Nikita Tretyakov (091816390)
Professor: Tabatha Dominguez, Section H
TO: Keith Collins
FROM: Nikita Tretyakov
SUBJECT: Recommendation for Paragon Information Systems
DATE: November 29, 2011
__________________________________________________________________ During the second year of Paragon Information Systems recovery from mid—1996 crisis, the company is in need of a clear stated strategy that will solve the issues of losing a major part of its employees and management to a newly formed competitor. After the first year of rebuilding the company found itself in much better conditions than before (Exhibit 1,2). One of the changes that has been made is the change to the company’s business strategy and direction (Exhibits 3,4,5) After a thorough alternative evaluation (Exhibit 11), the proposed strategy is to continue expanding the company’s portfolio of IT capabilities and move beyond Newfoundland region of Atlantic Canada. The company’s employee commitment and innovation will be its main advantage in the industry and over its new competitor(Exhibit 8).
After conducting the industry and environment analysis (Exhibits 6,7), it is clear that the IT industry is driven by new advancements in technologies, which needs a particular level of knowledge and innovation.
The management preferences as well as the organization capabilities (Exhibits 9, 10) perfectly fit the chosen strategy as they both support new IT products and services as well as new market opportunities.
The company is expected to be profitable in the next 3 years (Exhibit 13). With a small decrease in the profitability in 1998 year (mainly due to increase in Wages), the company is to make a profit of $1,892 and $3,946 thousand dollars in 1999 and 2000 respectively.
To implement this plan the company has to find new suppliers, implement new IT training and look for new customers in new Atlantic market. (Exhibit 12)
Exhibit 1 – Current Performance Assessment – Balance Scorecard Financial Prospective
Increase in Revenue of 17% in one year
Decrease in expenses of 6%
Net income is twice as high as the historical
Shift to more service-oriented culture
Customers loyalty is back as they are assured
the company is in the rebuilding process
New customers acquired in IT consulting and
systems integration and other serviceoriented industry sectors
Internal Business Process Prospective
Shifted from hardware to more customerservice oriented capabilities
Some past contracts were recovered from the
Learning and growth Prospective
Initial lack of expertise due to the exit of key
High employee morale and motivation
High openness to changes
Strong sense of contribution and support from
the parent company
Exhibit 2 - Performance Matrix Analysis
Analyzing the performance matrix of Paragon, we can notice that in mid-1996 the company had hit the crisis poin, being in the Quadrant 4, with a very low organizational health, as key managers left the company, along with low operating performance. However, after Keith Collins became the president, the company started to move toward the upper-side of the Quadrant 3, with better organizational health and better operating performance. In order to become in the desired state the company has to significantly improve its organizational health and operating performance. Exhibit 3 – Current Direction
Mission: Paragon’s mission is to become a client-based provider of IT-related hardware and service to the businesses in Atlantic Canada that delivers a high-quality customer service. Vision: The company’s vision is to acquire a big number of IT capabilities, which can be utilized while providing as many IT products to the clients as possible.
Values: As Paragon tries to achieve its...