K-Bell
Consultancy Report

Erik Ploeger
17-10-2011
Consultancy Team H (BK 2.08):

Timothy van Beelen 2511873
Iris Hosman 2061597
Beatrice Munnichs 2121670
Index

1. Business and IS analysis Approach to and objectives of the IS strategy 3 Internal and external business environment 3 SWOT analysis of K-bells current situation: 4 IS environment 4
2. Data Analysis Redesigning the VoD system 6
3. IS Solutions Changes in existing IS and data-organization 7
4. IS Implications and implementation Structure and Culture 10 Changes in structure and culture 11 Decision making 11 Resistance to the system 12 Implementation system 13
5. Recommendations Overview of Recommendations 15
6. References and Apendices References 16 Appendices 17

1. BUSINESS AND IS ANALYSIS

Approach to and objectives of the IS strategy

The first step of our consultancy report for K-bell is to analyze the internal en external business and the information system environment.

K-Bells latest information strategy opens up new possibilities for expanding and can even improve customer satisfaction. The rapport we will present shall explain how K-Bells can best implement the improved system. New improvements will be added in a way that K-Bell can even redefine their strategic objectives.

K-Bells new IS objective is to be a intermediary between supplier and consumer in. Both parties should be able to access the information system (content suppliers however, with limited access). This objective is to improve K-Bells business in general as well, as they will achieve more revenue when customers are satisfied and commit to K-Bell for a long period. More customers also means a higher profit for the content suppliers. This can lead to more content for the customer and will also contribute to customer satisfaction. With the new IS, K-Bell can start with the most advanced Video on Demand system that will greatly improve its position in the market. After completing this task K-Bell will be able to enter new markets and continue to increase their market share as a provider in the Netherlands.

Internal and external business environment

The permanent objectives of K-bell are: • To develop and maintain long-term relationships with its customers by stressing on customer satisfaction. The improvement of the VoD system could help here, because the customers demand more of the current system. They are not satisfied with several options that the VoD provides ( or not provides). Such as only being able to watch one movie or clip at a time, and that within 24 hours they are not able to watch another clip or movie. When the changes in VoD are implemented, they will take into account the needs of the customer, including these demands, meaning that customer satisfaction will increase.

• They also strive to offer a large range of telecommunications to their customers. Not only digital television but also mobile services and internet. VoD might help to achieve this objective by having a better relation with the content supplier, and they will be able to broadcast and supply more content to a larger range of media, because the content suppliers will allow that.

• They also want to be an intermediary between content suppliers and customers. The VoD system is essential in this objective, because this system will provide the content that is supplied by the supplier to the customer, through the intermediary K-Bell, whose consumers will be able to watch the content.

K-Bell’s strategic objective is to improve customer satisfaction. Like mentioned before this can accomplished with the improvement of the VoD system. K-Bell knows the flaws of the current system and will take every complain in to account.

SWOT analysis of K-bells current situation:

It’s very important to know what the strengths , weaknesses, opportunities and threats from K-Bell are. So before we are going to think about improvement we will perform the SWOT analysis.

Strengths: - K-bell is the largest cable provider in the Netherlands. - Does not only offer digital television, but a whole infrastructure of services. - It has a strong corporate culture that is followed and understood throughout the company. (Employees feel part of the company) - Has a strong market position in television, internet and the mobile sectors.

Weaknesses: - K-bell is currently working with very weak Information Systems ( there are many disadvantages to the VoD system) - Customers are currently not very satisfied with the systems. - Their functioning is dependent on two modules, meaning that they are very vulnerable.

Opportunities: - There are rapid changes in the market, meaning that they can profit from the changes that are done, if they are flexible. - There is an increase in the use of television, mobiles and internet. - There is interest in the improvement of the VoD system by large content suppliers as well as customers.

Threaths: - Customers are no longer geographically bound to their supplier. - There are different kinds of providers that are entering each other’s markets. - There is a rapid development of products, so they will have to stay up to date and modern. - There is a high level of competition in the market. - Because there is so much competition, the customer has a large number of service suppliers to choose from, so there is low customer loyalty.

IS environment

K-bell uses three information systems to support its business. The first one is the CCBase, also known as the Customer Care base. The intended use of this system is that is contains all customer-related information. It contains the services the costumer has, information about the installation and repairs and complaints and questions so far. So this system makes it possible to give every customer the service they need. When a customer has a question about an installation or product, the staff member can see immediately the details about the specific customer. A customer appreciates that, so satisfaction will be high. The CCbase system is not critical for the operational activities of K-Bell. It does not give a competitive advantage too. So this IS system is a support system on McFarlan’s strategic grid (1983).

The second one is the VoD system. VoD makes it possible for customers to select a video or program to stream. The intended use of this system is mainly for administration. That is because the system checks automatically the program’s fee and it sends information about the price and the customer ID to the finance division. This is a simple way of communicating between the customer and the finance division. Now the VoD system is not critical to existing business activities, but with the fast growing market it will be critical in the future. When we got a very good VoD system it will give K-Bell a competitive advantage. Therefore the VoD system is a strategic IS (McFarlan, 1983).

The third system is the DTV-Stratinfo. This system combines the two other systems. It is used for strategic planning, to evaluate the use and appreciation of the provided content and gives information about the additional content K-Bell can buy to provide to its customers on the VoD system. This makes it possible to become more connected with the customer. For example in this system you can find information about the interest surveys, when a specific program is very high rated in the survey K-Bell can consider to provide that program to its customers too. The DTV-Stratinfo system is a strategic system too. It gives an competitive advantage and we need it to be successful. (McFarlan, 1983)

To understand which flows of information are going through the company we made an information flow. You can find the information flow in appendix 1.

2. DATA ANALYSIS

Redesigning the VoD system

Now that we are finished analyzing the internal and external business and IS environment, we are almost ready for making real improvements. These improvements will start with the redesign of the current VoD system. The current VoD system is not good enough to meet the expectations of the customer. To meet these expectations there are two things that need to be done;
The first one is to convert the flat-file system into a relational database system. Secondly is to improve the system with new technology.

To reach our goals we will go through some different steps. The first step is to analyze the current system. It is important to know what the exact steps are in the system and the path a customer has to follow in order to complete a purchase. We choose to use a flowchart to picture this. A flowchart gives us a clear picture of the system and the different steps of the system. To make the flowchart we made a list of all de different step of the process. After that we wrote down the output of the different steps. When that was clear we composed the flowchart for you. The flowchart can be found in appendix 2.

Our next step in the transformation of the VoD system was to convert the flat-file system into a relational database. The advantage of a relational database is that the speed of information in the system will improve and will be more detailed. This system will be more effective. To do this we made an Entity Relationship diagram of the current situation. To make the system more efficient we have also converted every possible many-to-many relationship into corresponding one-to-many relationships. You can found the current relational database in appendix 3.

Now that we have a clear picture of the current VoD system we can proceed to the next step; improving the VoD system. The current system is not capable enough for a customer to purchase multiple programs within the same 24 hours. This is the first improvement of the new VoD system. Furthermore customers have to be able to switch among multiple active programs within the viewing period of 24hours. We made a new ER diagram with some changes to the ‘old’ VoD system.

We made the following improvements:

• Customers are now able to filter programs by genre to enhance user experience • Customers are provided detailed program information; release year, length, actor information, etc.) • The VoD system has a memory function and is able to remember when a program was paused, so customers can resume watching a program from where they left. • There will be daily report with the number of times each program is watched to meet the request of the content to be paid per view.
With this Relational Database K-Bell will be able to continue one of their most important goals; improving customer satisfaction. You can find the improved ER diagram in appendix 4.

3. IS SOLUTIONS

Changes in existing IS and data-organization

Now we will take a look at how we can improve the IS systems. We take a look at the information flow diagram (appendix 1). There are several flows of information that are missing in this diagram for K-Bell to achieve its strategic objectives. Firstly and most importantly the customer base has to be included into the diagram, as this will contain many vital information for the whole process.
In appendix 5 you can find the new flow of information.

