In class today, we had a contrast between the vendor selection process of Cisco versus that of Harley Davidson. what do you think should drive your vendor selection process - alignment with your organization, cost, or functionality? And what were your thoughts on the success and failure of the two cases?
We also approached the subject of serependity versus planning. It is clear that serepndity does play a huge role in your personal success as well as the success of your firm. What are your thoughts on planning versus pure dumb luck?
What should drive your vendor selection process? I think it should be a combination of alignment with your organization, cost, and functionality. To lean to heavily on one of the three, such as cost, can take away from the other. i.e. cost-quality relaitonships. The driving force can change depending on the business. As in the Cisco case, because they were in panic mode, Functionality was most important because their whole system crashed.
ReplyDeletePlanning is essential, and I wouldn't rely on dumb luck, after all serendipity is only serendipity because its unexpected. I don't think Cisco and Oracle cold pull it off again.
After reading and preparing for the refutation of the Harley Davidson case, I felt strongly that Harley definitely should have gone with provider two since it had the best functionality and a more "consultant" like attitude. We really did believe that Harley needed this change in order to keep up with demand and become more efficient. Since Harley Davidson is a wild and crazy culture and has a laid back business approach, we thought this was the problem to the 2 year backed orders. Apparently we were completely wrong.
ReplyDeleteWhile listening to what you had to say today about each case and what actually happened, I realized that functionality is not everything. Of course you need a little luck on your side as Cisco did, but creating a better atmosphere seems to be what makes these types of companies tick.
I think the RFP process can be pretty daunting for everyone involved. The tendency is to want to rush through it so the project can be started quickly. This, however, is a critical part of the process because it outlines requirements and clearly assigns responsibilities to the parties involved. I think Cisco was so fed up with their system that they jumped a little too quickly. Taking a risk on a project is one thing, but I don't think Cisco knew how big of a risk they were taking. Procuring a capability is a very interesting concept. I'm not sure Oracle will ever sign another contract like that. I certainly wouldn't consider this case a blueprint for ERP Implementation.
ReplyDeleteI think more than anything else, the lesson that these cases offers is that you aren't buying a product, you're hiring a company to provide a service. It's important to look at the other things they've done, but the most important thing is whether they intend to work with you to make the technology work for you.
ReplyDeleteAlignment with your organization, cost, and functionality, all three play important roles in the in the vendor selection process. For instance, just having the cost affordable for now definitely should not be the critical factor in decision making, one needs to think about the long-run as well.
ReplyDeleteAs to answer the second question - serendipity vs planning, definitely, planning is more important as it leads you to the right direction. Depending on luck might work for once or twice, but not always. Hence, one should always have a proper planning.
What are your thoughts on planning versus pure dumb luck?
ReplyDeleteI don't think anyone relies on dumb luck for anything. It just happens. Everyone plans out what they want to do in terms of their career and just takes the opportunities as they arise. Luck is defined as "a combination of circumstances, events, etc., operating by chance to bring good or ill to a person." If someone can predict chance then I suggest that they go buy a bunch of lottery tickets and become a millionaire.
I'll go ahead and repeat the line I used in class. Success is what happens when preparation meets opportunity. As a business, it is important to prepare adequately for what you feel is the right approach. You determine the benchmarks you want to use in making a decision. Luck comes in when your benchmarks are the right ones to use when making a decision. If you get the right benchmarks, the company that fits will work perfectly, but only because you got the benchmarks right. You may also pick awful benchmarks and get a good fit out of sheer dumb luck. Basically, do your due diligence and pray!!!!!!!
ReplyDeleteI believe making a brave and smart decision is the most important key in a decision making process. We cannot let luck derive our business process and we have to make the smartest choice available. For instance, choosing ORACLE by Cisco was a smart decision. They could choose a low rank company in offshore with much lower expenses, but they did make a right decision and most of their success is related to Oracle implementation of new ERP.
ReplyDeleteThen making the best choice is crucial to have a successful business; however, luck plays its role in our life.
I believe that functionality is more important to consider. While they must understand the organization somewhat, functionality is more important. It is easier to learn the culture if the vendor is functional. However, simply understanding the culture does no good if the vendor is not capable to do what you need to be done.
ReplyDeleteAccording to the study performed at Carnegie-Mellon University, under a grant from the McKinsey Foundation, offers to the best of our knowledge, the first quantitative and statistically significant proof that acquisition planning pays. Although subjective evaluation of results by management does not differ greatly between planners and non-planners, objective financial measurements show a substantial difference. On virtually all relevant financial criteria, the planners in the sample significaftly out performed the non-planners. Not only did the planners do better on the average they performed more predictably than non-planners, thus planners appear to have narrowed the uncertainty in the outcomes of acquisition behaviour.
