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Inventory related risk (inventory accumulation, inventory loss, depreciation) No transparency - thus company having high account receivables No centralized System of Records, manual book-keeping, hence crucial information was person dependent Speed - Market was moving faster than Company’s speed of processing logistics, information and capital
Pgpmx mum ism-group01(1)
Group 1 – Amit Jaitly, Amol Deshpande, Mandar
Risbud, Michelle Dsouza, Sanmeet Dhokay, Vinod
Interesting Facts & Analysis
1. SME Company was established in 1955, but performance
deteriorated by 1990, almost to bankruptcy
2. New company, SHMEC, was formed in 1998 with private
3. Despite of this, company performance did not improve due to
operational & capital inefficiency. Bad debts increased , loss was
close to Rmb 100 mn
4. Some reasons of bad performance were:
1. Inventory losess
2. Lack of monitoring & transparency
3. Lack of information capture & sharing
4. Slow response to rapid market changes
5. Company initiated social research in year 2000 which suggested
building of a B2B platform to address all the issues
Interesting Facts & Analysis (continued)
6. Company had following advantages:
1. 40 years of industry experience with complete understanding
of procurement & selling
2. Good IT application base
7. Company had following advantages:
1. Experienced logistics center
2. Established customer & supplier base
8. The new Platform connected suppliers & customers in an
automated, transparent & centralized manner
9. New platform removed earlier drawbacks of person-dependent
processes, person specific knowledge of customer & problem of
inventory & bad debts
10. New platform also carried opportunities of forming a completely
new company, extending the Platform to international levels and
expanding it to different types of industrial products
a. All the problems:
1. Inventory related risk
2. No transparency, no effective monitoring, Sales staff
having unlimited rights, giving random credits
3. No centralized System of Records
4. Speed: Market moved faster, company moved slower
b. Following challenges were addressed:
1. Reduced inventory accumulation, total transparency,
centralized all approval processes
2. No manual book keeping, 3. Improved logistics
c. New challenges:
1. Stakeholders still had traditional mindset
2. Online revenue was only 10-20% of total revenue
3. Inventory management was “First Come. First Go”
4. New platform did not integrate with supplier’s systems
5. Profit re-adjustment was not possible in new system
6. Arrangement of manpower
Answers to Lead Questions
d. New Opportunities
1. Countless opportunities, extend the Platform for exchange
of any industry material
2. Extend scope to International manufacturers
3. Spin-off the platform as a new Company & extend scope
4. Integrate with suppliers’ ERP, thus integrating all aspects
e. Before change, whole business was inventory drive. Inventory
accumulation resulted into loss of Rmb 200 mn. Huge dead
inventories, resulting into depreciation. No fast movement of
goods. New Platform: whole business became Order-driven.
Minimum Inventory (to serve routine biz + irregular orders)
f. Yes. Old model - unlimited rights to Sales staff, random credits.
New Platform - regulated processes & strict Staff assessment.
Payment settlement was a parameter in assessment of Sales
staff. Capital cost was also included
g. Old biz - unlimited rights to Sales staff. Staff gave random
credits. All tacit knowledge was with people. New Platform
brought in transparency, staff showed great resistance & left.
Thus, loss of customers & accounts receivables.
h. Earlier flow was inventory driven. Distribution rights were set
by individuals. Credit rights were random. Distribution &
account receivables was manual and personal specific. On
new Platform, the business was order-driven. Procurement &
distribution was approval-based & in real-time. Settlement &
Acct Receivables, cost of capital was part of approval decision
i. No. The Platform model was still not JIT. It only reduced
inventory to great extent. New business catered only to 10-
20% of total business. Also, many customers made last min
requests & in small quantities, for whom, inventory had to be
j. Promote Rolling Inventory option & mix old inventory in the
batch. Arrange auction. Sell inventoried goods to last minute
k. Before: Function IT = 1, Network IT = 2, Enterprise IT = 2
After: Function IT = 4, Network IT = 4, Enterprise IT = 4
l. No much change needed. Employees were already familiar
with basic IT skills.