At 1 the customer provides the Customer base with private information, which can then be stored into the CCbase. When the customer requests programs from the VoD system, the VoD system will request this program with the content supplier, which will then supply it, but at the same time bill the finance department for the programs that are requested. When the program is stored for the customer in the VoD base, the information about the program will also be stored in the CCbase, and can be used for the next time the VoD is used ( e.g. preferences and filter genres). The program is now available and will be send to the customer. The customer can watch the program and pause it, because it is stored in the personal VoD system. The Finance department will send a bill for every program the customer requests to the customer, and then the customer will have to pay the finance department. When this money is paid, the content supplier can also be paid for the services they have delivered.

Every flow of information has limitations. We will examine what the limitations are in our new information flow diagram.

At information flow 1, the customer provides its personal information. It is unlikely that the customer will provide every bit the information to completely accurate, because they want to keep several things privately. When there is a lot of information required the speed in the information flow will be low.

The speed of information flow 2 is dependent on only the Vod system. At this flow the VoD system checks whether the programs are available and filters the programs according to the customers preferences.

Information flow 3 is very important. For each requested program the VoD system will have to pay the content supplier (which will eventually be paid by the consumer). Speed might be an issue here, because of technical difficulties that might appear. The speed between information flow 3 and 4 will have to be high since this relationship is very important.

Information flow 5 will be costly to manage, as the CC base will have to be big and good enough to keep track of all information about the customers, their preferences, what they have watched, where they paused, what they pay, etc. This also applies for the VoD information flows 6. These vital information pieces that are shared between information systems are important. This private data must be recorded accurately, and handled with care.

The cost of the information send to the finance department from the content supplier will have to be accurate, as there are particular information flows available for each customer, and they are all very different. Also the information flow from the finance department to the customer must be very accurate, as they will have to send the customer the right bill.

The main objective of K-Bell is to remain the strongest player in the market. We wanted to realize this by applying a new IS strategy.

K-Bell finds itself as an intermediary between the content supplier and the customers. To maintain this position now and in the future we had to make some adjustments, mainly to the VoD system. As you can see in the updated ER diagram we have already made some updates. Therefore it’s now possible for customers to have an insight in different genres. To serve the customer even more we also suggested for every program a description. So it is easier for the customer to choose a program and get more information about the program before they order. Another improvement, a very important one, is that it is now possible to order multiple programs within 24 hours. It is also possible to pause one program and watch a part of another, and then go back to the first one. In short, it is possible to watch programs simultaneously.
Al these improvements are to satisfy the customer more and more. These updates are good improvements for the short term. Customers will be satisfied and will not go to an competitor in the market. However on long term there has to be some bigger improvements, mainly in the Information Systems.
As mentioned in the updated information flow diagram (assignment 7) there has to be also a fast change in technologies to lead our strategy. For now the improvement of the technologies is very expensive while the earnings are low.

K-bell has to implement another Information System to remain on long term the strongest player in the market. We suggest a system, called ‘the Bundle’. The idea of this system is to make the payments easier for as well the customer as well the finance department. We want to implement a kind of bundles. At the beginning of the month the customer can choose a bundle with a specific number of programs to watch. There are bundles of 5, 10, 50, 100 or unlimited programs. It’s just like a telephone subscription. For a specific amount you can buy the bundle and watch that number of programs for one month. After that month the programs will still stay downloaded but if you want to watch it again, you have to pay again. If a customer chooses a bundle of 50 programs, and he watches 51 programs, there will be an extra fee. This fee will be higher than what you have to pay in general for a program. We suggested this system because it also fits into our strategy. We suppose that the process of billing will go easier, this will make customers more satisfied. According to McFarlan’s strategic grid, ‘the Bundle’ will belong to the Strategic Category because it has an high impact on both strategic and operational level. In the future it will generate a competitive advantage.

