Application of It for Competitive Advantage at Keane, INC

The Application of IT for Competitive Advantage at Keane, Inc.

Mark R. Andrews and Raymond Papp

Idea Group Publishing

IDEA GROUP PUBLISHING Application of IT for Competitive Advantage at Keane, Inc.

1331 E. Chocolate Avenue, Hershey PA 17033-1117, USA Tel: 717/533-8845; Fax 717/533-8661; URL-http://www.idea-group.com

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g n i h s i l b u P p u The Application of IT for Competitive ro G a e d I t h g i Advantage at Keane, Inc. r y p Co g n i h s i l b u P p u o r G a e d I t h g i r y Cop g EXECUTIVE SUMMARY n i h s The Keane Company, founded in 1965 by John F. Keane,lihas grown b uwhich has three from a local software service company into a nationalP firm p operating divisions and over 45 branches throughout the United States, u operating othese r Canada and the United Kingdom. G Within divisions are a multitudes of consulting opportunities, ranging from supplemental staffing, de outsourcing. I t project managementh and application gfocus on Keane’s approach to Project Management and i This case will r y pprovide this service to their clients. This includes not only how how they o C Keane is hired for Project Management but how they train their clients on how g n i they too can implement the Keane philosophy of Productivity Management. h s li Instead of focusing on any one client of Keane, their overall technology b u P the present to strategy will be highlighted, from their early daysp through u illustrate how Keane has successfully incorporated ro information technology G and Project Management to becomea a major player in the software service and e is to provide the student with an example consulting field. The goal of I this case d t hstrategy in action and allow them to explore future of business-technology g i r y may take based on how they use technology today and in the paths that Keane p o decade C to come. Mark R. Andrews, State of Arizona, USA Raymond Papp, Central Connecticut State University, USA

Mark R. Andrews has been in the Information Technology industry since 1996, primarily as consultant. He has provided PC technical support for such firms as General Electric ED&C and BancOne Commercial Credit. Currently, Mr. Andrews is serving as an External Consultant at the Government Information Technology Agency, State of Arizona, as a Web Developer and Application Support Analyst. He was recently a member of the Web Masters Task Group, whose goal was to develop a set of guidelines for all State of Arizona Web Masters. Raymond Papp is an assistant professor in the Department of Management Information Systems at Central Connecticut State University. Dr. Papp’s current research interests include strategic impacts of information technology, Internet-based learning, strategic alignment, and emerging information technologies. His research has appeared in several academic and practitioner journals, and he has presented research at professional and executive conferences. He has worked as a computer programmer and senior analyst and continues to practice as an independent consultant.

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g n i h s i l b u P up BACKGROUND o r G In 1965, John F. Keane, having worked for IBM for several years, saw a e the need for a software I service company that would cater to firms interested d their t h in using technology to improve operations. It was at this time that Keane g i r decided toy venture out onto his own and established The Keane Company in p o a small, one room office above a donut shop in Hingham, Massachusetts.g C n i From these humble beginnings, Keane has grown over the past three decades h s li States, to a national firm with over 45 branch offices throughout theb United u Canada, as well as the United Kingdom. The firm has grown to such an extent P p uand listed as one of Forbes’ that by the end of 1980s Keane was incorporated o r “Top 200 Small U.S. Companies.” Revenue has correspondingly increased G a e $1 billion in 1998, and based on the most from $99 million in 1992 tod over I t recent earnings report, ghthe trend will continue. i r Keaney has not always been so successful. Problems in the early 1970s p overruns led Keane to develop its own project management oproject with C g process called Productivity Management. Today, this process is the foundan i h tion of Keane’s application development and outsourcing methodologies. s liManagement b During the 1980s, Keane continued to grow and its Application u P solutions (see Methodology (AMM) was the catalyst for itp outsourcing u o of its software development Appendix A). 1989 saw the standardization r G process into its Waterfall, Rapid Development and Client-Server aApplication e d I Frameworks development life cycles. These frameworks continued to evolve t h g and early 1990s saw Keane acquire several consulting into the 1990s. ri1980s y The late p o completing 17 acquisitions over a 10-year period. These acquisitionsng Cfirms, i h have allowed Keane to enhance its repository of processes and methodologies s i l b and prepared them to take their next major step. u P In 1996, Keane debuted its Resolve 2000 service the Year p to hasaddress usolutions o 2000 (Y2K) problem. The growth of itsrY2K allowed it to G two years earlier than originally surpass its goal of $1 billion a year a in revenue, e din the past few years, expanding into European planned. It has also diversified I t h markets with its acquisition of Bricker & Associates (http://www.keane.com/ g i r y about/history.shtml). Cop Several discussion questions are included which focus on Keane’s IT strategies and their implementation. These questions can be used to stimulate class discussion or given as written assignments to be handed in.

