HIT7462 - Contemporary Issues in Business Analysis

Assignment 3

Easy Credit Australia - Case Study

Q1 MetaphorsQ2 SSM – Rich PicturesQ3 Cognitive MappingQ4 ETHICS

Revision 1.04

19 May y

Introduction

Easy Credit is Australia’s largest credit financing company. It’s customers predominantly fit into the medium to high-risk category of risk profile. Despite this, Easy Credit has managed to sustain annual growth rates of between 7 and 10% per annum, whilst maintaining their conservative operational focus.

A decision has been made to modernise the file management system used by the Risk Management team and implement a shared data warehouse. No decision has been made on vendor selection for the data warehouse, nor has any decision been made on the funding requirements for the project.

The purpose of this report is to analyse the problem from different perspectives, particularly the key stakeholder perspectives, and document key recommendations for action and presentation to the CEO. Considering the anecdotal evidence of differing stakeholder views, it will be important to engage key stakeholders and bring about a shared understanding and consensus on the way forward.

To this end, the business analysts named within will be conducting a multimethodology approach to the initial analysis, covering such areas as Organisational Metaphors (OM), Soft Systems Methodology (SSM), Cognitive Mapping (CM) and the Effective Technical and Human Implementation of Computer based Systems (ETHICS) methodology. Mingers (2000) Argues that a richer analysis results when soft systems methods and techniques are combined and applied to a problem. For Easy Credit, it makes sense to tackle the problem from a cultural and sociological perspective.

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Metaphorically speaking…

We begin the analysis by examining the environment of Easy Credit through the “lens” of organisational metaphor to build a profile of the organisation from a cultural perspective.

The complex nature of an organisation’s environment could be well understood in meaningful ways through metaphors that are based on our day-to-day images about things. It is all the more important to get closer to the very spirit of the working atmosphere. According to Morgan (1998) a metaphor is “a primal force through which humans create meaning by using one element of experience to understand another.” By using metaphors we have a wider perspective of things and get a panoramic view of an organisation that is yet unexplored by conventional means. We can easily find different dimensions of the organisational environment by using metaphor in this way.

Lawley (2001) has listed the factors of cultural metaphor as: “Society, values, beliefs, laws, ideology, rituals, diversity, traditions, history, service, shared vision and mission, understanding, qualities and families.” It is clear that Easy Credit holds a very strong belief in keeping traditions intact and behaves much like a family in making decisions, exhibiting shared vision and with a mission of serving their customers. They develop a strategy to readjust their risk profile of the loan portfolio.

We will examine the profile of Easy Credit through the lens of the ‘organisation as a machine’ metaphor. With this metaphor, the concept of input and output applies to the efficiency of the workforce and production of the organisation. The fact that the risk profile of the customers of Easy Credit varies from moderate to high speaks of its high input and low output that needs to be balanced in favour of the organisation. “To achieve greater effectiveness, managers must become skilled in identifying and using a different approach to management.” (Yousefi, 2005)

As a machine, Easy Credit displays a standardised and measured efficiency in offering balanced services to its customers through varying percentages based on their risk profiles. Divergence in tolerance level also speaks of “Machine” metaphor where order is kept by controlling the credit pricing of their products for customers of different risk profiles.

The idea of organisational culture is based on the observation that organisations mirror societies: they are characterised by a relatively coherent and bounded system, display various social structures and norms, members undergo socialisation processes and there is the possibility of dispensing sanctions (Baba, 1989, Jordan, 1994).

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When viewed under the metaphor of culture, the environment of Easy Credit presents a very conventional and traditional scene where the benefit of the customers is given high priority. The tolerance percentage of the organisation speaks volumes on this aspect of culture of serving its customers in the best possible way as being the dominating factor in the organisational fabric of the company.

Organisations not only do business to earn a profit, they also become an integral part of our society in general and affect some vital decisions in our lives. Each organisation has its own culture and as we presently see at Easy Credit, it is the culture of change. Owing to some issues with data storage, its uploading time, delay in vital data reaching the analysts, etc. The CEO and other senior managers have made a plan to facilitate their Risk team by modernizing the file management system and installing a data warehouse.

