Bicycle enthusiasts not only love the ride their bikes provide, but they are also often willing to pay for newer technology especially when it will increase their speed or comfort. Innovating new technologies for bikes is only half the battle for bike manufacturers. Designing the process to manufacture the bikes is often the more daunting challenge.

Consider the case of Dominion Bicycles. It is a small 85-person company that is working to bring state of the art technology in mountain bike design to market. It digitally designs and builds mountain bikes and tests them under the most extreme conditions to bring the best possible product to their customers. A few years back, the company designed and patented the Virtual Pivot Point (VPP) suspension system, a means to absorb and shocks that mountain bikers encounter when on the rough terrain of the off-road ride. One feature of the new design allowed the rear wheel to bounce 10 inches without hitting the frame or seat, providing shock absorption without feeling like the rider was sitting on a coiled spring.

Failure of the first few prototypes was the motivation for a complete redesign. The company had to find a way to go from design to prototype faster. The research team had been using computer aided design software (CAD) but it took 7 months from design to prototype. The company was having trouble determining what part of the process was least efficient. They had not taken the time to document their business processes.

The time to develop prototypes was becoming a significant drain on company time and finances. The company decided to adopt the use of product life cycle management (PLM) system that allowed them to analyze and model capabilities in a much more robust manner. The team found a system that uses simulation capabilities to analyze the impact of the new designs on rough mountain biking terrain. It should allow the designers to track the pertinent variables and make adjustments to the design in a few minutes. Simulations should be as short as a few minutes as compared to 7 hours for the older software.

To work in conjunction with the new software, the company is considering hiring a new master frame builder to build and test prototypes in-house. This would require an investment in a van-size machine that can fabricate intricate parts for their prototypes, a process they used to outsource. These changes have resulted in a significant improvement in design-to-prototype process. What used to average about 28 months from start of design to shipping of the new bike should now take 12 to 14 months. This equipment will be housed in a separate building in an industrial warehouse as currently the staff are located in a central office building in downtown Brampton. With the two locations senior management was concerned that they would not be able to keep track of key metrics however, the physical space was inadequate to accommodate all the necessary equipment activities.

Once the designs are finalized the company sends general design specifications to a manufacturer in China to establish a contract price. Due to the long distance and cost of travel, the contracts are sent via the internet and agreements are negotiated through teleconferencing. Once the contracts are finalized the final detailed specifications are forwarded via the internet.

The new computing technology and infrastructure required to run their operations has been managed in-house. With the investment in their new technologies that provides them significant competitive advantage to the company the company is concerned with the security of their software systems. With the potential now for multiple locations the company has even greater concern over how the communication between sites will occur and how it will be secured. This technology has the potential to generate significant competitive advantage and a breach in security could result in significant losses.

In addition to the technology concerns, the company must also find a way to fund the project. They have approached several banks as well as investors in the capital markets. They need to provide them with a financial plan to support raising additional capital. The potential investors have requested audited financial statements. Management has approached Ernst and Young to complete the audit of the financial statements. In addition, the investors have requested a "second opinion", or independent review, of the viability of the new software for use by Dominion Bicycles. They are questioning the advantages of the software for a small company such as Dominion as compared to large companies that normally employ PLM software.

Management recognizes it will be imperative this new technology is kept secure so they have hired you, an expert in business controls, to make recommendations on how they can protect this competitive advantage. In addition, they are concerned that some employees may not embrace the changes as they are experts in CAD technology but not in PLM technology. The company wants to retain its employees as they are expert bike designers. The company must decide whether to hire new employees to work with the master frame builder. Due to the high cost of investment it is imperative this IT project is successful.

Instructions:

Step 1: Identify three events that are inviting uncertainty and risk to the business.

Event (problem) 1:

Event (problem) 2:

Event (problem) 3:

Step 2: Analyze the business to justify that the events you have identified are consistent with the contemporary managerial practices. Also, provided evidences that those problems exist in the above-mentioned organization.

Analysis of event (problem) 1:

Ref. to management model(s):

Evidence from the case:

Analysis of event (problem) 2:

Ref. to management model(s):

Evidence from the case:

Analysis of event (problem) 3:

Ref. to management model(s):

Evidence from the case:

Step 3: Write three recommendations to overcome those problems.

Recommendation to solve problem 1:

Recommendation to solve problem 2:

Recommendation to solve problem 3: