REVIEW PAPER: Innovation in NTBFs: Does leadership really matter? (CASE 2 of 2)

1. Latar Belakang

Kebutuhan untuk melakukan inovasi saat ini menjadi sebuah kebutuhan yang sangat penting mengingat sangat cepatnya perkembangan teknologi dan keadaan market yang terus berubah. Selain itu juga adanya kebutuhan akan produk yang lebih baik dari customer. Bagian Research and Development (R&D) dalam suatu perusahaan berfungsi untuk memberikan ide dan konsep baru bagi sebuah perusahaan agar perusahaan tersebut dapat terus berkembang. Karena alasan inilah, seorang pemimpin di bagian Research and Development harus bertanggungjawab untuk memberi motivasi kepada para bawahannya. Sangat penting bagi pemimpin tersebut untuk dapat mengetahui kebutuhan para bawahannya, dan cara pendekatan yang mereka butuhkan.
Paper ini akan membahas pendekatan leadership yang berbeda - beda dan hubungannya terhadap kapabilitas untuk mempercepat tumbuhnya invoasi dan efektivitas dari inovasi itu sendiri. Paper ini secara khusus membahas pengaruh dari gaya kepemimpinan terhadap inovasi di perusahaan New Technology Based Firms (NTFBs). NTFBs dipilih karena tentunya inovasi sangat berkaitan erat dengan perusahaan yang bergerak dalam bidang teknologi.

2. Tujuan Penulisan

Paper ini adalah review atas penelitian “"Innovation in NTBFs: Does leadership really matter?” yang ditulis oleh Nicholas O’Regan dan Abby Ghobadian.

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REVIEW PAPER: Breakthroughs: How leadership and drive create commercial innovations that sweep the world (CASE 1 of 2)

1. Latar Belakang

Buku ini secara umum berisikan terobosan – terobosan atau breakthroughs yang terjadi dalam dunia bisnis komersial, baik produk maupun jasa. Penulis buku ini mengambil 14 cerita mengenai terobosan yang terjadi dan membahasnya secara menyeluruh. Terobosan – terobosan yang diceritakan menggambarkan kreativitas, determinasi, dan kegigihan dari para pembuatnya. Terobosan - terobosan yang dimaksud disini bukanlah sebatas peningkatan atau inovasi dari sebuah produk, melainkan sebaliknya terobosan disini adalah terobosan - terobosan atau penemuan yang dianggap sangat hebat dan mampu menggoncang keseluruhan industri dimana mereka berada. Penulis paper ini meneliti bagaimana terobosan tersebut dapat dicapai baik dalam perusahaan dengan skala global maupun perusahaan start - up. Paper ini bertujuan untuk membantu pembaca dalam memahami proses dalam terjadinya sebuah terobosan dala industri.


2. Tujuan Penulisan 

Paper ini adalah review terhadap buku yang ditulis oleh P. Ranganath Nayak dan John M. Ketteringham berjudul “Breakthroughs: How leadership and drive create commercial innovations that sweep the world”

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Making a Case for Microsoft’s SharePoint - CASE UTS (3/3)

Increasingly more and more organizations are attempting to make information more accessible and shareable among employees. According to Bill Gates, “(SharePoint) is based on a vision of letting workers share information in a better way.”

  The latest version is SharePoint 2010 (SP 2010), while earlier versions introduced by Microsoft included SP 2001, SP 2003, and SP 2007. SP 2010 offers a number of new features and functionality over previous editions. According to Microsoft’s Steve Ballmer, “SharePoint 2010 is the biggest and most important release of SharePoint to date. When paired with Microsoft Office 2010, Share- Point 2010 will transform efficiency by connecting workers across a single collaboration platform for business.” Although Microsoft Office sales have been declining, SharePoint sales have been increasing. More specifically, Microsoft reported that SharePoint sales have seen 20 percent growth and revenues topping $1.3 billion. In addition, Microsoft claims that in 2007 it has shipped over 85 million seat licenses to approximately 17,000 customers since SP 2001. As Alan Pelz-Sharpe points out, “If there was ever any lingering doubt that SharePoint was having an impact on the market, these numbers put that argument to rest.”

