to merge inconsistent databases, but they also had to contend with the protectionism that is typical of database managers. Database managers typically know the value of the data that they control and (thankfully) are very careful with how the data is shared. Even within the company, data can be analyzed to see deeper within the organizational unit than many desire, especially by corporate parents. I think that the MDM software was the best option that Panasonic could have selected. Trying to optimized such a massive amount of data by hand would have been a Herculean effort to say the least. This is a perfect use of the data consulting services offered by an expert corporation such as IBM.

TTX TAKES CHARGE

In the summer of 2007 TTX decided that it was finally time to upgrade it’s IT infrastructure to save the company some money. The article was highlighted in baseline magazine (http://www.baselinemag.com/). The goal was to make the website more effective at gathering the information from the customers, and reduce the number of customer service staff.
The results were impressive according to the article (http://www.baselinemag.com/c/a/IT-Management/On-the-Right-Track-580119/1/) with a successful integration of new software and business processes they were able to reduce their service desk staff by 50% and have better customer experience.
This got me to thinking about many of the businesses that still have not adopted an appropriate modernized IT strategy, or any IT strategy for that matter. In some of my dealings with some medium sized businesses I have noticed that the software that they use is so antiquated. I would have to believe that the security systems protecting the data and information contained in the is antiquated as well, if there is any protection at all. Small business usually cuts corners where it can and one place that is not obvious to customers is behind the IT scenes. I remember back to when the Y2K problem was identified. Software was still in use that was written in the 1970’s which accounted for the massive effort to check and prepare software for the change in millennium. What I learned from that was good software can last a long time and be forgotten.
I got to rambling here, but sometimes that is what happens in a blog. I must be on an information kick today because my take away from these thoughts and this article is that so many businesses are so far behind the times in IT infrastructure and protection of the information that one must be ever-vigilant with the protection of what information is shared.

Netflix Vs Blockbuster

Study Case Questions:
1. Blockbuster Entertainment set out to dominate the video rental world by having the largest selection of DVD rentals of any of their competitors. They were well funded and with a very influential CEO, they soon became the Goliath of the industry and life was good at the top. In many industries, particularly retail, a solid physical infrastructure with the best selection in a nearby location is a recipe for success and can give you a significant advantage to fend off new competition. This advantage is enhanced because of the impatience of today’s consumer. We are all products of the “I want it now” generation and I think that Blockbuster was focusing on meeting that demand. Most people didn’t plan ahead for their entertainment and Blockbuster felt comfort with that social norm.

2. Meanwhile, a new fad called the internet was changing how companies interacted with consumers. Blockbuster was caught off guard by a different business model based on changing technology. Most people would attribute the technology that beat Blockbuster was internet based ordering, however the real innovation that hurt them was the DVD. VHS tapes were much more difficult to ship, and more prone to damage while DVD’s were cheap and lightweight to ship and less prone to damage. In addition, Blockbuster misunderstood a small a segment of their consumer base who were frustrated by the late fees and who were willing to plan ahead in order to avoid them. The DVD allowed a new business model, adopted by Netflix, to try challenge the traditional way consumers watched movies at their leisure. Keying on the fact that most consumers overestimate the number of movies in a month that they will watch, Netflix slowly started capturing a some consumers from Blockbuster.

3. Both Blockbuster and Netflix will be challenged in the future to remain growing companies, and in the end, both will become historical footnotes. Just as the DVD opened new options, changing technology is again forcing business to modify to meet consumer demands. VOD (Video on Demand) is quickly becoming a reality and will soon be the preferred delivery of choice due to the convenience and reduced cost. No longer will there be a need for a physical warehouse to distribute rented items. Servers will be able to download the videos as desired to computers and DVR’s that are now becoming prominent in many homes. Both Blockbuster and Netflix have tried to convert and capture the market by offering video on demand to download requested video files to the customer, however, eventually, their current value of being a single site will be usurped by search engine technology eliminating them as a one stop video shop. The streaming technology will advance so that any company can stream video in massive quantities thus eliminating the two competing companies as distributors.