Reference no: EM132919752

IBM Credit Corporation, a wholly owned subsidiary of IBM, enagged in the business of financing the computers, software, and services that the IBM Corporation sells. It is a business of which IBM is fond, since financing customers' purchases is an extremely profitable business. When IBM field salespersons called in with a request for financing, they reached one (1) of the 14 people sitting around a conference room table in Old Greenwich, Connecticut. The person taking the call will log the financing request on a piece of paper. That is step one (1). In step two (2), someone will bring that piece of paper upstairs to the credit department, where a specialist shall enter the information into a computer system and check the potential borrower's creditworthiness. The specialist shall write the results of the credit check on the piece of paper and will dispatch it to the next link in the chain, which is the business practices department. The business practices department, step three (3), is in charge of modifying the standard loan covenant in response to customer request. Business practices has its own computer system. When done, a person in that department would attach the special terms to the request form. Next, the request will be forwarded to a pricer, step four (4), who will key in the data into a personal computer spreadsheet to determine the appropriate interest rate to charge the customer. The pricer will write the rate on a piece of paper, which, along with the other papers, will be delivered to a clerical group, step five (5). There, an administrator shall turn all this information into a quote letter that could be delivered to the field sales representative by Federal Express.

The entire process consumes six (6) days on average, although it sometimes take as long as two (2) weeks. From the sales representatives' point of view, this turnaround is too long, since it gives the customer six (6) days to find another source of financing, to transfer to another computer vendor, or simply to call the whole deal off. So the representative would call and call and call to ask, "Where is my deal, and when are you going to get it out?" Naturally, no one had a clue, since the request is lost somewhere in the chain.

Answer the following items:

1. Identify the process problem in the given scenario. How does it impact the company's operations?

2. In the context of the given case, decide and justify which dimension of the Devil's Quadrangle should be redesigned. Discuss the possible trade-off from your recommendation. Cite example/s, if necessary.

3. Using a process redesign method, propose a new process for IBM Credit Corporation.