Analysis of NexGen IT Services Company - Case Study Example

NEEDS ASSESSMENT goes here] [Your goes here] [Due the paper] Executive Summary In this paper, the researcher explored a small business that sells IT services to customers. The researcher analyzed the business of the company by exploring each business function. The researcher personally interviewed 6 employees of company, as well as 5 customers to know their viewpoints about the company. The results showed that the company was facing two major problems that were low employee retention level and decreased customer satisfaction. After doing complete analysis, the researcher came up with some effective solutions to solve the problems. The researcher introduced training programs to improve product quality, as well as to improve customer satisfaction. The researcher also gave a proper action plan using which the company can get the problems solved. Name of the Company The name of the company selected for analysis is NexGen IT Services Company. The company started its business in 2005. Business of the Company NexGen IT Services Company provides different types of IT services to the people living in and around New York. Some of the main business areas of the company include software development, network management, database development and management, and IT consultation. The company develops different kinds of software applications and makes them available in market for customers. The company also developed software products based on customers’ requirements. Along with software development, the company also develops database applications based on new technologies. Network management is another specialty of NexGen IT Services Company. Moreover, the company also provides IT related consultation to its customers. Current Situations and Problems The current situation of the company is not up to the standards as the company is loosing its grip over its market share, as well as position it had achieved in the market based on te quality if its products and services. The two main reasons behind this situation are: 1. High employee turnover rate 2. Decreased customer satisfaction Let us discuss these problems in some detail in order to know how these problems are affecting the overall business of the company. 1. High Employee Turnover Rate “Employee turnover is the process of replacing one worker with another for any reason” (Beam, n.d.). High employee turnover means that the company is not able to retain its employees. It is a fact that experienced employees yield higher levels of productivity as compared to employees who join a company as fresh employees. The reasons behind high employee turnover ratio are usually improper employee recruitment and lack of a proper incentive plan. When I inquired the managers of NexGen, I came to know that they had started hiring less experienced employees in order to cut down the cost of retaining experienced employees. They also took this step as the result of resignations from their key employees. However, this strategy of the company is proving unsuccessful because new employees are not able to show good performances because of which their managers fire them from their jobs after a very short span of time. Another reason which I came to know through analysis was the lack of a proper incentive plan for employees which could motivate the employees to remain associated with the company instead of giving resignations. A couple of people who had worked for the company earlier told me that the company did not reward them for their performances because of which they left their jobs and became associated with other IT companies. 2. Decreased Customer Satisfaction Another problem being faced by the company is decreased customer satisfaction. Decreased satisfaction leads to decrease in the number of customers which results in increasing costs of finding new customers. As Andrews (2012) states, “keeping customers costs less that finding new ones”. If we analyze the cause of this problem, we come to know that the first problem, which was high employee turnover, causes decreased customer satisfaction. The reason is that new employee who have less experience are unable to develop high quality IT products because they have less knowledge and experience of working at critical positions. When I analyzed the situation at NexGen, I came to know that the company lacked the presence of such employees who could develop IT products as per customers’ requirements. The reason was again the poor selection of employees. Most of the current employees of the company just have the basic knowledge of software programming and network management. They are unable to provide best IT services to the customers of the company because they are unaware of the importance of quality management. Some employees working for the company even told me that they are working for the company just to get the experience certificate which they can show to other companies for getting high paying jobs. Such attitude of employees can never produce any favorable outcome for a company. System Requirements To solve the problems, managers of the company should hire a consultant who can provide them with possible solutions to the problems, as well as the action plans to implement those solutions. Consultants analyze the business functions of the companies, as well as their historic data and performance graphs and recommend proper solutions to the problems based on the analysis. Moreover, the company should also arrange training programs for its employees in order to refine their knowledge and skills regarding their jobs. Training programs