INFORMATION TECHOLOGY MANAGEMENT PRE-ASSIGNEMENT

Prepared by Robert C. Kramer

Questions

1. Outline the key factors that led Bombardier to consider an ERP system.
2. P&G is considering using a single, large, third party vendor versus multiple specialist third party
vendors for outsourcing its GBS division. Discuss the pros and cons of these two sourcing
models.
3. Hulu has three different sets of constituents to satisfy. Who are they and how does Hulu serve
each of them? Do the needs of these customer groups converge?
4. What strategies and tactics can HighNote use to increase the proportion of premium users?

1. First of all, Bombardier went on considering an ERP system because of its strategy.
Bombardier’s strategy was to be ever more competitive, ever more productive, ever more
efficient. Or as the VP put it more specifically : to become an integrated organization in which
employees semlessly share common data across sites, and so on…And if you want that, past a
certain self dimension of the business, you cannot make it without ERP. You simply become too
big to handle things by the ear or from own experience.

The key factors would be :

- They needed higher and faster productivity, in accordance with the product-to-market
times
- They neede less costs (at least 75% of the cost of an aircraft can be attributed to
material spending)
- They had low inventory visibility and they needed less inventory (primary goal of the
system was to improve the visibility and to reduce the value of inventory)
- One of their goals was to reduce the paper used, to become a paperless workplace
- Bombardier needed better data sharing and communication between divisions, since it
inherited the data, processes and ystems of every company it acquired and thus
became an inefficient system.
 2. Pro’s and con’s of single versus multiple outsourcing specialists :

Options PRO’s CON’s

- Since it’s only one relation, it’s
easier to maintain and manage
- Only a small team of own
personnel is required to
Single supervize the implementation
outsourcing - Due to his size, it can manage
third party multiple functions, with above
satisfactory performance : IT,
accounting, logistics.
- Hard to find such a vendor
- Big company means less flexibility.
Less flexibility means less
inovation.
- Big vendors make business too :
they will focus on the most
profitable of the services.
- Since you will find only a few, if
any, such vendors, they are in a
position of power, with fixed or
raised prices.

- Agility : if not satisfactory, a - Time and resource consumming for

small specialist can be your company
replaced - Very hard to make different
- Much more interest and outsourcing specialists to allign
Multiple attention in you and your themselves to your values,
specialist needs, since you are, framework and pace.
outsourcing supposedly, a big account for
third party them.
- Smaller prices, as the
competition is very steep.
- Smaller teams reach different
innovations faster, and you
bennefit from that.

3. Hulu’s set of constituents are :

a. Content owners (Disney, 20th Century Fox, Universal, Warner Bros., etc)
Content owner are served by the further capitalization of their content. Often a show on TV is
facing less popularity, or it ends, and it has no more space in the current broadcasting programme,
thus losing capital and notoriety by oblivion. Hulu can push its value further away and help the
content owner to capitalize on the value, however little, of that ended TV show or movie, by re-
distributing the content.
b. Users (the regular customer, the public)
Users have the best deal. Free site, less advertisement, a lot of content, whenever, however and
whatever they want it. The site is user friendly and has a lot for them, they can give or reveive
recommendations, they can vote, theay can see surveys, etc. Hulu is different from the usual
televison sets, that force the televiewer to watch its show when they want, with not much interplay.
Hulu also offers that : interaction.
c. Advertisers (American Express, Cisco, GM, Honda, Intel, Johnson &
Johnson,McDonald’s, Procter & Gamble, Unilever, Visa, and Wal-Mart, etc)
In contrast to the classic content provider, the televisions, Hulu can exert more control over the
advertisement. It can target, select, segment and properly address the commercial to the right
customer, based on tv shows and movie preferance or user profile.
The needs of these customer’s rarely converge, which makes Hulu’s job very difficult :
- Hulu, through some features, like Hulu desktop, cannot control the user
engagement, nor the advertisement’s efficiency – minus for the advertisers
- By not evidentiating the name or the brand of the network that own the show, it
allienates the network’s base of customers and renders impossible for networks to
launch new shows based on the popularity of current ones – minus for the content
providers
- Hulu cannot have acces to episodes on the spot. It takes time between the official
air time and Hulu’s availability – minus for the users
- Hulu does not have ad-skipping or fast-forward – minus for the users and for the
providers

4. HighNote, in order to increase the size of the paying customers portfolio, should, above all,
apply a survey among the customers. It is important that you know what they like or if they’ll be
willing to pay at all. It would be great if the survey could reveal how much are they willing to pay
and for what features exactly, which leads to further development. Maybe HighNote doesn’t
have what it takes yet, to switch from free to premium.
Then, they should look into the communication with the customer database, since
communication is the basis of a relationship. Hence, if the decision would be of migrating from
free to premium, they should take care of the clarity and the philosophy behing that move.
Nobody likes to pay more than it’s worth and certainly nobody wants hidden costs. The purpose
of High Note communication initiatives should be to help free users understand the full range of
the premium capabilities and value, so, in case of a migration towards a predominant premium
range of services they don’t want to try some other music services.
And then there’s the free accounts. They should be available still, but they should be tweaked
just a little above satisfactory, since you don’t want to lose you army of loyal clients that bring
you revenue from advertising. They, the free accounts, should be lured into the premium with
dazzling and extra cool features.