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Application of IT for Competitive Advantage at Keane, Inc.

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SETTING THE STAGE

g n i h s i l b u P p u ro G a e d I t h g i r y p Co g n i h s i l b u P p u o r G a e d I t h g i r y Cop What is Project Management? g n i h Project management is a specialized branch of management that has s i l b evolved in order to coordinate and control some of the complex activities of u P modern industry. It is concerned with planning, scheduling, and controlling p constraints. Harold uresource o non-routine activities within certain timerand G at Baldwin-Wallace College Kerzner, Professor of Systems Management a e das:, defines project management I t h Project Management the planning, organizing, directing, and gcompanyisresources i r y controlling of for a relatively short-term objecp o Ctive that has been established to complete specific goals and g objectives. Furthermore, project management utilizes the systems in h s i approach to management by having functional personnel assigned l b u to a specific project. (Kerzner, 1995, p.4) P p u It is intended to show o r Figure 1 is a representation of project management. G a that project management is designed to manage or control company resources e dtime, within cost, and within performance/ I t on a given activity, within h glines, time, cost, and performance/technology signify i r technology. The outer y the constraints Cop of the project. As a consulting firm, Keane must also be Today, Keane has three operating divisions: Information Services, Healthcare Services, and the Federal Systems business unit. Within these operating divisions are numerous consulting opportunities, among them Supplemental Staffing, Project Management, and Application Outsourcing. Keane is always expanding the services of its software development life cycle to include Year 2000 Compliance Management, Project Management, Information Systems Planning, Application Management Outsourcing, Application Development, Help Desk Outsourcing, and Healthcare Information Systems (see Appendix A). Despite the focus on Y2K issues, Keane’s non-Y2K business continues to grow, up 30-35% in 1998. The areas of Operations Improvement Consulting, e-Solutions, Customer Relationship Management, and Application Management Outsourcing are leading Keane’s growth.2 Project and Productivity Management, since its inception in the early 1970s, has been the cornerstone of Keane’s application development and outsourcing methodologies. Project Management will be introduced briefly, followed up Keane’s approach to its implementation and directions for future use of information technologies.

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g n i h s i l b u P up o r G a e d I t h rig y p Co g n i h s i l b u P p u o r G customer relations. The a concerned with an additionale constraint—good d lies within the fact that although the project I importance of this last constraint t h gtime, cost, and performance parameters, but if customer i is managed within r y relations Copare poor, the company may not receive future business. ng i The Project Manager h s i l some other Usually, the identity of the project manager is hidden b behind u P organizational role. This leads to the manager having increased responsibility p u without having any real authority. It is understood the project manager is oactivitiesthatacross r G responsible for coordinating and integrating many functional a e lines. The job role itself, Idhowever, is in need of a fairly standard job title, t complete withg jobh description, although not many companies can agree on ri It is hardly possible to lay down an ideal personality specifiy qualifications. p o for a project manager. J. Robert Fluor has tried to do just that, though.ng Ccation i During his keynote address to the Project Management Institute, October h s i l 1977, in Chicago, he described the new responsibilities of project managers b u at Fluor Corporation: P and we p u Project management continues to become more challenging o r G think this trend will continue. This means we have to pay special a e attention to the development of project managers who are capable d I t h thatmonths of coping with jobs range from small to mega projects and with g i r life spans of several to ten years. At Fluor, a project y p o must not only be able to manage the engineering, procureCmanager ment and construction aspects of a project, he or she must also be Figure 1

TIME

COST

RESOURCES

PERFORMANCE/TECHNOLOGY

Application of IT for Competitive Advantage at Keane, Inc.

able to manage aspects relating to finance, cost engineering, schedule, environment considerations, regulatory agency requirements, inflation and cost escalations, labor problems, public and client relations, employee relations and changing laws. That’s primarily on the domestic side. On the international projects, the list of additional functions and considerations adds totally different considerations. (Kerzner, 1995, p.11)

