New Strategic Thrusts

Topics: Strategic management, Need to know, Budgets Pages: 6 (2270 words) Published: April 29, 2013
MINI CASE: IT Planning at ModMeters
Brian Smith, CIO of ModMeters, groaned inwardly as he listened to CEO John Johnson wrapping up his remarks. “So our executive team thinks there are real business opportunities for us in developing these two new strategic thrusts. But before I go to the board for final approval next month, I need to know that our IT, marketing, and sales plans will support us all the way,” Johnson concluded. Brian mentally calculated the impact these new initiatives would have on his organization. He had heard rumors from his boss, the COO, that something big was coming down. He had even been asked his opinion about whether these strategies were technically doable, theoretically. But both at once? Resources—people, time, and money—were tight, as usual. ModMeters was making a reasonable profit, but the CFO, Stan Abrams, had always kept the lid screwed down tightly on IT spending. Brian had to fight for every dime. How he was going to find the wherewithal to support not one but two new strategic initiatives, he didn’t know. The other VPs at this strategy presentation were smiling. Taking ModMeters global from a North American operation seemed to be a logical next step for the company. Its products, metering components of all types, were highly specialized and in great demand by such diverse customers as utility companies, manufacturers, and a host of other industries. Originally founded as Modern Meters, the firm had grown steadily as demand for its metering expertise and components had grown over the past century or so. Today ModMeters was the largest producer of metering components in the world with a full range of both mechanical and, now, digital products. Expanding into meter assembly with plants in Asia and Eastern Europe was a good plan, thought Brian, but he wasn’t exactly sure how he was going to get the infrastructure in place to support it. “Many of these countries simply don’t have the telecommunications and equipment we are going to need, and the training and new systems we have to put in place are going to be substantial,” he said. But it was the second strategic thrust that was going to give him nightmares, he predicted. How on earth did they expect him to put direct-to-customer sales in place so they could sell “green” electric meters to individual users? His attention was jerked back to the present by a flashy new logo on an easel that the CEO had just unveiled. “In keeping with our updated strategy, may I present our new name—MM!” Johnson announced portentously. “Oh, this is just great,” thought Brian. “Now I have to go into every single application and every single document this company produces and change our name!” Because of its age and scientific orientation, ModMeters (as he still preferred to call it) had been in the IT business a long time. Starting back in the early 1960s, the company had gradually automated almost every aspect of its business from finance and accounting to supply-chain management. About the only thing it didn’t have was a fancy Web site for consumers, although even that was about to change. Today ModMeters had systems reflecting just about every era of computers from punch cards to PCs. Unfortunately, the company never seemed to have the resources to invest in reengineering its existing systems. It just layered more systems on top of the others. A diagram of all the interactions among systems looked like a plate of spaghetti. There was no way they were going to be able to support two new strategic thrusts with their current budget levels, he thought as he applauded the new design along with the others. “Next week’s IT budget meeting is going to be a doozy!” Sure enough, the following week found them all, except for the CEO, back in the same meeting room, ready to do battle. Holding his fire, Brian waited until each of the VPs had presented their essential IT initiatives. In addition to what needed to be done to support the new business strategies, each division...
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