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H.A. Foods A Broader Vision Ryan Miller Chris Modec-Halverson Edie Plasch Kayla Pocquette-Rondeau Mgt 6530 Managerial Applications of Technology
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H.A. Foods A Broader Vision

Feb 24, 2016

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H.A. Foods A Broader Vision. Ryan Miller Chris Modec -Halverson Edie Plasch Kayla Pocquette-Rondeau Mgt 6530 Managerial Applications of Technology. History. History. H.A. Foods esta blished by Hans Rolo in 1954 Chewbacca, Maine Focus on organic foods and supplements L ocal suppliers. - PowerPoint PPT Presentation
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H.A. Foods The New Strategy

H.A. FoodsA Broader VisionRyan MillerChris Modec-HalversonEdie PlaschKayla Pocquette-Rondeau

Mgt 6530Managerial Applications of Technology

1HistoryHistoryH.A. Foods established by Hans Rolo in 1954Chewbacca, MaineFocus on organic foods and supplementsLocal suppliers2Mission StatementOld To make the world a better place through healthy food.

NewTo offer value to each neighborhood we become a part of through providing healthy, organic, socially responsible products. 3Current StrategyMission driven, centered around several core pillars:Sell the highest quality natural and organic products available;Satisfy and delight our customers;Support team member happiness and excellence;Create wealth through profits and growth;Care about our communities and our environment.

Current strategy supports mission:Command & Control / High InvolvementBuild and nurture alliances with local organic growersEnter areas of similar demographic, affluence, and income.4Why Change?HA foods has described a disconnect between the community and the organization.

5Recommended StrategiesEnter into new markets by re-envisioning the HA Foods brandBuild-out, remodel existing storefrontsStock quality, HA branded foods and items popular within existing geographic areasColloquially relevant marketing and advertisingDo NOT reinvent the wheelCreate Alignments between StrategiesDirect information, organization, & business strategies towards sustainability, agility, and innovation.6Create Maximum Surface Area

Flattening the hierarchy and putting organization members in touch with the environment Structure the organization around customers (internal and external) Make heavy use of teams (permanent, virtual, temporary, project, etc.) Create small, wholly-contained business units (this could be the individual stores) Push decision making down in the organization Align to create transparent information systems (mention this will be discussed later in the pres.)7Porters Generic Strategies

HA Foods, through the proposed radical decentralization, will shift its current strategy from one of a industry-wide differentiation, to focus on the perceived* narrow market segment, still focused on differentiation: achieving competitive advantage in local segments.

*Perceived as being focused narrowly, but as in Porter (1985) this narrow focus in and of itself is not sufficient for above-average performance. Other factors are included. However, if all store branches have this narrow focus, does it not create a competitive advantage in the entire marketplace?8DAvenis Hypercompetition

Business practices as momentary competitive advantages.Competition in the market leads to innovation.Innovate ->Exploit -> Abandon

9Current Information Strategy Hardware/SoftwareCentralized Computer System

ERP Systems Sales/Inventory

CRM SystemsMarketing/Customer InitiativesNetwork/DataUsers access the the mainframe via networkingData collected/stored centrally

In regards to the hardware/software: HA foods has a centralized computer system. The ERP system and the CRM system are all centralized with the data being collected and stored centrally.Local users access the needed data but for viewing purposes only. All decisions are made at a high level and the decisions are rolled down throughout the organization. Current Business ProcessesMarketingProduces and executes marketing plans

One marketing plan, many locations

No longer fits with HA's business strategy Marketing Business Process in the current state of the company. One marketing plan for many locations. Current Business ProcessesHREffectively hires capable applicants

Data flows from the top down

No longer fits with HA's business strategy Human Resources and their hiring process in the current state of the company. Corporate HR makes staffing decisions for all levels and regions of the company. With the new business strategy, this is no longer a realistic practice. Current Organization Strategy

Human Resources and their hiring process in the current state of the company. Corporate HR makes staffing decisions for all levels and regions of the company. With the new business strategy, this is no longer a realistic practice. RECOMMENDATIONS14Proposed StrategiesQuestion 1: How can we align the Business Strategy with Organization and Information Strategies?

Answer: Develop a mindset that is Built to Change.On-the-fly adjustments to strategic intent which optimize sustainability.- Breadth- Aggressiveness- DifferentiationCapture momentary advantages

Recognize IT as a Strategic Business Partner

15Proposed StrategiesQuestion 2: How can we align the Organization Strategy with Business and Information Strategies?

Answer: Rally around capabilities, processes, and the culture.Communication Collaboration ConsensusWhat do our employees need?What processes create value?What do we already do that support this?Reduce levels of hierarchyPush decision making down and across boundaries

Recognize IT as a Strategic Business Partner16Proposed StrategiesQuestion 3: How can we align Information Strategy with the Business and Organization strategies?

Answer: Recognize IT as a Strategic Business Partner!Information Transparency- Visible to All- Understood and Accepted- Available and timely- Focus on critical control areas

IT flattens organizations.IT functions are no longer taken for granted as ad-hoc services which either work or become obstacles for work-arounds.Pushes information across boundaries and allows for the dissolution of management levels and the empowerment of lower level employees to make decisions.

Flattening in the sense of the radical decentralization proposed means to normalize the IT function so it is same for individual units and supports individual store processes and goals.

