|Type of paper:||Essay|
|Categories:||Company Finance Business Technology|
Ockham Technologies, Inc. is a company that designs and develops a diversity of internet applications for sales management. The company’s mission is to develop the best practices for sales and marketing organizations in the global perspective. The internet applications developed by Ockham are focused on increasing the productivity of sales management. The company was established in 1999 by Alexander Group consultants who were interested in developing software to aid sales managers forecast sales, analyze results and set goals for its sales associated. Major competitors of this company include Pivotal Corp, and Siebel Systems Corp which offers customer relationship management software. However, the sales forecasting software designed by Ockham Technologies is unique among its competitors (PRNewswire, 1999). This paper analyzes a particular case at Ockham Technologies, determining the best funding alternative for the company and the best way for Ockham to outsource its system development efforts.
Case Study Context
The company is currently facing a number of strategic and management issues. These include
a) Whether to hire in-house technology teams or outsource new developing teams
b) The kind of investors or capitalists the company can rely on to fund its operations
c) How the tension between the two co-founders of the company, Meisenheimer and the Co-CEO’s Triandiflou (Noam, 2004).
The case comes to a conclusion when Triandiflou, one of the company’s founders describes how the company has succeeded through landing a deal with IBM and the financial offers that the company received from various venture capital organizations and successful investors. Nonetheless, the company is still facing operations problems ranging from making the right decisions regarding assembling of its human resource and creating an outsourcing relationship for its continuous business operations. In addition, the tension between James Triandiflou and Meisenheimer continues to get worse especially after the company brought on board a COO Mike who had left a competitor company.
The Best Funding Alternative for Ockham Technologies and how its effect on board formation
There are numerous options that Ockham can pursue so as to raise funds for its operations. Amongst these is to change the structure of the company to become a public limited entity, thus enabling them to issue stocks on the stock market. In this case, shareholders will become the new owners of the company and the founders will not be considered in this case. Accordingly, the company will need to list its shares and trade them at the stock market exchange freely. Furthermore, shareholders in this type of company can only lose the amount they paid in form of shares and not capital. This implies that in case of a loss; the greatest losers are the founders and those who contributed the capital (Altinn, 2015).
However, this will affect the structure of the management and more particularly the board of directors in a number of ways. For instance, many people will have the opportunity to buy the stock issued by the company and hence, those with many shares will ultimately become major shareholders and directors of the company. In other words, the board will need to change by incorporating members with the largest shares. This may not work positively to the company since board members will comprise of those with the largest shares and not necessarily experience in the specific area of operation.
Another funding alternative for Ockham Technologies is Noro-Moseley. When compared with other alternative financiers, Noro-Moseley happens to be more relevant for Ockham. Among the reasons for this observation is that a apart from being a popular venture in the entire of Atlanta, Noro-Moseley is the biggest amongst its competitors. Furthermore, the general partners for Noro-Moseley are people with immense experience both in information technology and sale force management, directly aligning with Ockham’s main objective, which is technology development and sales force. Despite the fact that by incorporating Noro-Moseley and its partners implies a necessity for Triandiflou to cede some control since there would be two more board members from the venture firm, Ockham will enjoy the benefit of experienced members who will eventually provide valuable expertise and resources to this organization. Evans (2014) explains that in many situations, inclusion of outside members in the company boards, may help in improving its effectiveness and performance and could save it from a downfall. According to this author, outside board members and directors come with them the outside perspectives, experiences and skills to the board. Since they are not likely to be biased or leaning towards one side, they can monitor the inside directors, check on the operation of the board as well as the entire organization. In addition, they can provide guidance in regard to practices of corporate governance and risk management. What is more, outside directors are quite important when it comes to dispute resolutions and as such, they may be relied upon in solving the conflict between the two founders, other board members or shareholders (Evans, 2014). Board members with little experience including Bobby Crews do not have much value to the company growth and day to day operations and it could therefore be an uphill task to seek advice from such people.
