Respond to two of your colleagues in one or more of the following ways:
- Based on what your colleague observed from the WestJet case, explore ways that your organization might assess its information technology capabilities. What lessons did the case provide that help an organization make a better assessment?
- Expand upon your colleague’s observations by positing additional problems that a business manager might encounter if a similar assessment were done for their organization.
- Offer your colleague alternative perspectives, if in fact you drew different conclusions from the case.
- Describe the IT governance model used in your organization, and explain why it is important to the organization’s ability to achieve its strategic goals.
When Cheryl Smith, the new CIO arrived at West Jet, she was asked by the CEO to advise whether or not the company had an adequate IT infrastructure.
What aspects of the West Jet IT situation did she assess in order to respond to the CEO’s concern, and why do I think they are important? Cheryl Smith saw significant opportunities in the IT governance model at West Jet. Her first course of action was to restructure the IT organization, align IT with corporate goals, overhaul IT planning and budgeting and in general, make IT more responsive to business needs. It is important because the change in the governance model was a mandatory first step if IT was to become a strong partner to the business and help it move to the next level, and she would need to move quickly. (Munro & Khan, 2013)
Summarize and critique Smith’s assessment. Her first month Smith focused on benchmarking IT by bringing in two IT benchmarking and performance experts to perform a comparative study with similar sized companies in the transportation industry. The objective was to determine the proper level of resources, budget, and to compare West Jet’s IT cost and numbers of people by skill type to the industry.(Munro &Khan, 2013). I think she took the necessary steps to carefully assess the most important parts of the company and worked from there. Communication is key. She spent considerable time with her team explaining and building commitment. This is important to establish trust with your team. By Smith doing these things built a stronger team with acceptance.
Offer evidence/arguments that major changes in IT at West Jet were essential and that Smith’s governance model would enable West Jet to achieve its strategic goal. As Smith and the senior IT leadership team pondered the “big picture” in these opening weeks they concluded that if West Jet hoped to sustain its rate of growth and build on its remarkable success, IT would be a critical success factor. An IT transformation plan was needed. Smith and the IT leadership team understood that the immediate core of their IT application strategy had to be to increase revenue by increasing system functionality, and give the business units the confidence.(Munro & Khan, 2013) The team understood this importance which played a major role in change.
Summarize the lessons I learned based on the experiences as West Jet. How might these lessons help my organization evaluate its information technology capabilities and best serve its business strategies and needs. The awareness of the five forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack. Establish rivals, customer power, supplier power, new entrants, and substitutes. By analyzing all five, you gain a complete picture of what’s influencing profitability in the industry and game changing trends early. (Porter, 2008)
The aspects of the WestJet IT situation that Cheryl Smith assessed in order to respond to the concern’s was to first restructure the IT organization, align IT with corporate goals, overhaul IT planning and budgeting and, in general make IT more responsive to business needs (Munro & Khan, 2013). Furthermore, she also had to determine if WestJet had the right technologies, the appropriate expertise, efficient processes and procedure, an affective operating structure and solid systems (Munro & Khan, 2013). These aspects are important because in order for WestJet to stay of relevance and be a top competitor there has to be some improvement with IT. Otherwise the company will be at a standstill.
Within Smith’s first 30 days her main focus was on benchmarking IT and in addition to that a few other issues arose, which was the high-risk placement of WestJet data centre adjacent to a runway, at its WestJet headquarters, and that WestJet operated 24 hours a day (Munro & Khan, 2013). Smith came into this situation with the mind frame to do the best she could in order to make WestJet a successful company. Even with all the challenges and complications she faced she knew that as long as she takes the necessary steps that are needed, and get everyone on board WestJet will be a force to recon with before her contract is up. The best way for her to accomplish her goal was to make sure there was good communication between everyone that way her vision could be seen and understood by all.
Once Smith and the senior IT leadership team understood the “big picture” they knew in order to sustain its rate growth and build on its remarkable success, IT would be a serious success factor (Munro & Khan, 2013). They understood that the immediate core of IT application strategy had to be to increase revenue by increasing system functionality, and give business units confidence, and IT had to become more transparent in its operations and more responsive to WestJet’s individuals business units (Munro & Khan, 2013). The organization was aware of the challenges this transformation would bring, but they understood the significance of the change to WestJet.
For an organization to best serve their business strategies they have to have awareness and that is where the five competivie forces come into play. They include supply-side economies of scale, demand-side benefits of scale, customer switching costs, capital requirements, and incumbency advantages independent size ((Porter, 2008). These forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack (Porter, 2008).