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g n i h s i l b u P p u ro G a e d I t h g i r y p Co To be effective as a project manager, an individual must have manage-g n i h rial, as well as technical skills. The difficulty lies within havings business li Inc. is b people that struggle to think as business people. This is where Keane, u Ppeople that have the able to excel. They are able to employ technically skilled p u aptitude for business. This translates into Keane being able to provide a high o r G level of quality customer satisfaction and technical proficiency to all jobs. a e d I t h Evaluation Techniques g ri of any organization y Thep management involves the efficient allocation of o resources. They are continually seeking new and better control techniques to C cope with the complexities, tremendous amounts of data, and tight deadlines that are mainstays in many of today’s industries. By seeking better methods,g n i they are able to present technical and cost data to their customershmore s i l effectively. b u Keane’s project managers use network techniques to assist them. Two P p u such techniques have come into prominenceo in recent times, those being the r G program evaluation and review technique (PERT) and the critical path a e method (CPM). PERT andICPM techniques can be used on small projects, as d t well as large projects. The more complex the activities of the projects, and the h g i r more coordination that is needed, the greater the value of PERT/CPM systems y p o toC the project manager. These two techniques are almost identical; the difference lies in the factng i h that PERT attempts to handle some of the problems of uncertainty.lPERT has s i b several distinguishing characteristics: u P • It forms the basis for all planning and predicting and provides managep u o ment with the ability to plan for best possible r use of resources to achieve G a given goal within time and cost limitations. a e d I • It provides visibilitytand enables management control “one-of-a-kind” h to repetitive situations. g programs asropposed i y • It o helps management handle the uncertainties involved in programs by p Canswering such questions as how time delays in certain elements

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g n i h s i l b u P up o r G a e d I t h ig r y p PERT/CPM systems assist the project manager in planning, scheduling, o C g and controlling on a regular basis. It is important that the project manager n i h s realizes that their responsibilities are not static, they are definitely dynamic. i l b u Because there will be continual changes throughout the life of any project, P p PERT/CPM methods require there be constant u revising and updating. Figure oManagement. r 2 illustrates the complete life cycle ofG Project a As has been previously e stated, project management is divided into d I different phases—planning, scheduling, and controlling. In order to gain an t h g understandingr ofi how these phases are applied, it is necessary to grasp what y p each o Cone involves. g n i Planning h s Planning is the process of deciding a future courseb ofliaction and is u P something that must be done throughout the life of the project. It involves p u answering the questions of what, when,r and how to reach the objectives of the oquestions G project. PERT/CPM systems answer these for the project manager a e by creating a network, or of the project. This requires the manager to dmatrix, I t h itemize every critical task that needs to be completed before the project can g i r y be considered complete. By establishing this task list, the project manager is p o guaranteeing that no section of the project will be overlooked. Ing Calmost n i addition, it helps to provide a logical sequence to the steps of the project. The h s li project manager has a plethora of tools to assist them in devising theb formal u plan such as work-breakdown structures, Gantt charts, network diagrams, P p ucharts, linear responsibility resource allocation charts, resource loading o r G(Frame, 1987, p. 8). chars, cumulative cost distribution, etc. a e d Scheduling I t h g i r Scheduling is the process of converting a plan into an operation timey p systems provide methods for assisting the project manager oPERT/CPM table. C in setting up the timetable for the use of project resources. Specifically, PERT influence project completion, where slack exists between elements, and what elements are crucial to meet the completion date. This provides management with a means for evaluating alternatives. • It provides a basis for obtaining the necessary facts for decision making. • It utilizes a so-called time network analysis as the basic method to determine manpower, material, and capital requirements as well as providing a means for checking progress. • It provides the basic structure for reporting information.

Application of IT for Competitive Advantage at Keane, Inc.

Figure 2 (Weiss, Joseph W. and Wysocki, Robert K., 1992, p.5) PLANNING IMPLEMENTATION

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g n i h s i l b u P p u ro G a e d I t h g i r y p Co g n i h s i l b u P p u o r G a e d I t h g i r y Cop g n i h s i l b u P p u o r G a e dinto six steps: I t scheduling is brokenh down g Two are actually combined and start with the project i • Steps One and r y p listing the activities, their priority, and their interrelationship o Cmanager with other components. g n i • Step Three is for reviewing of charts and diagrams to ensure that there h s i l is neither too many nor too few activities identified, and theb relationships u P are indeed correct. p uconverts all charts and • In the fourth step, the functional manager o r Gthe time lines for each activity. diagrams to a PERT by identifying a e • Step Five is the first step This is where the manager don the criticalofpath. I t h first defines the actual requirements the project itself. If the critical g i r ynot satisfy the chronological needs, then they must modify the path does p o Ccritical path so that it will fit. 1

