MS Project 2013

Dear C Levels,

you have tasked me with evaluating the need to purchase and implement MS Project in our department. Every year we undertake a lot of projects that sometimes fail to meet deadlines and set forth expectations. Managing people  timing, progress, budgets and changes in scope and deliverable is not an easy task especially considering the fact that out project teams are made of employees who, apart from the project participation, still have their full time day-to-day jobs. I believe that our teams would benefit from having an application that will facilitate the structure and timing of various project activities.

Let me start by briefly introducing MS Project, its functionality and cost of licensing. According to MS website and my personal experience, the application allows a user or a group of users, to effectively manage projects by tracking activities, deadlines, milestones and timing of each one of the decisions. In order to promote collaboration  users can utilize Office 365 or SharePoint functionality to work from virtually anywhere. With that in mind, we could take advantage of our SharePoint sites to facilitate user collaboration between our teams. MS Project allows users to easily plan and manage a project by focusing on what matters most, selecting most effective and efficient actions, utilizing templates that fit particular project and staying organized by being able to quickly access all related project files. It appears as though our project teams could become better organized by being able to stay in control of the project plan no matter how big the project turns out to be. We often change the scope by including more value added activities that can improve our processes. MC Project can facilitate those changes and help with planning future actions. Our planning process will benefit from the flexibility offered by the application as MC Project tools, such as Team Planner, help discover timing and availability problems and amend them before they will impact the schedule.With this software we could support our recommendations and offer immediate insight into planning, resource allocation, cost effectiveness and other details about our projects. Various graphs and reports can help us visualize our project's progress and deliver stellar presentations to the Financial Leadership Team.  Furthermore, as noted above, since this software is developed by Microsoft, we would have no problems using it with other Office products, SharePoint and Lync to enhance collaboration capabilities between project teams. Overall, based on my understanding of the features, implementing MS Project would improve the effectiveness and efficiency of our project teams. 

With regards to the cost, a single license for MS Project Professional 2013 runs at about $1,159.99, whereas the Project Standard 2013 is $589.99. We can take advantage of the Microsoft Open License Business software, which is a volume program designed for customers who order as few a five licenses. After the initial order, we can benefit from volume pricing for all licenses for the remainder of Open License Authorization. In this case we can save on estimated retail prices by placing an initial order for five or more licenses, or one server license, and save around 25% on each license. Should we decide to purchase 10 licenses for each one of our Project Management office team members, we are looking at an approximate investment of less than $10,000. Based on the review of benefits associated with the implementation of this application, I believe this is an investment that will produce immediate benefits to our teams.


In order to become more familiar with the features of the software and provide you with a first hand user experience information I started using MS Project to track the timing, requirements and milestones associated with the potential buy out of my mother's house, which was severely damaged during Hurricane Sandy. Ever since the disaster stroke I struggled with managing the documentation and deadlines associated with various Local and Federal Government requirements aimed at successful Buy Out application. Since the approval has been obtained there are a number of requirements, meetings, activities and deadlines to meet in order to comply with the project requirements and close on sale of the property to Department of Environmental Protection. I have been continuously entering various activities and timing into the software, assigning milestones and associating the sequencing of dependent activities. 


Although my use of MS Project was rather simplistic and limited, it made me realize how we can take advantage of this software in our work environment and fully capitalize on implementation of its functionality. The application made my process easier and helps me keep all activities on track while clearly mapping each requirement. The learning curve associated with the use of MS Project should not be high as the application is rather intuitive and all of our users are very familiar with all Office products. I believe we can benefit from MS Project functionality on each of our projects, and I therefore recommend purchasing 10 user licenses for each of our Project Management Office team members.

Please do not hesitate to contact me should you have any questions.
Best regards,
MKO

Opening Pandora's Box - Reflection

Dear C-Levels,

We contracted the consulting company, Capgemini, to help us develop some ideas that would turn our revenues into profits. We are all cognizant of the fact that while our customer base is growing rapidly, we are not profitable. Please find this memo as my recommendation regarding future actions of our company.

First and foremost, I agree with the consultants that we need to double our advertising since among our competitor, our advertising rate is the lowest. This will allow us to double the advertising revenue. Advertising has always been the most significant revenue source for Pandora and it is only logical to capitalize on this idea.  It seams as though charging customers a fee for our services with a built-in benefit of avoiding advertisements will also bring us the much needed revenue. The consultants encourage Pandora to fight the royalty structure and advocate for a less burdensome model with a level laying field between traditional AM/FM radio and Internet and satellite alternatives. Since royalty expense is our largest variable cost, deducing it will yield greater revenue return given the large customer base. 

