Blitzkrieg 2013 The HR Challenge

Team Cloudburst
Kunal Chhajer (2nd Year) Aditi Dixit (2nd Year) Kanika Mittal(1st Year)

Answer 1. The new business model is about best in class service to enterprises through its unified and innovative suite of enterprise service offerings. 1.

Mode of Sale:
Transition from a sales team to a consulting team, to provide best in- class solution The above would thus improve DSLs market knowledge in terms of product requirements and Sector Expertise, thus creating depth in solution categories.

2. Product To Service: Instead of different SBUs selling their existing products to the clients, DSL as one entity would offer solutions to the business problems (ERP requirements) as consultants: An Existing Software Application tailored to client requirement. Build new Software Application to create a business value proposition after an organization diagnostic. Financial Implications: For clients who would require one of the existing products as a solution, DSL would charge the price of the product and the consulting fees. In cases where a new product is to be developed, DSL would charge a the product development fee and consulting fees.

3. Build Capability Through Collaboration: In areas such as cloud computing where DSL does not have expertise it would collaborate with one of the start-ups of the ERP market, and would offer their products as a solution. Collaboration with the new company would also help build capability over time. DSLs new partner brand to sell all its products under the new collaborated brand. Financial Implications: The above setup would include sharing of profits, where the start-up company would get paid for the software, whereas DSL would charge for consulting. Thus, DSL even without a product offering would generate profits through consulting. It will also create a relationship with clients across sectors, building channels for new business. 4. Creation of Sector Specific Solutions: A Newly Created Solution so offered to a client would in most cases work for another client in the same industry, and can be sold as it is, or with minor modifications. Financial Implications:

Minimal costs and high margins on such sales made would improve the bottom line. 5. Continuation of Current Business: The existing on-premise customers would not easily move to the online ERP versions because of risks like data security and lower customization. The customers who end up taking on-premise ERP systems would renew their licenses every year.

6. Customer Support: A value Proposition

DSL would provide the best in class responsive customer support, which would be chargeable after the end of a promised service period. Financial implications: Profit through the customer service.

7. Implementation: Same As Before

The Implementation of ERP for the clients would still be done by third party vendors.

Overall the new Business Model of providing ERP solutions would position DSL in both markets, the onpremise ERP which has been popular with the Fortune 500 companies and the more affordable online versions which would be popular among the SMEs.

Overall Financial Implication

1. As DSL moves from a product based company to a more service-oriented company, consulting would become a major revenue source thus profit margins would increase as it is a low cost service. 2. Non performing service would not be resource intensive, as the focus would be at selling what the customer requires at the best cost, thus further improving the bottom line. 3. Initial move from a product based firm to a service oriented firm would mean increased costs of capability building and buying for the consulting and sales force, with low sales volume for some time. Thus, a drop in overall profits. 4. The customer support arm would also help in improving the bottom line.

Answer2. Change in Engineering Practices: 1. Senior engineers would work as consultants providing innovative solutions to business problems (ERP requirements). They need to have good product, business and information systems knowledge. 2. Separate engineering teams would work on integrating the various enterprise solutions. 3. Engineers would also work on development of innovative products in sync with the requirements of the client, as per the consulting teams. They would also work on customization of existing product. 4. An IT engineering team would also be required to maintain the IT infrastructure, bought in for online enterprise solutions customers. 5. Strong Customer service teams would require engineers to continuously troubleshoot for issues and debug the software. 6. Integration of engineering resources of all product verticals into Consulting, Product Development and Customer Service.

Answer3. The new organization structure would not have different business units according the products. Instead they would have verticals according to the functions. The functions would include 1. 2. 3. 4. 5. 6. 7. 8. Consulting (Sales), Marketing, HR, Product Development, IT, Legal, Finance and Customer Support

There would be a common HR department with common policies and systems. However, there would be HRBPs for each of the new verticals who would take care of their specific and short term needs. The HR policies of the company should be aligned to drive the entrepreneurial culture. The HR processes must also drive problem solving, innovation and customer service orientation among employees. These four competencies can be driven by means of 1. The Performance Management System, 2. Through staffing the right resources and training them, 3. Giving individuals more responsibilities and freedom to work, 4. Allowing them to take risks would also inculcate entrepreneurial instincts (no penalty for failure when taking risk), 5. Avoiding bureaucracy in the organization and 6. Avoiding centralization of power. The Engineering vertical would comprise of: 1. Product development: Development of new products and customization of existing products according to client needs. 2. Product Improvement: Updating and improving existing products to higher and newer versions. 3. Product integration: Team would integrate different suites into one platform for the client. Under the heads of each of the above groups would be team leaders with their teams working on the requirements of different clients. If there would be free resources at any point of time they could be moved from one team to another. The structure would be flexible, such that all engineers could move across not only their sub-functions of engineering but also across the major functions like consulting and customer support. The Consulting (Sales) vertical would mostly comprise of senior engineers with good product and business knowledge, who would also work in teams on different projects.

The Customer Services vertical would comprise of engineers who would cater to specific clients and resolve their issues. The Marketing teams would advertise and market the consulting expertise of the firm and the existing products.

Answer 4. The Current performance appraisal system is not the right fit for the new business model because: 1. The current PMS talks about potential and performance however it does not have the right measure to judge potential. 2. Moreover the current PMS talks only about rewards 3. There is no information about the differential in rewards for different grade of performers. 4. Bottom performers were terminated. It is thus only a performance appraisal process and not a Performance Management System. To inculcate the cultures of entrepreneurship, innovation, problem solving and customer service, we need to have a performance management system which focuses on: 1. 2. 3. 4. The What (goals and results and outcomes) and the How (Input, Competencies) Development (Trainings and career planning) and Rewards (Incentives, and Salary hikes) High differentials among different grades of performers. Proper steps on the PMS a. Goal setting. b. Training needs Identification (from previous years performance, and job requirements) c. Mid-Term or Quarterly review of performance and path correction if required. d. Year end review e. Talent round tables. (Among function line leaders) f. 360 Degree Feedback (which would take the client perspective) g. Payment of Bonus and Salary hike. 5. Even if employees (mainly engineers) are not able to perform in the current set up and some of them lie among the bottom performers, they should not just be terminated. We believe that they were very talented when they were hired, and so would like to recommend that they should be counseled to leave and be helped in finding jobs elsewhere. This is in line with creating a cushion for risk takers thus promoting entrepreneurial spirit.

Answer 5. In the current compensation structure, the key driver to achieve full compensation is Division revenue and profits through DSA Reward System. It is recommended that the compensation be driven by the following value drivers such as 1. Customer satisfaction and 2. Capability building 3. Organizational profits. It is a right approach to pay the senior leadership in stock options as that brings in accountability. However the actual no. as mentioned above should depend on customer satisfaction, capability building and organizational profits. Answer 6. Currently the culture of the organization is broadly 1. Entrepreneurial in nature 2. Openness and Transparency. The new business model where DSL moves to service strategy would require the leadership and HR to drive a culture of: 1. Entrepreneurial spirit to improve sales of business solutions through Consulting. 2. Customer service orientation to boost sales and build relationships with clients by means of giving what they want. 3. Innovation to create the new products to suit the needs of the customers. The existing culture of openness and transparency will be a driver for entrepreneurial spirit.