Case study Analysis

Case study Analysis

Order Description

Based on the case study:

Derive 7 steps of Soft Systems Methodology with Root Definitions, Conceptual Modelling, Rich Picture and CATWOE analysis

Draw Cognitive Maps

Draw ETHICS Diagram

looking to have a basic analysis of a case study in diagrammatic format

Imagination Corporation: Bringing About a Transformation

It had been two weeks since Mark Campbell joined Imagination Corp (IC) as the Chief Executive Officer (CEO). Mark was also required to head the sales and marketing function. Imagination Corporation was the largest provider of real estate sales and management consultancy services in Australia. It has been in business since 1963 with a work-force of nearly 1000 employees. It is a listed company in the Australian stock exchange. IC’s major clients are large global corporations that have access to IC’s expertise in the following areas:

•    Sale, purchase, and leasing of commercial properties

•    Provision of legal support to clients for real estate deals

•    Developing and enforcing real estate contracts

•    Liaising with financial institutions to organise funds for real estate investments made by its clients

The business activities that delivered most value to clients broadly included the following:

•    Providing current information to its clients on real estate prices and regulation.

•    Make information available on the real estate contractual obligations to its clients.

•    The information related to funding arrangements with financial institutions is kept current for the clients.

•    Process financial transactions (inflows and outflows) that arise from dealing with clients.

•    Developing and executing real estate contracts for clients.

Today, in his first meeting with the company’s Board, Mark was given a clear picture of what the board members expected from him. The board had made it clear that they expect tangible benefits from investments made in IT. Katherine Mill, the chairperson of the board, in her opening statement at the meeting looked straight at Mark and said, “Imagination Corporation continues to make investments in IT to support all its business processes. But we fail to understand whether the investments in IT are any good for our shareholders. There is a view that the return on investment would be greater if we spend parts of our IT budget for charitable causes and public relations instead of spending on technology! ” After making this statement, Katherine paused for a moment to ensure that her message had registered with Mark.

The board was unanimous in its concern for value to shareholders. The recent decline in stock values was causing problems. The board was of the view that an increased IT spend had not resulted in improved financial performance, thereby contributing to poor performance of IC’s shares. Increased IT spend was not only causing a problem with the investors, but was also beginning to adversely affect the attractiveness of the company as a market leader from the clients’ perspective. The board had empirical evidence from surveying its client base that suggested a decline in customer confidence in IC’s services in recent times. Therefore, the board was not convinced that spending on technology was resulting in an improved service for its clients. The board had directed the governance audit committee and the benchmarking committee to review the processes and practices that were being used for developing and approving business cases for IT investments at Imagination Corporation.

The Board was interested in bring about a fundamental change in the way IT investment decisions were made and clearly fix the accountability for decision making. Katherine continued, “We have received recommendations from the governance audit committee and the benchmarking committee. We are in agreement with their suggestions that going forward the proposal for investment in IT will no longer be the responsibility of the CEO and the CIO (Crooke Klaus). For all major IT investments, the board would like to see the proposal being developed by the CFO (Chris Tucker). Of course, you and Mr Klaus will share the responsibility for IT implementations. We are of the view that a finance led development of a business case will be more effective in questioning and analysing the imperatives of making IT investments for improving financial performance and improving the service for the customers, both improvements would then create value for our shareholders. We want to see the share prices back on the track, as they have always been in the past. We want the finance staff in our organisations to use their number crunching skills and lead the technologists and customer facing staff in analysing IT investment opportunities. Perhaps, we may then find out why the IT and marketing led investment decisions have not resulted in improvements”.

Mark found it odd that the Board was getting involved with management rather than keeping to its governance role. Reflecting on the fact that the previous CEO (John) was viewed by the Board as someone who had taken a back seat while IC’s share prices fell, Mark could somewhat explain to himself why the Board, instead of restricting itself to a governance role, was interested in micro managing some of the management processes related to IT investments.