DEFINE

2

PLAN

3

ORGANIZE

4

5

CONTROL

CLOSE

State the problem

Identify Project Activities

Determine Personnel Needs

Define Management Style

Obtain Client Acceptance

Identify Project Goals

Estimate Time & Cost

Recruit Project Manager

Establish Control Tools

Install Deliverables

List the Objectives

Sequence Project Activities

Recruit Project Team

Prepare Status Reports

Document the Project

Determine Preliminary Resources

Identify Critical Activities

Organize Project Team

Review Project Schedule

Issue the Final Report

Identify Assumptions & risks

Write Project Proposal

Assign Work Packages

Issue Change Orders

Conduct PostImplementation Audit

• Variance Reports • Status Reports • Staff Allocation • Reports

• Final Report • Audit Report

DELIVERABLES

• Project Overview

• WBS • Project Network • Critical Path • Project Proposal

• Recruitment Criteria • Work Package Description • Work Package Assignments

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g n i h s i l b u Once these steps have been completed the project manager must conP p tinually review the process to ensure that theyu stay as proactive as possible in o r preventing mishaps. G a e d I t Controlling h g i Controlling process of comparing planned performance with r isandthetaking y p actual performance corrective action where significant differences o C g exist. The project manager must constantly look at what has been doneiand n h s compare it to the original plan, then determine if there areliany major b discrepancies. If there are they must then figure out if theseu discrepancies are P p of a detrimental nature and, if so, what corrective action needs to be taken. ua consolidation o r PERT/CPM systems present the manager with of the current G a and future status of the project. The systems also assist by updating and e d I reporting expected versus actual performance and by identifying new critical t h g i special attention. tasks that mayrneed y p managing a project is not an easy task, many project managers o CAlthough have a tendency to make them more difficult than needed. It is believed that g n i effective project management can be learned. In order for this to occur, there h lisFirst, they are two basis lessons that the effective project manager must learn. b u P must be able to identify and avoid some of the common pitfalls that are p u encountered while managing a project.rThe is how to organize and o secondproject G carry out the project for success. The successful manager should a e proactively guide the project d forward in the best, most professional manner I t h possible. rig y p CASE DESCRIPTION Co g n i h There are several areas that Keane confronts with every project. s These limuch” b involve having to answer questions about the project likeu “How and P “How long”, implementing systems with time p constraints and a limited u o budget, and determining why some project managers can get results more r G often than others. a e d To answer the questions “How much” and “How long” Keane holds a I Estimating t h seminar calledr “The Project and Risk Management”. This seminar g i y shows what are needed to have successful project planning and Cop requirements implementation. There are four points that Keane touches on. They are: • Step Six is a matter of having the project manager begin to plug in calendar dates onto the PERT chart.

Application of IT for Competitive Advantage at Keane, Inc.

• • • •

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management of the estimating process, identification of the risk, articulation of the risk, proactive risk management

g n i h s i l b u P p u ro G a e d I t Seminars are held to show associates how to h g i Productivity Management r y p Co

implement projects on time within the specified cost and to the users’ expectations. The seminar also shows the importance of teamwork and individual accountability. The techniques that are practiced during the seminar can be used for any project life cycle methodology or project control software. The Project Manager Development Program teaches people how to be competent project managers. Project managers must follow project philosophies, processes, methods, and tool sets to guarantee the success of a project’s execution. The project manager job functions include planning, managing tasks, managing project team, interfacing with client and the organization. With 35 years of experience, Keane offers a unique approach to projects. With their proprietary methodologies, they ensure consistent and reputable results for their clients. Their solutions are always sized to whatever the problem, not making solutions too big or too small for the particular client or project. Keane’s strategic services involve following all the steps through during the software development life cycle. Keane follows a project management checklist that is found in the Principles of Productivity Management, written by Donald H. Plummer, PMP. This text is presented to all employees upon attending their initial orientation when they are hired. It serves as a means for a constant reference. The checklist includes the Initial Project Review, Preliminary Planning, Project Confirmation, and Tracking. Keane’s future objective is to strengthen and improve its application development, application outsourcing, Year 2000 compliances, and staff augmentation. John Keane identified his visions for the company in his 1997 Letter from the President: To help clients respond to business requirements with software solutions, Keane is focused primarily on application development, application outsourcing, Year 2000 compliance, and staff augmentation. These services respond to the critical needs of our clients to successfully deploy new technology, cost-effectively manage existing software assets, and complete Year 2000 compliance efforts on time. Keane is also focused on providing a full range

g n i h s i l b u P p u o r G a e d I t h g i r y Cop g n i h s i l b u P p u o r G a e d I t h g i r y Cop g n i h s i l b u P p u o r G a e d I t h g i r y Cop

