Chapter 15 Article: Companies Willing to Take Risks in a Recession

I chose an article from BusinessWeek. The article talks about companies that are taking risks in this recession. The article was pretty long and talked about many different companies all using the recession as a tool to either buy out companies with cash hoards or expand globally. I turned my focus on one particular section about a company called Inditex based in Spain. This company chose to continue to go global even in this recession. Inditex is one of the worlds leading textile distribution groups. They are the owner of clothing retailer Zara which has annual sales of $14 billion across 4,264 outlets. The company has been praised for its outstanding supply china management organization that allows it to adapt to changing economies.

Inditex is now expanding aggressively adding as many as 450 stores this year! This has to do with chapter 15 because they are not only expanding throughout Spain but also into the U.S. They already have 42 stores in the U.S. and will be adding to that number by opening stores in Chicago, the Midwest and Florida. The company is fortunate enough to take advantage of this economical climate especially in the United States. Right now in the U.S. there are so many retail stores going out of business. This has left prime real estate open and available to be bought up very inexpensively by Inditex and other companies wanting to get a chunk of the U.S. market.

This article shows that with the proper planning and knowledge of your global market you can be successful in any sort of economy. Initex has been lucky to have such a strong supply chain management system. This has given them the base to go global and continue going global keeping all operations in order. With further research I found that Inditex has also recently moved to a centralized web based shipping platform to improve shipping visibility. The message I took away from this article was that even if a company has already gone global there is still always room for expansion. With expansion may come further improvements that a company must be willing to roll with in order to be a success.

Works Cited

Weber, Joseph. (June 11, 2009). Companies Willing to Take Risks in a Recession. Retrieved June, 15, 2009, from http://www.businessweek.com/magazine/content/09_25/b4136036137349.htm

Nestlé Tries for an All-for-One Global Strategy

Nestlé Tries for an All-for-One Global Strategy Case Study Questions

2. The type of global business strategy that Nestlé originally had in place was decentralized. The company was operating on 80 different information technology units in many different countries. They realized that this system was not working and turned to centralizing their company’s operations. I think that this strategy was very appropriate for Nestlé because they were not able to take advantage of negotiating deals with suppliers, keeping all data organized and having one source of information that was accessible around the globe.

3. When it came time to implement the centralized data strategy named Global Business Excellence (GLOBE) Nestlé ran into a lot of challenges. Management around the globe at their different offices resisted the idea of centralization. They believed that they would lose decision making power if things became uniform throughout the company. They also did not know how this would work with their sectors since many of the countries were very different and had to abide by certain laws and regulations. There were organization challenges as well. It was difficult to organize this huge project when there were some budget restrictions coupled with strict deadlines. Things had to be reworked until processes were able to be completed one at a time within reasonable timelines. Chris Johnson who was the lead on this project had to make sure that not only was he meeting deadlines but that he was able to keep within a budget which proved challenging. Technology played an enormous role in this operation. Everything needed to be changed to a new system that would centralize data. Challenges arose because there was not a lot of time to train employees on this new SAP program but it still needed to be rolled out.

4. Nestlé’s management used a couple of strategies to deal with challenges. They were able to have meetings with managers and listen to concerns as well as voice solutions. They also had to use a little bit of a more forceful tactic when things were not going smoothly. Chris Johnson just laid it on the line, if the management was not going to fall in line with this new implementation then he would be fired and one of them would have to take over. Using this tactic made managers realize that this was going to get done with or without them so they just had to get used to the idea. When organizational challenges came about meetings were held and changes were made to timelines and budgets accordingly so that the project did not get pushed off track. The technology eventually fell into place with little complaint or problems from the global sectors. Overall I think that this implementation was necessary and will benefit Nestlé greatly in the future. By having all information centralized companies tend to run smoothly. Nestlé was also unique in that it kept strict guidelines however was accommodating to global sectors that needed a little wiggle room.