Mark decides to meet the CFO and the CIO to discuss what the board had just conveyed to him. Given that Mark is new and that there are likely to be different views expressed, Mark brings you in as a business analyst to help them analyse the situation and to help them come to some decision on the approach that they could suggest to the board. You attend the meeting. The following summarises their views/reactions/concerns:

CEO (also in charge of marketing and sales functions), Mark Campbell’s Views: Mark realised that he was new to the organisation and whatever his views, he would have to be tactful in expressing them and in carrying out his plans in accordance with the message he got directly from the board. He had not spent enough time in the organisation to know the culture, power issues, and practices at IC, so changing anything would take time. He was in agreement with the board’s focus on IC’s share prices. The better the stocks performed, the higher was Mark’s bonus payments. While supporting the board’s focus on share prices, Mark expressed his disagreement on the board’s decision to give the business case development responsibility to the CFO. Mark was quite surprised at the board’s decision. He was unable to comprehend as to how a finance led business case development (i.e., business case development in which the finance function takes leadership over all other functions such as finance, operations, and marketing) is more likely to result in improved performance and customer service: “The board is taking us back in time. Those times when IT was seen as a support functions (and nothing more) should not return here at IC. The collaborative vision of sales and marketing and the IT department should continue to lead case development for new IT investments. We need to diversify the portfolio of our services, include those services in the portfolio that our clients can start outsourcing more to us. For example, I see an opportunity for Imagination Corporation to manage real estate for its clients and not limit ourselves to providing consultancy services for their real estate transactions. Providing opportunities to our clients to shed more of their operations to us is the way forward for us. When the market will see us as a growing organisation, as an organisation that provides more solutions to its clients, our share prices will bounce back and bring increasing value to the shareholders. I think the board is taking a myopic view by relying heavily on the financial function to bring value to the investors. By viewing everything with the financial lens, we will not achieve our objectives”. It was evident that in his long career of nearly 40 years, Mark had seen the might of the financial department in other organisations and did not want to experience that again at IC. To Mark, it appeared that the board wanted to rein in the marketing and IT department’s spending culture by a stricter oversight by the CFO.

CIO, Crooke Klaus’s Views: Crooke, along with the previous CEO (John), had been responsible for making a case for investments in IT and was not happy with the Board’s decision to take that away from him. Crooke was of the view that Imagination Corporation should take a long term view on IT investments and the board should not focus on the short terms variations in the share prices on the stock markets. For him, the main goal of Imagination Corporation should be to establish Imagination Corporation as an innovative organisation, an organisation that leverages process improvement through investment in cutting edge technologies. Such innovation would drive up the level of services to the clients and help expand the company portfolio. Crooke was convinced that without innovation the board would not be able to improve both, IC’s performance at the share market and customer service: “We cannot maintain our market leadership positions without striving for an innovative culture throughout the organisation. Technology and products in themselves are not innovations. What will be viewed as innovations is the application of technology to improve processes and lives of our clients. We have not done enough in this regard. We need a cultural transformation towards innovation. IT spend on technology or people, nor a cut in the same, will not automatically result in our desired goal of being an innovative organisation”.

CFO, Chris Tucker’s Views: Chris was particularly curious as to why Crooke had not shared and acted upon his concerns for innovation and cultural transformation when he was driving all IT investment decisions. Chris was pleased with the Board’s decision. He looked forward to a position of increased importance and power. He spoke carefully: While Mark’s focus on growing our portfolio of services and Crooke’s suggestion of focusing on transforming us into an innovative organisation are desirable objectives, these do not appear to be aligned, at least in the short term, with the board’s objective of seeing more savings and better financial performance. In fact, the expenses and investments your suggestions will warrant can be viewed as contradictory to the board’s message to us. I think we should drop everything for now and just focus on transforming

