ASE STUDY 1: DRAX CONSULTING GROUP CASE STUDY

Background

DRAX Consulting Group is a leading management, information and technology consultancy,

operating worldwide from thirty-five offices. It was started in North America more than thirty years
ago. The company took over a consulting group in Australia eighteen months ago and a consulting
group with offices in Singapore, Hong Kong and Japan six months ago.

Advantages

DRAX draws on the knowledge and expertise of 2000 employees, whose skills span a wider range of
capabilities than any other major consulting firm. Its consultancy services include – strategic
development, performance improvement, IT, technology, human resources, recruitment,
information security and project management – these services help their clients to transform their
businesses in order to achieve significant increases in value, profitability and effectiveness. DRAX
Group also prides themselves on having high levels of IT security to ensure that the customers can
rely that any information used by DRAX will be secure and confidential.

Weaknesses and effects:

Recently DRAX re-examined its business processes and found that its offices and service groups did
not communicate as well as they could. Expertise was not being used to the fullest to create a
competitive advantage. DRAX Group has also had problems in projecting a more inclusive and
receptive image to their clientele. Many customers have complained that their online presence is
lacklustre and mechanical and does not portray a company that cares for their customers’ needs,
because of this many opportunities for new clients were being lost or simply overlooked.
Unfortunately some existing clients were considering changing to other organisations to meet their
consultancy needs.

Problems with cultural differences

The success of the consultancy is based on being able to provide total business solutions on a global
basis, regardless of the country. Historically, parts of the DRAX Group had been insular because they
were geographically distant. Now with the acquisition of the Australian group and the group in Asia
matters have become worse. The offices in each group based in Australia, Japan, Singapore and
Hong Kong have particular types of organisational culture and sharing of information and resources
are proving problematic.
Solutions: sharing and integration, engagement with customers

The aim now is to come together globally and share not just best practice but also common and
standard practice through the firm. For example, DRAX built up methodologies over many years, but
they need to be shared. There is a real need to integrate these systems and set some standards for
the organisation as a whole. The other issue is that DRAX Group needs to review their online
presence and look at ways to be more engaged with their customers and more responsive to their
needs.

Overall, the IT problems and the information and knowledge management problems reflect the
problems associated with integrating the newly merged companies as one entity. The company’s
board realises that strategic thinking is required in relation to IT.

(Answer the following question based on Case Study 1) – 6 marks

Question 17. Explain how you would distinguish data, information and knowledge by providing
examples that could be relevant to DRAX Consulting.

strategic development, performance improvement, IT, technology, human resources, recruitment,

information security and project management – these services help their clients to transform their
businesses in order to achieve significant increases in value, profitability and effectiveness

Data is raw facts that have been collected. In the case of DRAX Consulting’s business operations, this
could be employee turnover rates (human resources), inventory turnover as well as data log traffic
from websites provided by the firm’s customers.

Information is data that has been processed to be meaningful. For example, data log traffic can be
analysed and evaluated to find specific patterns and insights; conversion rate gives the percentage of
visitors who take a desired action (purchasing a product, filling in registration forms) while the
transactional aspects provide revenue, tax, transportation fees information

Knowledge is the combination of information with skills, experience and expertise. This allows DRAX
Consulting to make specific recommendations to their customers.

Question 18. (Answer the following question based on Case Study 1) – 3 marks

What are some of the likely benefits of integrating information, data and knowledge throughout the
DRAX Consulting organisation?

Question 19. (Answer the following question based on Case Study 1) – 10 marks

In an effort to improve their online presence, DRAX has decided to redesign their main website and
develop a social network channel. To assure that customers’ needs are being met by these
measures, the effectiveness of these actions needs to be measured. Identify and elaborate on two
(2) measures that a web analytics tool and two (2) measures that a social network analysis tool could
identify to improve engagement and effectiveness of their new online presence.
The first web analytics tool is the bounce rate that gives the percentage of new visitors who leave
the company’s website with little interaction. The second tool is the traffic source that breaks down
the specific sources of traffic to the website.

Social network analysis tools include content analysis that studies the topics, ideas and contents that
are being shared. Also, there is the social network graph that maps the interaction between different
people in the network.