Interesting Facts & Analysis
Started by Mark Zuckerberg in 2003 for Harvard students .Earlier
called as Facemash.
Hollywood film ‘Social Network’ is a movie about the story of
More than 2.5 Billion Pictures are uploaded to FB every month
.More than 500 TB of data is uploaded daily
Recently, Mark Zuckerberg and his wife Priscilla Chan gave 99%
of their shares to charity after the birth of their daughter ‘Maxima’.
Interesting Facts & Analysis (contd.)
Facebook acquired WhatsApp in $19 Billion deal in Feb 2014 and
Instagram in April 2012 for $1 Billion.
Facebook has its second largest user base in India after USA.
Facebook’s fastest growing segment in the United States is
women 55 years and older.
Internet.org is a partnership between Facebook and six
companies to provide affordable access to internet services in less
a. Stakeholders in Facebook's business model
• Companies (for advertisements)
• Game developers
• App developers
b. What do people do on Facebook?
• Connect with other users
• Share information (Photos, Video's) via post
• “Like" posts
• Form Groups
• Create events
• Comment on other’s posts
Answers to Lead Questions
c. What made Facebook become so popular, so fast?
• Initially created for Harvard Students
• Alternative to a printed student directory
• Rolled out to >800 colleges across the USA
• In 2006 added features like messaging, groups, events,
discussion boards, video sharing and mobile access
• Provided perfect way to communicate and stay in touch with
friends and family
d. Business model of Facebook and its robustness.
• Ads are FB's highest revenue generator.
• Customized Ads on basis of Geography , Language ,Age ,etc.
• Ads even on mobile platform as well. Allowed advertisers to
target their client group.
• Earn revenue from Social Gaming and Mobile apps.
• Attractive to Businesses due to growing user base globally
e. Unmet social needs – Need of Society that Facebook meets
• Need to express oneself
• Do meaningful work
• To love and be loved
• To be truly seen and heard and to see and hear other people
• To play, explore, and have adventures,
• Need for emotional intimacy
• Offers a platform to connect with strangers, and also share
experiences others views and life's through posts, video and
f. What role do social websites play in building improved relationships
among people? Among communities? Do they also destroy existing
• Help people to network quicker
• Exchange personal info and establish trust
• Identify common interests.
• Help communities to come together for festivals celebrations, sports etc.
• Can be used knowingly or unwittingly to post/blog/comment information
or opinion that could offend/hurt/inflame sentiments.
g. What are the differences in the norms of interaction in the off-line
World and the online World? Formal, Informal?
• Real world (offline) - Restriction to behave by a certain
• Virtual world (online) - Constraints do not apply to the same
• Offline world - the person or group you interact will dictate if it is
formal or informal.
• FB interactions among peer groups - Informal
• Professional networking in LinkedIn - Formal
h. How does LinkedIn differentiate itself from Facebook? Compare
Twitter and Google+ to Facebook.
• LinkedIn - Professional networking using job/business/education
• Twitter - Interact with almost any other user on its service. Used
by celebrities to connect to large number of people. Users report
on social and political events as they unfold.
• Facebook - Allows information sharing only with friends.
• Google+ - Offers status updates and picture sharing similar to
FB .Also offers video chatting with groups of more than 10
• Both FB and Google+ - Can be used to restrict the information
to be shared. Google+ emphasizes on privacy by using 'Circles'
- to divide friends into logical groups
i. What are the similarities and differences between the business
models of all of these?
• Facebook makes money from Ads, Social Gaming Apps, other
• Google+ - Increasing the value of search to users. Personal
endorsement to Ads.
• Twitter – Sells promoted ‘tweets’ to Marketers. Earns additional
money through data licensing . Named 4 companies who
perform data mining to measure consumer response.
j. How is Wikipedia different from Facebook?
• Wikipedia works on the fact that knowledge can be shared
amongst users and they contribute to the posts or topics which
• As per its founder , Wikipedia is dependent on the fact that
there are more good people than bad people in this world
k. What is the social, political, and economic impact of social
websites like Facebook, LinkedIn, etc ? Do you agree that it is
yielding more power in the hands of society?
