IT Strategic Solutions
Show & More Bicycles: Overview
Shore & More Bicycles is an American import/export company that has been growing with great success. Further, over the next four years the company is expected to double in size. Shore & More’s existing products includes 20 bicycle models for adults and children, bicycle parts, accessories and cyclist clothing apparel. The suppliers for many of the products are located in Asia although the main offices of the business are located in the United States. Not only are the suppliers half way across the world, Shore & More also sells to companies all over the world. The Information Communication Technology (ICT) Department of Shore & More must not only meet the company’s global communication and order processing needs but also has to be flexible and responsive to the company’s increasing growth.
Collectively, the following sections present the results of Gap Analysis of the company’s existing technology and future technological needs, and an IT project recommendation to fill current “gap.” In addition, a discussion is provided that describes how the recommendation aligns with and facilitates the company’s business strategy for global growth.
Show & More must continue to satisfy the demands satisfy the demands of their increasingly sophisticated customer base, in order to stay ahead of the competition. The IT initiative I am proposing will enable this.
The Company’s existing competitors range from low-end bicycle manufacturers that distribute their products through large volume discount stores like Wal-Mart, so a flexible distribution channel strategy becomes an important consideration. Currently, Shore and More bicycles are sold in licensed dealerships in order to ensure customers with a personal fit by physically interacting with the product. In addition, Shore and More competes against new high-end bicycle companies, so product differentiation becomes another key consideration in Shore & More’s product line strategy in order to remain competitive. An existing product feature that helps the Company’s competitive position is the use of light alloys for its bicycle parts, as opposed to the heavier metals used by competitors. Finally, competitors regularly sponsor bike races, where their company and product logos are prominently displayed at races, which likely make their products more recognizable to potential customers.
The competitive landscape for bicycling products continues to evolve, and that evolution is having an impact on customer demand. For example, bicycles have become more popular for commuting to work and for recreation. Local communities have become more biker friendly, as evidenced by the increasing number of safe bike trails, biker-friendly motorist laws, and conveniently placed bike lock-up racks. Shore and More Bicycle is uniquely positioned to tap into the increasing demand for cycling products, through the company’s existing product line, which includes lighter alloy-produced bikes that enable ease of use and transport, as well as a robust offering of biking accessories for its customers.
The major challenges recommended for meeting the business globally have been discussed, and now the discussion turns to how the business global growth strategy can be met by incorporating the suggestions.
Shore and More Bicycle could benefit from an ERP system with “a single platform for tracking all business data,” because supply chain management and warehouse inventory management (Carayannis, p. 110). The ICT Shore system should track the supply chain so that suppliers can easily and efficiently fill outstanding orders and process invoices (Carayannis, 2010, p. 110). The proposed IT project initiative seeks to provide these very types of functionality.
Indeed, Ed Peelan (2003, p. 6) a Professor at Nyenrode University, Netherlands and a CRM expert recommends considering CRM as a business strategy. The CRM cornerstones are (a) customer knowledge, (b) relationship strategy, (c) communication, and (d) “the individual value proposition (Peelan, p. 7). The value proposition cornerstone encompasses the “three value disciplines: operational excellent, product leadership, and customer intimacy (Peelan, p. 49). The CRM plan must be designed to meet the specific needs of Shore & More and remain flexible.
Shore & More will have the capability to develop a real-time interaction with suppliers. Therefore, the suppliers’ needs can be met while keeping Shore & More informed at any time of the day about the amount of inventory, the orders received and the orders outstanding. Tracking is a feature of ERP. Products can also be tracked so that their exact location in the process can be identified. An ERP system will provide records and data on sales revenue, as well as integrate the accounting and financial departments. Financial statements as well as quarterly and annual budget can be automatically generated. “Direct computer linkages with customers provide real-time sales data that the organization may use to plan for the future (Harrison, 2012, p. 149). ERP helps design the best strategy for increasing product sales; the bicycle designs with the highest volumes of sales will be identified. Appropriate network connectivity between each department and the suppliers will generate useful data and make production and sales more efficient than currently possible. CRM is necessary because the demand for Shore & More products are predicted to double in the next 4 years. An online catalog is being designed for customers. CRM enhances the management of customer relationships enabling the company to maintain a good working relationship with the customers.
