Agro Credit Case Study

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Creating a Process-Driven Organization at AGCredit

Answer 1:-AgCredit was a Midwest Agriculture Credit and Loan company. It was a midsize financial institution focusing on agribusiness. It had grown significantly in the past few years and was holding its own against other, much larger banks because of its extensive customer knowledge. Kate Longair to the CEO of the company explained all the processes and the systems the company used and how they were integrated using a diagrammatic view for the same. The CEO then decided upon the need for change into various departments to bring about a transformation in business. Finney, the CEO wanted to focus on AgCredit’s key strategic drivers which included continuous growth, expanded customer relationships, the ability to spend more time with the customer, the ability to cross-sell between business divisions and the ability to provide a consistent customer experience across all delivery channels. The CEO’s vision for growth was to create a customer-centric organization by using technology to support people and processes. Realizing that systems integration by itself would not produce the desired result, management redesigned the company’s business processes from beginning to end. Now the challenge was to redesign the IT organization to support the new organization structure.

Answer 2:- IT organizations serve two purposes: development (i.e., which involves the acquisition of new systems and technology and the implementation of these new systems into the workplace); and operations (i.e., which involves running the data center, production programs and networking infrastructure is decentralized. It leads to facilitation of various business processes across the bank. IT was in a significant state of disarray. Absence of appropriate IT Governance as well as an architecture plan. IT was organized in silos to mirror AgCredit’s divisional structure and each business unit owned and governed its own IT Projects. The company has outsourced chunks of IT functions. The tasks are unevenly and randomly divided amongst the staff irrespective of their expertise. The current structure seems to be more like the enterprise oriented architecture. Due to irregular IT organizational structure many problems arouse with the business processes which led to different choice for the architecture of IT. The structure moreover has a cross-silo flow which creates confusion amongst the business processes as well as data mess. The information appears in various formats, which is difficult to reconcile.

Answer 3:- Key Issues: - IT was completely broken and lack of systems integration. Everyone was aware of adding value to processes to the company but how the business strategy would fit with everyone else’s to deliver enterprise value was unknown by others. There exists lack of knowledge of business processes and how they worked together. The key business processes had never been written down before and hence they needed to be documented. The front line staff had to access many systems for simple business processes. IT was in a significant state of disarray. A key problem was application centric approach the organization took to its work. Business people would demand new systems from IT for every process whereas IT staff would always train them to make use of the existing systems. This created data mess as there were various systems with loads of information scattered everywhere. Due to this the information appeared in different formats, which were difficult to reconcile. This was a significant challenge when creating accurate reports for banking and other government regulators. IT is negative in business: expense, inability to get work done in a timely fashion, bad information, customer complaints and poorly trained IT staff. AgCredit starts with no formal IT architecture. It is also about the work the business needs to do first in order to create the right environment for IT transformation, i.e., a process...
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