Another billing system is what we call the “Prepaid System”. With this system you add a certain amount of money to your subscription. With this money you can order and view the programs. When this amount reaches zero you will again have to add an certain amount of money. This system is for people who want to be in control of their subscription and refuge to have long-term subscriptions.
Furthermore there should be a mobile application for the Vod system. Mobile smartphones are being used more and more. By offering customers the opportunity of watching programs on a mobile device, such as a Ipad or a mobile phone, we are able to create a much bigger customer satisfaction.

These improvements and new applications are to be implemented in the ER-diagram. The diagram in appendix 4 is before improvements.

By adding the mobile device application and the option for a different kind of subscription the ER-diagram will be slightly different. In appendix 6 you can find the improved ER diagram.

The VoD system now contains a part for the mobile device application. With this part added customers can acces the Vod system on their mobile devices. Programs can be ordered and viewed and will be billed via Finance.

The Customer now has the option to have a different kind of subscription, mentioned above.

These parts will greatly improve the customer satisfaction by offering more service and more choices for the same price.

4. IS IMPLICATIONS AND IMPLEMENTATION

Structure and Culture

We have arrived at the point of implementation of changes in the system. This is very important, because the implementation of the new system will have organizational consequences. For example, the new IS will influence the existing culture and structure of K-Bell.

Before we are going to describe this, it is important to thoroughly understand the structure and culture of K-bell in order to successfully create an image of the company and the consequences of the new system.

The structure of an organization is the total relationship between functions, roles, tasks and departments between an organization. We have no knowledge about the different tasks and functions between the departments. K-Bell has the following organizational chart:

[pic]

Also the organizational culture of K-Bell might influence the way the system is used. Organizational culture describes the attitudes, experiences, the psychology, beliefs and values (personal and cultural values) of an organization.
We used Hofstede’s Cultural Dimensions Theory to determine the organizational culture of K-Bell. This model exists of 6 different cultural dimensions.

First we start with the power distance. In the Netherlands the power distance of different organizations is very small. The work processes are strictly structured, but there is little power distance and formulation of relationships between people. Since K-Bell is a Dutch firm we assume that the power distance of K-Bell is also small. K-bell is also strictly structured because it always tries to forecast what is going to happen. Therefore we can assume that the level of corporate control is high.

Second is the ranking of Individualism. The Netherlands have a high ranking for individualism. We don’t know enough of K-bell to tell more about this part, but again we assume the fact that K-Bell is a Dutch firm and thus have a high ranking for individualism.

The third dimension is the Uncertainty avoidance index. K-Bell has a small index of uncertainty. The next dimension is Masculinity, the distribution of emotional roles between gender. Since we are a consultancy team for the implementation of new IS we don’t know enough about the genders of people working at K-Bell. The fifth dimension is about the Orientation of the firm. The goal of K-Bell is to maintain a strong player in the market. The last dimension is about indulgence. In countries with a high rate of indulgence people can freely satisfy their basic needs and desires. Holland has a high rate of indulgence, so we assume that K-Bell also has a high indulgence rate. What we also know about the culture of K-Bell is that it is as well internally as externally oriented. Internally because there is a strong flow of information between different departments. It is always possible for K-Bell to communicate and perform tasks on a high level, thus internally efficient.

K-Bell is also externally oriented because of the content suppliers and the competitors. It is important for K-Bell to have a focus on their competitors because of the rapidly changing market. We must not forget that K-Bell is also externally oriented because of the customers. The focus lies strongly on the customer satisfaction.

This all will influence the way the system is used. K-Bell’s internal orientation will play a major role in the implementation of the new system.

Changes in structure and culture

The new system will lead to changes in the existing structure and culture. One of the things we wanted to improve was the speed of the system. So we improved the internal information flow between different departments. With this new system the information flow between the Finance Department and DTV will go faster. With the new system we met the request of the Content Suppliers. K-Bell will be a stronger intermediary and there will be better information flow to the content suppliers. And last but not least the relationship with the customers will improve. Our strategy was aimed at a higher customer satisfaction. There will be more ways for the customer to determine their preferences and to make use of the extra provided additional information. This all will have an effect on the existing structure. The existing culture will not change a lot because the most important improvement is technologic. There is no change in the way of power distance for example.