In the same view we see varying opinions and views about financing the suggested change of installing a data warehouse. Be it the Head of Risk Management, Head of Credit Cards or CIO, no one is willing to pay for this change. Each Head has his own rationale for favouring his team and emphasizing the significance of the efforts made by them. This environment exhibits the metaphor of “Brain” that presents rational thinking and provides information in a theoretical way for providing collective understanding of each department.

This very situation directs us to the metaphor of “Power.” All three department heads are trying to direct organisational change in their favour by attempting to exert their power. However, they also appear willing to defer their power to a higher authority, namely the CEO, as they can’t decide amongst themselves who should fix the problem and who should fund the solution.

We can see that the culture and environment at Easy Credit is an obvious manifestation of organisational metaphors. We have seen metaphors of culture, machine, the brain and Power. Each metaphor helps us understand different perspectives of the organisation and through this, helps us to design better solutions that involve human sociological aspects.

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Every picture tells a story

The first two stages of SSM are very much in the real world (Checkland, 1981), it is about the “problem situation” and how the problem is expressed through drawing a rich picture.

Rich pictures are graphical representations of problem situations and are a highly contextual representation of problems, issues, processes, conflicts and relationships between internal and external, systems and stakeholders. Checkland (1981) suggests that the best way of identifying the problem situation is in picture form.

We conducted workshops with stakeholders throughout Easy Credit in order to build an understanding of current systems. During the workshops, a rich picture was developed for the current system and used to identify the problem situation. With the help of the group, the rich picture was further developed with their perception of the current system, and how the new system should ultimately work.

Drawing a rich picture with Easy Credit employees during the workshop made them think about the organisation as whole, and the problem they currently experience. When developing a solution to a business problem, it is essential to understand the vital components of that problem (Pidd, 2004). Lewis (1992) states that rich pictures can help Easy Credit to identify:

Business processes and their data requirements. The actors involved in the processes and their responsibilities. The relationships between processes and actors. Potential problems and conflicts.

By working with Easy credit employees and developing a rich picture of the situation, as they understand it, they were able to view the situation holistically and take ownership of the ideas presented. This not only helps employees feel proud that their ideas have been represented, but it also improves the morale in the work environment, with the knowledge that they are indeed part of the solution and it was developed to fit their needs (Mingers and Taylor, 1992).

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Figure 1 Easy Credit Rich Picture (SSM)

The above rich picture highlights the problems that are most prominent within Easy Credit, as described by its stakeholders.  At the centre of the diagram is the 'Easy Credit Organisation’ whose core business is loans in the form of personal loans, short term loans, mortgages, etc.  The core business is heavily reliant on credit reports and customer analysis, which is processed on the organisations ageing file server, which the various stakeholders describe as very slow, unreliable, highly problematic and prone to crashing. This dramatically affects business processes and productivity, due to reports disappearing from the server, and slow server access. The stakeholders all agree that a new data storage system is the solution, in the form of a data warehouse, which will provide reliability, security, scalability and performance with the correct control procedures set in place.  The general consensus is that the server is running on out of date hardware & software, and its current functions have far exceeded the original specifications.

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Users

The following prominent issues were identified through the creation of the rich picture:

There is a lot of blame between stakeholders, as to who is ultimately responsible for the fileserver.

The CEO is committed to the idea of a data warehouse, but needs to source funding.

Key reports go missing, or are late arrivals. This has impacts for Risk and Credit Cards and also results in blame being directed towards the CIO.

The CIO is concerned about his shrinking budget and views the existing fileserver as a business enabler to be owned by the main users of the system.

There is an issue around access control and security of the system. Anecdotal evidence suggests it has been used for personal storage.

The product executives refuse to fund any new system as they have lost faith in the CIO and the IT department in general.

With so many conflicting stakeholder views of the problem and questions marks remaining over who will own the system and more importantly, how will it be funded, an outcome from this analysis could be to seek guidance from the CEO on ownership and funding for the new system.

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Cognitive Consensus

After preparing the ‘rich pictures’, above, which outlined very clearly the complex and interdependent relationships between key stakeholders, it was decided to conduct a ‘deeper dive’ into some of those complexities, in particular the viewpoints and perspectives of the Head of Risk Management and the CIO. It’s clear from the initial analysis that obtaining engagement and consensus from these two stakeholders will be key to the success of the project.

