Nishantha De Silva 2010/MBA/WE/MKT/09

R Shyamali Dias 2010/MBA/WE/MKT/15

A.W.B. Karalliyadda 2010/MBA/WE/MKT/12

N.N.I De Silva 2010/MBA/WE/MKT/14

Group Members

Baxter Healthcare Corporation

Shared Services

Situation Audit

• Leading manufacturer and distributor of healthcare products – Market Leader • One of the Fortune 100 companies in the world• 62,000 employees • 33 countries • $ 8.1 billion revenue – 1990• Operating income of $ 4.5% from sales• 1985 – A Related Diversification strategy -

Merger with American hospital supply corp.

Shared Services in Albuquerque

• The Mission statement of Shared Service division is “ To be the Leader in quality service at the lower cost”

• The Objective is “ To Continuously improve both service levels and cost efficiency by eliminating manual processes”

• Quality Leadership Process (QLP)

Strengths and Weaknesses

Strengths• Financially strong• Market leader in the industry• Product range• Market coverage

Weaknesses• No proper internal communication• Rapid expansions without proper planning• More product oriented than market oriented

Internal Customer Survey AnalysisCustomer Response  Albuquerque Perception

Performance Importance Assessment Importance AssessmentUnderstanding Requirments 4.44 2.8 4.43 3.28Responsiveness        Maintain customer focus 4.37 2.93 4.43 3.42Credibility        Displays pride in work 4.25 3.39 4.21 3.59Reliability        keeps customer informed 4.13 2.62 3.95 2.98Tangibles        Thorough research 4.9 2.88 4.38 3.33Features        Initiates creative solutions 3.97 2.37 4.05 3.25Security        Inform changes 4.03 2.57 4.18 2.97Overall Response   2.96  3.61

 Customer Assessment

Albuquerque Assessment

Over all Satisfaction 2.96 3.61

Customer Billing 2.78 4

Credit and Collections 3.06 3.64

Hospital Supply Accounts Payable 3.11 4Hospital Supply Audit Control 2.33 3.2

Cash Applications 3.36 4.36

Overall Satisfactions of Albuquerque Vs Satisfactions with Specific functions

External analysis based on assumptions

• Technology • Government• Economics • Culture• Demographics

Opportunities• Opportunity to expand to international market• Related diversification

Problem/Discussion Statement

Symptoms• Internal customer complained about poor

service quality and poor internal communication• Issues in speed, responsiveness, accessibility

and timeliness • Internal customers felt that there is a lack of

control

Problem• Weak Strategic Planning• Strategy mismatch with the Organizational culture • No Change management • Quick transmission to automatic systems from

manual (assumed) system.• QLP was focused on cost reduction, did not concern

employee satisfaction

Alternatives Identifications

1. Shared service with Cluster approach

Identify the regions and main servicing offices which

can be clustered and have sub shared service center

for each cluster.

They can occupy themselves in the identified regions /

states whiles using the same shared services concept to

the cluster level as well, keeping line with their mission

and objectives. This will eliminate or reduce the

complaints in relation to communication and control

2. Process Improvement with proactive communications program - to create awareness and motivation among internal customers

Continue Shared services with value additions

• Establish a Central monitoring unit to verify daily operations & their cost & efficiency• Research & development on existing systems &

procedures on continuous basis & implement amendments where necessary• Hold regular staff training sessions on shared services• Carry out QLP audits by external people

3. Integrated strategy - Streamline Centralization focusing on Synergy concept to achieve Customer value with proper Change management and Internet Strategy (Cloud computing option)

• Streamline the centralization with the objective of identifying synergy opportunities

• Appointing a change management agent or team for Albuquerque as well as other main organizations, with focus on customer.

• Internet strategy - linked into one network (Albuquerque network) via interface each organization can have access to their portfolio.

• By Cloud computing and/or alliance or joint venture with a IT service provider. 

