Junk Van Reflection

Hi Sir,

I apologize that I won't be able to make the meeting regarding the consultant's presentation on IT system upgrades, I have a situation over at the Minnesota site that needs my immediate attention.  But I thought that I would at least email you my opinion on the matter.

First, I would like to say that they did a wonderful job in presenting us the facts about each of our options and I am very pleased with their analysis and recommendation.  To be quite frank I was thinking that PaaS was our only option but they opened my eyes on the ERP solution.  My first thought of ERP systems is that they are for very big corporations, not small operations like ourselves due to their initial and maintenance costs. PaaS, in my opinion, offers similar but not as good a solution as ERP but for what I thought to be a much cheaper price.

Though I would still like to see the demo before I make a final recommendation it seems that the Sage 50 software will do the trick.    It has meet all of our requirements within a budget affordable to us, it's a slam dunk option.  But it will be prudent upon us to do our due diligence on the software and its capabilities.  There may be a key component that they missed or we missed to inform them about that could make it impossible for us to proceed.

Are there other hidden costs that could come with unexpected events such as lost data from system crashes?

How is the data handled once it is in Quterra and what mechanisms to do we have to allow us to access or move the data when we out grow what Quterra can offer us?

If we decide to make fundamental changes to our business model how will that effect Sage and what mechanisms do we have to adapt if any at all?

I also wanted to contact a former colleague of mine who has some experience with this software, he will have some invaluable insight into the program and its capabilities. 

I hope my fellow colleagues have the same opinion as I do and I will see you next week when I return to HQ. 

Thank you

Rajae El Temawi

Lead IT Strategist

Junk Vans

Junk Van Case Study

Problem/Issue Statement

The problem is that Junk Van needs to find a cost-effective IT system that will minimize information handling errors allowing the company to retain its customers and help row the company.    The new IT system had to fit the business model and be affordable.

 

Some of the symptoms were the unnecessary length of basic administrative tasks like contacting helpers and money collection, mistakes in customer contact information, forgotten e-mails, manual calculations and billing errors, and incorrect versions of the database sent by the data clerk.

 

The scope of the problem involves JUNK VAN’s entire operations. Considering his virtual business model that does not allow for any physical office space, a flawed IT support system negatively impacts all processes and employees. 

 

Situations Assessment

 

The context of the problem is looking at the inefficiencies that are apparent within JUNK VAN’s current virtual business model. Currently, the business runs in a very structured manner with two call center operators, one data clerk, three drivers, and three helpers. The customer’s requests (jobs) came in via phone and from that point information would be inputted into a custom-built MS-Works database. From there, information would be e-mailed to the morning and evening operators and to the drivers. Mr. Kingo wants to maintain this virtual business and eventually move into franchising and growing. Before that can happen, he would like to have a central database and remove the manual process of e-mailing internal information.

 

The decision criteria to consider include the cost of the various alternatives to their current business model with MS-Works, ease of use as his staff and himself do not possess a high level of IT know-how, and adaptable to changes within the industry. Two other criteria that were discussed was having vendor support and being able to implement this change as soon as possible.

 

List Alternatives

o Custom Application

§ Pros:

·  Custom system built for the business including basic functionality

·  Centralized database allows for remote access

§ Cons:

·  Initial build time of 4weeks + cost of $2000, + potential maintenance at $60/hr per developer

·  Potential lack of understanding could lead to higher costs and longer programming times

·  Additional charges for data migration

·  Custom software can’t be tested prior to being developed, so no way to be sure if needs are met

·  Support is “billed by the hour”

o Platform as a Service

§ Pros:

·  Cloud based infrastructure

·  Users can utilize common applications as well as build their own unique applications

·  Third-party hosting of computing platform

·  Easy-to-build forms and connect tables

·  Data migration = 3 days

·  No long term contracts required, ability to scale-up or scale-down anytime (30 days notice)

§ Cons:

·  Kingo doesn’t possess the necessary developer skills to take advantage of PaaS offerings

·  Costs of services package - $500-$600/month

·  Additional customization of system costs $180/hr

·  Ownership and maintenance of development platform

o MS Access

§ Pros:

·  Could be up and running  quickly on small budget, installed locally on multiple computers (no remote access) or on centralized server (allowing remote access)

·  Kingo can manage installations personally and develop new database after work and on weekends

§ Cons:

·  Local installations do not allow for remote access

·  Kingo’s lack of knowledge around shared server implementation would require additional support

·  Multiple user licenses required – unclear how many at this point

·  Costs of hosting shared server, and additional developer support

o Google Docs

§ Pros:

·  Web-based applications that be used to create text docs, spreadsheets, slide presentations and forms

o Quick and easy to create and share with others

·  Users can work on same file simultaneously

·  Possible to set different user profiles for access rights

·  Supports e-mail distribution

·  Free for up to 10 users, low cost for small businesses ($5/user/month, or $50/user/yr)

·  Quick and easy to implement

§ Cons:

·  All data on single spreadsheet cannot be cross-referenced the way it has been in relational databases causing people to see additional information not pertinent to their specific roles

·  No customer support for GoogleDocs

·  Users do not own the tools and resources used to store the companies sensitive client data, what if Google decides to cancel service?

o Enterprise Resource Planning

§ Pros:

·  Built around central database and designed to be remotely accessible

·  Integrate business processes by covering every aspect from purchasing, sales and customer service to finance, HR and e-commerce

·  Designed for small- to mid-sized companies

·  Multiple “out-of-the-box” options available

·   

§ Cons:

·  Very costly solutions and unclear the overall costs 

o Four user licenses = $12K

·  Pre-fabbed Systems Included modules that Kingo is not interested in purchasing

·  Unsure if the ERP system will address specific Kingo’s specific business needs

Recommendation

 

I would recommend that 1-888-JUNK-VAN upgrade from MS-Works to a Platform as a Service in order to solve its current IT system.  Using a Platform as a Service model would allow the company to meet all of Kingo’s needs.  Though this system would require more IT knowledge, Kingo was confident based on the demonstration that he would be able to perform the setup himself.  This alternative is a bit more expensive but its capability in the long run will save the company money since it is customizable which prevents future updates.  Vendor support for PaaS is much better than other options and as the firm expands to other areas this customer support will be very helpful.  The PaaS should minimize errors, mitigate time delays, and allow for the custom needs that the company’s situation demands. 