For this analysis we will use a concept called Cognitive Mapping (CM), which forms the central analysis aspect of the Strategic Options Development and Analysis (SODA) methodology. The SODA methodology is largely based on Kelly’s personal Construct theory (Kelly, 1955) of interpretivism and the ways in which a person experiences the world around him/her. It centres on the concepts of pluralist views and subjectivism, where each stakeholder holds their own unique, subjective view of the problem (Rosenhead and Mingers, 2001).

Cognitive maps enable “…a group or individual to construct a graphical representation of a problematic situation, and thus explore options and their ramifications with respect to a complex system of goals or objectives. In addition, the method aims to help groups arrive at a negotiated agreement about how to act to resolve the situation…” (Ackermann, 2012, Ackermann and Eden, 2010).

A SODA intervention revolves around a Cognitive Mapping exercise in which stakeholders are first interviewed in a one-on-one meeting to establish the individual’s maps – each individual’s perspective and subjective views. The individual maps are then shared with the interviewees and any feedback or changes noted. They are then analysed for themes and a merged, or group map is created, shared and discussed in a facilitated group meeting. The interactive and participative nature of Cognitive Mapping often increases engagement and can bring new ideas to the table. As a result it also helps foster consensus and a shared understanding of the problem. These aspects were particularly evident in the case study by (Mckay and Marshall, 2005).

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To produce a Cognitive Map for an individual we start by identifying the facts, options, assertions or actions and drawing them on a white-board (or computer) as blocks of text, surrounded by a cloud shape. The next step is to identify the issues stemming from those facts, etc. and draw them above the facts, as blocks of text individually surrounded by rectangles. Facts can then be linked to issues with connecting arrows, with the arrowhead at the issue. Facts and actions, etc., lead to issues. More than one fact can connect to an issue.

The final step is to identify goals, or “next steps” stemming from the issues identified. These are drawn above issues, surrounded individually by ellipses and are linked to one or more issues with arrows. The arrowhead is at the goal. That is, the issues lead to these “next steps,” or goals.

Head of Risk Management

Figure 2 Cognitive Map - Head of Risk Management

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CIO

Figure 3 Cognitive Map - CIO

Once we have created the individual maps and shared them with our interviewees, we note any changes they identify and then begin looking for themes in the individual maps, making a note of these as we examine each one.

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Figure 4 Cognitive Map Themes - Head of Risk Management

Figure 5 Cognitive Map Themes - CIO

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To create the merged, or group map we begin by assigning our themes as facts in a new map, thus drawing our themes at the bottom, surrounded by cloud shapes. We then follow the same process as for the individual maps – facts linking to issues, linking to goals - only this time, using our themes as the facts in the map. With our group map complete we then bring it to a facilitated meeting, involving the original individual stakeholders, and discuss, revise and clarify to build a shared understanding and consensus on the next steps to take.

Figure 6 Cognitive Map - Merged Group Map

It is interesting to note that both the CIO and Head of Risk Management began the mapping process clinging to the idea they had differing, conflicting views. However, as has been shown in the group map, there was a lot of commonality.

Cognitive mapping has proven to be an effective method for generating a shared understanding of the problem and generating consensus for the steps moving forward.

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ETHICS in practice

Risk Management is the term applied to a logical and systematic method of establishing the context, identifying, analysing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process in a way that will enable organisations to minimise losses and maximise opportunities.

The Risk management team is sourcing their data from various devices, each night different production systems load their daily activities such as account balance files through file server namely D drive. Analysts upload their files to their desktop and through excel, prepare data for reports and careful analysis.

Due to an increase in business of Easy credit Australia, storage has grown from 500GB to 1.5 tera-bytes and this has impaired quality and performance. Significantly, anecdotal evidence suggests that employees have access to the file server and are storing personal files that cause the server to crash. The Risk Management function, being the “engine room” of the organisation bears the brunt of these crashes.

A motivating environment is one that gives workers a sense of pride in what they do and guide supervisors and managers how to build a more productive work environment,

Senior executives of Easy credit Australia must improve motivation within their organisations by providing positive working environment, timely reward and appreciation of employees, and funding to develop skills and training. They must also evaluate and measure job satisfaction.

The mission of credit Australia is: Responsible for managing the risk profile of Easy Credit.

