Expert Answer:MGMT576 OSU Whole World Enterprise Discussion Ques

  

Solved by verified expert:Focus on these online discussion questions using the case study
What approach would you take to identify the risks?
What are the likely risk categories to consider?
How would you evaluate the risk priorities?
How would you implement a process to navigate risks to this project?
Since the company has learned much from the previous experience, is risk management still important to this project? Why or why not?
Remember, you only need to select and answer 3 prompts for this week’s discussion
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Case Study: Whole World Enterprise (WWE)
Purpose
For MGMT576 course, I created a case study to compliment the learning. This case is organized by
Section, and each Section corresponds to the corresponding Module in the course.
I. Introduction
A. Company Overview
Name
Industries
Served
Geographic
Area Served
Headquarter
Current CEO
Revenue
Profit
Employee
Main
Competitors
Whole World Enterprise (WWE)
Retail / Wholesale
Internet
Consumer Electronics
Edutainment (Education Entertainment)
Publishing
Worldwide, with heavy emphasis in the United States. Current worldwide revenue is
as follows:
• North and South America: 51%
• United States: 70%
• Canada: 20%
• Mexico: 5%
• Rest of Americas (presence in Brazil and Argentina): 5%
• Europe: 28%
• Asia: 14%
• Middle East & Africa: 5%
• Australia: 2%
Saratoga Springs, New York
Darren (Wai Ming) Zhang
US $80.1 billion (2016), increase of 12%
US $500 million (2016), increase of 340%
160,800 (2016), increase of 10%
Alibaba Group, Amazon.com Inc., Apple Inc., eBay, Facebook Inc., Google Inc.,
Hewlett-Packard, Hulu, International Business Machines Corporation, Microsoft
Corporation, Netflix, New York Times, Spotify, Times Inc., Wal-Mart Stores, and many
other Internet and retail companies
Confidential and Proprietary
Page 1
B. Business Overview
Founded in 1997 at the dawn of Internet commerce, Whole World Enterprise started a virtual
eCommerce company striving to dominate various educational product categories. It started with
children’s products (books, toys, videos and programs and even digital electronics). It then rapidly
moved up the demographic curve including self-help, productivity enhancing tools and equipment, and
eventually into professional office stationery and equipment including computing devices. It also
developed a strong institutional market in which WWE sells directly to businesses and institutions on
their entire range of products and services. As it achieved a significant market in the basic products, it
started shifting, making much of its products including educational programs, documentaries, and
featured films which largely address one or more of the social concerns of our time. In 2010, it also
rapidly expanded into the digital space by offering cloud services for the educational market, software,
and devices. By 2016, the company had achieved a revenue of over US $80 billion worldwide and was
considered one of the fastest growing businesses in the world.
The company is guided by five principles:
1. Obsession with life-long learning and “maximizing human potential”. Its motto “reach higher”
resonates well with people who aspire to achieve more
2. Passion for solving problems. A vast majority of its products and services are designed to address
challenges and to make life more efficient and effective. Its documentaries are full of ideas to solve
problems
3. Strive to “do good”. While the company is a for-profit organization, social missions such as educating
the most vulnerable citizens in all countries that it serves is a strong indication of its commitment to
“doing the right things”, even at the expensive of profit. Until recently, the company had largely been
unprofitable, even though its investors believe in the mission of the company.
4. Desire for creativity and innovation. The company focuses on the future and has a long-term
outlook. Hence, it encourages its people to think differently and look beyond the near-term.
5. Fixation on getting things done. The balance towards a long-term outlook is the preoccupation with
achieving results. The firm views its ability to execute its strategies, deliver its projects, and bring
value to its shareholders and customers as a vital competitive advantage.
The company serves its retail customers largely through its retail website and focuses on quality
products, price, trustworthy reviews (only purchasers who have a complete profile can provide product
reviews), and convenience such as fast delivery. In 2014, it also started some retail stores that serve as
an educational hub that serve largely as a community hangout spot with product demonstrations and
quality speakers. For institutional customers, the company developed strong supply chain management
tools to interface with the institutional customer’s purchasing and inventory management systems that
seamlessly connect WWE as a part of their business customer’s value chain.
