The It System That Couldn't Deliver (lenox Case)

BACKGROUND OF THE STUDY

Three years ago, Diana Sullivan, was recruited by Lenox from a major competitor to work as its Chief Information Officer. Sullivan, a 20-year veteran information systems executive, knew going into this job that computers had never been one of Lenox's strengths. James Bennett, Lenox's Chief Executive Officer told Sullivan that they simply need a tool that would help their agents provide fast and reliable information needed to close a sale.

After years of hard work, Sullivan thought she had done her job well by delivering Lifexpress on time and on budget. Lifexpress is a sophisticated computer-aided system that enabled Lenox's 10,000-plus agents to do everything from establishing a prospect's financial profile, to selecting the most appropriate products from the company's myriad policies and generating all the paperwork needed to close a sale.

Lifexpress, however, wasn't boosting sales productivity as much as management had expected. Two of Lenox's competitors had launched similar systems and are already running ahead of them. Sullivan's Boss, Chief Financial Officer Clay Fontana seems to be blaming Sullivan for the problem. Bennett appeared to correspond with Fontana. They believe that since Lifexpress is Sullivan's "system" then she should be accountable not only for its creation and implementation but for realizing the business goals that goes with it as well. Yet Sullivan believes that had already taken what the necessary steps to bring the company up to speed.

STATEMENT OF THE PROBLEM

How can information technology projects help Lenox achieve its business goals?

OBJECTIVES

1. To describe the company's attitude towards information technology

2. To determine how Lenox can achieve radical performance improvements through the use of information technology

THEORETICAL FRAMEWORK

"Decisions on investments in IT are both critical and contentious. With a thorough understanding of a company's strategic context, managers can identify business and IT maxims that can help determine the IT infrastructure capabilities necessary to achieve their business goals."

Management by Maxims

The framework is made up of four components.

1. Considering Strategic Context. "To clarify infrastructure requirements, companies also need to understand the current strategies and strategic intents of each business unit, the synergies between units and the firm's experiences and beliefs in the value of leveraging those synergies."

2. Articulating Business Maxims. Business Maxims capture the essence of a firm's future direction. It is grouped into six categories: cost focus; value differentiation as perceived by customers; flexibility and agility; growth; human resources; and management orientation. It is therefore important for managers to prioritize the relative importance of maxims to ensure that the most important messages are understood. Business Maxims form a base from which business and IT executives can work together to identify IT maxims.

3. Identifying IT Maxims. "IT Maxims describe how a firm needs to connect, share, and structure information and deploy IT across the firm". It is grouped into five categories: expectations for IT investments in the firm; data access and use; hardware and software resources; communications capabilities and services; and architecture standards approach.

4. Clarifying a Firm's View of IT Infrastructure. IT Infrastructure has four views: none, utility, dependent and enabling. Firms take on one view. There is no one best view but rather one is more appropriate for a particular firm, according to its strategic context and business and IT Maxims. A firm's view of infrastructure should change together with it's strategic context and business maxims.

a. None View. It is when a firm decides to do without IT economies among its businesses. It does not invest in IT infrastructures at the "firmwide" level.

b. Utility View. IT infrastructure is viewed as a way to reduce costs through economies of scale and sharing.

c. Dependent View. IT infrastructure is viewed as a response to specific strategies.

d. Enabling View. IT infrastructure is viewed as a core competence that provides competitive advantage. Firms with this view are industry leaders in terms of infrastructure investment levels and provide extensive infrastructure services in a highly centralized way.

CASE ANALYSIS

Lenox Insurance Company admits that computers were never their strength and with the way they are going, it will never be. Bringing in new technologies, updating key applications and the reorganizing and streamlining of the information services