Handling the Tension between Jim Triandiflou and Meisenheimer
If I were Jim Triandiflou, I would need to create a boundary with Mike Meisenheimer so as to reduce the frequent conflicts arising between the two of us. In respect to this, I will have to sit down with him and create a line of responsibilities for the two of us so that there is no role conflict between the two of us. The responsibilities assigned should reflect on the company objective and there should be measures for achieving these goals. Since the major factors causing the conflict were related to goal and value differences, I will strive to make the goal and objectives of the company clear between the two of us. Furthermore, I will strive for open communication with Mike Meisenheimer concerning company operations and involvement for the smooth running of the business. According to Heide et al (1998), the concept of “divide and conquer” could be quite vital in ensuring that responsibilities are segregated and therefore, avoiding unnecessary confusion and conflicts. This way, it is possible to establish restrictions and no person will feel undermined or dominating a particular process since each person will be working towards attaining the specified goal. Furthermore, I believe this will help a great deal in dealing with issues pertaining to control and management which are the major cause of concern for the two of us.
Should Ockham outsource its system Development Efforts?
Yes, it is important that Ockham Technology outsource its product development considering that neither Triandiflou nor his other board of directors had operational skills for technology and software startup in the event the company opts to hire in-house operators and developers. Furthermore, the company had received various orders some of which had tight deadlines. If the management did not make quick decisions, then there is a potential to risk losing out to its competitors as well as its customers. It should also be considered that the entire team at Ockham did not have sufficient experience and necessary skills to develop its systems. The inefficiency of this team can be judged from the nature of their PowerPoint slides presented in Exhibit 5 which was considered as part of their presentation and which could not meet professional standards.
This explains why Triandiflou was looking for the “best people” to manage the company, implying that Ockham Technologies did not yet have the best people. On these grounds, a decision to establish an in-house technological support system could be disastrous for the company.
IBM, Flex solutions, NIIT, Hotsh
Accordingly, there are a number of options available for Ockham to outsource its system development. Among these include IBM, Flex solutions, NIIT, Hotsh,ot Coders and the low cost Thoughtmill. However, it should be taken into consideration that IBM is a multinational corporation and there could be potential risks if a small company like Ockham Technologies worked with this company. In the event that Ockham does not meet the expectations of IBM which could be (high owing to the nature and size of the company), then it is possible to lose the deal and therefore, customer confidence. Concerning Flex Solutions, this company was already offering technological services to Ockham, though the services were below standard. This point out the reason Ockham opted to terminate the contract with Flex Solutions since they were not meeting the expectations.
Therefore, the ideal company that Ockham Technologies should look out for in outsourcing its product development is the Indian based, NIIT. This company is rated highly in terms of delivering quality and prompt products and services, meeting expected deadlines, maintaining low cost, meeting specifications and ability to for a relationship that is productive. Further, the suitability of NIIT in this situation stems from the fact that the company has a number of experts in software development and that its efficiency has been ascertained. Ockham may be inclined to consider Thoughtmill as its system development partner owing to the cost aspect; however, the strong credentials for NIIT alongside its standardized development processes should be enough to convince Ockham to consider it in order to meet its quality constraints. On the other hand, the decision to outsource the system development option to Hotshot Coders should be shelved owing to lack of clear information concerning the company, as such; we cannot know the strengths, capabilities or weaknesses of this company and how its poised to satisfy the needs of NIIT. Furthermore, the low cost of this company appears overly optimistic and there is mention of the company’s physical location in the case. Therefore, a further research is necessary for Ockham in the event they opt to utilize Hotshot Coders.
Altinn Business Information Service. (2015).Public Limited Company (ASA). Available from https://www.altinn.no/en/Start-and-Run-a-Business/Before-start-up/Choosing-an-organisational-structure-/Public-limited-company-ASA/
Evans, M. (2014). Outside Board Members Bring Needed Experience And Perspective To Your Company. Available from http://www.forbes.com/sites/allbusiness/2014/08/26/outside-board-members-bring-needed-experience-and-perspective-to-your-company/#29080dcf7910
Heide, Jan B., Dutta, Shantu, & Bergen, Mark. 1998. Exclusive Dealing and Business Efficiency: Evidence from Industry Practice. 41 J. L. & Econ.387–408
Noam, T. (2004). Ockham Technologies: Living on the Razor's Edge. Harvard Business School Case 804-129.
PR Newswire. (1999). Ockham Technologies, Inc., Selects SocketPR for Plugged in Public Relations. Available from http://www.prnewswire.com/news-releases/ockham-technologies-inc-selects-socketpr-for-plugged-in-public-relations-77283702.html
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