Question 20. (Answer the following question based on Case Study 1) – 6 marks

To capitalise on their new online presence DRAX has also decided to actively present themselves on
mobile devices (smartphones and tablets). But they are unsure on which method would better suit
them. Explain the difference between native and web app mobile development and recommend the
better option for DRAX.

Native applications are proprietary mobile applications installed directly on a device. Native
applications can function without internet connection. They have increased performance and extra
functionalities like push notifications and access other applications on the phone. The disadvantages
include high development costs in terms of money and time. Also, updates have to be downloaded
and installed by the user.

On the other hand, web applications work on a web browser on a device. A single version can be
used across multiple platforms and can be updated instantly on the server. The downside of these
applications is the requirement for an internet connection for it to function as well as inconsistent
rendering.

The better option for Drax Consulting is a native application as customer experience is greatly
enhanced when the application works with great speeds and has additional functionalities.

Question 21: (Answer the following question based on Case Study 1) – 10 marks

Assure DRAX Consulting that you will be conducting an analysis of their competitiveness using
Porter’s Five Forces analysis model.

(A) Explain with examples from DRAX Consulting how buyer power could impact on their business.

Bargaining power of customers is low as there is no other company that is as versatile as Drax
Consulting; it is able to offer solutions for multiple business requirements. The business-to-business
market is not price sensitive; customers are willing to bear the costs associated with engaging the
expertise of this company as long as it provides solutions that prove to increase value, effectiveness
and profitability. Switching to another consultant might create unwelcomed issues that makes it
costly.

(B) Explain with examples from DRAX Consulting how the threat of new entrants may impact on their
business.
The threat of new entrants is low because the amount of initial investment is high. It is difficult for
an emerging firm to compete against its reputation that has been built over a period of more 30
years. Furthermore, the firm has the advantage of an exceptionally capable workforce that allows
the company to provide a wide range of services that will surely build customer loyalty.

Question 22. (Answer the following question based on Case Study 1) – 6 marks

Explain customer relationship management (CRM) systems and how they can help DRAX Consulting
understand their clients

CRM systems manages all the organisation’s business process that involve customers. All
interactions throughout the four phases of the customer (marketing, customer acquisition,
relationship management and loss/churn) lifecycle are tracked and stored in a single database. This
allows the organisation to have a complete and total view of customer purchases, questions issues
and concerns. These systems are implemented to increase customer loyalty and retention as well as
add to the organisation’s profitability.

The solicitation component generates prospects by sending messages to target market through
available messaging media. It also supports traditional promotional materials such as direct mail and
catalogues.

The lead tracking component monitors customer responses and contacts as sales leads. Responses
are prioritised to maximise revenue from new customers.

The relationship management component focuses on maximising the value of the current customer
base. It prioritises customers based on purchase history and reselling to high-value customers for
sales management. This component also deals with tracking customers problems and solutions in
addition to managing orders as part of customer support.

Question 23. (Answer the following question based on Case Study 1) – 6 marks

Summarise the importance of enterprise resource planning (ERP) systems to companies such as
DRAX Consulting.

ERP systems are generic but customisable program packages that integrate business functions such
as accounting, manufacturing, inventory and marketing. They provide comprehensive support and
data access to enhance process efficiency, increase supply chain effectiveness and gain overall
understanding of customer needs and behaviours. The specific benefits include:

1. decreased update issues of information

2. decreased redundancy of information

3. standardised formats of information in a single database

4. ability to access the information from other departments that gives an overall view of the
organisation

5. increased information integrity

Question 24. (Answer the following question based on Case Study 1) – 10 marks

Ethics, privacy and security are key concepts that are very important to DRAX Consulting. Provide
clear and concise answers to the questions below.

(A) If electronic surveillance/monitoring were introduced throughout DRAX Consulting, how could
this affect the morale and performance of the employees?

They will feel that their privacy is being violated. When they are being observed without their
consent, employees will find it difficult to develop trust towards the company. Hence, their morale
will be low and performance will deteriorate.

(B) To increase data security DRAX Consulting has recommended that all its global offices and clients
of DRAX Consulting utilise a minimum standard for wireless connectivity within their business
premises. Which wireless security encryption standard would you recommend and why?

WPA2-Enterprise. It uses a stronger encryption (AES) in addition to assigning unique access

credentials to individual employees and devices.