Warby Parker and Internal IT Governance
Warby Parker is an innovative eyewear company that is poised for large revenue growth in the forthcoming years. In order to properly compete, their internal IT systems need to scale along with consumer demand. At this stage, Warby Parker needs a comprehensive plan for IT governance, which will manage the way that IT systems are implemented and maintained. In addition, Warby must begin the process of building a dedicated in-house team, to make sure that the company has the necessary employees to monitor and troubleshoot the IT systems.
Build an Internal IT Team:
One crucial component to the IT strategy at Warby Parker must be the development of an in-house team. Hiring and nurturing highly skilled employees is of paramount importance. As we saw in the Volkswagen of America (VWOA) case, the failure to build an in-house team can have disastrous effects. VWOA decided to nearly eliminate their IT staff when they contacted with Perot to manage their IT systems. As a result, they had an insufficient number of in-house employees with adequate knowledge of the IT systems, even to the extent that they had a hard time administering the contract with Perot. Inevitably, VWOA was forced to increase hiring. As Warby Parker grows and develops the systems to manage inventory and other business analytics, it is necessary that they build an in-house team of technicians with expert knowledge of the systems.
While building an in-house team comes with considerable costs, the long-term benefits to managing their own IT systems outweighs those costs. As the company grows, they will need to build out their internal systems, potentially adding additional information systems to manage data from across the organization. For example, they could need an information system for human resources, which would manage time cards and employee performance evaluations. Additionally, the finance department could need a system to manage financial transactional data for internal auditing uses. In the future, if Warby Parker goes public, the aforementioned finance system could need to be adapted to electronically transmit data to the SEC, according to Sarbanes-Oxley. Having an experienced team of IT technicians will streamline implementation projects and reduced overall costs. In addition, having experienced technicians will ensure that new systems are integrated with existing information systems properly.
Minimize Vendors and Projects:
As demonstrated in the Alcan case, having a large number of vendors and information systems can be problematic. Alcan had three major SAP implementations going on at the same time across the organization which together represented a $500 million dollar investment. Warby Parker benefits from being a startup in that they can define their IT systems from the ground up and closely monitor the number of vendors they contract with. Warby Parker is currently evaluating order placement systems to manage customer information, orders and returns. In the future, it is possible that this could be paired with an electronic customer relationship management (eCRM) software, which will allow Warby Parker to easily and effectively communicate sales promotions to their customers. One of the important lessons from the Alcan case is the efficiency that came with reduced system diversity. Having a limited number of IT vendors will ensure that Warby Parker is able to keep management overhead to a minimum.
Create a Clear Strategy for IT Prioritization:
As Warby Parker continues to grow, the most important decision they will have to make is how to effectively evaluate and prioritize IT projects. As seen in the VWOA case, with a limited budget the question becomes which projects should be included in the operating plan and how to determine their overall importance to the business. Warby Parker is a young company experiencing tremendous growth, so it is likely that managers from throughout the organization will push to have their projects funded before others.
Initially, Warby Parker must create an IT Steering Committee (ITSC) responsible for evaluating projects and determining the overall IT operating plan. This committee will be tasked with categorizing projects, assessing their business impact, discerning their alignment with business goals, and making tradeoffs with stakeholders from across the organization. It is possible that one large IT project can appease multiple objectives ranging from across the company, if the strategy is correct and the implementation is properly planned. Therefore, it is wise for Warby Parker to evaluating whether an enterprise system is available that suits their needs. Choosing an enterprise system will reduce costs and increase efficiency. In addition, the ITSC would be responsible for making sure that each project is properly vetted against business objectives. Within each project, the business function affected would be identified as well as the major goal that the project would advance within the organization. As a startup, it is necessary that Warby Parker constantly monitor costs; each project should be scrutinized to determine if it is absolutely vital.
Developing an ITSC formalizes governance and prioritization by giving managers a clear way to evaluate projects and their potential to have the biggest impact. Once the projects have been determined, Warby Parker should hire qualified Project Managers with PMO certification to manage them. Doing so will make sure that each project is managed according to PMO standards. At the majority of companies, most projects fail to meet their targets of time, quality or cost. Large organizations are able to adapt to a failed project better than a smaller company, because they have more money and resources. Considering that Warby Parker is a startup, a failed project could potentially lead to overall company failure. Having a qualified Project Manager will reduce that risk.