Secondly, I have always been a supporter of artists, especially musicians. I like the 'open mic' and 'battle of the bands' idea that the consultants presented. I would only suggest to limit this option to artists already featured on Pandora. This will ensure that the songs that appear in the contest can be accessed by our customers. I would propose to implement my idea of charging artists for the opportunity to start up their career by utilizing and reaching out to Pandora's customers. Our team works very hard and spends significant time decoding the music and assigning it the musical DNA. I believe that a nominal fee between $100-$200, depending on the number of tracks on the CD, requested from a new artist would be a fair price, especially when compared with the $350,000 charged by the labels. This option would bring us anywhere between $1,560,000 and $3,120,000 based on a conservative number of 300 CDs received from new artists each week (300 x 52 weeks in the year x $ fee per CD). Furthermore, we could incorporate the artists social media sites and the chat function discussed by the consultants into their standard information displayed when Pandora plays their song. This would promote the artist and help start their career.  

Last but not least, we need to make our service more accessible to our users. I second consultants recommendation that we need to work with system-on-chip manufacturers to embed Pandora technologies on the chips they sell to consumer electronics manufacturers like Samsung, Sony, Nokia and Panasonic to bridge the online and offline experience. We also need to expand to portable radio devices. Furthermore, I am truly convinced that automating a portion of our genome development process would yield significant benefits not only to our company but mostly to our customers. We would be able to encode the music much faster and therefore increase our music database substantially. We would be able to offer much more versatile musical menu that could appeal to a broader customer base. This option, while not necessarily needed to be applied in the short term, may be a good starting point aiming at increasing our operating effectiveness and growing our customer base. I find it particularly intriguing when contemplating the topic of globalization raised by the consulting team. I can only imagine the possibilities and the amount of work required to decode the music made by artists from other countries. While we do have some of them represented in our musical library the potential here is enormous!

We have created a great company that has a lot of potential and satisfies the musical needs of the customers. I am convinced that by implementing a few ideas described above we can grow as a company, be profitable and sustainable, as well as continue to increase our customer base by offering a more customized and versatile musical experience.

Best regards,
MKO       

Opening Pandora's Box

Problem/Issue Statement

Pandora is facing multiple issues, the essence of which appears to be the inability to turn revenue into profit. There are multiple symptoms of the problem including the fact that at the current growth rate, the company will exhaust its cash by the end of the following year. The chief strategist and founder of Pandora.com, Tim Westergren needs to decide whether the company should take a more conservative path, pull back on the growth levers such as search engine marketing (SEM) and general marketing spend, slow the headcount growth, and raise the minimal amount of new investment to reach an exit, potentially through acquisition. Or should it go full force, fan the flames of viral growth, top out SEM, hire aggressively, and take advantage of the first-mover advantage. Another symptom of the problem recognized by Westergren was the fact that the company did not have a professional manager in the second round of financing and that he did not possess the required skill set to assume that role and effectively lead the company.

Situation Assessment

Pandora emerged as a music industry phenomenon that as of 2007 attracted over 8 million customers with online hours growing at an average rate of 50% year over year. Nevertheless, the company is not producing enough revenue to sustain operational profitability. It faces substantial challenges including a serious threat on the licensing costs. Investors are viewing the company as risky and each one of them has different idea as to what direction should the company follow. Furthermore, other service providers are able to meet customer demands creating competition for Pandora. 
The scope of the problem includes the entire company, the founder’s vision, sustainability of the business model and ability to attract investment necessary for future growth.  

The advantage that Pandora has over competitors is a rapidly growing, interactive and devoted customer base. The company earned revenue in three ways: via advertising on its website, via subscription fees from consumers who wanted to opt out of advertising, and via partners who leverage Pandora’s customer base. The largest revenue contributor was advertising, which made up 93% of the total. Pandora entered into affiliate agreements with iTunes and Amazon.com according to which customers could purchase a song or an album though a link. Despite a growing customer base, by 2007 revenues began to catch up with run-rate cost for employee salaries. After all administrative and other costs associated with playing music (royalties and streaming) the gross margin that the company received per listener was approximately 0.69 cents per hour.

The new CEO, Joe Kennedy proposed a strategic change making the company a direct-to-consumer Internet radio service (Pandora.com).

