IT Planning at ModMeters

09.08.2020 in Case Study
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ModMeters is an American company that is considered as world’s largest producer of metering components for both mechanical and digital equipment. After a successful operation on the American market for almost fifty years, the company’s management has decided to transfer its activity to the global scale, namely by penetrating to the regions of Asia and Eastern Europe. Moreover, in light of the growing need for the efficient use of energy, it was decided to organize a system of direct sales of the green electric meters to individual customers (Smith & McKeen, 2005). The simultaneous implementation of these initiatives will require the support of the marketing, sales, and, namely, IT plans of the organization. Therefore, the following work is dedicated to the development of the IT planning process for ModMeters, considering the current strategy of the firm, as well as the challenges presented by the internal environment of the company.

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First of all, it is recommended to use a simple option for the development of IT strategy. The primary gain of such an initiative is the fast thoughts structuring of the CIO and VPs on the IT planning for the following years. In general, the development of such a process takes only a few weeks. It is also characterized by a rather small amount of documentation on IT planning, making the project easier to grasp. In turn, this feature will allow minimizing the time for its reviewing, and, therefore, avoid the primary problem of many enterprises the lengthy overview of plans and proposals. Sometimes, after their thorough examination, it becomes clear that the situation on the market has changed, which means that the demand for specific goods has lost its relevance. Therefore, the planning process should take place in a short period of time, and the time horizons of the plans should be reduced to a few years (Buchta, Eul, & Schulte-Croonenberg, 2010).

The primary challenge to be addressed in the new IT planning process is the limited funding, which accounts for only 2% of the company’s total revenue (Smith & McKeen, 2005). Moreover, these costs are not used rationally. The experts believe that for the IT budget, the funds should be distributed as follows: 80% should be invested in its development and maintenance while 20% can be used depending on the situation. However, currently, 80% of current IT budget share of ModMeters is used solely for the maintenance of the business, namely the manufacturing division, and, therefore, cannot be lowered. Such a situation can be explained by the excessive complexity of the technical side of financial and supply chain management, and other systems of the company. Despite the automated business processes, they are rather bulky and often use outdated equipment (Smith & McKeen, 2005).

Therefore, in order to restructure the IT budget, it is necessary to conduct a reengineering of the above mentioned business processes. In particular, it is possible to consider selling and replacing the existing equipment (or, at least, it’s part) instead of modernizing it once again. By combining the costs received from the sale and the spare funds from the IT budget, it will be possible to create a financial base for this operation. In turn, this initiative will allow reorganizing of the IT scheme in line with the overall organizational structure of the company. According to the case, it is clear that the functional units of ModMeters do not work in equal conditions. Namely, the manufacturing department is considered a milking cow of the firm and, therefore, receives the largest amount of attention and financing (Smith & McKeen, 2005). As a result, the other spheres of the company’s activity, including IT, are often overlooked. Such policy results in the underestimation of IT role in the life of the firm. Therefore, the abovementioned reorganization of the IT structure will allow creating a relationship between the success of the department and the enterprise as a whole. The changes and results of the organization will be consistent with those in the IT sphere, which will lead to a common vision of efficient management. Moreover, it is necessary to integrate the process of IT planning with the principles of information security and the business continuity of the organization (Snedaker, 2014).

As a result of this initiative, IT will be viewed from the perspective of the enterprise rather than a separate functional unit. Therefore, it will be possible to strive for an increase in the amount of funding allocated for IT by the firm, which currently accounts for only 2% of the company’s total revenue. An additional income can be used both for covering the existing needs of the organizational units in the IT sphere, namely the research and development department, and the creation of a reserve fund to address the most urgent and unpredictable issues (Soriano, 2011).

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By taking into account the company’s course for expansion and penetration to the global market, it is imperative to connect IT with other departments of the firm. In particular, the IT sphere of the organization should involve the employees that are not professionals in the IT industry but can build relationships with other departments. In particular, it is possible to involve in the work some of the personnel from the marketing and R&D units of the company. The collaboration with the first one will allow forecasting the effect from implementation of direct sales of the green electric meters to individual customers. As a result, it will be possible to precisely calculate the IT costs required for organization of this business process, which can be critical in the conditions of scarcity of financial resources. On the other hand, the involvement of R&D department will provide the same opportunities in terms of global expansion. Finally, it is imperative to collaborate with HR department in order to participate in planning of human resources and the process of staff training. By taking into account that ModMeters plans to open new plants in Asia and Eastern Europe, it is possible to assume that the informational structure of the branches located there will be largely similar to that of the parental company. As a result, by involving the IT specialists from ModMeters in the process of staff selection and training, it will be possible not only to reduce the period of adaptation of personnel but also improve the efficiency level of their work, as well as the overall information security (Lientz, 2010).

Therefore, such collaboration will strengthen the ties between different departments. Again, this fact will contribute to the viewing of IT from the perspective of the entire enterprise, namely by the top management, thus giving an opportunity to petition for an increase of funding allocated for the IT by the company. Moreover, it will optimize the IT costs, making it possible to provide additional funding for the areas that require it (Soriano, 2011).

In conclusion, it is possible to say that the proposed IT planning process will allow increasing the financial resources for the implementation of the company strategies. In particular, this goal will be achieved through reorganization and simplification of the IT scheme in line with organizational structure of the firm, as well as strengthening of the ties with other departments. In turn, these measures will ensure deeper integration of the IT into the structure of the enterprise, and, therefore, provide possibilities for expansion of ModMeters IT budget in the following years.

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