ReplyDeleteThe mentality that I have towards serendipity is that of Obi Wan “In my world there is no luck.” I am a firm believer in the idea of odds and risk, and the idea of one firm having the edge over another because of an invisible and irrational entity doesn’t make sense to me. To me there are two basic components to a successful project. One is having the right people for the project who understand how to work. The other is the information obtained. If the right people have the right information, then odds are well in favor of success.
ReplyDeleteI believe the reason Cisco was able to pull it off is at the heart of it, they were a technology company and very entrepreneurial, yes they were lucky, but this is a business they have grown and thrived in. The fact that Harley was unable to make it work, after talking in class about them trying to make Provider 2 fit their organization (taking them on rides on their Harleys) seemed quite ridiculous. People and cultures should match up, but sometimes I think recognizing differences and improving communications to adjust for that should make the difference between success and failure.
ReplyDeleteSometimes it better to be lucky than good.
ReplyDeleteA company has to plan for the future. There is no way around this fact. A company has to plan for the future. They need to set goals and work to achieve them. Sometimes luck is required to reach these goals. So a compnay sometimes needs both luck and planning to reach its goals.
A company can achieve goals without lluck though. A compnay thatg is setup solid might not need luck. Maybe the relation is inverted; the more good planning you do the less luck you need.
In Cisco's case, implementing ERP was a huge decision and selecting an unproven vendor in Oracle was not the best of ideas. Cisco should have done their due deligence in researching more about the vendors and their company itself, to find a proven vendor and software. Cisco got lucky with the ERP, if something would have gone wrong, Cisco would have gone out of business.
ReplyDeleteThe alignment with your organization, cost, or functionality, of course, drives the vendor selection process. All the elements should be considered. But there should be a priority according to the company’s current situation and what kind of system the company wants to install. Learning from the Harley Davidson, the understanding of the culture is also important for implementation of the ERP system. But I believe what the vendor selection process needs should be depending on what kind of system it will use. If the company only wants to improve the delivery efficiency, do they need to consider the culture factor when choosing the vendors?
ReplyDeleteas one of the group who presented the harley project, and who ultimately recommended vendor 1, i was sorta glad to see the refutation party's suggestion of vendor 2 fail in real life. i think the more we modernize our workplaces via the integration of information systems, a culture match between two companies is the most vital aspect. permit me to explain; i think we live in a world were specialization isn't as necessary these days, merely because we have information systems to help us perform analysis and decision making that used to have to be done in an analog manner by an individual. since much of the hard, actual work is taken out of the decision making process by machines, this makes even more important the ability for two companies to work together in a manner that befits each other's "style" (for lack of a better term). i think had harley (or any other vendor, in the future) decided on a company who they would be able to work much better with, they still would have seen a better fit and ergo, better productivity. after all, how worthless is it to have the most efficient company in a vendor co-operative agreement if you have no desire to work with each other?
ReplyDeleteto conclude, company culture has gone from a buzz word to something worth talking about in the modern workplace. mega conglomerations are starting to rethink the way they hire and maintain employees; for instance, google is consistently referred to as one of the best employers in surveys, and they incorporate non-traditional company practices such as having video game rooms for work breaks, etc., in order to make sure an employee feels valued and as a result, works harder/better/more efficiently. so why shouldn't culture be a concern when working across companies too?
As far as outsourcing IT, we saw in our studies of Harley and Cisco that different outcomes can come from very different circumstances. One got lucky, Harley did not. However, as far as functionality, price, and social considerations, I feel that all of these are needed to have a successful and long term relationship with a company one wants to outsource from.
ReplyDeleteIf the outsourcing is a simple one time occurrence with an outside company, than these considerations are not nearly as important. However, in building a business partnership and value web with an outsourcing company that your company plans on using extensively in the future, many of these considerations are necessary. Trust and value must be instilled on both sides in order to receive the best possible outcome for both your company and the work of the outsourcer. As in the case of Harley, I feel like they would have been much better off choosing company 1 that matched up much better with their corporate culture. Group 1 understood what Harley was about and therefor knew what they expected. Price considerations should also be taken into consideration too but should almost take second chair to ensuring that the company involved can be trusted and through an understanding of your company’s corporate culture and goals give you the best possible product available.
As far as planning vs. dumb luck goes, it is fairly apparent that Cisco lucked out. This, however, is a clear exception to the rule and that a planning mentality is much more successful than simply hoping a company who had never done any volume of that nature before will somehow is able to deal with what you throw at them. I feel that proper planning is crucial to the success of a company, even in outsourcing where they are not actually doing the work. The proper research into who they are involving the outcome of their success with is crucial in the overall success In the future.