The following section presents a Gap Analysis to initiate a discussion for meeting the internal sales and production needs of Shore & More Bicycles, as well as external factors that are necessary to confront the competition.
B. Gap analysis
According to Hitt, Ireland and Hoskisson (2012) the process of comparing the current performance with future business prospects enhances the capability of designing a solution to remedy the deficiencies. J.T. Hawkes (2009, pg. 1) describes the Gap Analysis as an early warning system to “identify, monitor and close gaps with competitors. A gap analysis is a simple system that forces a manager to identify business goals and then evaluate the ability of the company to meet those goals. The Gap Analysis in Table 1 lists Business Objectives in the first column and then current standing in the second column. Any deficiencies between the first and second columns are listed in the third column. (See table 1) Finally, an action plan can be devised to take action and placed in the fourth column. (See table 1) The gap analysis of Shore and More Bicycles Company is shown in Table 1. J. T. Hawkes (2009, p. 4) describes a shorthand for the Gap Analysis steps: “awareness, understanding, prioritization and action.” The second step is to understand why the factor is important. The most effective action plan prioritizes the needs of the company and takes action based on need.
Recognizing possible internal or global deficiencies can help in the prioritization step. The notation of ’internal’ or ‘global’ has been made in the business objective column. Although all the corrective steps made by Shore & More have the umbrella objective of staying ahead of the competition.
The computer system currently available does not integrate information and data sharing between departments, employees, dealerships, customers and/or suppliers. Therefore, ERP and CRM systems must be installed. A sophisticated, modern IT system with ERP and CRM capabilities will enhance the growth and expansion of the company, and, therefore, increase the company’s competitive capabilities. There is a serious gap between the business objectives and the company’s networking design and Internet access. The existing communication process is difficult and causes confusion. Collaboration with the departments and between departments at the main office is impossible unless it is done face-to-face. Collaborating and sharing data with an integrated IT system will solve this glaring communication problem. The integration of online supply chain management will allow collaboration between suppliers, the main company and the dealerships. The improved and faster communication will save time and money. The anticipated growth of the company makes the need for a good ICT system imperative. A high-quality ICT system must be installed or all the other changes together will not be enough to successfully compete well with competitors.
A good quality communications system enhances efficiency. A first-class communication system is imperative to save time and money. Devastating problems for the company could develop when all the communication channels are autonomous rather than integrated. The autonomy of the current system will not allow the company to grow or to lead in the competition for customers. With good planning and a high-quality design, the implementation of ERP and CRM systems will provide the necessary communication connections to enable the company to meet the business objectives.
The Gap Analysis demonstrates that Shore and More Bicycles is lacking in cutting-edge technology. This lack in technology hinders the company’s growth. Some of the company’s hardware can be used in the future design such as the desktop computers and the landline telephone system. But more devices need to be introduced including printers, laptop computers, wireless routers, a fast Ethernet, smart phones, mobile phones, servers, scanners, rack servers, hubs, bridges, and a CCTV system. The software systems that are available in the company include the bicycle design software, and office communication application software like office suite but these may need to be replaced. From the gap analysis, the following can be deduced:
- The communication system is not integrated. There are different communication channels which do not allow easy, efficient communication.
- The enterprise systems in the company are not integrated creating isolated business processing systems.
- There is no central management of the business processes or the supply chain.\
- The communication system in the company is traditional and personal (not allowing for high level collaboration) because the employees use landline telephone system, smartphones, and cell phones.
- Back-up is done on individual computers, and no external backup is available.
For the computer to support future growth and enhance the communication of the company, there is a need to integrate enterprise systems for easy analysis of data. There is a need to provide a platform where all these systems and new processes/departments will be integrated. It is is evident that the current system has serious gaps in software and hardware. The company should make sure additional hardware is purchased and set-up by an experienced IT operations manager in charge. This will enable the company to run most of the processes simultaneously. The running of the processes should not be done in a single computer. There should be design collaboration can be enabled between designers by networking their computers. This will enable easy and efficient collaboration and sharing of design ideas; better designs will be achieved through collaboration.
