1. Critique the e-ordering process used at GDI highlighting strengths and weaknesses and producing a “lessons learned” document.2. Propose an implementation strategy for how GDI should design and implement Connected Customer. MINI CASE: Digital Transformation at GDIGlobal Digital Imaging (GDI) has two main businesses - Film and Medical Digital. Each is focused on a particular market: Film on traditional medical and dental X-ray film and film printers, and Medical Digital on new forms of digital medical imaging systems and software for hospitals and medical clinics. Today, with revenues of $1.8 billion, GDI is one of thetop global providers of digital radiography and computed radiography systems, with a track record for innovation. It has 6,000 employees, more than 600 patents for medical imaging and information technology, and conducts business in nearly every country in the world.An Opportunity for the Film BusinessThe Film unit sells X-ray film and printers and film equipment used to produce various images. Most of its revenue is generated from recurring sales of consumable film. Although the business has declined in developed countries over the past decade, sales are growing in the developing countries, such as China, where the digital infrastructure is not as developedand physicians and patients prefer film. Film sales have also grown because GDI has steadily gained market share from its competitors. Film is sold direct and through dealers to a wide range of health care providers, and GDI has sales teams serving most of the 168 countries it serves. These are supported by four call centers around the world and a commonlogistics network for orders and shipping. With a mature market and a stable competitive environment, CEO Ray Henderson and his team recognized it was time to further rationalize this business. Therefore, Ray asked CIO Ben Perry to help GDI visualize what the Film business could look like in the future.Technical VisioningA few days later, Ben called a meeting of his IT leadership team. "I've been thinking about digitization," he announced. "The world is going this way and we aren't there. We can either build the bus or get run over by the bus. We have to figure out ways to redesign our back-end processes for this transformation so we'll be ready for it. What are your ideas?""We're largely internally facing," said Carmen Natriello, Director of Connected Products. "We've developed point solutions for individual areas of the business. Now, I think we have to use technology to help large parts of the business work together and better connect with our customers.""I believe we can run the business more efficiently by being data driven," said Naomi Vogel, PMO Leader."We've been getting lots of requests for e-commerce applications from our business," said Brian Van Horn, Manager of ShopGDI, the company's B2B e-commerce site. "We've got a basic system that's used by many of our dealers, but it's now about 15 years old. There's lots more we should be doing. E-commerce software should be an important part of ourdigital architecture."Other managers suggested mobile apps, EDI, web content management, and an IoT platform to connect the company's film printers."These are all great ideas," Ben commented. "Let's plan how we can create a high-level target digital architecture and customer-facing environment that will include all of these things. Then we can begin to assess the foundational technologies that we'll need to enable our new business model when the business is ready to move forward."The Business VisionWith lots of ideas but no clear path, business case, buy-in, or mandate for moving forward, Ben then sought to engage GDI's business leaders in planning the transformation. He and Ray invited key stakeholders across the Film business unit to participate in a series of two-day workshops to explore all aspects of each Film process from beginning to end. Eachmeeting had about six to nine invited participants including business decision makers, a consultant with experiences in other companies, an IT person who acted as note taker, Ben, and a designer from the Marketing Department.At each workshop the teams articulated how a process worked and why, captured the complexities involved, and then discussed the preferred way it should work. All this information was captured as a storyboard to help everyone visually understand the process. "Storyboards made the future process tangible," said Ben. These workshops created 12 storyboards,each corresponding to a particular future state scenario, which were further consolidated into two high-level stories:• Electronic Ordering (e-ordering). This was the electronic ordering processes for the future Film business, the technology that would be required, and how related business processes would be simplified as a result.• Connected Customer. This described the model that would be deployed to simplify GDI's management and service of its equipment around the world. Remote Management Services (RMS) would connect all the company's printers and enable them to be identified and serviced.These two stories were presented to the Executive Leadership Team, who authorized Ben to develop the vision further. Ben then held meetings with the global functional groups, such as HR, Finance, and IT, to help them articulate an organizational design that would support the new processes. Then, it was time to put costs into the proposed new structure andeach leader was asked to quantify the costs involved with their part of the future Film business.As soon as the storyboards, processes, new organization design, and costs were all aligned, they were presented to the Executive Leadership Team for a final go/no go decision and then shared with the Board. With the Board's approval, Ben and Ray now had a clear vision, mandate, buy-in from business and IT leaders, and a business case to drive the digitaltransformation of the Film business forward. All they had to do was build and implement it.Creating and Implementing ShopGDIE-ordering was the first to be built. With all of the work that Ben and his team had done to put a foundational architecture and technologies