Case 1 Veri Fone The Transaction Automation Company

Case 1 Veri. Fone: The Transaction Automation Company

Issues to Consider n n Describe the business and competitive environment. What determines V’s success? (Industry) What are Veri. Fone’s core competencies? How does IT relate?

Issues, cont. n n n Describe the corporate culture. What are key attributes of the organizational culture? What is the “corp blueberry pancake model”? How has IT shaped corporate culture?

Issues, cont. n n Describe and evaluate the role of the CIO. What future challenges face the organization?

Describe the business/ competitive environ. n n Sales of over $500 million in 1996. Major player of point-of-sale systems; have breadth of applications to which its technology can be applied.

Competitive environment, cont. n Transaction automation – credit card authorization – debit cards – smart cards – food processing Strategy--low cost, high value, high reliability, high volume

Competitive environment, cont. n n Strategy--low cost, high value, high reliability, high volume All system components specific to TA systems (card readers) were manufactured in-house; outsource those not exclusive to TA (microprocessors, modems, etc. )

Competitive environment, cont. n n n Innovation and price performance central to the company having a leadership position. Invest 10+% of revenues in R&D. Truly a global company--manufact. , R&D, app dev.

Core Competencies? n n What are Veri. Fone’s core competencies? How does IT relate?

Key attributes of org. structure? n Decentralized network of locations--all berries same size; all locations equal. – Tyabji’s dislike for notion of a “corporate headquarters”

Organizational structure, cont. n Functions located near critical people. – Locations near centers of excellence--key to competitive advantage • enables “global strategy, ” forward deployment

Organizational structure, cont. n Pros and cons of centers of excellence approach: – Pros • locations near areas of expertise versus moving personnel • have a presence where you do business – Cons • infuse corporate culture in disparate locations

Culture and Nationality n n Tyabji wrote that “culture and nationality” are irrelevant; only operations excellence, relevant. How do you get people to understand buy into the culture of an organization? Are employees buying into the philosophy of senior management?

Culture and Nationality, cont. n Why is Verifone referred to as a “Virtual Corp? ”

How has IT shaped corporate culture? n n Allowed forward deployment Allowed decentralized control with centralized coordination.

Describe and evaluate the role of the CIO n n Pape’s role, to provide the company with information to run its business. Senior mgmt team monitors the progress of the company daily. Heavy emphasis on analysis, not just providing data (information). Should CIO be technologist and manage/develop IT resources?

Future Challenges n n Sustaining the culture of the company as it continues to grow. Leveraging local resources at a worldwide level and prevent decentralization philosophy to vary from corporate goals--think and act locally.

IT/Organization Structure n n Modern information technology enables work to be organized in very different ways if managers so desire. IT doesn’t force but enables new alternatives.

Veri. Fone Web Link

Case Review n n future of Veri. Fone; challenges; statement of problem the operating environment in which Veri. Fone is operating-- industry, competition, strategy Veri. Fone’s organizational culture, structure, and core competency(ies); how IT relates how organizational growth has helped/hindered growth of the organization from a entrepreneurial start -up to a mature mid-sized organization; relate change of ownership; how does current ownership better fit the culture of the organization