play a very critical role in improving employee productivity and job performance. Such programs include practical workshops, seminars, and presentations about the use of new technologies and job related knowledge. NexGen needs to arrange technical training programs, as well as quality improvement plans not only to improve employees’ skills but also to increase customer satisfaction. Possible Solutions Based on my analysis of the current situation and problems of the company, I would recommend the following solutions to the problems: For Decreasing Employee Turnover Solution 1: Hire Skilled Employees One of the ways to decrease employee turnover is to hire skilled employees who can increase their worth in the eyes of managers through their performances. Hiring right candidates results in lowering employee turnover (Mcgunagle, 2010). I have noted that the managers of NexGen have fired many employees in the recent past because of poor job performances. If the company starts hiring highly skilled employees and give market-based salaried to them, the employees will definitely yield higher levels of productivity and the managers will not even think about firing them from their jobs. Currently, the company is hiring fresh employees with no experience just to save money. However, this is not a right managerial approach as experience and skills although require some costs but they yield a lot more profit as compared to the costs. Solution 2: Implement an Incentive Plan Another solution to the problem is to implement an incentive plan which should reward employees for their performances. Incentive plan will help the company retain key employees as they will be rewarded with job promotions, bonuses, and other job benefits. Employees like to work for companies which take care of their needs and reward good performances. Therefore, the company should introduce an incentive plan for above-average job performers. However, this solution works in parallel with the first solution of hiring skilled employees. The reason is that when the company will have no skilled employees, incentive plan will increase the company’s costs instead of increasing employee motivation and productivity. For Increasing Customer Satisfaction Solution 1: Implement a Quality Management System One of the ways to increase customer satisfaction is to follow the guidelines of some quality management system. Implementing a quality management system helps employees develop products in accordance with the quality standards set by the system. Currently, NexGen is facing the problem of decreased customer satisfaction because the company is not able to meet the requirements of the customers. In order to solve this problem, the company needs to develop high quality IT products that should run without any bugs. Solution 2: Introduce After Sales Service Another solution towards this problem is to introduce an after sales service in order to help customers resolve that problems that may occur at any point of time. The company should implement this service free of cost in order to inspire customers. Recommendation of the Action Plan I would recommend the managers of the company to implement all solutions without any delay. Although solutions might take some time to implement but the process should be started right away in order to save the company from bearing more loss. For example, the hiring of skilled employees might take a couple of months but the effects on the company will be long lasting. Similarly, implementation of incentive plan would need a proper financial analysis. Managers of the company would have to analyze all financial factors before designing the plan in order to save the company from suffering extra costs for the incentive plan. Implementation of a quality management system also needs planning. Managers of the company need to set the guidelines and train employees to follow those rules while developing any new product. Introduction of after sales service can be done right away as no time-taking planning is needed to take such step. The managers just need to hire some outdoor service employees to implement this step. As far as measuring the success of solutions is concerned, I would say that the success of all solutions would be measured by analyzing the levels of productivity and customer satisfaction at least three times in a year. References Andrews, P. (2012). Importance of Customer Satisfaction Surveys. Retrieved from http://www.articlesbase.com/customer-service-articles/importance-of-customer-satisfaction-surveys-5856945.html Beam, J. (n.d.). What is Employee Turnover?. Retrieved from http://www.wisegeek.com/what-is-employee-turnover.htm Mcgunagle, D. (2010). How to Improve a Business by Hiring the Right Employees. Retrieved from http://ezinearticles.com/?How-to-Improve-a-Business-by-Hiring-the-Right-Employees&id=7237201 Appendix 1: Employee Retention Survey Survey answer range: Low, High, Highest Employee Name Number of years worked Satisfied with work atmosphere Satisfied with Job rewards Satisfied with salary Rhodes 1 year Low Low High Stephen 6 months Highest Low Highest Jones 1.5 years Low Low Low Silvia 8 months High Low Highest Clark 10 months High Low High Sara 1.5 years High Low Low Appendix 2: Employee Satisfaction Survey Survey answer range: Low, High, Highest Customer Name Satisfied with product quality Satisfied with requiremnts’ fulfilment Satisfied with Company’s ability to meet deadlines Satisfied with Market-based products Michael High Low High High Jessica Low Low High Low Claudia Low High Highest Low Richard High Low Highest High Philips Highest High Highest High Read More