Imagination Corporation into a self-auditing entity. We need systems and processes that each team follows to audit and review its own performance. The KPIs need to be reviewed. The external auditing system has not worked to the extent that we need it to work and it has its limitations. If we can get our systems, processes, and KPIs in place, we would achieve savings, a better financial performance, and an increasing value for our shareholders”. Having realised that he was now in a position to exercise more influence, Chris suggested that IC implement an internal audit and review information system: “We have not done this formally before, but I think like some of our emerging competitors, we need to invest in implementing an internal audit and review software (IARS). Perhaps, that is the first case for IT investment that I intend to take to the board. This will be a system that is used by all departments. We would aim to identify areas of improvements for delivering value to our share holders and clients, essentially by identifying potential for savings and adding more value to our services”. Chris was aware that what he was suggesting was a system that will monitor everyone and will highlight non-performing areas and individuals. Therefore, he expected considerable concerns expressed by the employees and the senior management. He continued to explain his expectations from IARS: “We will need a small team that will focus on realising the benefits from IARS. They will work closely with all departments to document their process and practices and then conduct regular structured workshops to identify areas of improvements. The team’s work with each department will be considered as an independent mini-project. IARS will be used for such projects and the best practices that have been built into IARS will help us in achieving our goal”.

At the end of the meeting, you are convinced that it is not possible to analyse the requirements for IARS unless you meet with key users and stakeholders at Imagination Corporation. You raise this with the CEO and he agrees to your request for conducting some interviews with the following key stakeholders and potential users of IARS:

Stakeholder            Stakeholder role
Mr Beans            Mr  Beans  manages  a  team  of  3  internal  auditors.  His  current
(Audit Manager)            responsibility   involves   auditing   the   various   departments   (HR,
Marketing and Sales, Finance, Legal support, and IT). He has been with
Reporting to CFO            the company for a very long time, nearly 25 years and has seen the
various  transformations  that  have  taken  place  over  the  years  at
Imagination Corporation.
Mr    Truman    (HR        The HR manager is responsible for a team of 10 HR staff and most of
Manager)            the work involves managing the outsourced functions such as payroll
and recruitment. He has been with the company for nearly 5 years.
Reporting to CEO
Mr Tech (IT Manager –        Mr Tech has been recruited about a month ago for his expertise in the
Procurement)            area of IT related procurements.
Reporting to CIO
Ms Trickle is responsible for provision of legal support to some of the
Ms Trickle (Legal            key clients for real estate deals and enforcing real estate contracts. She
Officer)                is viewed by the CEO as someone who understands the mood of the

Reporting to Manager-        workforce. Ms Trickle has been with the organisation for nearly 10
years and is viewed as a very competent professional by the senior
Legal division
management and the clients.

After conducting and analysing the interviews, you arrive at the following table that according to you may reveal some of the key issues, concerns, and expectations of the stakeholders:

Stakeholder        Some comments from the interviewee
Mr Beans        “It is my department, my team under my leadership, which has been asking for this
(Audit Manager)        system for a while. It is a good that we are close to getting a new system but now I
am worried about coordination with the external auditors, especially in the early
Reporting to CFO        days when we will still be dependent on them”.
“We will use IARS to work with each department on an ongoing basis to identify
areas of improvements. There will be routine tasks for documenting processes and
practices in each department. These tasks will be supplemented by activities that
are focussed on preventing problems in the department. But the challenge will be
to coordinate the activities of our various departments. I am sure we will have to
develop  new  processes  and  service  for  the  internal  and  external  customers.
Finally, we will need to keep a control on everything we do. Exciting times ahead
for all of us”.

Mr    Truman    (HR    “We can make IARS work with the HR performance management system. I am
Manager)        mindful of the good feedback that we have received in recent times regarding the
performance management system. We have identified some ways by which can link
Reporting to CEO        the performance measures with the learning and development measures. I am
aware that staff does not like excessive performance orientation. We need to focus
on developing and nourishing a sense of achievement for the staff”.

Mr Tech (IT Manager    “In my previous company, I managed a procurement initiative for a system that is
– Procurement)        very much like IARS. I think the main concern for us should be to get a system that
eliminates wastage, slow and clumsy procedures, We need to get rid of efficiency
Reporting to CIO        reducers in all our processes”.

“A new system again! I am not sure if the staff wants more scrutiny, benchmarks,
Ms Trickle (Legal        KPIs, targets. If you go the staff room during lunch and hear into some of the
Officer)        conversations, you will get a good picture of how some of the staff are not looking
forward to the new system”.
Reporting to Manager-
Legal division        “The  newly  promoted  performance  management  system  has  slowly  been
acceptable to us all; it was linked to learning and development measures and not
only to performance measures and KPIs. I think IARS is going to undo all the good
that performance management system achieved”.

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