Pandora Reflection

Sir,

I truly enjoyed the consultant perspective on the case.  They came up with very creative ways to generate more income which is always useful.  Offering multiple types of subscriptions is a great way to reach all segments of the market.  This will allow us to get the ad revenue from those who are not willing to pay while collecting a descent price for those willing to pay a premium.  Basing this off of hours played will make it very easy for our analyst to project into the future and allows our board members to see progress in a more concise way. 

Their rebranding effort was a fantastic and out of the box idea which I enjoyed.  I would add one more to this platform and that would be to allow those musicians who participate as well established stars to add information on their page where we already have their history or background.  This will give people a reason to stay longer in our network and allow for more ad revenue to be generated.

Entering the mobile device market is the way to go.  Nearly each person in the medium term will have a mobile device that can play music.  We need to make sure we capture that market.  People will want to use this in their car, on the train, or talking a jog.  We will need to present this as personal playlist of your favorite genre of music with little or no advertising.   

I think they did a great job and they gave us a great foundation to work off of.  We can implement some of their ideas and continue to hammer out the details.

I will forward a plan of action with all of the details and see if there are any changes you would like to make.

Thank You

Operations Manager

MS Project Review

Dear IT manager,

I am responding to your inquiry into MS Project for your Project managers.  I have been reviewing and testing this for the last two months and I have found it to be very useful.  It allows each step of the project to be clear and informative.  Project managers need to be aware of what is coming next and have each step laid out in a Gantt chart provides the clarity. 

MS Project uses a familiar format, Excel, for data input.  All of the actions are nearly self-explanatory.  The columns are headed from the beginning, so for your new employees it would be very easy for them to catch on.  But for the more complicated and senior level projects there are many bells and whistles they can add to the project plan.  Resource management is one essential tool that any project manager needs.  Without knowing how many hours each of your employees has for each project you would be lost. Double booking projects can be very detrimental to the business work flow.

Since we are a small operation we were able to get away with excel format to monitor our time.  We have grown so much in the past year and we plan on growing even more in the next year.  I commend you for thinking ahead and I think this will work great.  This will have a huge impact on our productivity and essentially our bottom line.  It will be well worth the investment. 

Thank You

Project Coordinator

Rajae El Temawi  

Pandora Case

The problem that Pandora faces is as Westergreen stated, how to get, “…the customers to leave a buck in the tip jar”.  How can we monetize this service to the fullest extent without jeopardizing customer service?  Basically, what is the connection of what users want and what they will pay? 

With pressure from investors to make Pandora profitable the CEO needed to figure out how to keep its regular customers, attract new ones while at the same time keep costs under control and below revenue.  There was pressure to bring Pandora to profitability.  Licensing fees was an increasing expense. Unless Pandora could convince the customer to pay for the music service, it would be an unattractive company for the support of their Venture capital partners.  Pandora has yet to make a profit.

Pandora should focus on the cost-benefit analysis in order to make a rational decision.

The following points must be considered:

·         How can the usage of service be traced?

·         What are the exact benefits in terms of dollar amount of changing the subscription model?

·         What are the effects of adding more advertising? What are the costs?

Pandora can do one of three things:

·         Add more advertising.

·         A new “freemium” model.

·         A subscription model for all the users.

The alternatives mentioned about have serious impacts on the ability to increase revenue for Pandora.

The first option of adding more advertisements during the music would add up more revenues. Based on the basic information, Pandora can make better use of its model by targeting particular ads or providing local marketing.

The second alternative is to implement “freemium” model that could provide a limited but free service to all the users and also offer a premium-priced value-added membership for the “super-users”.

The last option with Pandora was to implement a subscription model for all the users. This would help to take advantage of economies of scale by spreading the costs among large customer base.

After the evaluation of alternatives for the pros and cons, I would suggest to have a subscription pan to all the users. This would cover the operating and maintenance costs and also enable to improve the revenue generating ability for Pandora.  Give each segment a piece of the pie and use different methods of generating income.  The free service gets heavy ads while the paid service gets none or very little.  This would also allow for better targeting for local advertising.  The more people who use it the more people in a small area will have access to the ads which means they can charge more.

Bombardier Reflection

Sir,

The consultants did their research very well.  They came and delivered a deep analysis of the situation with very clear and concise recommendations.  I am happy to hear that they recognized the upper management’s hard work and positive results.  They worked hard and deserve the credit.  

I believe we were on the same page as they were as far as process.  We knew that project management was slacking a bit and they thought that we needed more controls and planning to keep projects from going over budget (project creep).  I was taken aback by the fact that 2/3 of all projects fail due to bad change/project management.  That is a high number and we need to make sure we do not fall on the bad side of that statistic.  Management of a project affects all aspects and should be a main focal point when fine tuning this process. 