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g n i h s i l b u P up o r G a e d I t h rig y p Co g n i h s i l b u P p u o r G a e d I t h g i r y Cop g n i h lis b u P p u o r G a e d I t h g i r y p Co g n i h s i l b u P p u o r G a e d I t h g i r y Cop The Initial Project Review • Begin the preparation of the statement of work • Meet with the customers and information processing management to review objectives & responsibilities • Produce a project organization chart to identify key individuals and their positions relative to the project • Determine staff availability • Review budgets, objectives, and milestones • Review schedules • Review standards and methodologies • Review any project control/accounting reporting procedures and systems • Decide on a development approach • Clearly define all products. • Prepare a document identifying all customer-significant, deliverable products

• • • • • • • • • • •

The Preliminary Planning Break the job down into manageable tasks. Create the work breakdown structure Determine assignments by skill level Develop time estimates with team members Determine and finalize individual schedules; assign in writing individual team members to each task Enter all data into the project management software Define the change procedures Define the acceptance criteria and procedures Finalize all budgets Prepare a project plan with a software package or according to organization guidelines Prepare a schedule of deliverable products Prepare a deliverable-versus-budget schedule indicating the hours or dollars to be expanded by week versus the number of products delivered by week.

The Project Confirmation • Break the job into acceptable short intervals (80 hours or less). • Produce a task list in which all tasks are no longer than 80 hours or two calendar weeks • Formalize change procedure; confirm in writing how changes will be handled for the project • Formalize acceptance criteria; confirm in writing how acceptance will occur for the project • Prepare a Project Control Book • Orient team members in a team meeting • Develop management report formats and project reporting framework. • Identify the specific weekly or monthly reports that will be prepared and distributed for the project

• • • • • • • •

Tracking Determine task dependencies and critical paths Prepare weekly timesheets for all team members to report against Take appropriate steps to maintain team morale and focus Track all progress against the plan by weekly reporting of hours and dollars Occasionally track projects through some form of trend analysis Begin the project completion process Complete all testing (Plummer, 1995, pp. 171-172) Turn completed project over to user

Application of IT for Competitive Advantage at Keane, Inc.

of integrated, open information systems to clients throughout the entire Healthcare spectrum. Our objective is to continue to strengthen and improve our capabilities in all these areas, to be the best available solution for a larger and larger number of clients. We are positioned to do this because of our strong network of branch offices, which facilitate responsive and cost-effective service delivery, and because of our project management and outsourcing methodologies, which embody Keane’s 30 years of experience. Working with Keane, our clients are efficiently managing their information technology assets, improving customer satisfaction, and building new information systems more quickly.

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g n i h s i l b u P p u ro G a e d I t h g i r y p Co g n i h s i l b u P p u o r G and improve in all areas to be the Keane’s effort to continue to a strengthen e d clientele is the result of their goal to be “the best solution for their growing I t h leading IT solution focused on helping clients plan, build and manage gfirm i r y application software to achieve business advantage” (http://www.keane.com/ p o investor_center/ index.shtml). C CURRENT CHALLENGES AND PROBLEMS ng i h Keane, while currently successful in their application development, s i l b application outsourcing, and Year 2000 compliance, cannot rely on past u P or even the next performance and success to carry it through the next decade p u o technology is applied and few years. Changes in the very nature inrwhich G leveraged in organizations requires that Keane continually assess its vision, a e dbusiness strategies with its technology stratemission, and alignmenttofIits h gies. To be ablerto igdo this effectively, Keane must examine where it has been, where itp is y at present, and where it plans to be in the future. The strategic o model is one approach to assessing the extent of business and C alignment g information technology strategy integration. This model will be explained iinn h s i the next section and used to assess Keane’s level of business-IT strategy l b u integration. P p u o Strategic Use ofG IT rat Keane a Strategic alignment is the appropriate use of information technology in e d I t of business strategies and corporate goals. In the integration and development h g i order for a company yr to assess its current alignment, it is important to address p a number of questions geared toward determining whether strategies that are o C

