Strategic Decision-Making: Innovation and Implementation of a New Reporting Solution Tatjana Vasiljeva, RISEBA University of Business, Arts and Technology, Latvia A beautiful sunny winter day... Middle of December 2008 ...The accounting department of the company ABC was dreaming about the Christmas party, but they had a lot to do before Christmas and New Year. The accountants needed to produce the monthly balance sheet and monthly reports for state institutions, including the statistical bureau. The chief accountant also needed to produce the yearly balance sheet. All these documents had to be created in advance, so that the president of the company would have the time to analyse and sign them before submitting. The company had seven regional branches and they were all situated approximately 300-400 km from the capital. Due to this, the biggest difficulty for the company was the task of producing daily accounting reports. The accounting department needed to have the latest data from the branches every day, but the branches had essential problems in creating and submitting the reports on time. Some data might be lost, some data might be contradictory, sometimes data might be obtained too late. Clearly the company ABC had to come to some sort of decision to solve the issue of timely data and reporting. Overview and analysis The company ABC had an interesting history. It was established in 1991 just after the Republic of Latvia gained independence. At the time of the case at hand, some of the original employees were still working there and were very loyal to the company. The whole team was very active, constantly struggling for better results and the best position among competitors. The company ABC belonged to the category of small and medium-sized enterprises (SMEs), the central office was situated in the capital of Latvia, Riga, and the company had been one of the players in the building and reconstruction industry for more than 15 years. There were more than one hundred employees working in five departments, mainly engineers and technical personnel, highly professional and experienced. The enterprise had a well-developed innovation culture, a positive innovation climate and a high level of innovation potential. The enterprise considered the IT department as one of the main innovation drivers, with its highly professional specialists and successful cooperation with business departments. According to their working responsibilities, some of the administrative personnel drove out to the countryside to observe the built and reconstructed objects, and in the process they needed to access agreements and contracts online. The business process could be described as knowledge-based, with a high orientation toward business results. Top management arranged meetings of the department managers on a monthly basis, while each department had its own weekly management meetings to discuss operational issues. Case problem The young manager of the production department, Janis Krumins, who was responsible for the observation of objects built according to customers' orders, was in despair. He was asking himself "What can I do? How can I cope with the situation?" He needed to submit various data about the building objects to the accounting department, so they could generate the necessary reports. The data comprised the following: the status of the building objects and the balance and building materials, such as bricks, cement, wallpaper, tiles, etc. Janis also had to know about the status of new contracts signed in the last month and all the details about them. The majority of the building objects were in the countryside while the central office was in the capital. It took some time to get the documents and contracts from the countryside to the capital as the documents were scanned and sent to the central office by

fax. The fax devices in the regional offices were rather old, the transfer speed was very low, and sometimes there was a problem getting the scanned copy to the central office at all. Janis's colleague in the IT department, Liga Abele, had obtained the documents about the building objects and entered the data into the accounting information system, so that the accounting department could produce the necessary reports. But the data volume was huge, and Liga was frustrated when she imagined the next long working day, processing all the data until late in the evening. Meanwhile, the manager of the accounting department, Peteris Kalnins, was looking through the balance sheet. He was very close to retirement. He was very experienced, having worked at the company since its establishment. Peteris always did his best to submit all mandatory reports on time. But many colleagues believed his time was up - that someone younger and more innovative should be chief accountant. The president of the company was worried. Every month there was the same problem. Would the company manage to submit the reports on time or would they incur a penalty for the delay? There might even be some loss of data, which was doubtlessly one of the key issues to be resolved. The situation was untenable, but the president had no idea how to proceed. Suddenly a thought came to his mind. Christmas was coming! All the employees were expecting small Christmas gifts and all of them were hoping for a Christmas miracle. He could arrange such a miracle, but only for one of them. What if he called all his employees together and asked them to solve the most painful issue at the company by coming up with an innovative solution? What if he promised to award a Christmas vacation trip to the author of the best and most appropriate innovation? Decided - done. The next day the president arranged a general meeting for the entire staff. Only one topic was on the agenda - innovation. What should be done in a more innovative way? What innovation could be introduced at the enterprise to solve the reporting issue and submit all the reports on time? What could be done more efficiently? Only two days were given to come up with the innovation, while a week's vacation in Singapore was announced as the prize for the winner. Employees were asked to arrange small teams up to 3 - 4 colleagues, seal their proposals in an envelope and submit them in a box in the secretary's room. Status report and employees' proposals For two days the company was a beehive of activity... All conversations and discussions were solely about innovations. What innovation to offer as a possible solution? Who would be the winner? Hopefully, someone young and dynamic with sophisticated ideas! The company had many such employees, as the majority were young or middle-aged specialists. The competition seemed tough enough for any of them. After the two days were up the top management began to analyse the proposals. The box was full of ideas - some of them were unrealistic, some were not too clever, some were simply unacceptable for the company. The top management team has read around 40 ideas but nothing viable yet. Without expecting anything interesting, the managers open the last three envelopes. The first is from the young manager of the production department, Janis Krumins' team. The next proposal is from the young employee in the IT department, Liga Abele's team. The top management is interested, hoping for something innovative from these young staff members. And the last envelope is from the chief accountant Peteris Kalnins. The president does not even want to open this last envelope. What could the poor man come up with at age 60, with no knowledge of modern IT technologies, and hardly any knowledge of innovations more generally. But in all fairness they have to read his proposal as well.

Janis Krumins proposes an effective and not very expensive solution. The company should buy new modern fax devices for all the regional offices and improve the quality of communication lines between regional offices and the central office. Liga Abele offers an entirely different solution. She proposes hiring two additional employees as data operators to reduce the time needed to enter data into the accounting system. This solution does not require much investment and would have the immediate effect of compiling reporting data according to schedule. Both ideas could be implemented quickly, but how effective would they be as long-term solutions? The top managers are very disappointed. None of the solutions could be considered as a winner... Without the slightest hope they start reading the innovation proposed by Peteris Kalnins. They are surprised. It turns out that Peteris is a fan of new technology, has three powerful computers at his home, plays computer games with his grandson, and reads a lot about the latest technological achievements. Peteris goes on to propose buying and installing an innovative new web-based accounting system so that any employee could enter data about building objects in real time. He has read that a lot of building companies are installing a new accounting system with web access to the data and a flexible report-generating functionality. These companies claim to be very satisfied with the new system and the possibility to operate via the Internet, but at the same time all of them acknowledge the great investment needed for implementing the new system.

Identify any issue  Context and issues  Problem  Alternatives  Solution  Risk and Mitigation Use the direct and indirect approaches of presentation in different slides. Please ensure to use the six types of detail discussed in command world and listed below: 1. Facts and Figures 2. Examples and Illustrations 3. Description 4. Narration 5. Reference to authority 6. Visual Aids