Springer Miller B

Case: PAR Springer-Miller Systems (Part B)
Group 5
1) What do you think (please evaluate) Halls decision to develop the new
product in an entirely independent company?
Advantages
Disadvantages
New people who are technologically adept

with latest skill sets and who understand the
current market trends. They have fresher
perspectives and no emotional attachment
towards legacy product
There is risk involved to keep current

product development. The current
customers may feel unsatisfied about
these update and might switch to the
rivals.
Less feature-rich product target at the

midscale market is a good strategy, since
there are fewer competitors and it allows
launching the product quickly into the
market.
Using disruptive innovation for

launching new product is makes it
difficult to generate profits quickly
because it caters to the low end of
current market.
Using Microsoft platform can help the No experience in the hospitality

company to develop an efficient product industry, where there is higher risk to
because it is the market leader in developing create user friendly product.
products
which
provides
great
userexperience for the customers
2) On page 2 of the (B) case in the paragraph under Solving the Innovators
Dilemma, What is the error
...as the more innovative start-ups move up market, the incumbents are threatened and
in some cases driven out of business-.In our opinion, the incumbents are less likely to be
driven out of business as the start-ups are to be acquired by the incumbents. Start-ups
with disruptive technologies place the pressure on the industry to keep incumbents from
becoming stagnant. As disruptive technologies develop from low-quality, low-margin
products into a higher quality product with increased demands, incumbent firms are forced
to adapt, develop new products to meet these new demands, and potentially acquire startups or force start-ups into partnerships. Disruptions do not kill incumbents, but they kill
innovators who are the first to develop the more complicated, expensive version of
disruptive technology that cannot be marketed to any segment. Disruptive technologies
target new markets that are underserved and have lower expectations.
3) What steps did PSMS management take to protect the core legacy business
and keep employees working on it motivated and engaged, while at the same
time building a separate innovation effort?
The CEO (Hall) had
the Sales & Marketing SVP (Vesnaver) stopped all new legacy product development and
launched a performance and quality review. This was solely to address a large number of
system bugs (and by extension, the high number of customer complaints). Hall specified
they had to slow down before they could speed up; by compartmentalizing immediate
firm requirements - one category for fixing existing platforms, one category for innovating
new ones - employees had focused, albeit parallel, runways for PSMS time-sensitive
objectives. This delay, coupled with the CEOs adoption of Christensens theory on
providing less capable technology to the opposite end of the market, may be viewed as
less customer-centric, but it DID allow PSMS employees to focus on a few things and
focus on them well. This compartmentalization of objectives most closely exemplifies
structural ambidexterity, as it is one part exploration (innovation efforts towards NextGen)
and one part exploitation (using firm resources to address bug issues in legacy platforms).
Effectively, this allows PSMS to - as suggested by Tushman and OReilly - simultaneously
pursue both discontinuous and incremental innovation [1].
4) What additional steps could Hall have taken to increase the probability of a
success of a risky project?
In order to cater to the international markets, the
product must be able to support multiple languages. Since the products target market is
mid-scale hotels, the employees in these hotels might not be fluent in English. By catering
to their basic language needs, this strategy gives the product to be easily understandable
and approachable. Besides, midscale hotels prefer cost-effectiveness. The product should
be easy to use and can help customers minimize their training time. The investment
required to development and launch of the product should be low.In this way it will lower
the price point of the product and it can be easily accessible to the mid-size market.The
project should aim to lower the training time to understand the product. They should be
extremely user-friendly and be based on a platform strategy which will help the employees
of the hotels to serve process the customers requests quickly and efficiently.
5) Human capital issues are critical in this case. Should management bring
employees from PSMS to lead the effort or should they hire externally?
They should hire externally.
There are several reasons for this: First, PSMS has already made a dedication in the short
term to resolve issues with its legacy platforms. According to the case, it took six months
to identify 1,600 bugs, and other six months to resolve the issue. In addition to time, this
would require a significant amount of manpower from employees already familiar with
these systems, so it is unlikely that shifting focus mid-project would be the optimal
solution. Second, hiring a new employee is most likely cheaper than promoting/reassigning firm veterans. NextGen was already going to cost a significant amount of
money, so if PSMS was going to successfully adopt a parallel structure for their projects, it
would need to keep costs to a minimum. Third, PSMS had access to significant pools of
human capital already trained in hospitality technology by way of their CEO and Sales &
Marketing SVP. Hall and Vesnaver, respectively [2], came from executive technology
management positions at Hotel Booking Solutions Incorporated and Micros Systems, Inc.
These direct lines should greatly expedite the process of sourcing qualified employees [3],
which saves time that PSMS desperately needs. Fourth, hiring from outside the company
brings in a fresh perspective
6) Should there be any special organizational structural changes to encourage
cooperation between NextGen and the legacy team at PSMS?
Yes, there should be organizational changes to bring together two diverse teams to align
on the same goal. Audits create opportunities for NextGen and Legacy teams to get
behind a single cause, which is to pass the audit. During the audit, having conversations
around risk helps each side better understand the larger reason behind why they are doing
what they are doing.NextGen and Legacy teams are often speaking different languages.
NextGen teams are likely to approach challenges from a technical perspective, while
Legacy teams are looking to achieve very specific growth goals. When two teams tackle
the same challenge from different perspectives, theres bound to be miscommunication

opening doors for wasted effort and endless rework: There are a number of SaaS tools that
promise to simplify workflows and to keep teams aligned. Tools can help but will be most
successful after teams have gone through the process of identifying and laser-focusing
upon the challenges bogging them down. Simplicity will always be best asset [4].
[1]Tushman, Michael L., and O Reilly, Charles,A.I.,II. "Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change."
California management review 38.4 (1996): 8-30. ProQuest. Web.
[2]http://www.springermiller.com/en/news/082708.html
[3]http://www.springermiller.com/en/news/news-aug-11-2009.html
[4]http://thenextweb.com/entrepreneur/2015/02/17/getting-development-business-teams-page/

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Case: PAR Springer-Miller Systems (Part B)

New people who are technologically adept

There is risk involved to keep current

Less feature-rich product target at the

Using disruptive innovation for

Using Microsoft platform can help the No experience in the hospitality

the same challenge from different perspectives, theres bound to be miscommunication

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