The Strategic Alignment Model

Busines s Strategy

IT Stra teg y

Business Scope

Distinctive Competencies

Technology Scope

Business Governance

Systemic Competencies

IT Governance

Strate gic Fit

Administrative Architecture

Processes

IT Architecture

Skills

Processes

Orga nization al Infrast ruc ture

Skills

IT Infrastruc ture

Functio nal I ntegration

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ng lishi Pub roup ea G ht Id yrig Cop ng lishi Pub roup ea G ht Id yrig Cop ng lishi Pub roup ea G ht Id yrig Cop ng lishi Pub roup ea G ht Id yrig Cop Figure 3

Application of IT for Competitive Advantage at Keane, Inc.

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presently in place are profitable and IT is being utilized appropriately. Those questions focus on the current business and IT alignment, whether the business strategies and plans are being developed appropriately, and the implications of misalignment between business and IT (Papp, 1998, p. 814). The theory of strategic alignment was first introduced in the late 1980s (Henderson & Venkatraman, 1990). Alignment looks at the relationship between business and IT. A model is used to identify the relationship and is based on two linkages (Figure 3). The model is divided into four quadrants: Business Strategy, Organizational Infrastructure, IT Infrastructure and IT Strategy. How a company assesses its alignment is by looking at the overall strengths and weaknesses. Based on the results of the assessment it is possible to determine the strongest area (this is referred to as the anchor) —this is where any change begins—and the weakest area (referred to as the pivot area) —this is the area that will be addressed. Once these areas are identified, it is possible to determine the are that will be impacted by any change. There are a total of12 perspectives, which include four fusion perspectives (when there are two pivot domains of equal strength, which creates a combination of two perspectives). The four original perspectives described by Henderson and Venkatraman (1993) include strategy execution, technology potential, service level, and competitive potential. The four other nonfusion perspectives are organization IT infrastructure, IT infrastructure strategy, IT organization infrastructure and organization infrastructure strategy perspective (Papp, 1996, p.227). Table 1 shows the breakdown of these perspectives. Companies that have achieved alignment can facilitate building a strategic competitive advantage that will provide them with increased visibility, efficiency, and profitability to compete in today’s changing markets (Papp, 1998, p. 11).

g n i h s i l b u P p u ro G a e d I t h g i r y p Co g n i h s i l b u P p u o r G a e d I t h g i r y Cop g n i h s i l b u P p u o r G a e d I t h g i r y Cop The Keane IT Infrastructure Strategy g n i h John Keane founded the company above a donut shop in Massachusetts s i l b with the vision of helping businesses bridge the gap he saw between the power u P of technology and the ability of companies to utilize that technology. With his p u o knowledge of the technology and a vision, he able to create an “anchor” ranwasIT strategy. G in IT Infrastructure. What was needed was As the company a e d Igrowing pains, it began to develop a clear and developed and went through t h g dependable project management approach. The resulting process was Keane’s i r y means of p a highly competitive market. Cosurviving

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g n i h s i l b u P up o r G a e d I t h rig y p Co g n i h s i l b u By its tenth anniversary, Keane had continued to develop its IT Strategy P p by recognizing the special needs of the healthcare field, which led to the ou Services r establishment of another division, theG Healthcare Division. Again, a this was a continuous process e of enhancing its IT Strategies which, in turn, d I improved the Business Strategy of the company. However, with the advancet h g i came the need to refocus. They had, by the mid 1980s, ment of technologies r y p achieved Co the IT strategy that was envisioned in the beginning. ng i A New Perspective h s i l to changed in The safety and stability that Keane had grown accustomed b u P the second quarter of 1986 when they experienced their first (and only) p u operating loss. This loss caused the company refocus its efforts on its core oand toreplicate r G business—software services. To capture its experience within a e a growing organization, began to focus on internal training. Most dKeaneBoston Iwith t h noteworthy, ang alliance University combined Keane’s business i r y capabilities with the university’s technical training expertise to form an p o training program for Keane employees called “Accelerated Soft-g Cintensive n i ware Development Program.” The idea behind this was to provide a h s i l significant competitive advantage by quickly bringing entry-level technical b u people up to speed in Keane’s software development and project management P p u methodologies. o r In an effort to further improve G its business strategy, Keane began to a e standardize its approach to software development, rather than relying on a d I t hexperts. handful of individual This evolved into Keane’s creation of numerg i r ous development life cycles which were needed for clear and disciplined y p o guidelines better business application software. CDuringforthedeveloping 1990s, Keane has made tremendous leaps in expanding Table 1: Alignment Perspectives: Anchor, Pivot and Impacted Domain (Papp, 1998, p. 7) Strategy Execution Technology Potential Competitive Potential

