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Issue Statement

Over the years, the Pay Zone organization has successfully established its place as a reputable consulting and software solutions firm within the oil and gas industry. What sets them apart, is their specialization in exploration and production, thus finding innovative solutions for an assortment of firms within this domain.

Its founding members are approaching retirement with no apprentices to impart knowledge. As a result, the Pay Zone company could be facing closure. Furthermore, as it currently stands, Pay Zone is facing a dilemma whereby current operations must be altered in order to assure the long term sustainability and the future success of the company as a whole.

The principal owners are looking to find the right solution that would help grow this company and reach its potential profit earnings, while at the same time maintaining the enjoyable lifestyle that comes by working as a virtual organization.

The following report provides a thorough analysis of Pay Zones current set of circumstances, and explores possible solutions which can benefit those who have heavily invested into the prosperity of this company.

Analysis

In reference to authors McShane and Steen, we can see that the aspect of Emerging Employment Relations is clearly demonstrated within the Pay Zone business model. At its core, the marriage between work-life balance and virtual work is what drives this companys operations, activities, and success (McShane and Steen, 2015). As previously mentioned, being able to maintain a lifestyle where each partner has the liberty to work within their own physical location (which means having their own ideal environment) is the highest priority. As a matter of fact, weve learnt that this is part of Pay Zones core values and identity. In our text, we can see that the Pay Zone partners/principals fit perfectly within the openness to change quadrant of the Schwartzs Value Circumplex model (McShane and Steen, 2015). This simply means that they have the propensity to easily adjust to major changes due to the innovative nature that each of the 5 members personify. Their motivation for success is the very same thing that stimulates their business operations.

Pay Zones niche in the market is the fact that they are highly specialized in oil & gas exploration and production. These core competencies are what have allowed them to receive lucrative contracts from reputable companies such as BP, IBM, and Petro-Canada. The following SWOT analysis provides a brief synopsis of Pay Zones current state (Friesner, n.d.). We will use the analysis from this table to later on find the best solution for Pay Zone to move forward accordingly.

Strengths No direct competitors and plenty of contracts for projects Experts in improving business performance through effective and efficient information discovery and management Each partner is highly skilled and specialized in oil and gas solutions Collaboration and sharing of information among Pay Zone staff members to provide optimal customer service 24/7 Help Desk Costs are greatly reduced (operating, capital, start-up, building) due to the virtual nature of their business model

Weaknesses Only working with 10% of their potential clientele Unable to increase the output of designing new software solutions due to the lack of availability from the principals

Opportunities Pay Zone did not invest in any marketing whatsoever yet still obtained plenty of clients based on merit and reputable services Attractive company for larger firms to acquire Pay Zone Discovering new solutions for the scarce oil and gas commodities is at a high demand

Threats The long term sustainability of the company is in jeopardy due to the lack of young available talent who are qualified to replace those who will be retiring in the near future Other firms might develop similar software solutions, consequently taking away a large portion of Pay Zones market share

Alternatives Analysis

Option 1

Borrow capital to acquire additional programmers to sell more software solutions.

Pros: This will certainly increase the number of potential clients which presently stands at only 10% of the market. Furthermore, this would alleviate 50% of the workload of the principals, and they could concentrate solely on consulting activities.

Cons: New software design and development was exclusive to the principals and they are unable to allot any time towards new designs or knowledge transfers.

Option 2

Acquire new consultants.

Pro: This will expand consulting capability, hence expanding Pay Zones profit potential.

Cons: Pay Zones consulting services is highly specialized and requires specific skillsets to fit the mold. Finding such talent would be difficult as there only 10 people who are available within the industry. These individuals would require significant compensation and might even oblige Pay Zone to make them principal partners. Furthermore, existing partners who have been a contributing factor on the onset would want to be compensated differently thus causing a limitation for a new consultant to become a partner with shareholder equity.

Option 3

Hire any additional consultants on a contractual basis.

Pros: This will resolve the issue of shareholder equity, and principal partnership.

Cons: This solution would however hider the long-term sustainability of the company as it will decrease the possibilities of finding people who would fit well within this companys culture. Moreover, the annual salary costs would most likely exceed one who would be a permanent employee.

Option 4

Sell Pay Zone software fleet to evade other firms from entering the market and developing products which would directly compete against Pay Zones software solutions.

Pro: Capitalize monetarily from Pay Zones software fleet while it is still unique and with out competitive products.

Con: A substantial amount of costs must be poured into marketing. An area where Pay Zone is weak in experience

Option 5

Sell the whole company.

Pros: Pay Zone is well established and would could be sold at maximum value. The income of the principals would increase significantly

Cons: This action however would relinquish all control, and the principles would not be able to reap from any future growth, expansion, and profits in long term.

Option 6

Do nothing.

Pros: Steady flow of income will remain while maintaining the desired lifestyle.

Con: The opportunity to maximize on growth and sustainability will be forfeited without any adjustments to the current way of doing business.

Recommendations

After careful evaluation of the aforementioned options, I would recommend the following solutions for Pay Zone to consider moving forward. My suggestion is to implement a combination of Option 4 and Option 2.

First, invest heavily in marketing and sell their software solutions at a premium price. The return on investment speaks for itself. The indirect market survey suggests that there is a great demand for such unique automated solutions. Now is the time to monopolize the market and maximize on the fact the Pay Zones software solutions have not competitors. Patent and sell the intellectual property to any big players who would be interested in creating their own software spin off. This solution in-turn will increase Pay Zones potential clientele from 10% (to a significantly greater value) and open more opportunities for more consultation projects.

Secondly Option 2 will be a by-product of Option 4. Mainly due to the fact that software sales inadvertently create a demand in consultation. I would suggest soliciting talent from the 10 known specialists within the field. They dont necessarily have to have equal share of the companys assets, but compensate them accordingly. An investment in young talent gives these prospects opportunity to learn and become acclimated to the Pay Zone company culture.

Conclusion: Action and Implementation Plan

Over the next 5 years, evaluate the performance of the newly hired consultants/partners to see if they would successfully fit the mold. If there has been steady growth and the goal to maintain a successful business model and personal lifestyle without compromising the companys core values is achieved, then this investment was well worth it. If, however, there has been no significant growth and sustainability, sell Pay Zone to the highest bidder (option 5), but continue to generate income from future software licensing sales by obtaining profits from royalties (option4). As a result, all 5 principle partners can continue to reap from Pay Zones success for generations to come.