Decision making

Currently K-bells decision structure would be centralized decision makers, thus the decision makers are to be called commanders. This is because in this kind of decision making, some flow of information is required and used, however, not as much as with connected decentralized decision makers. This also applies for K-bell with the DTV system, as they do not use any higher communication systems for decision making. Also, their decision making can be improved when there is the availability of more information about the matter, and that is what we try to achieve with the improvement of the DTV system, and all other IS’s. K-Bell is a relatively large company, which has to take into account much information when making a decision. However this is not possible completely right now due to the poor functioning of the information systems that are available. Below the three different decision making systems can be seen described by Malone. [pic]

The second image is the current system that K-bell is using for its decision making. ( Commanders or Centralized Decision Making)

When implementing the new Information systems, it should be possible for K-bell to become Cyber-cowboys, or use the connected decentralized decision making system. This is because this new technology will provide the possibility to make national decisions from a local area ( the front office).
The decision makers will be able to provide themselves with much more information that is needed, as almost all information about the company and its customers are stored in the improved information systems. Also, as these amounts of information are vast, they can make autonomous decisions, based on this information. Also the communication within the company will be improved with the new information systems, so all decision makers can keep in contact, also with several stakeholders etcetera. Thus the decision making system that they are most probably going to use with the improved DTV and other systems, is the third image from the picture above.

Resistance to the system

With the new system that we are going to implement there are several issues that might cause resistance to the system. There are three groups on an individual level that are involved in the new DTV system. The first one would be K-bells employees, secondly the content suppliers employees and the customers. When thinking about these stakeholders, we can already imagine that the content suppliers employees will not be affected by the new IS system, because not much will change for them.

The changes that we are going to make in the DTV system may lead to resistance by consumers as well as our own employees. They will tend to judge a new information system on lay out, accessibility and user friendliness.

As far a lay out is concerned, this will be very clear and easy, more so than it was before. Especially for the customers the lay-out of the new information system will be evident and clarifying. Some customers will not be happy with a change in layout, because they are used to the old system with the old lay out, but these problems can be dealt with by letting the consumer pick their own layout, and personalize it. They can also request some help with our company for information about the new system. We should have the service helpdesk cover this issue.

When looking at accessibility, the VoD system must be available on the screen with one button on the remote control. In this way we will make sure that the consumer can get anything they like with one click. For the customer the new VoD system will be more accessible than the old one, as they will have their preferences filtered, and all is customized to their taste. The thing about accessability that might cause resistance is that not everything should be accessible for everyone. Of course there is more than one person using the VoD system in a household. This might cause problems, as previous requests are recorded, and then there is filtering of programs. Most of all, children under a certain age should not be allowed to watch adult movies. This can be overcome by putting a children’s lock on the VoD system, so whenever the code is not inserted right, the children friendly VoD will appear.

User friendliness should be improved with the new system, as we are focusing on customer satisfaction, so we are doing almost everything to make sure that the customer will be happy. However, people, especially customers might resent the fact that there are changes made. This is because it is in the nature of the people to be scared of the unknown, scared of changes that are made. This can again be overcome by promoting the new system, and have a clear guide for every step of the way. Create a new helpdesk for starting up problems, so that people have a channel to go to when they are stuck. This will create a feeling of satisfaction and peace.

Moreover, the company should also focus a little more on the employees that are currently working, as they will have a whole new way of working now as well. Their training and education of the new system will be costly in money as well in time. We have to make sure that the employees are motivated enough to keep doing it, as it will be a high maintenance demand to ask of them. They must have heart for the company, and we have to make sure that we give this to the employees with the use of a certain type of rewards.