Communication should also be enhanced so that all channels of communication are enabled. There is a need to have integrated communication mechanism where all the communications from the clients are integrated into a single system. This will streamline the communication process in the company. Currently, a client who communicates via Facebook is not differentiated from the same communication from Twitter and mobile; instead they are taken to be autonomous clients,. According to Kapferer (2012), knowing how the customer is reaching Shore & More is essential.
IT System – The correct functioning of the company and alignment with the growth strategy of Shore & More Bicycles makes necessary the implementation of web-based ERP and CRM systems. ERP is an enterprise system that has different modules, each with different task abilities, integrated together. The modules include functionalities like procurement, accounting, finance, human resource management, communications management, and supply chain management. The modules need to be integrated into the system in a way that will meet the business objectives, and the priorities set during the design planning stage. And then the growth strategy of the company will be aligned with other parts of the system because additional modules can be added to the system as the company grows. With the anticipation of the growth of the company, there will be a need to integrate more modules as potential needs are identified.
There is also a need for a database system to store the data that is required for the company to function well. The database will be connected with the IT system and will be accessed using a 3-tier approach where the database will be stored independent of the operation of the system. The system will access the database as a third-party.
Installations required - As the ERP and CRM systems will have many modules working together, there will be an alignment and configurations needed for the systems to function properly. The systems will also need to be connected to a centralized database.
Hardware required – ERP, and CRM integrated so that they work together. The systems are web-based meaning there will be a need to have high quality internet connectivity for the systems which are located in far places. The web-based capability will enable the modules and the future branches to communicate well with the main installation. Shore & More Bicycles will need a server which is located at the headquarters. The server will be used to install the main application which will be accessed by the other host computers in the system.
Computers networked to the main office must be installed at all dealerships so dealers can access the database and other applications. LAN and internet connectivity will be required throughout the supply chain. The networked computers will use the internet to connect to the system. The LAN will be used to connect the computers found in all business units such as the finance department. The number of computers that will be required in a business unit will depend on the number of users that will work or are anticipated to work in that given department. In each department
LAN connectivity devices like routers, switches, networking cables (CAT6), network cable terminators (RJ45), and hubs need to be supplied. All the business units throughout the company and its supply chain will be connected.
Software required – The software that will be required for the system includes an operating system and the network operating system. There will also be a need to have system utility tools like antivirus and other security programs. The ERP system will not need to be installed in the host computers because it is not web-based. This will mean that the system will only have a web-presence and an interface that will be used to connect and interface with the main system. The interface could be a web browser. The main application system will be installed in a server dedicated to the company.
RE: Human resource need for new IT systems
An important element of the HRM computer needs is to make sure security precautions are taken seriously. The HR manager will need to assign different levels of access to the data, using different passwords, for example. Human resources can be integrated between several departments which are using the same database. A centralized database system will decrease the problem of duplicating or even replicating the data in storage disks or file cabinets within the company. All personnel related materials including resumes; hours worked, workshops for continuing education attended and performance assessment records. Access should be authorized to a department depending on the data needed. There is no need for employees to have access to the total database because private information will be stored there such as personal facts and performance reports. The best security is giving access to the data that employees need to do their job but to no other data.
Many of the HRM needs per department are obvious, such as the payroll department. The number of sick days and vacation days need to be accessed by managers in the departments. Sick days and vacation days can also be accessed by the employees when they have been assigned with personal and private passwords for gaining the information. A centralized database offers the opportunity to share some of the data between the HR department and employees. Employees can be assigned personal passwords to design their own career plan. Training sessions and workshops can be made available to all employees on a ‘bulletin board’ so employees can sign up online, for example. Openings for employment throughout the global locations of the company should be made available for those who want to move to a new position. The HRM will work more efficiently interdepartmentally, and the opportunity to connect with employees more easily is offered.
