Reference no: EM132102986

Datacard Group is a global provider of machines and software for issuing personalized financial cards, passports, driver’s licenses, and mobile devices. Customers use this Shakopee, Minnesotabased company’s solutions to personalize and deliver more than 90 percent of the world’s payment, identification, telecommunications, gift, and loyalty cards. Datacard Group’s customers include financial institutions and card bureaus, major corporations, and government agencies, and they issue more than 10 million cards every day. With more than 2000 employees, customers in more than 150 countries, and over $650 million in revenue in 2014, Datacard Group has an impressive track record. However, several years ago, management believed the company could do better. In 2008, the Datacard Group launched a major initiative to increase revenue, customer satisfaction, operational efficiency, and employee productivity with an emphasis on strengthening cross- departmental communication and business processes. In the past, Datacard’s information systems were built around its various lines of business. Business units would request their own system solutions from the company’s information systems department, with approval from the chief financial officer. Over time, this approach created many fragmented information systems that served the needs of specific departments but not those of the company as a whole. Datacard’s CEO Todd Wilkinson and his managers decided that the company needed nothing less than a complete business process transformation. In 2010, Chris Pelletier was hired to lead the business process redesign effort. Pelletier quickly formed a business process team to encourage people from all areas of the enterprise to talk together and collectively work on ways to improve processes and reduce inefficiencies. The business process team also quickly became involved in information systems projects. The team worked closely with Datacard’s information systems team to help them learn to develop solutions that were based on strengthening business processes for long-term enterprise-wide results. Working together, both groups tried to figure out what needed to be changed—was it the business process, the supporting information technology, or a combination of both? An example of a business process that was redesigned using this new way of working was the distribution of pricing to Datacard’s partners. Datacard distributed pricing for its secure identification and card issuance products to approximately 250 partners quarterly by emailing them a price book made up of multiple spreadsheets. To create this price book, people in marketing and sales had to spend many hours inputting data manually, and the Datacard partners that received the price books had to type their data manually into their own systems and check their accuracy, a process requiring as much as two days. Changing a price was very time-consuming, complex, and people-dependent, preventing Datacard’s marketing and sales staff from performing other, more valuable work. Datacard’s business process team held a series of meetings with key sales, marketing, and IT staff members to examine this process and the IT systems supporting it from all angles. After eight months of intense collaboration and process review, Datacard’s information systems team created a custom solution to automate the pricing process by using Oracle E-Business Suite. The team created a single version of the price book, with each Datacard customer receiving a price book tailored to its specific needs that can automatically update its corporate systems. Redesigning this process dramatically decreased the amount of time required for price updates each quarter, saving 6,000 hours of work annually and twice that amount at partners’ sites. Partner companies no longer have to enter Datacard pricing data manually into their own systems or pore through multiple pages and spreadsheets to find what they are looking for. Partner companies are even more likely to stay with Datacard because they no longer have to do manual data entry work. Redesigning took seven steps out of the process of creating price books and freed up time for sales and marketing staff to spend on higher-level work requiring more creativity and innovation. At the heart of Datacard’s redesigned processes are Oracle technology solutions, which make it possible to integrate applications tightly and support cross-departmental business processes. These Oracle tools include Oracle E-Business Suite (an integrated collection of enterprise resource planning, customer relationship management, and supply chain management applications based on Oracle database technology), Oracle Agile Product Lifecycle Management applications, and Oracle PeopleSoft human resources applications, and they can all exchange data with one another. For example, when introducing a new product, Datacard’s product engineering team will put parts and bills of materials data into Agile Product Lifecycle Management applications. These data flow through a third-party application and update Oracle E-Business Suite automatically, so that the parts order is processed and billed correctly. Oracle CRM on Demand supports Datacard’s sales processes. CRM on Demand is integrated with Oracle E-Business Suite so that data on sales opportunities and quotes automatically flow between the two applications. This tight integration means that Datacard customer service employees don’t have to reenter data manually, saving time and money spent on correcting errors in manually entered data. The payoff from redesigning Datacard’s business processes has been huge. Improved processes for price book distribution and on-time shipment of supplies and spare parts has made customers happier. Employee productivity and morale have increased as the time spent on manual tasks has been reduced. Other business processes improvements at Datacard include easier identification and development of new products, improved cross-selling and up-selling processes (for selling complementary or higher-price products to customers), greater operational efficiencies, reduced product time to market, standardized global processes, and greater overall organizational effectiveness. Datacard’s revenues have almost doubled since the company began its process redesign work.

Case Study Question

What people, organization, and technology factors contributed to Datacard Group’s problems with its business processes?