WWE competes head-on with Amazon.com and Alibaba in multiple product categories. Comparatively,
WWE products are more expensive and somewhat slower in shipping speed once Amazon.com
introduced Sunday shipping. WWE’s product selection is also more limited with about 20 million stock
keeping units (SKU) versus Amazon’s 340 million. But WWE views its more limited SKUs as a positive
Page 2
because WWE rigorously selects its products and this has created a strong following. WWE understands
that most of its customers are confused by product varieties. By providing fewer but higher quality
selections, studies have shown that WWE has a more loyal customer base while retaining a higher price.
From a transaction perspective, it is estimated that Amazon.com experiences about 53 orders per
second or about 4.5 million transactions per day. For WWE, the volume is significantly less, but it still
achieves about 17.5 orders per second or 1.5 million transactions per day. This works especially well
with its institutional customers. But the competitive pressure has always kept the company on its edge.
While the first four guiding principles are vastly interesting, this case study primarily focuses on the fifth
principle – “getting the right things done”.
C. The Burning Platform- The Need for Project Management
In 2007, shortly after the ten year anniversary of the firm’s founding, WWE experienced a near-death
experience. Due the rapid growth of the company, in March 2006, the company decided to integrate the
firm by implementing an Enterprise Resource Planning (ERP) tool to break down the barriers across the
various areas of the company. The goal was to improve internal efficiency and communication and also
to centralize the management of its products, people, and customer accounts. Unfortunately up to that
point, the company focused mainly on expansion and not internally on its management capabilities,
especially project management. Its internal systems and processes are stitched together by a huge list of
patchwork items and it was breaking at the seam. An example was orders taking longer to fulfill and in
some worse case scenarios, customers and orders were mixed up. There was a severe inventory
management issue that occurred in the holiday season in 2007. When the company selected the ERP
tool and consulting services, WWE was led to believe that the implementation was relatively easy. The
truth could not be any different. In short, after working on the system for almost 18 months, the ERP
launched on September 30th, 2007. Immediately, there was a series of near-catastrophic errors –
inventory issues, customer records mixed up, accounting errors, employee records went missing, etc. By
late December 2007, in its busiest season, the CEO, Mr. Zhang, made the tough decision of reverting to
the former set of systems (luckily the firm kept the new and old systems in parallel operations just in
case of a disaster) and ended its first attempt at implementing the ERP solution. (Consequently, it sued
the ERP firm and eventually settled out of court. The internal stories suggested that the settlement was
hugely in favor of WWE.) Nonetheless, the company suffered immeasurably. Due to the delays,
miscalculations, and customer service issues, the revenue for the 2006 holiday season was actually
below 2006 expectations, and it was the first major setback for the firm. The stock dropped nearly 30%
from its high in 2007, and the Board demanded immediately management’s attention.
To be fair to the upper management team, they were already doing everything they knew at the time to
stem the losses and resolve the problems. But the optics was bad even though the situation stabilized
after terminating the ERP solution. Under Mr. Zhang’s leadership, the senior management with the
support of the Board, agreed to create a new role in February 2008 – Chief Project Officer (CPO) for the
company at the enterprise level. The CPO’s primary responsibility is the successful execution of strategic
initiatives. WWE hired Korn Ferry and conducted a worldwide executive search. After six months of
intense search and selecting from a pool of over 300 candidates and a shortlist of 15 highly qualified
Page 3
business executives, Mr. Zhang and the Board agreed to hire Ms. Adriana Holmes. Ms. Holmes has a
long list of successes as a CEO of a smaller regional retail chain in Massachusetts. Through acquisition,
she went to become a COO for a significantly larger retailer in the Northeast where she was responsible
for a successful turnaround of the organization’s operations and sales from being an industry laggard to
a leader. In her spare time, she became heavily involved in a number of non-profit organizations as
Board members, taught in some of the local schools, and became a champion of education and learning
across the entire spectrum from K-12 to adult and life-long learners.