Anchor Pivot Impact

Anchor Pivot Impact

Business Strategy Business Infrastructure IT Infrastructure

Business Strategy IT Strategy IT Infrastructure

Organizational IT Infrastructure

IT Infrastructure Strategy

Business Infrastructure IT Infrastructure IT Strategy

IT Infrastructure IT Strategy Business Strategy

Service Level

IT Strategy IT Strategy Business Strategy IT Infrastructure Business Infrastructure Business Infrastructure IT Organizational Infrastructure

Organizational IT Infrastructure

IT Infrastructure Business Infrastructure Business Infrastructure Business Strategy Business Strategy IT Strategy

Application of IT for Competitive Advantage at Keane, Inc.

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market share, geographic coverage, capabilities, and healthcare products with the acquisitions of GE Consulting and PHS in 1993, AGS Computers in 1994, as well as Fourth Tier, Inc. and Bricker & Associates, Inc,. in 1998. This critical mass helped the company reduce costs by spreading major expenses over a broader revenue base, which has strengthened the entire business strategy for the company. This strength has translated into a stronger organizational infrastructure that should help Keane move into the 21st century.

g n i h s i l b u P p u ro G a e d I t h g i r y p Co g n i h APPENDIX A: SERVICES PROVIDED BY KEANE, INC. s i l b u P p Year 2000 Compliance Management helps the complicated uto manage o r endeavors of reaching century compliance on time. Keane combines project G a management and technology migration expertise with the tool-assisted capae d I bilities from industry leading t tool vendors. h g i r System Planning service identifies the clients most critical y Information p o needed for the organization, projects, and infrastructure that will information C provide the largest return on investment. Application Management Outsourcing deals with maintenance and g n i h management of all or portions of the client’s application. During this time s i l b Keane offers benefits such as reduced costs, improved control, and estabu P lished metrics for continuous improvements. p u o r Application Development services planning, design, and impleGincludes a e mentation services. All of these services can be customized to meet the clients d I t needs and requirements. h g i r y Help Desk Outsourcing helps the client control hidden costs of end-user p o C support and provides consistent Information System Support services for all g n business areas and applications. i h s i l b Its Project Management services help to show participants how to u P complete projects successfully and efficiently. Keane’s project managers p u o provide seminars to their clients and employees to assist them in managing r G project environment, develop capable project managers, and identify and a e d migrate project risks. I t h g ri y p Co

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g n i h s i l Strategic Alignment Matrix b u P up o r G a e d I t h rig y p Co g n i h s i l b u P p u o r G a e d I t h g i r y Cop g n i h lis b u P p u o r G a e d I t h g i r y p Co g n i h s i l b u P p u o r G a e d I t h g i r y Cop APPENDIX B

Characteristics BUSINESS

Business Scope

Distinctive Competencies Business Governance

Administrative Structure Processes

Human Resources

INFORMATION TECHNOLOGY

Technology Scope

Systemic Competencies IT Governance

IT Architecture Processes

Human Resources

BUSINESS

Entry Barriers

Executive Role

INFORMATION TECHNOLOGY

IT Focus

CIO Role IT Value

Alignment Perspective

Strategic Planning Method (Papp, 1996)

Current Marketplace

Emerging Marketplace

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Strategic Alignment Components

g n i h s i l b u P p u ro G a e d I t h g i r y p Co g n i h s i l b u P p u o r G a e d I t h g i r y Cop g n i h s i l b u P p u o r G a e d I t h g i r y Cop g n i h s i l b u P p u o r G a e d I t h g i r y Cop I.

BUSINESS STRATEGY

1.Business Scope – Includes the markets, products, services, groups of customers/clients, and locations where an enterprise competes as well as the buyers, competitors, suppliers and potential competitors that affect the competitive business environment.

2. Distinctive Competencies – The critical success factors and core competencies that provide a firm with a potential competitive edge. This includes brand, research, manufacturing and product development, cost and pricing structure, and sales and distribution channels.

