Case Study Description of ProSight: New Millennium Financial Technology Portfolio Management
Mergers and acquisitions (M&A) are often very complex management endeavors. Analyzes the IT component of M&A for two financial institutions. Students are tasked with assisting Mike Farrell, the CIO of New Millennium Financial (NMF), a new company created through the merger of FinStar Financial and D&L Bank, in determining the optimal combined IT portfolio. To accomplish this task the strategic business objectives of the firm must be clearly understood and the IT projects in the pipelines of both institutions analyzed. Students must make an IT portfolio management decision and answer the question: What is the optimal IT strategy and project portfolio for NMF?
Authors :: Mark Jeffery, Chuck Olson, Robin Barnes
Swot Analysis of "ProSight: New Millennium Financial Technology Portfolio Management" written by Mark Jeffery, Chuck Olson, Robin Barnes includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nmf Portfolio facing as an external strategic factors. Some of the topics covered in ProSight: New Millennium Financial Technology Portfolio Management case study are - Strategic Management Strategies, IT, Mergers & acquisitions, Risk management and Technology & Operations.
Some of the macro environment factors that can be used to understand the ProSight: New Millennium Financial Technology Portfolio Management casestudy better are - – there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
increasing commodity prices, increasing energy prices, etc
Introduction to SWOT Analysis of ProSight: New Millennium Financial Technology Portfolio Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ProSight: New Millennium Financial Technology Portfolio Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nmf Portfolio, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nmf Portfolio operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of ProSight: New Millennium Financial Technology Portfolio Management can be done for the following purposes –
1. Strategic planning using facts provided in ProSight: New Millennium Financial Technology Portfolio Management case study
2. Improving business portfolio management of Nmf Portfolio
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nmf Portfolio
Strengths ProSight: New Millennium Financial Technology Portfolio Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nmf Portfolio in ProSight: New Millennium Financial Technology Portfolio Management Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the ProSight: New Millennium Financial Technology Portfolio Management Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– Nmf Portfolio has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ProSight: New Millennium Financial Technology Portfolio Management Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Nmf Portfolio in the sector have low bargaining power. ProSight: New Millennium Financial Technology Portfolio Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nmf Portfolio to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Nmf Portfolio in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Nmf Portfolio has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nmf Portfolio has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Technology & Operations industry
– ProSight: New Millennium Financial Technology Portfolio Management firm has clearly differentiated products in the market place. This has enabled Nmf Portfolio to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Nmf Portfolio to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Nmf Portfolio is one of the leading recruiters in the industry. Managers in the ProSight: New Millennium Financial Technology Portfolio Management are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Nmf Portfolio are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Nmf Portfolio has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nmf Portfolio to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Nmf Portfolio has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in ProSight: New Millennium Financial Technology Portfolio Management HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Nmf Portfolio digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nmf Portfolio has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Nmf Portfolio is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Mark Jeffery, Chuck Olson, Robin Barnes can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses ProSight: New Millennium Financial Technology Portfolio Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ProSight: New Millennium Financial Technology Portfolio Management are -
Low market penetration in new markets
– Outside its home market of Nmf Portfolio, firm in the HBR case study ProSight: New Millennium Financial Technology Portfolio Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study ProSight: New Millennium Financial Technology Portfolio Management that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case ProSight: New Millennium Financial Technology Portfolio Management can leverage the sales team experience to cultivate customer relationships as Nmf Portfolio is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Nmf Portfolio has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Nmf Portfolio has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As ProSight: New Millennium Financial Technology Portfolio Management HBR case study mentions - Nmf Portfolio takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Nmf Portfolio products
– To increase the profitability and margins on the products, Nmf Portfolio needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Nmf Portfolio needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, Nmf Portfolio has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Nmf Portfolio has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Nmf Portfolio even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Nmf Portfolio is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Nmf Portfolio needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nmf Portfolio to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ProSight: New Millennium Financial Technology Portfolio Management, is just above the industry average. Nmf Portfolio needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities ProSight: New Millennium Financial Technology Portfolio Management | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study ProSight: New Millennium Financial Technology Portfolio Management are -
Using analytics as competitive advantage
– Nmf Portfolio has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study ProSight: New Millennium Financial Technology Portfolio Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nmf Portfolio to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Nmf Portfolio can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Nmf Portfolio can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Nmf Portfolio can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Loyalty marketing
– Nmf Portfolio has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nmf Portfolio can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, ProSight: New Millennium Financial Technology Portfolio Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nmf Portfolio in the consumer business. Now Nmf Portfolio can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nmf Portfolio can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Nmf Portfolio can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Nmf Portfolio has opened avenues for new revenue streams for the organization in the industry. This can help Nmf Portfolio to build a more holistic ecosystem as suggested in the ProSight: New Millennium Financial Technology Portfolio Management case study. Nmf Portfolio can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nmf Portfolio in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Nmf Portfolio to increase its market reach. Nmf Portfolio will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Nmf Portfolio can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ProSight: New Millennium Financial Technology Portfolio Management suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nmf Portfolio is facing challenges because of the dominance of functional experts in the organization. ProSight: New Millennium Financial Technology Portfolio Management case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats ProSight: New Millennium Financial Technology Portfolio Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ProSight: New Millennium Financial Technology Portfolio Management are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ProSight: New Millennium Financial Technology Portfolio Management, Nmf Portfolio may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nmf Portfolio in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nmf Portfolio in the Technology & Operations sector and impact the bottomline of the organization.
Regulatory challenges
– Nmf Portfolio needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Nmf Portfolio needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nmf Portfolio.
Consumer confidence and its impact on Nmf Portfolio demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Environmental challenges
– Nmf Portfolio needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Nmf Portfolio can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nmf Portfolio can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Nmf Portfolio has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Nmf Portfolio needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Nmf Portfolio will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Nmf Portfolio can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of ProSight: New Millennium Financial Technology Portfolio Management Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study ProSight: New Millennium Financial Technology Portfolio Management needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study ProSight: New Millennium Financial Technology Portfolio Management is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study ProSight: New Millennium Financial Technology Portfolio Management is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of ProSight: New Millennium Financial Technology Portfolio Management is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Nmf Portfolio needs to make to build a sustainable competitive advantage.
