Geoffrey Graves MG3700 Mid Term Exam 4/24/2000 Part I 1.) In order to produce
an upwards swing in revenue, Toy World must track its customer’s buying trends
with more accuracy and more detail. The Point of Sale system that they are
currently working from can be improved and made to reduce after-market
inventory. Trend data can be used for a wide variety of purposes. One of the
first problems is the store design and layout of items. Sale items and hot
merchandise must be as strategically positioned as possible to allow a
prospective customer to locate and remove the item from the shelf quickly and
painlessly. By analyzing customer data, the new system must be able to sort
items not only by popularity, but also by genre. Once data is collected, new
stores can be quickly designed around the products. Some trends never die, seen
by the toy world market data. Comparing one toy with another is extremely
important in order to decipher just why it’s a big seller. The POS system should
be able to lay out all pertinent information about a toy obtained from sales
data, and compare it next to a variable number of other “hot” sellers. Data can
be compared with toy descriptions after analysis of the item, and research of
the toy’s advertisements and media exposure. Also by doing this, under- stocking
and over-stocking shelves can be prevented. A “hot” toy can be kept in stock if
the retailer orders a large quantity ahead of time after POS analysis. What of
the items that don’t sell much when the POS data is analyzed? The system should
be able compute the quantity to order, to keep in the stock room, or to totally
remove the item from inventory. 2.) At the “snap-shot” of this case, Toy World’s
tactical strategic position was decent and had room for expansion, but the
tactical position was lacking in many areas. If you ask the CIO of any
successful company that has been around for about 25 years, he will agree that
for maximum results and increased overall cash inflow, a large portion of the
budget should be spent on IT.
More funds towards improvement of the POS system would have increased revenue
two or even threefold. Much of the data network at Toy World is too slow to
handle the amount of traffic necessary to sufficiently analyze POS information.
From IT Planning (Exhibit 5) the MIS spending plan as a fraction of sales,
decreases from 0.9% in 1987 to 0.8% in 1988, around $4000. This shows a clear
lack of good prediction when this % of sales data is compared with the revenue
(Exhibit 3) of $10 million. IT spending could have been increased by 50%,
(1.8-2.0) percent from 1986 to 1987 with practically no negative side effects.
Strategically, the company was looking towards the future of sales. One of the
major ideas that were worked into Toy World’s “electronic future” was
e-commerce. If they were to win that race, the sales would predictably
skyrocket. Toys are the perfect product to purchase online for tech savvy moms
and dads at Christmas time. Though the technological problems were many, Toy
World was still a leader in toys manufacturing and sale. 3.) As the CIO of Toy
World, I would have a comprehensive and competent staff working in a
team-oriented workplace. The new management team positions would be Systems
Analysts would be hired in order to redesign the POS system. The system would
keep the same base coding and structure but certain descriptive items must be
added to the data analysis. This team would be in charge of analyzing the system
and would work closely with the team of programmers to design the best way to
integrate additions to the POS system. The Lead Programmers would work closely
with the Systems Analysts with the intent of upgrading the IT systems of Toy
World. They must be competent in ANSI C, C++, SQL, Visual Basic, ORACLE, UNIX
(AIX), and any other database systems.
Web Support and Development Experts would be in charge of an E-commerce
storefront and the development of a company website. This team of web savvy
programmers and web designers would maintain the web system and servers. The
team would also update the web page with new items. The analysts would
specifically choose these new items from the new POS data. Telecommunications
personnel would be in charge of the phone line services and satellite
connectivity between the points of Toy World’s stores and business offices.
Small three or four man teams would have to be positioned at each store for
maximum results and ease of communication and synchronization. The POS systems
analysts should be an elite hand picked team that knows the toy business and
what makes function the best. This team would analyze computer POS data and also
work with the Lead Programmers to design the POS system. After all, they are the
personnel that will ultimately be benefiting from the POS IT system. Technical
Support Managers and Personnel would be in charge of troubleshooting systems and
setting up small, business computer systems as needed. The managers would be
trained by the team of Lead Programmers and would, in turn, instruct the larger
number of Technical Personnel. This group of professionals would be serving
under a Vice CIO/ IT Financial Manager who would oversee problems and make
financial decisions along with the CIO.
