The Kilkenny Bookshop Commissioned by: Bryan Marsh.Brynik Systems. Addressed to: Frank Black. Chief Executive Officer. Kilkenny Bookshop. Dated: 25th April 1999. April 25, 1999. Mr. Frank BlackChief Executive OfficerKilkenny Bookshop. A concise evaluation of your business has been formulated for your perusal. Included in the report is Brynik's recommendations for the Kilkenny Bookshop. Brynik Systems has extensive knowledge in all areas of business computing ranging from accounting applications, stock control, point of sale systems, distribution applications and e-commerce, all integrated into one user friendly management system. Our aim is to implement our products into your working environments with the least possible down time whilst making sure the product is up and running the first time. Enclosed for your perusal is the Business Report you requested. Sincerely yours, Bryan MarshProject Manager/PrincipalBrynik Systems. Encl. Executive Summary. Bryan Marsh, Project Manager of Brynik Systems, commissioned this report. This report evaluates the Information Systems/Information Technology needs of the company. The report identifies the alternate opportunities the Kilkenny Bookshop is faced with. In order to successfully gain a competitive advantage, technological changes must be made. The Kilkenny Bookshop is currently facing a devastating growth limit. Brynik Systems has taken into consideration many contributing factors such as the industry type and competition. Therefore it is recommended that the Kilkenny Bookshop adopts and makes arrangement to implement Option Two: The Total Management Solution immediately. This system has proven to be the people choice offering a complete online data system for all your online ordering, a complete accounting package for all size businesses whilst bundle up in one user friendly management system. CONTENTS. 1.0 Introduction 51.1 Objectives. 51.2 Scope. 51.3 Situation Analysis ..61.4 Rich Picture 81.5 IS/IT opportunity Evaluation .91.5.1 Option One. 91.5.2 Option Two .. 111.5.3 Option Three 131.6 Recommendations/Justifications ..141.7 Implementation Plan. 141.7.1 Summary ..151.8 Conclusion. 151.9 References 16 1.0 Introduction. Technological change is one of the principal drivers of competition. In order to secure a sustainable competitive advantage The Kilkenny Bookshop must make certain technological changes to their value activities. High technology does not guarantee profitability. Technological change is important if it significantly affects competitive advantage and industry change. Therefore proving strategically beneficial to The Kilkenny Bookshop. 1.1 Objectives. This report evaluates The Kilkenny Bookshop as a collection of activities. The Kilkenny Bookshop, as a collection of activities, is a compilation of technologies. Addressed will be the technological activities that are affecting the competitive advantage of the firm whilst providing you with strategically beneficial alternatives focusing on your competition. 1.2 Scope. Firstly the report will provide a situational analysis evaluating the potential possibilities of future competitive advantages whilst outlining current circumstances of The Kilkenny Bookshop. Secondly the report will introduce three strategically beneficial avenues for deliberation. Finally the third part of the report will forward professional recommendations that have been justified within the report and introduce an implementation plan. 1.3 Situation Analysis. The situation analysis will provide you with documentation of your current circumstances relative to your company's industry. The situation analysis will evaluate the potential possibilities for future competitive advantages. Utilising Porter's notion of the five competitive forces a vivid picture of the market within the organisation is operating. Furthermore, providing you with directional avenues on how Information Systems/Information Technology can be used to impact one or more of the competitive forces. This situation analysis is based on an industry in which the Kilkenny Bookshop is striving for a competitive advantage. Porter's (1980:5) definition of an industry is "group of firms producing products that are close substitutes fore each other". The state of competition in an industry depends on five basic forces, New Entrants, Suppliers, Buyers, Substitutes and Industry competitors. The collective strengths of these forces determine the ultimate profit potential of the Kilkenny Bookshop situated in the industry. Understanding the critical strengths and weaknesses of the Kilkenny Bookshop will give you an analysis of the competitive positioning of the company in the industry. Once we understand the critical strengths and weaknesses of The Kilkenny Bookshop, we will be able to clarify what strategic changes yield the greatest payoff. Three of Porter's forces will be used to analyse The Kilkenny Bookshop's situation. The first competitive force we will analyse is the threat of new competitors, the desire to gain market share. "The seriousness of the threat of entry depends on the barriers present." Porter (1980:89). There are a few major barriers which we will analyse. Economies will determine whether a new entrant will need to come in on a large scale or to accept a cost disadvantage. What research, marketing and service does a new entrant need to enter your industry? These factors play a major role in analysing the Kilkenny Bookshop's market size.How much of the market does The Kilkenny Bookshop capture? The Kilkenny Bookshop growth opportunities appear unlimited if the organisation can develop adequate systems to support the business. A New Entrant to an industry must secure distribution of its product. The more these channels are tied up the higher the barriers are for the New Entrants to distribute products. The more reliable the service, the more market access The Kilkenny Bookshop has, the harder for a New Entrant to gain access to distribution channels.Increasing market access such as Internet presence will increase your distribution channels. Internet advertising is quite inexpensive compared to other conventional means of advertising. "Intense rivalry among existing competitors is related to the presence of a number of factors including price competition, product introduction and advertising slugfests" Porter (1980:91). If the industry growth is slow, precipitating fights for market share will erupt. If non-existent customer switching will occur. The kilkenny Bookshop is situated in an industry of rivalry, low switching costs and buyer powers. The Kilkenny Bookshop is currently faced with changing industry technologies. Being situated in an industry of competitor rivalry puts enormous pressure on technological changes. Changes that will yield profitability. Low switching costs give the customer no obligation to stay loyal to The Kilkenny Bookshop. From the customers point of view a switching cost is a cost incurred while switching from one vendor to another. In the industry of bookshops there are no minimal if any at all switching cost incurred by the customer switching from one vendor to another. Reliable service, easy access and customer support, are the three major reasons why customers stay loyal. Production costs can prove to be a major factor in profitability. Production costs such as productivity, advertising, data entry and unnecessary transport costs can be quite expensive. The higher the expense of these productions cost the lower the profits. Information Technology is able to reduce some of these costs by introducing a more efficient computer system. More time can be spent retrieving data then currently entering it. Reducing the cost will only play part in increasing competitiveness.1.4 Rich PictureThis part of the report will give you an illustrated outline of The Kilkenny Bookshop as a business. The Rich Picture is used for diagramming the company as a collection of activities. Each individual activity in the Kilkenny Bookshop has been diagramed bellow.