Implementation system

Kim and Lee (1991) describe 3 kinds of strategies regarding the behavioral management strategies of information system implementation. These 3 strategies are:

The empirical/rational strategy; This strategy assumes persons are rational. Changes that are to be made often occur out of self-interest

The normative/re-educative strategy; This strategy hold the normative culture above self-interest. Key words in this strategy are impulse and need satisfaction.

The power/coercive strategy The power /coercive strategy has as most important fundament that personnel behavior is affected by political or economic sanctions.

To better explain the implementation and the organizational consequences of the IS we have proposed, we will advice one of the above implementation strategies to K-Bell.
First we will look at the organization. K-Bell has a divisional structure. Separate divisions have separate teams and each have their own tasks and responsibilities. DTV is one of these divisions. They do have a specific culture. They see themselves as the key to K-Bell’s survival. In their opinion digital TV is the future of the company and because of that they will increasingly become more important.
In short, DTV is a independent division with several teams working together. They are creative and their focus lies on the customer. In light of the decentralized organization we have used the next hypothesis;

The power/coercive and the empirical/rational IS implementation management strategies are more contributive to IS success when IS functions are more decentralized than less decentralized.

When we look at the culture of DTV we find it to be strong and independent. About the independence of the teams and tasks we find the following hypothesis;

The power/coercive IS implementation management strategy is more contributive to IS success when the level of task interdependence is higher than when it is lower.

In light of these hypothesis’ we find the power/coercive strategy the most suitable. Following this strategy a few steps will have to be taken;

The implementation will have to come with a certain reward system. Also a penalty system will be stated in the new system. For example, changes that are made within a certain stated time period will be rewarded. Also, changes that are not finished in time will come with a penalty. A penalty will also be given to personnel that shows resistance to the new implementations. Furthermore it is important that the independence will stay the same. The personnel is used to managing his/her own tasks, alone or in teams. The implementations that are to be made will be best served if the IS implementations are led by a leader. This leader should appoint tasks to the members of that team.

Overall, the power/coercive IS implementation management strategy is one that has a good fit with K-Bell. The new system should be implemented without too much trouble and should be possible in a short time frame.

5. RECOMMENDATIONS

Overview of Recommendations:

In conclusion we have come to the next recommendations;

The speed in the system should greatly improve ( improving the internal information flow between different departments ( finance department and DTV)). Bottlenecks should be eliminated for a perfect flow of information.

The Mobile VoD system should be added as an extra service. In order to keep up with competitors these new services are necessary. Innovation is a an important factor of success in this kind of business.

To maintain a fruitful relationship with the content suppliers their requests should be fulfilled. A VoD system is nothing without the videos of the suppliers. Therefore the system will have to be able to meet the pay-per-view demand of the suppliers.

K-Bell’s focus lies strongly on one important stakeholder; the customer. However, another important stakeholder should not be forgotten; the employees. The employee s are key players in the implementation of the new system. K-Bell should support these employees in adjusting to and implementing this new system. Rewards should be given to workers that are successful but also penalty’s should be given to those who are opposed to the new implementations. Firing and hiring employees is expensive and of course, should therefore be avoided.

The implementation should be divided in parts, in different tasks. These tasks should be appointed to different teams. These teams are responsible and accountable for their own tasks. In this way the independence in the culture would stay high. This will satisfy the employees. The implementation of the new system will therefore be swift and workers will accept these new changes.

6. REFERENCES AND APENDICES

References:

Managing Information Systems: Strategy and Organisation: Amazon.co.uk: David Boddy, Albert Boonstra, Graham Kennedy; Pearson Education, 2008.

- Malone, W. (1997). Is empowerment just a fad? Control, decision making, and IT. Sloan Management Review, 38(2), 23-35 - Kim, S., & Lee, J. (1991). A contingent analysis of the relationship between IS implementation strategies and IS success. Information Processing & Management, 27, 111-128.

Appendices

Appendix 1; information flowchart

[pic]
Appendix 2; Flowchart 1

Appendix 3; current relational database.

Appendix 4; The improved relational database

Appendix 5; The new flow of information

Appendix 6; the improved ER diagram