17Current Architecture

This slide contains both a generic IT view as well as a organizational explanation for how the current culture/identity/image have been formed.18Proposed Architecture

19OutsourcingNo plan to outsourceImproving company culture: fitting the store with the communityService maintenance with CRM

Knowledge Assets Improve CRM knowledge to learn more about customersNeighborhood/geography knowledge Improve supply chain management knowledge

Data MiningCompany and customer information needs to be protected Competitors TrendsConsumer profiles-keep in house

Data MiningData Protection ActOnly collect information for specific purposeKeep it secureRelevant and up to dateOnly hold as much as the company needsAllow the data to be seen upon requesthttp://ico.org.uk/for_organisations/sector_guides/business

Leadership NeedsEnsures there are effective strategies in place:ResourcesCommunicationA leader who ensures the alignment of:BusinessOrganizational Technological Strategies24Governance Structure

Decentralized

Governance questions which must be considered are those pertaining to IT principles, IT architecture, IT infrastructure, Business applications, and IT investment and prioritization. Projects26Project 1: Facilitate DecentralizationExamples of business processes after decentralization

Purchase HR Services from CorporatePurchase IT Services from Corporate Project 2: Purchase CRM Uses:Examples of business processes using a CRM

Part MarketingPart SalesPart Customer RelationsAn example business process using a CRM: marketing.

The CRM integrates marketing, sales, and customer relations data. The goal is that all of the specialized data from the local market can enable the local stores to better serve their local market. Project 2(cont): Purchase CRM BenefitsGet the big pictureLocal customersLocal marketsRelevant DataProposed Products

SalesForceLocal customers, local markets, relevant data. Proposed product: Salesforce, a no hardware, no software (Cloud) solution to start with.Primary uses: monitor local market trends, special sales and promotions, enable the team from HA Foods to work together the better their marketing strategy as a whole. Also can be used as a social media platform.Project 3: Supply Chain ManagementGood relationship with local suppliersProduct forecastingTailoring products to the store location and consumers wants/needs, not corporate needs

Project 4: Change ManagementWhat needs to be done:Overcome resistance to changeDisconfirm existing ideas;Create conditions in which employees feel empowered to help with the change process;Information transparency regarding scope;Achieve leadership buy-in;Communicate;Make it happen!31Evaluating the Projects32Project Costs Funding

Capital budgeting Project Costs Year 1 Year 2 Year 3 Implementation Costs:New Offices - Lease 500,000 500,000 500,000 Servers 50,000 - - Thin Clients 50,000 - - Project Management 50,000 10,000 10,000 Total 650,000 510,000 510,000 Operating Costs:Personnel 100,000 75,000 75,000 Client Licenses:CRM 25,000 25,000 25,000 Supply Chain Management 25,000 25,000 25,000 Total 50,000 50,000 50,000 Annual Benefits:Increased Sales 5% 750,000 950,000 1,150,000 Return on InvestmentImplementation Costs 650,000 510,000 510,000 Operating Costs (5 years) 50,000 50,000 50,000 Total Costs 700,000 560,000 560,000 ROI: Total Benefits - Total Costs / Total Costs 7%70%105% Weighted Return on Investment Project ROI Alignment Accuracy Weighted ROI 1 Decentralization 61 0.8 0.5 24.40 2 - CRM Module61 0.9 0.8 43.92 3 - Supply Chain Module 61 0.8 0.7 34.16 4 - Management Culture 61 0.7 0.5 21.35 35Project RisksTechnical

Financial

Organizational

ClosingThe implementation of these four projects will allow H.A. Foods to create a stronger connection to the communities in which they operate.

Questions?

37ReferencesEisenstat, R., Foote, N., Galbraith, J., & Miller, D. (2001). Beyond the business unit. McKinsey Quarterly, 1, 54-63.Frand, Jason. Data Mining: What Is Data Mining? Retrieved on May 4, 2013 fromhttp://www.anderson.ucla.edu/faculty/jason.frand/teacher/technologies/palace/datamining.htmGrover, V., & Segars, A.H. (2005). An empirical evaluation of stages of strategic information systems planning: patterns of process design and effectiveness. Information & Management, 42(5), 761-779.Information Commissioners Office. Business. (2013). Retrieved on May 4, 2013 fromhttp://ico.org.uk/for_organisations/sector_guides/business.Lederer, A.L., Sethi, V. (1988). The implementation of strategic information systems planning methodologies. MIS Quarterly, 12(3), 445-461.Lawler, E.E., & Worley, C.G. (2006). Built to change: How to achieve organizational effectiveness. San Francisco, CA: Jossey-Bass.Lawler, E.E., & Worley, C.G. (2010). Management reset: Organizing for sustainable effectiveness. San Francisco, CA: Jossey-Bass.McElheran, K. (2012). Economic and Business Dimensions: Decentralization versus Centralization in ITGovernance. Communications Of The ACM, 55(11), 28. doi:10.1145/2366316.2366326Maroofi, F., Aliabadi, B., Fakhri, H., & Hadikolivand. (2013). Effective factors on crm development.Asian Journal Of Business Management,5(1), 52-59.Pearlson, K., & Saunders, C.S. (2013). Managing and using information systems: A strategic approach. (5th ed.). Hoboken, N.J.: Wiley.Reich, B.H., & Nelson, K.M. (2003). In their own words: CIO visions about the future of in-house IT organizations. The DATA BASE for Advances in Information Systems, (34)4, 28-44.Schein, E. H. (2010). Organizational culture and leadership (4th ed.). San Francisco, CA: Jossey-Bass.Vosila, R. (2013). Selling IT to the business, means business. CIO (13284045), 2.Worley, C.G. (2011, July). Management reset: Organizing for sustainable effectiveness. Lecture presented for the Cape Cod Institute, Eastham, MA.Woniakowski, T., & Jaowiecki, P. (2013). IT systems adoption and its impact on the food and agricultural sector.Acta Scientiarum Polonorum. Oeconomia,12(1), 45-54.38