• Target market - give the internal clients the lost control of knowing what is happening and informing their clients on time and can build client relationship by extending this facility to external clients for online enquiry system etc.,

These are considered as alternatives because :

• Relevant – changes to existing strategy hence cost is the minimum. The purpose of implementing centralization concept is achieved (cost saving, operational excellence, innovation and quality)

• Feasible – The company has the assets and capabilities as the staff recruited are trained and knowledgeable and the operation is headed by a CEO with experience and expertise hence good leadership is available.

• Sustainable – Sustainable in the long-run. This would further gain synergy concept and increase of customer satisfaction, thereby, increasing sales and growth in the long run.

• The competitor strategies reasonably assumed to have focus on superior customer service competing against Baxter as the market leader hence they are looking at improving this aspect.

• Baxter can be the leader in this as well in line with their mission statement in leadership in innovation and by this gain competitive advantage over the others. 

• Baxter history states that they used to service their clients and sales and distribution levels, at headquarters and at regional offices, which built the customer relationship with each company. This can be achieved and further improved by the internet strategy. 

• In the long-run the business strategies proposed would create customer value, competitive advantage, innovation, superior customer services to internal and external customers and by this increase sales, growth and profitability.

 

However, a proper feasibility study is proposed to see the implementation effectiveness and fit/match with Organizational culture, assets and

competencies.

Critical issues• Merger - Cultural differences and approach between different

organizations

• System Perfectness – Expert system needed enhancements - Reduced Confidence on new systems & procedures

• Mission / Objectives – of Baxter and Albuquerque are - not aligned

• Fit between strategy and Organizational elements not considered

• Same level of performance indicators to Internal and External customers but their requirements differ

• Recruiting Skilled / knowledgeable staff

• No tool to measure customer expectation and satisfaction – internal and external customers

• No mechanism for Complaint handling

• No ServQual framework to measure promised against actuals and to identify gaps

• Strategy (shared services concept) mismatch with the Culture

• Change management

Analysis

• Shared service with Cluster approach• Process Improvement with proactive communications

program• Integrated strategy

Strategy 1 –Synergy Concept with Internet Strategy (Cloud)

1) Cost High Low

2) Increase customer satisfaction High Low

3) Profit making ability High Low

Strategy 2 –Process Improvement

1) Cost High Low

2) Increase customer satisfaction High Low

3) Profit making ability

Strategy 3 – Central Monitoring unit

1) Cost High Low

2) Increase customer satisfaction High Low

3) Profit making ability High Low

Alternative 2 – Process improvements

Alternative 1 – Cluster Approach

Alternative 3– Synergy with Change Management

Recommendations

• Define process boundaries• Define common standards• Define process policies• Design core processes and procedures• Ongoing communication with internal

customers and external customers• Develop a collective culture

• The recommended strategic option is to do a BPR to the current centralized operation and to the each specific unit with the objective of achieving synergy . Therefore, in this regards ;• What specific actions should be taken – The centralized team makes all

the strategic decisions and has a strong functional capabilities to implement them. This will be done in form-wide perspective. And it can make sure that synergy opportunities are detected and exploited.

• Main reason why this course of action will work – To succeed the central team needs to have credible knowledge of the products and the markets, the necessary resources, and the authority and stature to get things done. This will work best when the scope if narrow and is under a knowledgeable CEO who has a well earned respect throughout the organization.

Implementation : • Who should do it – A Change Agent is recommended to handle this change

management along with a business analyst to do the BPR. The top management support is mandatory. Furthermore, the employees of all units (as much as possible – identified key operational and influential employees) should be actively involved n this process.

• What should be done – The centralized should play the role of a service provider, consultant or facilitator to the internal clients,

• When should it be done – The strategy should be carefully planned and should be feasible.

• Where should it be done – overall organization • However, whatever the management style or strategy used it need to match

with the organizational heritage and culture otherwise it will be rejected. • Tentative budget – keeping a adequate budget is important in order to

achieve success in this process.

Thank you

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