• Politics - Building image of Politicians through social media.
• Natural calamities - People reach out/offer help to others.
• Definitely gives more power but it can be used for both
Constructive or Destructive purpose.
l. What are some of the social problems faced by societies in India?
In World? Can these be addressed using Social Networks? How?
• Many people are not aware of the important issues that may
directly or indirectly impact their lives.
• Simply ignorant or do not access printed or electronic media.
• Social networks help in spreading awareness Offering help or
Donations for Natural Calamities like Flood, Earthquakes, etc.
due to social media impact are good examples.
About CA technologies
• Founded in 1976 by Charles Wang & Russ Artzt founded New York
based Computer Associates.
• Business – IT Management Solutions & IT security Solutions
• IPO – 1981; Revenues in 2011 - $4.429 billion
a) Briefly describe a. Cloud b. Major Firms providing services in the clouds
& their services
– Cloud - It is metaphor for ‘Internet’ & Cloud Computing is an IT
service model where computing services are delivered on demand to
customers over a network in a self service fashion, independent of
device & location
Microsoft Windows Azure – Cloud operating system PaaS
Google Cloud connect, SaaS
IBM Blue cloud , Consulting service, Smart business
EMC VMware (storage & virtualization software)
Symantec E-mail archive cloud
Amazon Elastic compute cloud , Simple storage system
AT&T Synaptic Hosting, Synaptic storage
b) What is Public , Private, & Hybrid cloud?
– Public cloud – is a cloud deployment model. You can share a
computing infrastructure across different users, business units or
businesses. Can be made available from a 3rd party service provider
via internet eg. Google apps.
– Private cloud – Private cloud offers many benefits of public cloud but
is managed within an organization. Provide greater control over
cloud infrastructure & often are suitable for large installations.
– Hybrid Cloud – combination of Public & Private cloud. Non critical is
outsourced to Public cloud while business critical services & data are
kept within the control of organization.
c) What is SaaS, IaaS & PaaS?
• SaaS – Software as a Service in which the application runs on cloud,
eliminating the need to install & run the application on client computer.
Eg- Gmail, FB, Google Apps
• IaaS – Infrastructure as a Service where computing & storage
capabilities are offered as a service. Eg- Amazon’s S3, EC2.
• PaaS – Platform as a Service facilitates the development & deployment
of applications without the cost & complexity of buying & managing
underlying hardware & software layers eg MS Azure
d)What do you understand by Business Process as a Service?
– BPaaS – is a form of BPO that employs a cloud computing service
model. The information & processes can be shared using Public
Cloud. BPaaS sit atop on the other 3 foundational cloud services
SaaS, PaaS & IaaS.
e) Identify the primary IT/IS technologies that have ruled in each of the 4
decades? Why do you think the revenues from UNIX/Open source platform
are not growing so fast?
– Mainframe Computing
– Client Server computing
– Grid computing
– Collaborative computing (Cloud)
– Unix/Open source – Tightly coupled system architecture, Significant
switching costs & time required to move to new software model,
security & compliance.
f) Briefly compare the traditional (in house) IS Model with Cloud based IS
Model on Cost, Hardware update, Maintenance, Applications /Software
update/management, accessibility, usage, reliability/uptime &
security/safety (of data & information)
Parameters IS Model Cloud based IS Model
Cost High Less due to virtualization
Hardware update &
Regular Hardware update & high
maintenance due to infrastructure
No Hardware update &
maintenance cost as it is provided
by 3rd party service providers
Companies need to buy software
license & renew it. Need to rely on
Software companies. More cost due
to employment of IT engineers
All applications provided by 3rd
party service providers. Less costly
Accessibility/Usage Limited accessibility, Server
capacity utilization ~6% only
High accessibility & usage
Reliability/Uptime Highly reliable, Can set SLA uptime
at 99.99% or higher.