D. Evaluate how the recommended IT system would help support the company’s globalization
The driving force for growth has always been the integration of new technologies to gather data and analyze trends from all over the world. Technology needs to be integrated intelligently according to the expansion needs of the company. Common sense, business-wise use of the technology can enhance the ability of the company to find the best prices for raw materials and to gain information about demand for bikes and bicycle accessories and apparel. Different cultures have different uses for bikes, such as Holland where people commute by bicycle from home to their jobs every work day. On the other hand, Americans are more likely to use bikes on weekends for leisure activities. Technology implementation enhances Shore & More Bicycle’s competitive advantage globally. This means that the technology to be implemented should be an intellectual property for the company. It should be used strategically for to edge competition.
With web-based information system that will be implemented, it will be possible to have clients from far countries placing their orders to the system. Customers use the Internet to find important information regarding the bicycles available in order to make purchasing decisions. Shore & More has an opportunity to design an online catalog with special capabilities, such as a graphics tool to help a customer design exactly the bike they want or quickly order a part they want urgently. With the development of a global company network, it will be possible for the suppliers to monitor their inventory online and automatically supply needed items.
The inclusion of ERP and CRM systems supports communicate and collaborate between employees located anywhere in the world. Communications integration between appropriate departments and dealerships will make delivery of products to customers more stream-lined. If designed to be flexible, the IT capabilities can continue to accommodate expansion. A company extranet could be another enhancement to globalization. An extranet enables the customers and suppliers to connect to the company in the context of globalization.
The $243,000.00 you have designated for IT expansion will be money well spent and should be considered as a critical investment needed to improve the worth of Shore & More Bicycles into the future. The ability to serve customers quickly and efficiently will bring more orders from satisfied customers. Satisfied customers share the name of the company with friends, neighbors, and their bicycle groups.
The global market is fast-paced because of the competitive nature of the bicycle, bike parts and bicycle apparel sector. “Enterprises are increasingly dependent on data, information, and the means to communicate and manipulate these resources – especially information technology” (Whitaker, 1998, p. 73). Our competitors use strategies allowing them fast information processing. The proposed IT system is justified because the company will be able to integrate processes so that the total enterprise will run more smoothly than they do now. With the use of CRM, the company will be able to understand the needs of the customers; new strategies can be implemented quickly when trends change. An ERP system will enable departments to work together and share important information in an atmosphere of collaboration.
The implementation of a high-end website for an online catalog will give Shore and More Bicycles an attractive site for customers to view products and place orders. The ability to manage data and the supply chain will save time and money. Satisfied customers and stream-lined processes will increase the profitability of the company.
The IT system can enable the company to change the distribution process to suit the needs of the customers. This can be done nationally and internationally from a centralized database. Response to changes will be quick. The IT system will enable company productivity to improve due to collaboration between designers, inventory connection to suppliers, and overall easier access to information and data within the company. The IT system will enhance the HRM capabilities to hire new workers and make sure employees have opportunities for up-to-date training.
Finally as Kapferer (2012, p. 12) has pointed out that “in a global world where most of the things we know are know not through experience but through hearsay, images, the internet and so on.” Therefore, the advantages of creating an Internet presence cannot be over emphasized.
IT Team Member,
Shore and More Bicycles
Carayannis, E. G. (2010). Strategic management of technological learning. Boca Raton, FL: CRC Press.
Harrison, J. S. & St. John, Caron, H. (2014). Foundations in strategic management. (6th Ed.). Mason, OH: Southwestern, Cengage Learning.
Hawes, T. (2009). Early warning gaps analysis process: Simple steps to identify monitor and close gaps with competitors. JTHawes Consulting, www.jthawes.com/pdf/Gaps%20Analysis%20System.pd
Kapferer, J-N. (2012).The new strategic brand management: Advanced insights and strategic thinking. (5th Ed.). Philadelphia, PA: Kogan Page.
Whitaker, R. (1998). “Chapter 6 - Managing context in enterprise knowledge processes” in The strategic management of intellectual capital: Resources for the knowledge-based economy. Edited by D. A. Klein, Woburn, MA: Butterworth-Heinemann, pp. 73 – 86.