Chapter 13 Article: Healing Health Care

I found an article titled “Healing Health Care” and thought it was a perfect fit to go along with chapter 13 because it talks about reengineering the health care market. I also did the Medicaid system case study questions so this article fit right in with both of those readings. The article starts out stating, “One of the greatest inefficiencies the U.S. faces is the $250 billion a year that it spends on health care administration, trying to resolve the information flow between providers, patients and insurers. Archaic systems and processes cause disputes, paper pushing, numerous phone calls and injustice.” This number is staggering and could be drastically cut if reengineering combined with the proper technology were implemented.

The article goes into a couple of companies that have been trying to revamp the health care industry such as Athena Health. This company offers a software-based subscription service to doctors' offices that helps them collect reimbursements from insurance companies. Athena Health does about a billion claims per quarter and is so efficient that doctor’s offices have seen a decrease in the amount of days it takes to receive reimbursements from 75 to 45. The company does not charge upfront costs for their services but do take a percentage of the claims per year. In 2007 they managed $2 billion in claims and made a profit of $100 million. In the next few years they are expected to continue to grow at a rate of about 30% per year.

The article also gave a great example of three MIT engineers who really took advantage of this market. Each of these three founders had a personal experience with Lou Gehrig's disease. They decided to start an internet community called PatientsLikeMe. It is designed to cater to patients, doctors and organizations for various diseases. The more people who joined this group the more information and personal contact could be gained between parties. Doctors or researchers could now have direct access to specific patients for studies. Patients could have a direct line to other like them and also to doctors that could potentially help. It was a very ingenious idea. The article talks about communication and connection being the future of health care and this is a great start.

In closing the author states, “Overall, the health care industry is a significant problem area that encapsulates many dormant opportunities for entrepreneurs and venture capitalists. And yes, health care needs to create a bubble comparable to the dot-com, telecom, Web 2.0 and Green Tech bubbles we've experienced in the last decade. Those bubbles drew attention, energy and investment, and they created companies, jobs and wealth. So let's blow it up!” I think this last paragraph in her article is very motivational. We all know that there is a huge problem out there and a lot of money to be made. All you need to do is have the motivation to solve it and you’ll potentially be set for life. I guess we should all start getting to work!

Works Cited
Mitra, Sramana. (Novemeber 21, 2008). Healing Health Care. Retrieved June, 05, 2009, from http://www.forbes.com/2008/11/20/mitra-healthcare-innovation-tech-enter-cx_sm_1121mitra.html

What went wrong with Maine’s New Medicaid System? Chapter 14

What went wrong with Maine’s New Medicaid System? Case Study Questions

1. Information systems for Maine’s Department of Health and Human Services are extremely important. Without a functioning system in place the entire Medicaid system went completely haywire. There was a great negative impact felt by all involved when the newly chosen information system company, CNSI failed to deliver. Thousands of doctors were either underpaid or overpaid causing huge debt for the practice and state respectively. Claims were also so backed up in the system that some physicians had to close their doors to the patients causing them to suffer by not receiving treatment. Without an effective and accurate information system put in place Maine’s Department of Health and Human Services came completely undone.

4. In order to control the risk in the IT modernization project I would have first looked around at other states that had already begun to implement changes. I would have observed and researched what they were doing right and what needed improvements so that I was prepared for the task ahead. I also would have done some trial runs with the potential new system and tried to foresee any large scale problems. With this information I then would have been able to make a more reasonable Request for Proposal and possibly had more companies bidding on my job. This would have allowed for more options of companies with potentially more experience in turn leading to lesser risk.

5. If I were in charge of managing this project I would have done a lot more research to begin with. I would have gone to experts in the field of developing information systems and probably paid a higher price for the work to be done if it was going to be done right. I think it was a bad call to bring in a “no name” company to take on such a large scale overhaul. I also would have considered updating the system with something that was compatible with the old system instead of started from scratch. I don’t think the managers in charge of this thought through all of the people who would have to be trained in order to use these new standards. The system completely shutting claims out for data entry errors was a big problem. If employees would have been properly trained in the new system this could have been prevented. As the manger I would have never had a system that was so incompatible in the first place. Something more updated but still in the same realm of the old system would have made the transition much easier and a lot more straight forward.