What follows in the rest of this case study are the various projects and challenges that Ms. Holmes and
her team had to confront.
Page 4
II. The Current Situation
A. State of Project Management in 2008
When Ms. Holmes arrived at WWE in September 2008, the timing was both fortunate and unfortunate.
Fortunate because the company is now reconstituting the ERP project and she started at the very
beginning of the planning. It was unfortunate because of the historical failure leaving no room for
mistakes. Ms. Holmes, even before having a chance to bring in additional help, decided to conduct a
high-level review of the state of project management in the company.
Through primarily by interviews with internal project leaders who worked on the failed ERP project as
well as other project sponsors and managers, she learned the following:



There was no standard methodology or approach for project management, from project selection,
through project approval, through implementation, and closure
There was little consistency of tools and processes. Of the three major projects that Ms. Holmes
reviewed only two tools were consistently applied: email was the most popular communication and
knowledge management tool and nearly all project documents are literally dumped into multiple
shared folders in SharePoint. Even the project status reporting had three different ways of gauging
project performance.
There were a few certified project managers in the organization, but their voice was largely muted.
From speaking with many others on the project team, project management was largely viewed as
bureaucratic (e.g. so many processes and firms and not sure of their value) and a lower priority than
doing the actual work (e.g. the teams were so busy doing the work that there was little time for
planning).
Page 5
III. Global Information Store (GIS)
After much deliberation and with the project team in deadlock over which system to implement
(including a consideration to build it in-house), it was recognized that one of the previous biggest
challenges was the inconsistency in the data design from the earlier attempt that led to so much
confusion. Even though the actual ERP application is still under investigation, everyone agreed that the
company needed to launch a project to build a Master Data System (MDS) that can establish and enforce
clarity of important data elements across its customers, products, and people. The Global Information
Store project was born.
The first phase of the GIS system includes the three most important types of data: People, Products, and
Customers. The GIS People brings clarity to how the organization and its systems view and manage its
employees and contractors. This role-based system will eventually be used by other systems, including
the ERP, for authentication and access control. Plus, in a future phase of the ERP, this GIS People will be
an invaluable input to the human resources system. The GIS Products formalizes the product and
services categories of the 20 million (and growing) SKUs throughout the organization. By standardizing
the product and service categories, the organization can assign proper product management processes
including service delivery. GIS Customers is required for the ERP system to better manage the supply
chain. It also has a strategic importance for another project under consideration – Customer Relationship
Management (CRM) in which the GIS Customers will be an important foundational component. There
are additional GIS components being planned for future phases. This includes: WWE Retail Store,
distribution center, and vendors and suppliers.
After much deliberation, the project team agreed with these strategic business drivers for the GIS
system:




Single Source of Truth – GIS system will be the system of record for the information in its system
Reduce Redundant Data – GIS system will be the only system for these records, to avoid confusion
Single Point of Accountability – Once done, the GIS system will have one global team to manage the
system and govern the processes for data identification, categorization, cleansing, use, and
termination
Continuous Improvement – This team will be responsible for the ongoing management of this
application and its data as a strategic asset of the organization
Phase 1 of the GIS System is estimated to be $10 million and requiring one year to complete, after the
signoff of the project charter. Given the importance of the project, Ms. Holmes will be the project
sponsor, and she will also be forming a Governance Committee in which Mr. Zhang will also be
participating. The ongoing operating budget for maintaining and improving the system is estimated at $2
million per year. Both the budget and schedule are approximations and refinement is expected.
However, given the past history, the need to produce a quality system is the highest priority. Mr. Zhang
has also suggested that WWE should use this project as a way to develop its employees.
Note to students: To learn more about master data management (MDM), refer to a list of credible
resources in Appendix C of the case study.