in place, building eOrdering's components appeared quite straightforward to the business, but they still required a great deal of hard work from the development team. "It wasn't a slam dunk," commented Brian. "We movedahead by fits and starts at the beginning. We had to integrate multiple technical resources." From IT's point of view the major challenge was coordinating, not only among development groups but most especially with all of the business process changes needed as the company replaced its old model of ordering and payment for a new digital model. However,within six months ShopGDI, the company's new B2B online store for all film products, was ready for implementation. In addition, GDI's existing EDI processes used by some large customers for ordering and paying for film products were adapted to integrate them into the new e-ordering model. After a short pilot, the rollout of ShopGDI began soon after.In Film's old, non-digital business model, individual country sales teams processed orders for its products and services via one of four call centers. Staff from these centers then interfaced directly with end customers for pre-order support, order placement, post-order status updates, billing, back office support, rebilling and reshipping, and field service. Before theimplementation of e-ordering, almost 100% of orders required some manual interaction. Orders came in by fax, mail, or telephone from customers (e.g., a hospital), end users (e.g., doctors), or dealers. Some dealers used the old e-commerce site, but even these orders needed manual edits, common sense checks, and pricing. "In short, very few orders were goingthrough without being touched in some way by our team," said Mohan Motiwalla, Director of Call Centers.The plan for rolling out the new software was straightforward. The Marketing Team would communicate with the sales people in a country and ask them to tell their customers about the ShopGDI site. The manual process was maintained but as customers placed orders for additional products or services, call center staff would offer to help them set upcredentials for online ordering or would send them the information so they could do it themselves.The introduction of the software went well with just a few glitches, according to all concerned. In general, business leaders were pleasantly surprised. "Before we started I had heard from both our sales people and our business team members that their customers wouldn't use ShopGDI," said Mohan. "In fact, our customers did embrace it - where they could.Some of them even told me that it was about time we did this."The ChallengeAs soon as ShopGDI was introduced, many dealers who had been using the old e-commerce site switched easily, as did a few customers, but following this, adoption stalled at around 20%. As a result, the anticipated savings didn't materialize. "This was no 'Field of Dreams' where 'if you build it they will come," said Peter Mathers, the Business Lead for theproject. "The technology was ready," said Ben, "but the business was very slow in making the changes they needed to drive adoption." Soon, Ray wanted to understand why the promised digital transformation and the resulting savings were not occurring as planned, so he called a meeting of everyone involved."This was a 'colorful' meeting," Ben recalled. "Everyone from the business was there, and Ray demanded to know where the savings were, what was hindering adoption, what it would take to attract customers to e-commerce and eliminate manual activity, and stating categorically that the present situation was 'unacceptable.' The business people, who wereused to working with P&L statements, asked him to give them an amount for the savings he wanted to generate and that was when our entire view of the situation changed. Ray replied that he wanted to see 'real cost savings and benefits' not simply manipulation of the financials. He told us that our goal with this project was to change how the company operated,improve the customer's experience, and generate savings from reduced manual order activity. This was the driver of real change, and it's what he wanted us to measure, not dollars. This was to be our true measure of success because cost savings would follow adoption."Ray asked the group to identify the percentage of manual orders country by country and determine why customers weren't switching to ShopGDI. He became Executive Sponsor of the project and in addition to reframing the initiative's success criteria, also set a new goal for 100% electronic orders with no manual intervention for the Film business. Then, heasked Ben to lead this initiative. "This was surprising and a huge shift in accountability," Ben stated. "Normally, it's IT's job to meet the requirements and deploy the technology and if business doesn't use it, it's up to them."Now, Ben, Peter, and other business leaders had to dig into the data to find out what was impeding the transformation. Starting with the new mandate from Ray, "it's not done until the customers have fully adopted it," Ben and the business team dug into GDI's records and spoke to the individual country managers to find answers as to why it was so difficult toget customers to switch to electronic ordering. The first answer they received was almost laughable. The country managers pointed out that their customers needed user IDs and passwords to access ShopGDI, but when Ben asked them to contact their customers to get this process started, he discovered that their salespeople didn't know who was actually placing theorders. "The customers our salespeople were dealing with handled purchasing," Ben explained. "But the people actually doing the work of ordering after a sale were data-entry clerks."After establishing a plan for Mohan and his call center staff to contact customers and set up IDs and to capture any further problems customers had with electronic ordering, Peter developed a series of "waterfall slides" that would document and project the company's progress toward the goal of eliminating manual orders. These started with the total number oforders placed by month and cascaded down from there: • Number