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Socio-technical Approach

Socio-technical approach is pertaining to human nature, affairs, or welfare with a strong concern for human welfare, values, and dignity. With reference to the socio-technical approach, Easy credit Australia must produce encouraging, favourable and good insight on how to combine technical capabilities, and social aspects of organisations to address both organisational and employee needs. This conceptual idea aims to persuade employees of an idea based on evidence of historical background of social technical approaches. Then it will turn to the early development of socio-technical approaches within the field of information systems, and the unfortunate decline of socio-technical design. The decline has to do with the dramatic transformation of competitive environment and also a lack of adoptability of the socio-technical design to accommodate rising theoretical and practical needs. Otherwise it makes a situation expensive in long run. The socio-technical design, emphasizing the set of values it embraces a need for daily, one-to-one contact between workers and management and the people support its theory and the organisations that practise it.

In addition, when such principled practises and joint agreement between employees and management are contrasted with much economic gains, efficiency and downsizing cost cutting in a global economy partly reflect the impact of information and communications technology.

Above all Socio-technical principles might return in a many different ways in which something is seen, experienced, or produced and even support to humanize the potential impact of technology in a world of work where consistent organizational and economic change are the norm.

Organisation design is generally an outcome , not an input, the input in easy credit Australia must be provided by the technicians, both who design systems and equipment and also , who design work methods , processes and procedures and layout the system engineers. This method outlines an approach for implementing business ethics.

The easy credit Australia as a company should both organize for ethical business policies and execute them. The organizational structural components including codes of ethics, meetings , and training programs and an ethical audit. The corporate culture must support these structural elements with top management playing a central role in implementing ethics. The execution of ethical business policies includes implementation responsibilities and tasks. These responsibilities are leadership in ethics, delegation, communication and motivation of the company's ethical position to employees

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Will the DW Solve all Problems?

Based on ethics analysis just implementing data warehousing is not going to solve the risk management problems. There are other issues such as:

Maintenance issues for data warehousing systems

Another important aspect of data warehousing and decision support systems may faces some of the issues when systems are in production as if these systems ever achieve the stability, How to deal with these issues will depend upon work conditions and environment. Key challenge is as business and feeder system changes that will affect the data warehousing and decision support systems. Hence, System developers must allocate adequate time to assess what is impacted, what to change, test changes etc are common concern for system maintenance Many changes will require a fair amount of effort, executive support and funds. Keeping informed and assessing the impact of technically driven changes to the feeder systems may be more difficult than keeping track of the business driven changes.

In order to speed the process of extracting, transforming and loading Data warehouse processes is excellent and make less prone to errors.

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Conclusion

When we began the analysis exercise for this report, the problem at Easy Credit was ill-defined, there were conflicting stakeholder views and perspectives and there was mistrust amongst stakeholders, with the IT department bearing most of the brunt of that mistrust.

The authors’ of this report applied a multimethodology approach to the problem, thereby viewing the problem from different perspectives and gaining a richer analysis. The authors’ began by analysing the underlying culture of the organisation, through metaphor and found a very process driven organisation. However, they also uncovered mistrust and the “psychic prison” that breeds. From an application of the real world analysis of SSM, and rich pictures, the authors’ were able to come up with an overview of the problem, in picture form to help the stakeholders understand each perspective and the relationships that exist. This lead us to taking a cognitive mapping approach with two of the stakeholders – the Head of Risk Management and the CIO. From the cognitive mapping exercise we were able to show commonalities between the two stakeholders viewpoints and importantly, a way to move forward with consensus and a shared understanding.

The final part of our analysis involved the ETHICS approach to socio-technical problems where we showed the impact the existing fileserver problem was having on the Risk team, from a HR perspective.

A replacement for the fileserver will go a long way to improving relations at Easy Credit. However, to get to that point a full requirements gathering exercise should be undertaken along with direction from the CEO on the ownership and funding for the new system.

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Table of Figures

FIGURE 1 EASY CREDIT RICH PICTURE (SSM)..................................................................................................................5FIGURE 2 COGNITIVE MAP - HEAD OF RISK MANAGEMENT...............................................................................................8FIGURE 3 COGNITIVE MAP - CIO..................................................................................................................................9FIGURE 4 COGNITIVE MAP THEMES - HEAD OF RISK MANAGEMENT.................................................................................10FIGURE 5 COGNITIVE MAP THEMES - CIO....................................................................................................................10FIGURE 6 COGNITIVE MAP - MERGED GROUP MAP.......................................................................................................11

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