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Essays

Alcan's growth as a global conglomerate in the aluminum and metal fabrication industry follows a similar trajectory of many companies whose business models forced rapid, highly distributed business models at the expense Information Technologies (IT) management systems consistency and performance. Alcan's IT management systems and underlying infrastructure have become balkanized as the company has grown into four separately functioning and highly autonomous business units. In evaluating the key success factors of successful Enterprise Resource Planning (ERP) implementations in multisite locations, the most critical factor overall is creating a unified, well synchronized system of record across all ERP instances (Hanafizadeh, Gholami, Dadbin, Standage, 2010). A second key success factor for multisite ERP implementations is the ability to negotiate a very low level of maintenance pricing with ERP vendors in the form of multisite or use-based pricing instead of the traditional per-seat model (Law, Chen, Wu, 2010). A third key success factor in the implementing multisite ERP systems is the ability to create a shared set of analytics, financial reporting metrics and measured of shared collaboration performance across all sites (Nour, Mouakket, 2011). Alcan has none of these best practices in effect during the time periods of the case study. They are conversely creating very high costs of maintenance for themselves, paying $500M in software costs and fees to SAP, tolerating up to 400 systems dedicated to just pricing alone, and attempting to manage well over 1,000 systems throughout the four divisions. As the company continues to grow and attempts to move into new markets where unifying all four divisions is necessary, they will find their IT systems are more of a liability than an asset in their current configuration. Coupled with the escalating costs of keeping each of the four divisions under maintenance with SAP, the ongoing high costs of integration, there is the threat of compliance violations to industry safety and quality requirements in addition to Sarbanes-Oxley Act (SOX) financial reporting requirements. All of these factors taken together point to the need for more effective IT management strategy that takes into account the critical success factors for ERP system integration in a highly decentralized organizational structure. The intent of this analysis is to evaluate the pros and cons of the current Alcan IT management system, in addition to evaluating the pros and cons of the new Alcan IT enterprise architecture as proposed by Robert Ouelette. The final section of the paper discusses if moving from the current Alcan IT management system to a new structure is advisable or not.

Alcohol abuse would be approached by an economist in terms of demand and supply. Where there exists a demand for intoxication and for consuming alcoholic drinks, there will be suppliers available, willing to fill in this demand gap and cashing in on the profits that they can reap. One possible solution is that people are made to see the disadvantages of drinking, against the advantages- which are none, so that, acting as rational decision-makers, they can decide on their own, on stopping drinking. In a similar vein, in order to curb consumption, people and especially youth can be made to realize from the beginning that drinking is ‘un-cool', leading to a change in trend that can help with curbing demand. The second solution that can be used in this case, using the factor that alcohol use can create secondary effects, is that everything has a cost. Therefore the prices on alcoholic drinks can be raised through imposing high taxes on them, staving off demand, especially from youngsters, who will not be able to afford it due to their limited income. The four elements that have been used here, as can be seen from the above analysis are that everything has a cost, economic actions create secondary actions, incentives matter (in case of suppliers looking for profits to supply alcoholic drinks) and that people choose for good reasons so that if these reasons are changed, their lifestyle patterns and choices too might change.

Both articles and their extensive empirical and theoretical research have a wealth of insights and intelligence that brings e-commerce into a more realistic and pragmatic perspective. Starting with Exploring E-commerce benefits for businesses in a developing country (Molla, Heeks, 2007) that authors explain how they have interviewed 92 businesses in South Africa who have moved beyond the basic stage of ecommerce as defined by the 6-point e-commerce capability indicator cited in their article (Molla, Heeks, 2007). In citing this scale the authors contend that the much-hyped benefits of e-commerce surrounding operating efficiency gains including lower transaction costs and greater fluidity and flexibility of e-commerce are in fact not occurring in the emerging economy of South Africa. Instead, the authors state that the greatest gains are being made in the area of intra- and interorganizational communication and collaboration, clustered primarily in services industry as evidenced by their cited research (Molla, Heeks, 2007). This is certainly the case in Brazil where the continued growth of e-commerce has succeed while other nations have failed mainly due to the exceptional stability of the nations' banking system, strong laws and regulations to protect e-commerce and online commerce, and an infrastructure that makes automating supply chains more achievable than many other regions and nations of the world (Paulo, Dedrick, 2004). Brazil is also unique in that is government subsidizes new ventures and seeks out global technology partners, including Intel, for its e-commerce and infrastructure-dependent industries (Callaway, 2008). Juxtaposing the growth of Brazil is the stagnation of South Africa as is shown in the analysis, which implies e-commerce is better at breaking down the walls of organizations and getting them to work together more effectively than it is in driving top-line revenue from transactions., This consistent with the more pragmatic and practical studies of e-commerce adoption in emerging nations that show e-commerce system development and implementation will teach a business more about itself than it had never considered prior to the implementation (Alemayehu, Heeks, 2007). The process of creating an e-commerce strategy including the process and system integration, coordination of product and services catalogues, redefining and clarification of pricing, and the ability to define expediting processes for service and service recovery of negative customer events all force a business to grow faster than it had anticipated (Standing, Benson, 2000). Small businesses enter e-commerce thinking the big pay-off will be increased top-line revenue growth and greater transaction efficiencies (Molla, Heeks, 2007). Small businesses in commodity driven industries will also do this to specifically drive down the cost per transaction and pool purchasing power to gain an advantage in negotiating with suppliers (Salcedo, Henry, Rubio, 2003). All of these actual benefits are completely different than the much-hyped and promoted benefits of e-commerce being frictionless commerce throughout a supply chain, greater revenue growth at lower transaction costs, and ease and speed of generating customer loyalty, all contributing to skyrocketing profitability of an enterprise (Romano, 2009). All of these benefits accrue, in actuality, to oligopolistic firms who have the infrastructure, from a corporate IT staff to a well-known brand and the ability to selectively disintermediate their own supply chain to gain the much-hyped transaction cost efficiencies (Molla, Heeks, 2007). The greater the global market power of a company and its commanding position in an oligopoly, the more it can enforce its market-maker statue and drive change (Alemayehu, Heeks, 2007). Molla and Heeks (2007) deflate the hype of Transaction Cost Theory and its corollary of disintermediation by showing through their research that perfect competition doesn't exist in e-commerce globally and is especially problematic in emerging countries due to the lack of value chain integration and transparency. The authors also make an excellent point that the main catalysts or fuel of e-commerce growth in many nations is market research and mass customization (Molla, Heeks, 2007). There are myriad of examples of how e-commerce combined with mass customization has led to explosive, profitable growth on the part of companies with Dell not only reaching over $1B in revenues from online sales but also achieving double-digit inventory turns and extensive operational efficiencies at the same time (Luo, John, Du, 2005). The authors contend that for many emerging nations this however is not possible given the lack of trust and adoption of e-commerce, and the lack of alacrity and accuracy in complex supply chain relationships including a lack of clarity in communications and procurement performance (Molla, Heeks, 2007). Contrasting this however are the effects of a stabilized and trusted banking system in Brazil for example (Brazilian e-Commerce, 2005). The greater the trust levels in a given nation's financial system the higher the level of e-commerce adoption, even in highly collectivist cultures (Joia, Sanz, 2005). The authors continue with a triangulation of market performance, communications and transaction cost reduction, showing how e-commerce is more of a catalyst of organizational synchronization than a platform for selling more online (Molla, Heeks, 2007).

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