of manual orders• Number of orders from the old e-commerce site• Number of ShopGDI orders• Number of EDI orders• Percentage of Manual Orders• Percentage of E-commerce orders• Percentage of ShopGDI + EDI ordersBen began by having weekly meetings with Peter, Mohan and other business leaders to review each of these metrics. "Initially, we had IT people in these meetings as well, but I soon realized that these were business problems. If IT people were in the room, everyone focused on the technology, not the business issues involved," Ben said. He therefore uninvitedthe IT people and changed the focus to business driven adoption.It took a year of effort to increase the number of electronic orders from 19% to 60%. "This was trench warfare," said Ben. "We had to dig into the numbers and accept no excuses. The only way to get the usage up was to get customer buy-in by dealing with their concerns on an issue-by-issue basis." "Getting to the first 40% usage was hard slogging," recalledPeter. "We had never understood how many different types of customers there were and how many indirect as well as direct customers we had. We also recognized that our business processes were not as simple as we had assumed." Part of the problem stemmed from simple lack of communication about the changes that were coming and what they would mean forthe sales teams in each country. "We needed more communication for sure," said Mohan. "We should have kept the regions more informed internally on our progress and what it would mean for them. Once rollout began, communications improved but we should have done more up front." Carmen added, "The technology was good, but we didn't do enough workup front to simplify our processes, empower the regions to deliver, and align incentives."Initially, there was a widespread perception that this transformation wouldn't get support from the regions and that implementing it would require a heavy hand from Head Office. The reality was that "resistance" was often due to real challenges customers had with moving to electronic ordering. For example, many regulated customers (e.g., large national healthcare organizations) were prohibited by law from using ShopGDI. Instead, these customers were required to enter their orders on government websites and GDI was expected to regularly log onto their websites and look for orders. To prevent fraud, some countries required orders to be officially stamped and sealed before being mailed to the company and the orderdocument returned with the purchased goods. "The devil really was in the details," said Brian."The next 20% needed even more detailed analysis, country by country, customer by customer," said Peter. "We just had to hack away at the problems." This required detailed waterfall slides for each country looking at the root causes for manual orders with the country managers and individual Tiger Teams and digging into their processes and data. "We startedwith understanding the data, the kinds of customers involved, and the major objections to electronic ordering," said Peter. For example, the sales team in Greece told them that electronic ordering was illegal. "We asked them to bring us the law that stated this," said Ben. "They really wanted us to go away, but we wouldn't accept an excuse. When they told us thelaw was in Greek, we told them we'd find a Greek translator." In Mexico, the team stapled orders to people and walked them through the current processes to better understand the obstacles. In Japan, customers were accustomed to faxing small-quantity orders several times a day. In Brazil, there were so many pricing gyrations, it was impossible for a system tokeep up with them.With a few countries, problems had to be escalated to get serious attention, first to the World-Wide General Manager and then to Ben. Occasionally, Ray was asked to step in. "We've learned that our global business processes didn't all work the same way," said Peter. "We needed to understand the data and make the necessary changes. With manual processes weknew what we were doing and could make adjustments on the fly. As we dug into things however, we discovered that our data and processes were much looser than we expected, and we've learned we could all do a lot better if we had better data.""In the process of this exploration, we now understand that engagement complexity hides itself in the way an organization works locally," said Ben. "When you're chasing a dollar metric, you can hide a lot of things but with a different measure, like usage, it's much more difficult to hide. We needed to use data to understand our blind spots."As the team learned more about the reasons for manual orders, GDI had to develop a variety of responses to match the diversity of ways customers engaged with the company. It created projects to improve electronic adoption beyond 60%. For example, Robotic Process Automation (Bot) technology was deployed to log into governmental systems, collectorders, and log them into the ERP. This added a further 15% to electronic usage. Bots now log into a government system three times a day and see if there are any orders for GDI and then input these orders directly into the electronic order system's back end. The team also began looking to increase EDI in cases where it made sense."The end of this part of the project is finally in sight," said Peter. "We've recognized that 100% electronic orders is a longer-term goal, but our business case numbers will work with 85%. This is our near-term goal now." "This is a more realistic adoption rate," said Ben. "We've learned that about 15% of our customers don't have Internet access. Once the Botshave been fully implemented, this will leave us with a 10% gap to close." Mohan added, "We now know we have different classes of customers. Some are easy to connect but others are virtually impossible. Also, when dealing with different environments, we must be willing to meet our customers where they are willing to be met. For example, one Germancustomer's ERP system was already sending e-faxes to our call center and they saw no value in switching to ShopGDI. So now we've got a Bot dealing with their