Page 6
IV. Class Discussions
M2. Project Communication Management
From a communication perspective, the post project evaluation also showed major concerns. Clearly,
the project communication was ineffective. There were a lot of issues raised throughout the project and
groups were essentially talking “over” each other and not “with” each other. Furthermore, there were
concerns with the timeliness and accuracy of the information. Even though the previous project
manager raised the awareness of communication importance, the project executives thought little of the
concerns and they were rarely followed through with credible actions that remedied the situations (For
these reasons, the management team blamed itself and did not blame the previous project manager).
To summarize three major groups of communication issues were raised:
1. Timeliness: Even though there should have been weekly performance reports, the information
in those reports were infrequently updated. For example, the budget almost always lagged the
current information by about a month. The progress on activity completion was lagging the
actual. Some concerns were raised, but band aids were applied, and there was no systemic
change.
2. Accuracy: The ERP vendor and project manager painted a far more optimistic picture of
conformance to the standard project performance metrics than was happening in reality. The
previous internal project manager raised a series of concerns when there were disconnects
between the reports and the actual deliverables. But the Management Team, including Mr.
Zhang, was too busy dealing with other company activities to push the ERP vendor. Plus, the ERP
vendor had an effective engagement manager that at least appeared to address any escalated
issues. The previous project manager was so frustrated and felt disempowered that he left the
company shortly after the launch (which created more internal turmoil).
3. Chaotic management of information: Since the ERP was the largest project of its kind, WWE did
not have the tools and processes to manage the information. There was no single Project
Management Information System (PMIS) and there was general confusion, even amongst the
project team members, on the location of the latest information.
There were other considerable issues too. Most of the project team worked from the Saratoga Springs
office, even though there were offices and distribution centers around the world. Project meetings were
poorly attended. Some of the remote project team members felt disconnected with the project.
Discussion:
1. Why is project communication important?
2. Given the situation above, what would you have done differently to improve project
communication?
3. Should the company implement a PMIS for this project? Why or why not?
4. What are your recommendations to improve communication management with remote teams?
What would you do to engage the remote team members more?
5.
How do you manage communication effectiveness? Identify two ways to measure
communication.
Page 7
M3. Project Risk Management
Given the failure of the previous attempt to implement the ERP system at WWE, the project experienced
a high number of risks. Many of these risks happened due to significant issues for the project that
eventually doomed the first attempt.
But much of the risk remains with this latest attempt to implement the system.
Discussion: As the Project Manager…
1. What approach would you take to identify the risks?
2. What are the likely risk categories to consider?
3. How would you evaluate the risk priorities?
4. How would you implement a process to navigate risks to this project?
5. Since the company has learned much from the previous experience, is risk management still
important to this project? Why or why not?
Page 8
M4. Project Quality Management
As stated in Section III, the quality of this system is the single most important aspect of this project.
Project quality does not occur by accident. Project managers work hard from the project inception to
make sure quality is planned into the very fabric of implementation. As described in the textbook, there
are two important considerations: Fit for Purpose (utility) and Fit for Use (warranty). For the GIS Project,
they are as follows:
I.
II.
Fit for Purpose (utility) – Refers to the ability of products/services to meet the intended needs.
For GIS Project, each of the master data types serves as the definitive categorization of the data.
The application is the repository for the specific data, which is used by all other information
systems requiring People, Products & Services, and Customer data.
Fit for Use (warranty) – Refers to the performance and accessibility of these three types of data.
It can also refer to the security, maintainability, scalability, and availability of the data. As this is a
master data servicing all systems eventually, a particular concern is service disruption, for
example. To address disaster recovery, there is a plan for active mirrored sites throughout the
world in which the availability is essentially 100%. It would take a global catastrophe to
simultaneously shut down all backup sites around the world.
As mentioned in Section III, WWE experienced about 17.5 orders per second or 1.5 million transactions
per day. Each of these transactions has the potential to touch one or more of these data types.
Discussion:
1. Why is qua …
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