 

 

Impact of Google Docs: How should C-Level employees react?

Google Docs or Google Drive as it is known today is a very useful tool but it has its limits.  I use it for personal use all the time and I really don't know how I could operate with it.  But for corporations it is little more complicated.  In the end it depends on the size of the company.  I worked for a tech start-up where we only had 6 employees (20 before I left) and Google Docs was such an easy way to share information.  Also, since we didn't have a local server we can all access it was also a good way to share files that are too big to move via email.  For small companies it is a great tool at a very low price. 

But as the company grows and the work they produce becomes more complicated and involves many more people C-Level individuals need to worry about potential security risks.  This could be as simple as files being corrupted and a project's work is lost causing your team to do double work which could delay projects as well as give your company a bad reputation.  There is also the possibility of another firm attempting to steal your work via hackers.  Since Google Docs requires the company to open their network of files to Google or the Internet at large there is a gaping hole that IT needs to watch for potential risks.  It becomes very easy for hackers to get behind the company firewall.  Many projects have sensitive information about the company and our clients.  There is no amount of potential savings that is worth ruining a comoany's reputation. 

It can be used on a small scale for items deemed for public viewing in order to releive storage capicity on the local firewalled server.  If this can be manged in a way that will not burden the IT department I would suggest using Google Docs but I cant imagine there is much savings in using Google and would onlu add another layer of confusion with employees as far as where files are. 

I beleive that Google is working on creating a sense of security around thier system.  Until they do so it will be very difficult for any C-Level employee to agree to use Google Docs or any other Cloud based system as a main source of storage.  Companys who have secrets worth billions of dollars are not worried about saving 1, 2 or 10 million on storage facilities.  In the end, if a company cant keep thier Intelectula property protected who would want to do business with them?  So it isn't jsut the lsot money or the lose of conveniance, it is about the character and reputation of the company as whole. One bad move can seriously hurt potential growth and value of the company. 

 

Blogs: Is this something we should incorporate into our company?

Hi Sir,

I am responding to your inquiry regarding internal blogs and its use to incentivize communication between different parts of our company.  We have a global presence and we operate in different parts of the hearing aid industry.  We have individuals scattered all over the world who speak different languages and have many cultural backgrounds, each with a different perspective on the industry.  They will never be able to efficiently communicate with each other on daily functions.  I understand you would like to use a blog on our Intranet site to connect all of these individuals in order for ideas to be shared across the company on how they tackle their daily tasks and ideas on we can be more efficient. 

Like many other issues this one has its pros and cons.  The biggest pro I see is that it has the potential to save many labor hours.  People can openly discuss day to day issues they have resolved in their particular aspect of the business.  For instance,  a finance team in Denmark has figured out how to get payroll data electronically which will allow them to upload the figures instead of manually entering it, saving them 3 hrs each month.  This team will be encouraged to post this new found knowledge on the blog and can be a highlight on the Intranet home page.  Another example is a production manager in our Poland facility has designed his line to save 8 minutes off of each unit produced.  As you may know we produce 100s of thousands of units each month and if we can shave 8 minutes off a unit produced we may be able to reduce one or two head which will make a real impact on our Gross Margin figures. 

Here are some figures that can give you some perspective on how both examples can impact our bottom line.  An average finance person makes $25/hr.  The one blog entry regarding saving 3hrs each month can save our company $75/month per finance team.  We have 15 finance teams doing this task which gives us a total savings of $13,500 each year, though this figure seems small relative to the volume we produce it is from one blog entry and one specific activity.  The second example has a much bigger impact.  We produced 330,000 units last year that are influenced by the activity the production manager in Poland helped shorten.  It costs us $120 per unit in direct labor which takes an 1 hour to complete.  8 minutes is 13% of an hour which relates to $15.6 per unit.  Our total savings from this one particular blog posted from a mid-level manger in Poland could save our company $5.148 million each year.  This is real savings that has a direct impact on our bottom line.

The biggest con I see, besides the blog not being used at all, is if our employees are so motivated to come up with blogs and ideas to help the company that their work productivity is hindered. Production managers might not be as focused on what is happening that we could add 8 minutes to the production time which would increase our costs by the same $5 million.  There is also the possibility of creating more work than needed.  For instance, using the payroll as an example.  If one of our finance teams attempts to duplicate the new payroll function and spend weeks trying to figure out if and how to integrate this in their process but in the end find out they can't.  This of course would cost us money in labor hours wasted. 

My recommendation would be institute the blog and give clear guidelines on how they should be used and that current work should not be affected.  If we can make it convenient for managers and entry level employees to access and jot down ideas but not a time consuming task the company can really benefit.  Moral would be high since those we can bring something positive to the table would be reward in some reasonable way and recognized throughout our organization.     

Please let me know if you would like to sit down and walk through this recommendation to hammer out some of the details.

I am hoping that the MBA program at Montclair will expand the possibilities in my career.