 The popularity of SharePoint is that it makes it easier for people to work together. SP 2010, for example, allows individuals to set up their own Web sites to share information, manage documents, and publish reports. According to Microsoft’s Web site, SP 2010 provides the following capabilities:

  ■ Sites—allows for a single infrastructure to support all of an organization’s Web sites. People can share documents, manage projects, and publish information.

 ■ Communities—provides enterprise collaboration tools found on the most popular social networking sites. Users can locate key contacts and information, join groups, and create wikis.

 ■ Composites—supports the use of tools and components that allow individuals to build business applications without having to write code.

 ■ Content—supports content management with features like document types, retention policies, and automatic content sorting that works seamlessly with Microsoft Office.

 ■ Search—allows users to search for information and documents based on a combination of relevance, refinement, and social cues.

 ■ Insights—gives people access to information stored in the organization’s databases, reports, and business applications.

 Large companies like Sony Electronics (a division of Sony Corporation) have upgraded from SP 2007 to SP 2010 to take advantage of its improved search, social networking, and document sharing features. According to Jim Whitmoyer, business applications manager at Sony Electronics, the improved search capabilities of SP 2010 has been welcomed by many of Sony Electronics’ 180,000 employees across the globe. The updated search filters now provide results by document type, author, or within a specific time period that can narrow down thousands of documents down to a relevant dozen. In addition, the new search features now provides results for search terms such as a company expert’s profile.

 With the hiring of younger workers and the popularity of social media sites, Sony wanted to encourage the use of My Sites to allow for a more progressive work style. As Whitmoyer points out, “All our worldwide users are dealing with the conflict of distance. But SharePoint 2010 provides better social connections and richer profiles through My Sites. So if someone is searching for a subject they can get help from colleagues quickly.” Moreover, Whitmoyer says, “SharePoint 2010 represents an opportunity to remake the Sony landscape, where employees will chat and post on discussion boards instead of e-mailing, and use wikis instead of tracking revisions made to various Microsoft Word docs sent as e-mail attachments. We’ve been preaching about sending links to each other instead of attachments.” The use of SharePoint has allowed Sony to communicate more effectively and efficiently by curbing the reliance on sending emails back and forth.

 On the other hand, small and midsize size businesses have been adopting SharePoint technology. For example, the Greater St. Louis Area Council of the Boy Scouts of America serves close to 60,000 kids and 15,000 adult volunteers with only 80 staff and an IT department of one. Their SP 2010 Web site allows scout leaders in 15 different regions to coordinate activities and update their own blogs. Although the Council considered several other solutions, including open source tools, Joe Mueller, director of public relations, said, “We realize that in the blink of an eye we could set up 15 WordPress blogs for our districts, but when you look at everything from an information management standpoint, SharePoint just made sense.”

 The SP 2010 Web site enabled a culture shift toward collaborative content development. As Mueller points out, “That’s a huge change in our culture here. We have been a top-down organization from a communication standpoint, and now we’re opening the gates.” However, this would only be possible because of SP 2010’s administrative controls that allow only authorized people to have access to troop activities and scouts’ personal information, as well as controls that ensure that blog posts meet certain organizational standards.

  However, SP 2010 will allow the Council to have broader capabilities, which will come in the next phase of the project. Aside from enterprise content management, Mueller contends “The other part of the project is to do online reservations, and having SharePoint as our platform will facilitate that. When a scout is in a church basement with his troop leaders planning a campout, and they want to use our equipment to go rock climbing, they can use their mobile phones to log onto our Web site to make a reservation, possibly pay with a credit card, and boom, they’re done.”

 According to Toby Bell, a vice president of research at Gartner Inc., SharePoint has been “nothing short of a phenomenon.” Unfortunately, while there has been a high interest in the product, there has been confusion about its value. As Bell points out, “For Microsoft and its partner ecosystem, it’s easy to see SharePoint becoming the billion dollar baby in ECM [enterprise content management], but estimating the potential ROI for SharePoint and related products for enterprise buyers is harder.”

