CASE STUDY - Using skills to respond to the external environment (Business Environment)

 CASE STUDY:

Business do not operate in isolation. They are constantly faced with internal and external factors
that impact on the dynamics of their operations. Monitoring the external environment is vital to identify changes that could affect the business operations. Being able to address and adapt to these changes ensures the longer term survival of the business. Logica is an innovative IT services organization that brings people, business and technologies together. Logica employs more than 41,000 people and has clients around the world in a variety of industries including automotive, oil and gas and manufacturing. Logica's services aim to add value for clients through, e.g. , improving efficiency and productivity or reducing waste.

Question:

 Which technique is suitable in environment scanning to provide innovative solution to the customer and what strategies should be adopted by the company in order to face the challenges?

Ans: Logica can use PEST analysis for environmental scanning, as this provides innovative solution to the customer. PEST is a structured business tool that looks at the political, economic, social and technological influences affecting a business. By auditing and monitoring these influences, Logica can be proactive in ensuring it remains competitive by adapting its own business and by generating innovative and unique solutions for its clients. PEST is an acronym for the Political, Economic, Social, and Technological factors. These are explained of the external macro - environment for Logica explained as follows: 

1) Economic Factor: These factors change rapidly and are sometimes difficult to predict. The global economic recession has affected how most firms conduct business, perhaps by looking for cost savings or reducing waste. As businesses focus on areas where efficiencies can be made, some might choose to outsource functions to reduce costs, rather than employing people with specialist skills. This has created increased demand for outsourced services such as those Logica offers. Logica's employees have the specialist IT skills required to offer businesses of all type efficient and effective ways to manage systems and processes.

2) Political Factors: Business decisions may be influenced by political factors. For example, recent public sector budget cuts by the U.K. Government and increased university fees are affecting the education sector. Logica identified that these changes in the educational landscape I could have an impact on the number of potential employees with the skills and competencies that it requires. Logica has now engaged in strategies to ensure it has enough workers with the right skills both now and in the future. Logica has introduced apprenticeships and enhanced its graduate scheme. Logica has embraced the strategy of direct training as it provides the company with a new pool of talent, with the focus on individuals who have decided to specialize in IT or Computer Science. 

3) Social Factors: These factors reflect the constant change in society's interests, beliefs and actions. The make-up of society is also changing. The U.K. has an older and more diverse society with people from many different backgrounds and cultures. A diverse workforce brings together people with different skills and competencies. A diverse workforce brings together people with different skills and competencies. Diversity is therefore the focus of Logica's HR strategy. Logica competes with many other firms for a limited pool of highly talented individuals with good IT and numerical skills. To increase this pool of talent, Logica aims to increase the number of females in its workforce.

4) Technological Factors: The speed of technological advances means that existing electronic equipment, IT processes and systems will quickly become outdated. To remain competitive, a business must ensure that its processes and systems support innovation and creativity for itself and its customers. Logica has embraced recent advances in technology to offer its clients the most advanced and sustainable services possible. For example, Logica has created innovative software for Ford which monitors vehicle emissions. If drivers behave in an environmentally efficient way, they may benefit from fuel discounts.