Less reliable. Providers cannot
commit High quality of service &
availability of Guarantee. Cannot
match SLA uptime of 99.99%
Security/Safety of Data &
Very High Can be compromised, matter of
concern for companies.
g) Which system infrastructure, application software & application
development, deployment is projected to be rising rapidly? Why do you
– 1992-2008 was characterized by Network Computing
– Distributed servers handled an Enterprise’s departmental & other
workloads emulating Mainframe functions
– Rise & maturation of distributed computing allowed core IT functions
to expand beyond mainframe.
– Enterprise IT capabilities became more complex as Internet & e-com
software enterprise applications into sales & purchase process over
• The main reason is ‘Virtualization’ which was becoming
increasingly important in distributed computing environment as well
as in three forms (system, platform & hardware).
Infrastructure Application software Application development
LINUX 22.4 22.4 23.5
Windows 32 & 64 8.8 9.2 9.2
h) Why did CAT change name to CA Inc in 2006? Why did it change the
– Founder Wang stepped down as CEO in 2000
– 2001 – Earnings were reported inaccurately using various
accounting practices which led to investigation (Accounting scam)
– 2003 – Investigation found that some contracts were backdated
– As it’s brand name was hit; new CEO John Swainson launched a
new global branding program ‘Believe Again’
– As part of re-branding & to emphasis the firm’s differentiator – Ability
to unify elements of IT & simplify complex IT management it changed
its name to CA Inc in 2006.
– By 2010 CA Inc had 13500 employees, Revenues Inflow (55%
Domestic, 45% International). CA intended to change the revenue
inflow (55% international & 45% domestic) by entering into new
geographies & selling to new accounts in 3 years.
– So, CA Inc changed its name to CA Technologies under new
management & dedicated $200 mio in marketing to support
rebranding & reorganization effort.
i) What are the advantages of using Clouds that Adam Famularo & David
Dobson can project to convince their clients (the prominent CEO’s, CIO’s &
– Advantages of using cloud –
– Through Virtualization management, Service assurance, Security
– Immediate access to Hardware resources with no upfront capital
investments for its clients.
– For start ups Cloud can dramatically reduce the upfront cost in
– Cloud computing will make it easier for clients to scale their services
as the computing resources are managed through software & they
can be deployed very fast as new requirements arise.
– Cloud computing will help its clients to respond in real time to
information by using new class of application – eg mobile interactive
– Clients can use clouds for Business analytics that use vast amount
of computer resources to understand customer buying behavior from
voluminous amount of data
– Extension of computer intensive desktop applications that can
offload the data crunching to the cloud leaving only the rendering of
processed data at the front end for it’s clients.
j. What are the likely disadvantages going to be pointed by
– Difficulty in shifting the applications
– Significant switching cost and time
– Security and Compliance
k) Address doubts regarding the confidentiality of data
– By Advocating Fully private Cloud Service
– Highlighting a dedicated vertical for the security
i) Challenges in adopting Cloud Technology by CA
– Ensure dominance in Main frame
– Integration of the acquired company with CA
– Reorganization of the company
– Aligning of the internal team with the line of business
– Addressing the User Interface
m) Changes to structure
– Individual responsible for the following pillars
• Grow the Main ware
• Develop SaaS
• Lead Security
• Develop Virtualization Products
– Reflecting Customer Facing approach
– Integration of the new acquired business (incubation time)
– Shift from geographic to product perspective
n) New Knowledge/Skills/Talents necessary in team
– adaptation , alignment towards the goal
– New management integration platform catalyst
o) Purpose of Acquisitions – Capability Based Acquisition
– Difficult to move company from its core strength
– Large companies don’t easily innovate
– Integrate from start ups
– Build on existing platform and make it stronger
p) Private cloud or not ?
– Private cloud is secure has dedicated resources for the company
– Expensive compared with hybrid/public cloud
– In case of private cloud – agility can be issue , difficult to upgrade
q) One stop single point solution
- Large companies were focused on providing their core competence
- Cloud computing yet to evolve
- Regulatory, Security issues
- High switching cost
- New partnerships may bring opportunities along with risks
- Yet to develop standards
- Manageability is an issue