  Russ Edelman of Corridor Consulting believes that the true costs of deploying and supporting SharePoint are not well understood. Moreover, he contends that many executives believe that SharePoint is a “shrink-wrapped” product that can be easily installed and configured within days. Edelman believes that it cannot, and provides a breakdown of the true costs that need to be considered when deploying SharePoint or with rolling out any new software solution:

 Expected Costs: 

■ Product Licenses Microsoft, for example, offers different licensing options for SharePoint, and these options can vary considerably. Even though some versions are free, the version selected should depend on the functionality required and the number of instances the server software will need to run and the number of users.

  ■ Microsoft SQL Server Licenses The cost of SharePoint does not include the cost of Microsoft SQL Server a database management system (DBMS) that is required to store the SharePoint content and metadata. In some instances, organizations may be already running SQL Server, but an additional SQL server database may be needed, depending upon scalability, redundancy, and performance. Pricing will depend upon the configuration and type of licensing agreement.

  ■ Windows Server Software SharePoint also requires Windows Server 2003 or Windows Server 2008, and can be on physical or virtual machines. Again, pricing will depend upon the configuration and type of licensing agreement.

  ■ Virus Protection and Backup An organization’s information must be secure. Virus and backup protection can be purchased from Microsoft or another third party, but the price of these products can vary and can be user or server-based or both.

 Hardware and Infrastructure This includes the actual computers need to support a SharePoint environment. Certain computers may be servers for SharePoint or SQL Server databases, as well as the necessary network hardware and workstations.

  ■ IT Staff In general, IT staff will be required to support the SharePoint environment. If the SharePoint users build their own basic applications, then the cost of support will be lower. However, if the organization plans to build more sophisticated business applications, then the cost will increase significantly because more staff, like developers and quality assurance testers, will be required. Depending on the size and complexity of the projects, project managers, business analysts, and help desk staff may be needed as well.

  ■ Third Party Products SharePoint is not perfect and may not solve every problem directly. Therefore, third-party vendors may provide specific products to fill such gaps. This may include tools for image capture or workflow enhancements, and the price of such products varies widely.

  ■ Consulting Costs Organizations that wish to implement SharePoint may not have all of the requisite skills or knowledge, and, as a result, may need to hire consultants to configure SharePoint or to integrate third-party products.

  ■ Quality Assurance Testing must go beyond out-of-the-box functionality and include testing of any custom development, the integration of third-party products. As a general rule, organizations should allocate five to 10 percent of their SharePoint project’s budget to quality assurance.

 In addition, Edelman outlines a number of unexpected costs in order to gain a true cost of ownership picture:

  Unexpected Costs:

  ■ Governance Although one of SharePoint’s strengths is its simplicity and ease of use, a drawback is that it can be used inconsistently. Therefore, design and governance standards and policies need to be developed and implemented throughout the organization.

  ■ Change Management Users will have to change the way they manage and share information once Share- Point is deployed. People often resist change, so a change management plan is highly recommended. This could be as simple as a formal communication such as an email or newsletter or a highly visible campaign to promote the proper use of SharePoint.

  ■ Training All users will require at least some training, and can be performed by internal staff or outside consultants.

  ■ Community Participation The SharePoint community of users has been described as collegial and growing. For example, a number of SharePoint conferences are being hosted around the world, so user travel may have to be factored into the true cost of SharePoint.

 Although there a number of costs associated with a Share- Point (or any other IT solution) project, it is important to develop a business case to determine if the benefits really outweigh the costs. Russ Edelman also provides a framework for understanding the specific challenges of building a business case for SharePoint. He believes that although SharePoint deployments can lead to process improvements, it’s not always easy to quantify the value of those improvements. Edelman suggests that the benefits for any software solution should include three core areas: The hard savings, the soft savings, and risk mitigation.

