CHAPTER 4 RESEARCHED CASE – AUTODAQ
4.4 A GILITY AS CORE CAPABILITY
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4.4 Agility as Core Capability
In competing with the physical auction, Autodaq chose to react to the fast-shifting market circumstances, to make used of Rapid
technological changes and to deliver its platform quickly. It continues to grow sustainable competitive advantages by making the
organization agile. When the original business plan to create an open auction virtually to replace the physical auction did not take off after the first big sales in December 1999, the startup needed to modify its business model. The team needed to create a new platform to support the newly modified business model. By 2000 April, the first private label was up and running to sell Enterprise Rental cars. While the business team was struggling getting bigger sellers to sign up for the services, the engineering team never stopped to innovate and create killer applications. By 2002, Autodaq had five (Enterprise, Hyundai, Suzuki, Audi, Volkswagen) private labels and numerous sellers on the open auctions. The team never stopped in improving the applications to fulfill the customer’s requirements. The quick responding spirit branded this new startup in the used car vehicle auction industry.
Although the physical auctions started to build the on online auction platform, Autodaq still had the competitive edge. The reputation of the agility brought in various new business developments. The agility and innovative capability of the company also helped the merger with
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AutoTradeCenter. Although AutoTradeCenter was a public company, Autodaq was able to merge AutoTradeCenter with owning 70% of the new united business entity and kept the control power. The new united business entity started to get RFP requests from fortune 500 customers. In bidding private labels for Nissan and Infiniti, three RFPs were presented to the Nissan Corporation; one from ATC and two from the physical auctions. ATC presented the RFP with the highest cost quote but won the contract at the end. The reputation of the agility, the quality of the product and service helped ATC won this key business. After this victory, ATC continue to win the fortune 500 companies business such as Chrysler and Ford. These RFP are
requested from the manufacturers referred from ATC customers. By focusing in following the spirit of customer first in the agile
development process, Autodaq continued to win the business with its great reputation.
AutoTradeCenter continued to deliver its Internet platform using agile development process and open source platform and tools. By providing speedy service to its seller customers, ATC was able to deliver changes to the private label sites every 6 weeks for each account and the
company was able to bring in new revenue by charging the site maintenance fees besides the original transaction fees based on the original business model. ATC never forgot its original open auction
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business model. The company continued to invest to build its open auction site features while building the individual private sites for their seller customers. Incremental and radical changes were planned to the sites to sustain the competitive advantages.
AutoTradeCenter had built a good operation team. Selling vehicles on line are not just the virtual transactions. The post-sale operations and the CRM are as important to maintain the happy customers. However, Autodaq never reached the economies of scale in transporting the sold vehicles; the cost to transport the sold vehicles had been rather high in Autodaq. Along with the volume from AutoTradeCenter, the
operation team was able to negotiate better deals with the
transportation companies. ATC furthermore created new distance matrix to minimize the cost of the transportation. The newly formed matrix created better ROI for the company. The cost reduction created a competitive edge in the transportation area. The
transportation certainly brought in a new good revenue stream for AutoTradeCenter.
ATC holds the values and culture to best satisfy its customers. Always providing quality service in shortest time was the common
understanding among all team members in ATC. ATC never hesitated to apply any changes to its organizations to support the team to be agile. With minimum formal control system, ATC allowed the social
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control system to take effect. ATC had gone through many cycles of the growth and downsize. It managed to continue motivate its employees with supportive organizational values and culture. The agility as the core competence had elevated the competitive energy of the company and no other players in this market could have mimic or caught up with its success in a short time.
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4.5 Summary
AutoTradeCenter followed the agile philosophy and adopted various principles and disciplines to create process suitable to the organization factoring in its software framework and the talents. Incremental
changes and short cycles, frequent and effective communications to advance the project progress, eliminated efforts in creating
documentation but creating working software as deliverables and not sacrificing the quality in the quick cycles are the main focus in the development process. These disciplines and principles are followed in the “AutoDaq way” to create the agility as the core capability.
Adopting the open source tools and advanced technology, encouraging and executing the continuous innovation, and creating the learning organization helped Autodaq to better utilize the agile software development process. Not only saving the financial costs, but such effective knowledge managements also helped Autodaq to effectively create new products and enhancements for its customers and
therefore helped the Autodaq acquiring new business opportunity.
Jorge Borbolla, founder of Autodaq, recalled “Being agile helped tremendously, as it allowed us to be quicker to market with our product than the competition. Once out, it also gave us the ability to
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keep clients more satisfied, as we were able to deliver the change requests they had more quickly.”
The adaptive organization certainly helped Autodaq to adopt the agile software development process and the innovation managements. The social control system and the organizational structure changes to motivate the team members and support the process is one of the keys to allow the organization remain agile. During the interview with Jorge Borbolla, he stated “we knew that if we were to succeed, we had to be faster than the competition, outsmart them and outrun them.
Agile was a key part of that concept. We believed that the entire
organization needed to be agile in order to succeed, and we wanted to create a culture that would reflect these values.”
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