faxes.""We've also realized that although a speedy implementation was important, there are ways we could improve our original ShopGDI site by enhancing our data with better product descriptions and price information," said Peter. "For example, our EU store worked well, but the pricing was initially missing. We've also recognized that we need to fix a lot of sinswhere we've allowed some countries latitude in their processes. In the Philippines, for instance, most work was manual rather than through our ERP. Many of these processes simply weren't adding value or were overly convoluted. In these cases, we're rebuilding their processes from the ground up."We've built a platform we can grow from," Peter continued. "Now we're starting to design what we've missed and figure out what more we can do. We're also doing one-on-one coaching; when you're changing the way you do business, you can't just train and let them go. You must coach and help them and make this a priority." With all these improvements,day-to-day operations of the e-ordering platform were finally turned over to a business owner two months ago even while work continues to improve usage.The ResultsDigital transformation has clearly been highly disruptive for GDI demanding significant change in all parts of the business as well as on the part of its customers. Was t worth it? "I'm generally very happy with what we've accomplished so far," said Ray. "All our metrics are improving customer satisfaction, percentage of e-orders, and our costs. Our processesare more predictable, and this gives our customers and suppliers a positive view of GDI and makes us easier to work with. We feel we are now in a position of competitive advantage." "We can see value of this transformation, for sure," said Peter. "We've implemented a foundation and can now begin to add on other pieces of value. Our dealers and regions arestarting to see what this transformation was all about." "We have achieved about one-half our cost savings target," said Mohan. "We have reduced headcount from attrition and repurposed staff to more value-added work. This effort will continue as we improve usage and connectivity.""We've just started this change," said Peter. "We've still got so far to go. In the middle of things, everything seemed truly overwhelming, but when you work together as a team and tackle the challenges piece by piece, things begin to work and the end of the first part of the transformation is in sight." "The critical shift for us has been changing from selling'things' and developing features to having technology and business work together to deliver outcomes that incorporate technology, services, and feature," said Carmen. "We are now seeing meaningful change in our organization," concluded Ben. "The key has been being clear in what you want to happen and holding both business and IT accountable for it."Connected Customer Hits a WallThe next phase of transformation involves developing the Connected Customer process and linking it into the e-ordering platform. This will simplify Film's service backend by enabling and encouraging remote connectivity for its devices. "By connecting all our devices, we can identify problems remotely, and either resolve them or dispatch a service person,making this part of our business model fully automated as well," said Mohan. "We will even know which of our products are being used and can send replenishments as needed.""One hundred percent of our devices are now capable of remote connectivity," said Ray. "The challenge for this project, as with e-ordering, is getting our customers to register and activate their equipment online so we can monitor them." An earlier version of this approach was tried unsuccessfully in 2013. "We had about a 2 percent adoption rate and discoveredmany problems with our platform assumptions. Some of our customers had no Internet connection or had firewalls that prohibited persistent connectivity to our company," he said. "Our dealers were also afraid that this new process would cut them out of the loop since they often provide service as well." However, a longstanding FDA requirement that companiesmust know where all their medical devices are located for recall purposes has given this project a new impetus since this goal is achieved as customers register and activate a device."Our goal is 100% activation and 90% ongoing connectivity," said Ray. "There are considerable savings to be generated from this project," added Peter "but until we connect our customers we cannot create diagnostics and can only guess at what our indirect customers' (i.e., through dealers) needs are." As with e-ordering, internal cultural changes will berequired. "Our salespeople really know how to sell discrete products to generate commissions," said Ben. "But when you are selling a long-term revenue stream like managed services that generates smaller commissions over longer periods of time, much like insurance, we need to create a different sales mind-set that works to build a client population. Ourchallenge is therefore to learn from our experiences implementing e-ordering and develop a strategy for how best to tackle the Connected Customer initiative using and building on these lessons and the issues we know are out there."Discussion Questions1. Critique the e-ordering process used at GDI highlighting strengths and weaknesses and producing a "lessons learned" document.2. Propose an implementation strategy for how GDI should design and implement Connected Customer.

A logistics company called GDI (Global Delivery Inc.) uses an online ordering system for its…

1. Critique the e-ordering process used at GDI highlighting strengths and weaknesses and producing a “lessons learned” document. 2. Propose an implementation strategy for how GDI should design and implement Connected Customer.

1. Critique the e-ordering process used at GDI highlighting strengths and weaknesses and producing a “lessons learned” document. 2. Propose an implementation strategy for how GDI should design and implement Connected Customer.

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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