 Hard Savings A well-framed model of the true costs of a SharePoint project is the first step of developing a good business case. Without it, a business case will fail to pass the “sniff test” by most financial analysts. The first step for any business case is the cost savings that will result. For example, an organization may deploy Share- Point for imaging-based solutions. Here, the hard savings would focus on how the organization would save money by eliminating or reducing physical storage and retrieval cost or shipping costs if documents no longer have to be mailed or shipped to other locations. In addition, SharePoint may allow an organization to eliminate other systems the organization may be using. This would result in a hard savings on support, maintenance, or software licenses.

 Soft Savings A business case should also include the soft savings—that is, the less tangible benefits that the software solution provides. This may include efficiency improvements, such as the amount of time a person or group will save as a result of using SharePoint or any other system to replace a manual business process or retrieve stored documents. These efficiency claims can be backed up by using time and motion studies that track how long it takes a person to perform a specific task before and after the software is implemented. This may include, for example, the closure of a case from five days to one day.

 Risk Mitigation The third element should include a description of how using the product will mitigate certain risks. For example, SharePoint can provide a redundant repository for storing electronic copies of original documents. If disaster recovery and business continuity are important concerns for an organization, then a portion of the system’s costs could be amortized over the time a catastrophe may be likely. Moreover, since SharePoint is used many organizations world-wide, deploying Share- Point can reduce the IT staffing risk since a pool of talented people who can support it exists.

 The main point your business case wants to make is that the organization will be doing more for less. In addition, the key capabilities and the benefits those capabilities will provide are important to justify the costs of the investment. For example, global non-profit Conservation International was able to show how SharePoint’s functionality reduced the time and cost of implementing a Web site. As Alexandre Dinnouti, director of Web applications, states, “Ultimately, we realized that we would never finish the project. We redirected the resources to utilize SharePoint, and we had the first version of the system ready in just under six months.”

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Wal-Mart’s RFID Supply Chain - CASE UTS (2/3)

In 2003, Wal-Mart of Bentonville, Arkansas announced its vision for an RFID-enabled transparent supply chain. By January 1, 2005 the company decreed that its suppliers would be required to have a system in place for attaching radio frequency identification tags to a portion of its products destined forWal-Mart stores. Unfortunately, as the deadline grew closer many of the company’s suppliers knew that they were not going to be able to meet that deadline.

 One supply chain executive, who wished to remain anonymous, said that his company would stick RFID tags on just enough pallets to satisfy Wal-Mart’s mandate, but he’s not even sure that those tags would work upon arrival because of technical problems. According to Patrick Sweeney, CEO of ODIN Technologies—a software and integration company working with several of Wal-Mart’s top 100 suppliers—there are two camps. About 30 percent of Wal-Mart’s suppliers will integrate RFID fully into their infrastructures now, while the rest will follow the practice of “slap and ship” like the supply chain executive mentioned above. As a result, the efficiencies Wal-Mart envisioned for the RFID supply chain may not be realized any time in the near future.

 In addition, the mandate by Wal-Mart has become a moving target. Originally, only Wal-Mart’s top suppliers were required to put RFID tags on all products shipped to specific distribution centers in Texas. Wal-Mart now wants its suppliers to attach tags to only 65 percent of their products. Several suppliers have confided that the percentage of their products shipped with RFID tags would be much lower—about 10 percent. The method of slap and ship will involve only a small percentage of products shipped to Texas, minimal data integration, and leave the supply chain blind to the movement of product. Not surprisingly, Simon Langford, Wal-Mart’s manager of RFID strategy, says “[The slap and ship method] is something we sort of cringe at.”

 The anonymous supply chain executive also said, “We don’t have a business case for RFID. Because the standards are not complete, the equipment isn’t developed. And because the equipment isn’t developed, I can’t fulfill Wal-Mart’s demand.” In addition, Christine Overby, an RFID analyst at Forrester Research said, “Many of these consumer-packaged goods companies are really struggling with the business case. These are really costly projects, and they’re hard to do with a technology that’s a moving target.”