List of Plausible Alternative Courses of Action and Evaluation of Alternatives

People who wanted to listen to music had various options, including terrestrial radio, Internet radio stations, Satellite radio, consumer-owned collections etc. Music recommendations come from all of those sources as well as from friends, concerts, recommendation from sites such as iTunes.com, Amazon.com, or on the radio stations. As mentioned above, Pandora should utilize the subscriber advantage to increase its revenue stream. Following are some of the potential courses of action: 

• Do not change current business model and strategy and continue with the current state - this option would not require any additional investment or risk of decreased productivity due to process changes. Nevertheless, it would also not solve the company’s problem of stagnant revenue and therefore would halter Pandora’s growth potential. This option would also fail to provide additional capital to fuel future development. In this scenario Pandora would have to seek external funding and yet again be threatened by potential changes to its vision and business model.  Due to these reasons this option does not appear to be sustainable.
• Begin charging musicians for playing their songs on Pandora and upstarting their career.  Pandora receives hundreds of CD's per week from all sorts of artists looking to get into the business. These songs, in order to be placed in the library, need to be analyzed and decoded by Pandora's employees, who should be compensated for their effort. Let's assume that the company receives an average of 300 CD's per week (conservative interpretation of several hundred). Each analyst at Pandora spends around 30 minutes to analyze a song. If a typical album includes 14 songs, that translates to 7 working hours per analyst. If they were to be compensated, say at $25 per hour, the cost to just cover the labor would be $175 per CD. If Pandora applied this methodology to each CD and have the aspiring artist pay for the analysis, it could potentially make $2,730,000 per year (300 CD's x 52 weeks in the year x $175 per CD) to cover the labor cost of developing musical DNA. Although the stereotype presents new artists as usually lacking any funding sources, I would expect little drawback to this option as $175 per CD is a very insignificant expense when compared to $350,000 for recording, marketing and producing cost referenced by a music label. While using Pandora does not guarantee the artist's success, it is a very low price to pay for keeping their musical integrity that is often sacrificed to the cost of success. Additional funding would certainly help the company's bottom line.
• Automate the musical DNA coding process, focus on more direct-to-consumer relationship by offering premium services, and increase advertising on free-access site. This option would allow the company to generate more revenue and partner with advertising companies that are looking to take advantage of the active and growing customer base. By pursuing this possibility Pandora could potentially evolve its customer feedback collection and make improvements to the music genome project by soliciting customer feedback on a more elaborate basis than thumbs up/down and also allow for customer suggestions in order to expand the music library. If Pandora were to charge customers $5 per month for premium service (with no advertising) although they would loose the advertising revenue, they could potentially make additional $20 million if, say, half of customer base signed up for the service. Furthermore, automating the development of musical DNA would lead to reduction in workforce. The initial cost of developing the program that would be capable of analyzing as many as 400 different attributes to determine the song's DNA would be offset by the first year's savings, and from then on, the money saved on labor would be added to the bottom line to generate profit. Pandora should consider this option carefully as potential software development costs may be significant. Furthermore, the application would probably need periodical maintenance. The downside of this option could be customer dissatisfaction with increased amount of advertising at free user level. In order to reduce the frequency of advertisements customer would need to pay a subscription fee, which can have an adverse effect in terms of subscriber growth.

                                                                        Recommendation

Based on the analysis of the alternatives mentioned above, I would suggest that Pandora pursue a mixture of option 2 and 3. I believe that some revenue should be generated from new artists as there is significant time and expense invested in decoding their music and playing it on the station. I also believe that Pandora should charge various subscription rates based on customization and end user preferences. Free access should still be offered with increased advertising and limited listening time. I see the development of an automated solution as an effective, efficient and sustainable option that will escalate the availability of various songs, including new hits and new artist work. The increased speed of assigning the song its musical DNA and being able to play it to the listener would increase the service appeal in the eyes of new artists and further substantiate the initial fee.

Presentation
In my opinion, presenting this case would need to focus on business model and strategy choices. I would therefore start with outlining the current state and SWOT analysis of the business environment. I would ensure to include all possible threats of substitutes as well as alternatives to the service offered by Pandora. I would also explore various decision criteria to be potentially considered by management when implementing a new business strategy.

Presentation of different alternatives and their effect on the bottom line would help make the decision clearer. Furthermore, analyzing the subscriber basis and segmenting it would help establish the target and future positioning of the service offered. I would utilize various analysis and market share graphs to depict the size of the market. I would also provide visual graphs depicting customer trends in music purchase (shift from CD purchase to digital albums and singles).