3. Business Governance – How companies set the relationship between management stockholders and the board of directors. Also included are how the company is affected by government regulations, and how the firm manages their relationships and alliances with strategic partners. II.

ORGANIZATION INFRASTRUCTURE & PROCESSES

4. Administrative Structure – The way the firm organizes its businesses. Examples include central, decentral, matrix, horizontal, vertical, geographic,, and functional.

5. Processes - How the firm’s business activities (the work performed by employees) operate or flow. Major issues include value added activities and process improvement. 6. Skills – H/R considerations such as how to hire/fire, motivate, train/educate, and culture. III.

IT STRATEGY

7. Technology Scope - The important information applications and technologies.

8. Systemic Competencies - Those capabilities (e.g., access to information that is important to the creation/achievement of a company’s strategies) that distinguishes the IT services . 9. IT Governance - How authority and responsibility for IT is shared between users, IT management and service providers. Project selection and prioritization issues are included here. IV.

IT INFRASTRUCTURE AND PROCESSES

10. Architecture -The technology priorities, policies, and choices that allow applications, software, networks, hardware, and data management to be integrated into a cohesive platform.

11. Processes - Those practices and activities carried out to develop and maintain applications and manage IT infrastructure.

12. Skills - IT human resource considerations such as how to hire/fire, motivate, train/educate, and culture. (Luftman, 1996) 12. Skills - IT human resource considerations such as how to hire/fire, motivate, train/educate,

18 Andrews & Papp

g n i hmillion, s 1 Revenues for the first six months ending June 30, 1999 wereli$565 b up 13.8% over the first half of 1998. Net income P wasu also up almost 25%, p rising from $45.5 million in the first half of 1998 to $56.8 million for the u o r first six months ending JuneG 30, 1999. (http://www.keane.com/ a investor_center/2ndq99.shtml) e revenue in the second quarter of 1999, down d I t 2 Y2K revenue was 22% of total h g i from 36%rfor the same period last year. Keane’s outlook is that its growth y p will continue to lead the industry. (http://www.keane.com/investor_center/ o C2ndq99.shtml) g n i h s i l b REFERENCES Pu p u Frame, J.D. (1987). Managing Projects ino Organizations. San Francisco, r CA.: Jossey-Bass, Inc. G Strategic alignment: A model for a e Henderson, J., & Venkatraman, N. (1990). d via information technology. Working Paper I t organizational transformation h gSchool of Management, Massachusetts Institute of Techi r 3223-90,y Sloan op nology. C g Henderson, J., & Venkatraman, N. (1993). Strategic alignment: Leveraging n i h information technology for transforming organizations. iIBM Systems s l b Journal, 32(1), 4-16. u P Keane, J. (1995). President’s Letter. [On-Line]p http://www.keane.com uNew York, NY: Van Nostrand o Kerzner, H. (1995). Project Management. r G Reinhold. a e d in the Information Age: Practical ApplicaLuftman, J. (1996). Competing I t h tions of the rigStrategic Alignment Model, New York: Oxford University y Press. p o J. & Papp, R. (1996). Business and IT Strategic Alignment: Newng CLuftman, i h Perspectives and Assessments. Presented at Proceedings of the Second Ameris i l b AZ. cas Conference on Information Systems, August 1996. Phoenix, u P Papp, R. (1995). Determinants of Strategically Aligned Organizations: A p u o Multi-industry, Multi-perspective Analysis, (Dissertation), Hoboken, NJ: r G Stevens Institute of Technology. a e d Papp, R. (1998). Achieving Business and IT Alignment. Emerging InformaI t h tion Technologies, Hershey, PA: IDEA Group Publishing, 814-16. g i r y Papp, R.p Alignment of Business and Information Technologies o (1998). How and Why. Information Management, 11(#3/)4, Hershey, CStrategy: ENDNOTES

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PA: IDEA Group Publishing, 6-11. Plummer, D.H. (1995). Productivity Management. Boston, MA: Keane, Inc. Weiss, J.W. & Wysocki, R.K. (1992). 5-Phase Project Management. Reading, MA: Addison-Wesley Publishing.

g n i h s i l b u P p u ro G a e d I t h g i r y p Co g n i h s i l b u P p u o r G a e d I t h g i r y Cop g n i h s i l b u P p u o r G a e d I t h g i r y Cop g n i h s i l b u P p u o r G a e d I t h g i r y Cop