Qus: -Recommend to the CEO a revised management structure at the executive level and justify why this should be considered (10 marks).

You have just joined DMC (formerly trading as DataMine Consultants) as the new CIO. Your CEO has given you six (6) weeks to develop an initial draft strategy document (3 Year Plan) with the requirement to reorganise the business so that IT supports the companys business needs going forward for the company itself to be more effective and efficient. It is the CEOs vision for DMC to be restructured so that IT will be the driver and enabler of DMC future.

DMC has been in business for 12 years being originally a start-up company of the current CEO and founder. During the initial period of the company it focused on the creation of a novel generalised deep-learning Big-Data analytical system called DWagon (short for DataWagon). After 2 years DWagon was ready for local release and sales began at a moderate level. Clients of DMC make an up-front purchase for the right to use the system followed by an annual licence for the DWagon software. Originally, Dwagon operated as a distributed services from DMCs data servers more recently it has been moved to the cloud and operates as a software service. The other aspect of the DWagon business model is the supply by DMC to its clients of embedded consultants who organise and clean the clients data sets and develop specific scenario investigations to their clients specifications. The DMC client base has grown rapidly in the last few years with its client base mainly in the resources sector (oil, gas and minerals). However, the CEO wants to move into new areas, firstly financial services (using DWagon) on an expansion pathway not yet fully disclosed to you.

In the early years of DMC things were tough financially and all profits were used to develop and improve the software until it became a successful, stable, easily deployed and maintainable software system. In the last 8 years DMC has been growing its customer base globally to the point where it has won national and international acclaim.

During the years that followed the global release of DWagon the CEO became more and more aware of other technologies used by his clients, particularly the use of data-loggers, remote control systems, rapid deployable remote networks and satellite telemetry services. Using this knowledge, the CEO started buying out small niche manufacturing companies who made critical components and systems for the resource industries globally. These companies on acquisition by DMC continued to operate with their extent management and from their own manufacturing premises. Also, all of the acquired companies have maintained their individual branding and trading identities. Part of the CEOs vision is to create a new DMC Group Brand incorporating and retaining the existing brands of the DMC Groups companies.

After accumulating over 20 small companies the CEO decided that he wanted to house all of his manufacturing businesses and his software development business into one custom built state of the art manufacturing, office and design facility to take advantage of the cost savings brought about by the increased scales of economies and improvements in productivity. The CEO also wants to bring together all the intellectual capital of his group of companies to create an innovation and design centre creating the next products or services to maintain the competitive advantage that DMC clearly has over its few competitors.

DMC will be moving into their new premises in nine months. There are several issues that the executive of DMC needs to deal with to make the move a success from day one. You have been tasked to put together the draft recommendations for discussion by the board so they may be finalised prior to the move and the radical change all of the business divisions would be encountering.

Information to assist in creating the Draft Strategy Document -

Management Structure

Members of the board: Chair CEO; CFO; COO (note, the CEO would like to introduce a Chief Commercial Officer (CCO) in a later revision of the board structure)

Operations Group: Chair - COO; Head of Division (x 5 Software Development, Data Collections Technology (data logging), Remote Networking, Control Systems and Satellite Telemetry)

Finance, Governance and IT Support Group: Chair: CFO, Chief Accountant, Head of Legal and Governance and the CIO (you)

Operational Structure

Each Division has several of the acquired companies under the Head of the Division. Each company has a Company Manager who overseas Research and Development, Sales and Marketing, Customer Services, IT Services, Operations (manufacturing or software development as necessary) and logistics (suppliers, distribution and warehousing).

All the Divisions have regular monthly meetings internally and Heads of Divisions meet on alternating fortnights. There is little social contact between Divisions or indeed with the companies within the divisions

The Head of Legal and Governance deals only with legal issues when they arise at the company level. Otherwise, on the governance front, standard employment and NDA contracts and metrics have been applied across the organisation where possible and appropriate. There is no DMC Code of Ethics or a code of Professional Practice in place. There appears to be little ongoing review of governance.

The Information Technology Services (ITS) in each company varies in size and is managed by a local ITS manager or team leader as the individual company size demands. Each company commonly uses different software stacks (applications) to support the activities of the individual companies which is an artefact of their different backgrounds. There are very few service level agreements within any of the companies. There is standardisation around office software limited to Word, Excel and Outlook. Design and project management tools vary from company to company. However, only approximately 50% of the companies use the same accounting package to record revenues and expenses of their operations. This means that centrally the organisation has to rely on their banks accounting system to fully understand the financial situation of DMC on a daily basis. A central team of finance administrators group and collate weekly and other periodic reports on the financial state of DMC. Generally, ITS is considered at an operational level in the companies and there is not any IT strategic plans across DMC, only at the company level in some companies. Throughout DMC there are significant duplication of services and roles in the ITS area. Of all the business functions in DMC, ITS is going to be the function most affected by the amalgamation. Many ITS positions will go if you chose a central ITS model for DMC. It is your intention to retain as many of the current ITS staff as possible in the new structure. However, potential career pathways will open up for the retained ITS staff and upskilling these already skilled individuals into new roles may have the potential for significant improvements in productivity and innovation.

On the operations level, there are many similarities of technologies used in manufacturing but as there has been little investment in replacement technologies since the companies were acquired, the CEO considers the opening of the new manufacturing facility a golden opportunity to build a state of the art manufacturing facility with as much automation as possible.