 The failure of the January 1 deadline for RFID could mean more bad press for the retail giant when it could use some positive publicity. Wal-Mart’s reputation has recently become blemished because of allegations of unfair wage practices, hiring illegal immigrants, and discriminating against female employees. Many believe that Wal-Mart made a critical mistake when it imposed a top-down mandate on its suppliers before the technology and business needs matured to the point where RFID technology made good sense for Wal-Mart and its suppliers and customers.

 Founded in 1999, MIT’s Auto-ID Center began to look at how RFID technology could help organizations track and manage products using embedded sensors. The center proposed an electronic product code (EPC) that replaces bar codes by utilizing radio frequencies to identify computer chips placed in tags. In a controlled environment, RFID works quite well. Although tags can vary in size and shape, they can be affixed to cases and pallets as stickers or labels, or like thin plastic wrist bands. Each tag contains a small antenna and a chip with a unique string of numbers to identify each product. Active tags contain a battery, while the more common passive tags acquire their energy from a reader and are less expensive. Readers are antenna devices that identify the tags as they pass by. The tag transmits its digital electronic product code to the reader and then to a computer system.

 The promise of RFID is to help reduce the number of products that are misplaced or misdirected in a supply chain. According to Paul Fox, director of external relations at Gillett, “There are countless millions of dollars tied up in warehousing because of the inefficiencies in the supply chain.” He believes that RFID technology will tell Gillett “where the product is in our warehouses, what the product is and how much of it we have. No manual counting, no driving around, no question of mispicks, no order number mistakes. Once you get an accurate understanding of inventory position, that information becomes invaluable.”

 Before the year 2000, the price of RFID tags was about $1 to $2 apiece. Recently, the cost became as low as 25 to 75 cents, depending on the volume of the purchase. However, many suppliers contend that the price of an RFID tag must be even lower before they make economic sense. Assuming a cost of 40 cents per tag, a supplier that ships 15.6 million cases and pallets to Wal-Mart per year would spend about $7.6 million in RFID tags. Adding to the problem is Wal-Mart’s one-size-fits all strategy, where there is no difference between such consumer products as razor blades, tires, or computers. Each pallet will require an RFID tag when shipped. Kara Romanow, an RFID analyst at AMR Research, calls this the “toilet paper and toothpaste problem.” She says, “If you look at TVs, DVDs, and video games, the price tag doesn’t matter. But when you’re talking about TP and toothpaste, there is no tag cost at the case and pallet level that makes the numbers work.”

 Another problem with RFID is that no standard for the technology currently exists. Not all tags and readers are compatible. As a result, Wal-Mart may need more than one reader in its warehouses to read different tags. Moreover, the radio waves that are the foundation for the technology have not lived up to expectation in several pilots. One RFID technology provider wasn’t getting a good read rate so their engineer kept increasing the power and adding more antennas. The read-rate still never got higher than 50 percent and one reader kept drowning out another reader. Radio frequency also tends to act abnormally when it’s near certain elements like liquids, metals, or porous objects. Many believe that the next generation of tags that will supposedly be available in two years will overcome many of these problems. Unfortunately, no one is sure how much they will cost.

 According to Wal-Mart executive vice president and CIO Linda Dillman, the business case is, “[RFID] will help us increase customer satisfaction in the near term, and ultimately pay an important role in helping us control costs and continue offering low prices. Moreover, Simon Langford believes that the RFID payback for Wal-Mart’s suppliers will be twofold: First, it will help Wal-Mart’s suppliers reduce their inventory, and second, sales will improve because Wal-Mart will always have its products in stock.

 Some of Wal-Mart’s suppliers need to consider some unpleasant alternatives. If they wait for RFID to mature, they can lower the costs of developing an RFID system that meets Wal-Mart’s demands. However, by waiting they may jeopardize their relationship with Wal-Mart and open the door for their competitors to slip into their place. As a result, some are complying with the mandate via slap and ship. And what if many suppliers can’t meet the deadline? Will this turn into more bad press for Wal-Mart?

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