The one thing that I would be cautious with is their recommendation to hire “shadow” employees.  It is a hard pill to swallow and though it should be looked into to make sure the ROI is worth it, it seems a bit excessive.  The numbers they mentioned were that a person would need 20% of their normal time dedicated to the implementation of the project which would mean that we would require 120% of total time.  That is 8 hrs. extra a week or 1.6 hrs. each day.  I understand people need to have a life work balance but asking key individuals to work a bit extra through a transition period, in my opinion, is not asking for too much. 

Training is an integral part of any change.  We will have many employee types affected by the new ERP system: production, finance & sales.  They will each need to understand new functions as well as learning old ones in the new ERP system.  This takes time and money.  We seem to have fallen short according to them.  I would have to agree considering the complexity of the change and the feed back from employees.  We need to ensure that we heed their advice about making sure training has enough budgeted, we do not want to be left with no more money and too many people lost on how to do their jobs.  They mentioned $61 million or around 17% of the total budget.  Of course these figures will be vetted by our finance team but I agree with their idea of emphasizing training to shorten the “shock” of adapting to an ERP system.  Getting back to our productivity number and then surpassing as quickly as possible will be worth the money invested.

Thanks

Rajae

Bombardier

Problem

The problem Bombardier has is that it went through two ERP transitions each successful but each had their flaws.  For the next installation Bombardier is looking to fix those flaws which are found in their processes in implementation and the standard of best practices. 

The main problem in this case is that there are disagreements between the project team and company employees over the validity of certain processes and the necessity and scope of some methodologies. 

Here are some symptoms:

• Improper concentration of knowledge in a narrow set of users
• A project structure perceived as overly complicated
• The absence of contingencies or “shadows” for specific key employees
• The sense from some users that the new system did not apply to enough of that person’s responsibilities.

The scope of the problem is the ERP systems in place at Mirabel and Saint-Laurent, as well as future locations. 

Situation Assessment

Roll Out 1:

•  Communication gap
• Reduced inventory by $1.2 billion
• Didn’t jeopardize production
• Mismanagement of user input

Roll Out 2:

•  Much Smoother
•  Employees adequately trained
• Clear Vision
• Unified Message from Sr. Management

This third roll out should build on the successes of the first two and improve on its failings by adhering to ERP best practices.

The decision criteria should be how well the determined solution can adhere to the established ERP best practices.  An ideal ERP implementation would have:

• Executives should back the project and VPs need to implement
• Executives need to be actively involved in the implementation process
• IT and area of installation should have shared responsibilities during deployment
• Executives need to understand the company’s ability to adapt to changes coming from the new system
• A full time project manager assigned to implementation
• A project team that represents all areas affected by the implementation
• The same project team should delegate their current duties to someone else
• Training for staff on successful teamwork before implementation starts
• A retention of ownership of the deployment process by the institution wherein skills have been fully transferred from consultants to employees
• Training for all users of the new system
• A reformation of administrative processes by the company to fit the new system
• Appropriate communication of deployment details to the business community

Alternatives

There are two alternatives:

• Change the implementation process to more closely reflect the ERP best practice standards with several alterations in the company’s transition approach
• Follow an implementation that closely resembles the deployment in Saint-Laurent without any serious adjustment. 

Changes that could be made using best practices would be:

• Enroll more employees as part of team that has the specialized knowledge required to insure the continuity and stability of the project. 
• Roll out 2 had issues with having adequate number of team members with specialized knowledge needed to work intensively on each deliverable
• This would allow Bombardier to better retain ownership of its own implementation process by having enough internal employees with the necessary skills.
• It would represent a better understanding by management of the company’s ability to adapt to changes that occur through implementations, as more team members with the necessary skill set could meet the rigorous informational demands of ERP implementation.
• Inform the project team that any communication with the users and management must be crystal clear and that any obvious exaggeration will be punished. 
• The project team may be tempted as in the Saint-Laurent deployment to exaggerate certain details to keep the business side from worrying but any false information from either side is unacceptable and must be addressed as such by top management to allow for the smoothest transition.
• Train employees prior to project initiation and then add them to the team during the course of the implementation. 
• One of the major issues in the Mirabel deployment was that the quality of the support was not adequate because the team members were too far removed from the everyday business responsibilities (some of the team members during the Mirabel implementation had not had business responsibilities separate from the project in over 10 years). 
• To meet the best practices of training for employees on teamwork prior to the project and insuring the project team’s composition represents all functional areas where the software will be implemented, Bombardier could give the project team a more updated sense of how the implementation could reflect functionality over process and the actual daily business tasks. 
• Change training program to be less rigorous before the Go Live period and more advanced shortly after the Go Live period. 
• This would respond to the complaints of users who felt that by having a base knowledge of the system prior to the Go Live and then learning more of the advanced SAP functions once they were familiar with the tool they would better be able to fully take advantage of the new system. 
• If done properly, this would qualify the project better under the best practice standard of all employees using the software receiving thorough training.
• Maintain a project manager that is assigned full-time to the deployment.  
• In order to insure that this project costing hundreds of millions of dollar is functioning as perfectly as possible, the lead project manager must be dedicating his entire workday and necessary overtime to the implementation. 
• This would be a clear message to the entire staff that this project is a top priority and is being handled with the necessary attention. 

