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Course Project - Miranda

This document outlines an IT solution proposal for a Chinese food chain store called Store A. It includes: 1. An overview of the business problem of ineffective information management limiting Store A's competitiveness. 2. A proposed database system to manage customer, product, and other information to help Store A reduce costs and improve service quality. 3. A cost-benefit analysis finding benefits of easier information management and inventory/pricing optimization, with development and organizational change risks.

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deMontfort nd.
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45 views4 pages

Course Project - Miranda

This document outlines an IT solution proposal for a Chinese food chain store called Store A. It includes: 1. An overview of the business problem of ineffective information management limiting Store A's competitiveness. 2. A proposed database system to manage customer, product, and other information to help Store A reduce costs and improve service quality. 3. A cost-benefit analysis finding benefits of easier information management and inventory/pricing optimization, with development and organizational change risks.

Uploaded by

deMontfort nd.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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IS/IT Governance Course Project

Table of Contents
Introduction ....................................................................................... 1

Background Information & Business Problem .................................... 1

IT Solution & Alignment with organization’s goal ............................... 1

Cost-Benefit Analysis & Risks and Strategies ...................................... 4

Key levers to increase the adoption of users & Chargeback ............... 4

Introduction

This proposal will first define a business problem in a Chinese food chain store, and some
background information about it. The second part will present an IT solution that is in the
form of a database, including the system definition and the ER diagram. Next, the
cost-benefit analysis of the proposed system will be provided. Then, risks and corresponding
strategies of this IT investment will be explained. The following part will show a simple plan
of IT chargeback. Finally, a discussion of some key levers to address any change management
issues in this food chain store will also be presented.

Background Information & Business Problem

In China, there are various food chain stores providing similar products, if wants to become a
market leader, it must have competitive advantages which could make it become more
attractive than competitors. The object (one food chain grocery I chose) involved in this
proposal called Store A, compared with competitors, it has no competitive advantage in
terms of product prices and service quality due to ineffective information management. With
the emergence of more and more similar stores, it can neither attract new consumers nor
retain old customers, which ultimately led to a sharp decline in store sales, plummeting
profits, and employee resignations.

IT Solution & Alignment with organization’s goal

Overview
To solve this business problem and gain a dominant position in the market, designing a
database system to manage Store A’s information needs could be a suitable IT solution. As I
mentioned above, due to the messy information, Store A cannot efficiently use various
information (customer information, product information, department coordination
information, etc.) to make timely decisions or constantly adjust decisions to the situation,
and thus it has no competitive advantages. In order to gain competitiveness and increase
profits, it has two goals in terms of product prices and service quality. The first is to reduce
inventory and transportation costs so that it could sell products of the same quality at a
lower price. The second is to improve service quality (such as salesclerks' service attitude
and delivery service) to increase customer volume and customer loyalty. So, by establishing a
relational database, storing various information in it, and finding connections between the
information to ensure Store A’s managers could make decisions more efficiently to increase
revenue and reduce costs.

Database system definition


In order to design a database that could align with the goals and strategies of the Store A, I
identify three main users’ requirements based on the user types of this IT system, and then
according to these four requirements to design how to manage various information and their
relationships to meet these needs.
1. First of all, customers want to know the basic information about foods such as unit price,
expiration date. They also require the contact number, address and distance of the store
in order to choose the closest store. In addition, they need to know if the physical store
has sufficient inventory to ensure that they can purchase goods they need. Order
information is also important so that customers can figure out their spending over a
period, amount of each order, transaction date, pick-up time and delivery time.

2. Regarding to physical store managers, they focus on the sales and total revenue of
different products in different branches. According to this, they can make rational
business decisions such as increasing products inventory in the branch where certain
products are popular. Additionally, physical store managers need to keep closed contact
with all suppliers in time to guarantee sufficient inventory for online, offline and
cross-channel orders. Also, physical store managers want to manage offline and
cross-channel orders information such as order store, order time and time interval
between order time and pick-up time. Apart from this, physical store managers also pay
attention to customers’ feedback and product rate of return (i.e. the ratio of revenue to
cost price plus transportation cost) to decide the best supplier for each product.

3. As for customer relationship managers, firstly, they are supposed to analyze


consumption preference among different customer groups based on age, gender,
occupation for further promotion. Besides, there is a need for managers to monitor the
flow of new and old customers. If the number of customers decreases, managers should
pay attention to customers’ feedback about product, online and offline services to
improve grocery’s performance

Based on above analysis of database-system users’ requirements, the main scope of the
database need include products sales, product/service/delivery assessment, customer
purchase record, inventory management, transportation management, platform and store
management, staff information, and supplier information. We do not consider product
manufacturing, human resources management and accounting information system
management.

ER Diagram
Below is a simple ER diagram used to present the database system:
Cost-Benefit Analysis & Risks and Strategies

According to the design of the database, I have listed two strategic and operational benefits
as well as costs, respectively. The first benefit is that store managers could manage
information more easily, all the information are recorded in this database and thus, they
could further use visualization tool to analyze information. For example, they could know the
reason why customer volume decreased by looking at the rating feedback information
collected from customers and based on these specific suggestions, managers could make
corresponding changes. The second benefit is that by managing the inventory information
and sales information, managers could know the popularity of different products, and then
purchase goods according to demand, reduce inventory waste and transportation costs,
thereby reducing product prices. However, it also has costs. That is budget and fitness with
other IT projects of Store A. For risks of this IT investment, maybe the development risk and
organizational risk are two main risks because this database is relatively complex, and it also
need continuously support and maintenance.

Key levers to increase the adoption of users & Chargeback

From my own view, this database system is an ‘Informational System’ whose goal is
tightening reporting and control functions to reduce costs, and they help identify new
opportunities for revenue generation, thus improve profitability. In addition, it is also an
‘Revolutionary Change’ we are trying to use the systems to radically change how the
company does things. In order to increase the adoption of the users, besides I have already
think about what the users’ requirements are, Store A also need to providing enough and
skillful training to employees to ensure they do not have any knowledge barrier and make
them have high control over this new system. As for IT chargeback, I think would be better
use the ‘Profit Center Based Chargeback’ as it could not only incentive for IT unit to be
efficient, but also motivate users to consume prudently. However, it is very complex as they
have to find out what is the comparable market offering and how much does the market
charge for offering the service.

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