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In: Operations Management

Read over the scenario. Prepare a decision memo for approval. Any clarifications (how many senior staff,...

Read over the scenario. Prepare a decision memo for approval. Any clarifications (how many senior staff, how many helpdesk etc.) should be posted within the Discussion Board.

You are the CIO of a Startup called Kitnip. Currently there are 20 employees supporting 500 customers in the Sacramento area. If the market share is gained, total employees could balloon to 300 in the next 5 years in accounting, marketing, customer support and other administrative areas. Your business is in connecting individuals with cats with individuals who want to change their cat litter…for money. Coupled with a plant-based, non-scented litter and other cat related toys and accessories that are sold direct to consumer in an online store. All litter changers are 1099 employees and thus not included in the expansion or the rest of this analysis.

Your startup just received a Series C funding, where you are now tasked to become a more stable company with standardization. Your CEO and President Harry Cat understands the importance of standardization, but depends upon your expertise. He wants to know what he should budget to give you to ensure you have the equipment and technology to “get everyone on the same page”. His criteria for determining viability are: mobility (prefers lightweight), costs, and aesthetics (looks nice). Due to the startup nature there is little standardization in platform or policy, with the exception of G Suite basic is purchased for all employees, however beyond email little else is utilized.

Your initial analysis boils down to what should Kitnip provide its employees to conduct business and is G Suite basic enough. Things like operating system, monitor, laptop, phone, BYOD software, BYOD reimbursement could be considered for a employee devices. Is G Suite Basic enough to also provide backups, collaborative capabilities and productivity software?

Harry Cat has asked for a SHORT (no more than 2 pages w/o figures) decision memo stating in simple terms what is needed, why, and a dollar amount by year. Any anticipated questions should be included in appendices with charts, figures, or forecasts. Comparing costs to an alternate solution is suggested.

Write a decision memo:

I. Background & Current Status: What is the background for reaching this decision memo? Where is the company and the department at in the process?

II. Impact and Evaluation: What is the impact to the organization should a decision not be reached? Why do we need to make this decision now? What other factors could be involved for not coming to a decision? What key factors are we using to make the evaluation?

III. Options: What are the options that we will choose from? Why did you choose them? How can it mitigate the issues forecasted in section II?

IV. Analysis/Discussion: Conduct an analysis of the options against your critieria. Discuss why one or two is better than the others. (If you do a Matrix, if you run out of space put it in the back)

V. Recommendation: Bottom Line. What do you recommend, why, how much?

Solutions

Expert Solution

                                     Decision Memo

                                      (Mr. Harry Cat)

Recipient: CEO and President of Kitnip Mr. Harry Cat

SENDER: ANINDYA CHAKRABORTY

DATE OF ISSUANCE: 27/04/2020

SUBJECT:   RECCOMENDATION FOR BUDGETING AND NEW WORKFLOW FORMATION TO MAXIMIZE EFFICIENCY

BACKGORUND AND CURRENT STATUS:

Currently the company is in nascent stage and growing a rate of knots. But the start up culture has to be shifted to a more organized and measured approach. The employee strength is expected to grow from 20 to 300 and keeping in mind the same employee to customer ratio the number of customer to be served after 5 years is around 7500-8000. That is a huge in number and if systems/operations are not enhanced drastically servicing will be a big headache which will in turn impact the growth. Hence this Memo is being prepared by me to recommend the best course of action and achieve efficient system.

IMPACT AND EVALUATION

If a particular pathway is not carved out there would be ambiguity in roles and employees will not be able to handle the tremendous growth in customer number due to bandwidth issues.

To avoid such scenario where the first line employees are choked with work and the quality of service rendered by the company to its customers completely falls apart, decision has to be taken now. The opportunity cost of the delay in decision will surely prove to be fatal for the company. The reason behind not coming to a decision could be the constraints related to fixed number of employees on ground to interact with customers directly.

Key factors used in to evaluate the scenario are estimate of probable customer to employee ratio, gap in current system capabilities and required capabilities in future to serve projected customers, amount of work that can be outsourced to third party vendors, quality of human resource required and current level of skilled manpower etc.

OPTIONS:

Options to choose from are to outsource a good amount of work to vendors, scale the manpower and systems to extreme capacity so that all future demands can be handled.

If the operations part is outsourced then the limitation pertaining to systems can be avoided at a less cost at the same time very little time investment will be there. On the other hand if the systems, operations along with manpower are scaled up drastically then it will be weather the upcoming storm in demand anyway. If the core capabilities within the company are developed then the deliverables will be easy to achieve.

ANALYSIS/DISCUSSION: Conduct an analysis of the options against your criteria. Discuss why one or two is better than the others. (If you do a Matrix, if you run out of space put it in the back)

An outsourced model will be cheaper in terms of upfront money requirement and overhead costs. But level of control and measure over the quality of deliverables will be quite less compared to a fully fledged scale up of the systems and resources. The scale up option will have higher overhead and one time payout as well as being time consuming. But it can provide the level quality required to create a brand proposition among the growing customer base. Outsourced model will take lesser time and lesser investment in terms of money, manpower. As the company will have no need to scale up it can solely focus on customer service and relationship management.

RECOMMENDATION:

As a growing company there is a huge need to create a brand image among the niche sphere of customers to maintain the competitive advantage. The outsourced model will be an easy way out but it can be replicated and bought by other companies (competitors). This will lead to a sudden relapse in the company’s competitive advantage in the market. Rather a large scale up model where at least 20 times of current expenditure is done to ensure a constant capability of serving the customers without any quality compromise.


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