Recommendation

My recommendation is to adopt the five proposed alterations to the implementation process.  From my perspective, none of these changes would demand a huge amount of resources, though some need more than others. Having a full-time project manager, adjusting the training program’s depth before and after the Go Live, and setting a clear standard for the reliability of communication all can be done with relatively little pressure on the budget.  However, increasing the quantity of team members with specialized knowledge of the project and injecting additional staff into the project team during the project would represent additional investment for Bombardier as well as a shift of human capital away from actual business related responsibilities.  Considering the hefty sum invested in an implementation and the potential cost savings associated with inching this process towards perfection, I would recommend that we adopt all five of the proposed changes in order to better align the deployment process with ERP best practices

Ubuntu Implementation

Sir, 

Ubuntu does offer some benefits which could be beneficial to our organization but there are a few issues we should look into. The key question is whether or not the benefits outweigh the risks.  We have 2,500 hundred computers/laptops throughout or organization with each costing the company around $1,200.  Windows OS is about $200 out of that $1,200 a small portion but much more than Ubuntu—this does not include the cost of labor spent on maintaining and uploading the software since this will be required for both Operating Systems.  If we switched to Ubuntu we could save $500k each round of upgrades.  We upgrade our laptops every 2 years which would give us $250k savings each year. 

There are other cost which fall under “switching costs”, the cost it would take to switch the current laptops and training each employee.  According to the IT manager it will take 2 hours to switch systems and another 2 hours to train the employee.  We thought about doing lecture style training but we find that to be very unproductive and in the end require IT personnel to go to each employee for very small issues which will add to more than 2 hours.  The average cost per hour for IT is $25. If we take 4 hours per employee our IT department would spend 10,000 hours or $250k in initial costs to switch.  This makes the savings a net zero in our first year.  The last factor is opportunity cost with each employee spending time to train, set up & get familiar with the system.  We can give this a number by averaging out our salary cost at $80k/year per employee or $42/hour--this comes out to $417k.  There is also the productivity which is affected, though employees get their 2 hours, productivity will take 3 months to reach current level.  With efficiency levels at only 90% it will cost us $4.20/hour in lost production.  If this happens for three months we can expect another $630k in costs.  Our second year will have a savings of $250 which comes from not upgrading the Windows OS.  With these costs and stats we will be able to recoup the costs in the 5^th year.  Please see the chart below.

	1st	2nd	3rd	4th	5th	6th
Savings	250	250	250	250	250	250
Set up Cost	250	-	-	-	-	-
Training Cost	417	-	-	-	-	-
Inefficiency  Cost	630	-	-	-	-	-
Total Cost	1,297	-	-	-	-	-
Net Cost	1,047	250	250	250	250	250
Cost Recouped	1,047	797	547	297	47	(203)

Is this worth all the effort and cost?  Though we can calculate some of these costs by using hours spent or not spent we don’t know what some of the inefficiencies can do to the quality of the product we produce.  If we are inefficient it could leak into our product and cause our reputation to be tainted which could cause untold damage to our bottom line. There is no significant change to our bottom line or efficiency that is worth such a huge initial investment.  I believe the cost of Operating systems will continue to drop as Ubuntu and other alternatives become more popular.  The possible savings each year will actually decrease each year. 

I hope this is helpful in our decision to transition to Ubuntu.  If you have any questions please let me know.

Thanks

Rajae

Zara Reflection

Sir,

Unfortunately I won’t be able to make tomorrow’s meeting regarding the consultants’ recommendation on our IT infrastructure.  Here are my thoughts.

I know you have strong feeling about our current system-- it hasn't failed us and it isn't broken so we should leave it as it is.  Though I am tempted to follow that path I think the consultant’s recommendation should be entertained. 

The mere fact that DOS will no longer be supported by Microsoft is a huge risk to us and we need to create a sound and feasible solution.  I understand that this system allows local stores some autonomy and if we believe this is an asset to this company we should be sure any solution keeps that in place. Also, the price tag is a huge roadblock; it is hard to justify so much investment into a potential risk that has many workarounds. 

Since this is not an immediate problem, meaning that if Microsoft decided tomorrow not support DOS we can manage on our own for quite some time with aftermarket parts and left over IT Techs who still know the system, we can slowly transition out of DOS into a system over a long period of time.

This situation will allow IT a chance to analyze many solutions in depth rather than the usual reaction to an immediate problem. 

So my recommendation is, yes, move forward with modernizing but we shouldn't spend $7+ million in a short period of time. I hope this perspective is helpful to you and the whole transition team.  Please let me know if you have any questions.

Thanks

Rajae EL Temawi

CIO