1.5 IS/IT Opportunity Evaluation. The following portion of the report will submit multiple options for The Kilkenny Bookshop to take into consideration. There are three options for consideration. 1.5.1 Option One. Option One contains many sophisticated management features from database systems, including stock control, supplier and customer information to the complete accounting package. The option includes complete network access either Local Area Networking or Wide Area Networking. For example The Internet. Whilst featuring access limits for security reasons. System upgrades will have to be made on all current computers ensuring system requirements are met and that all systems are year 2000 compliant. Upgrades would include Microsoft Office 97, Email and Internet Software. To follow is a detailed list of features included in this option: General Ledger Setup Accounts and BudgetsCompany DepartmentsJournal EntriesStandard EntriesUpdate LedgerProblem Solver WizardLedger AdjustmentsCash/Asset TransferClose a Fiscal PeriodClose a Fiscal YearBudget AnalysisGeneral JournalBalance SheetIncome StatementChart of AccountsStandard Journal EntriesAccount Opening BalanceBudget Specifications. Accounts Payable Vendor InformationBook Job CostingCustomer InformationJob StandingsBuy Items From InventorySell Items to InventorySell Items InventoryMiscellaneous Job ExpensesJob ClosingsActive Job ListingDetailed Job StandingJob Task ComparisonsEmployee Hours - By JobInventory Control Inventory ItemsInventory AdjustmentsQuick Part LocatorCreate New Work OrderTransfer to General LedgerPrint Work OrdersInventory Retail Worth AnalysisInventory ReportsInventory Single KitsInventory Stock BreakdownInventory Valuation ReportIn Stock Serial Numbers Order Entry Customer InformationCreate New Order or QuoteEdit Existing OrderPackage SlipsBilling WizardsPurge Orders and QuotesFill Back OrdersPrint/Fax/Email OrdersPrint/Fax/Email QuotesPrint/Fax/Email InvoicesBack Ordered Parts ListingOrder History - By ItemOrder History - By Customer Purchasing Create New Purchase OrderEdit Existing Purchase OrderReceive Purchased ItemsPrint Purchase OrdersItems on Order ListingPurchase History - By VendorPurchase History - By Item Security/User Access User Access for: Accounts Payable Accounts Receivable General Ledger Purchase Orders Inventory Control Order Entry Security Utilities Mapping, InternetAdvanced Security for: Local Tables Linked Tables Queries Forms Reports Systems Upgrades Minimum Intel 333MMX ProcessorWindows NT Operating System.Upgrade to Windows 2000. Avail.Internet, Email AccessMicrosoft Office 97.Coral Draw V8 (Graphics Program). Advantages over existing system are enormous. Option One includes a complete system upgrade, Internet Access, complete data and accounting access to all users. Microsoft Office 97, StockControl, Graphics Program and many other features. The only disadvantage of this option is that online orders are not available. This option will help The Kilkenny Bookshop keep more accurate control of Stock, Accounts and improve general office needs. It will improve productivity by allowing by granting access to data by all users. 1.5.2 Option Two. Option Two: The Total Management Solution, is a sophisticated management system. Incorporating a complete online database for all online ordering, online stock control, detailed information and a fully comprehensive accounting package. The option includes complete network access either Local Area Networking or Wide Area Networking (Internet), whilst featuring access limits. Data import and export is available in this option. System upgrades will have to be made on all current computer's ensuring system requirements are meet and that all systems are year 2000 compliant. Upgrades would include Microsoft Office 97 minimum, Email and Internet Software would also be included. To follow is a detailed list of features included in this option: Inventory Control Online stock controlInventory ItemsInventory AdjustmentsQuick Part LocatorCreate New Work OrderTransfer to General LedgerPrint Work OrdersInventory Retail Worth AnalysisInventory ReportsInventory Single KitsInventory Stock BreakdownInventory Valuation ReportIn Stock Serial Numbers Order Entry Online OrderingCustomer InformationCreate New Order or QuoteEdit Existing OrderPackage SlipsBilling WizardsPurge Orders and QuotesFill Back OrdersPrint/Fax/Email OrdersPrint/Fax/Email QuotesPrint/Fax/Email InvoicesBack Ordered Parts ListingOrder History - By ItemOrder History - By Customer Purchasing Online PurchasingCreate New Purchase OrderEdit Existing Purchase OrderReceive Purchased ItemsPrint Purchase OrdersItems on Order ListingPurchase History - By VendorPurchase History - By Item Security/User Access User Access for: Accounts Payable Accounts Receivable General Ledger Purchase Orders Inventory Control Order Entry Security Utilities Mapping, InternetAdvanced Security for: Local Tables Linked Tables Queries Forms Reports Systems Upgrades Minimum Intel 333MMX ProcessorWindows NT Operating System.Upgrade to Windows 2000. Avail.Internet, Email AccessMicrosoft Office 97.Coral Draw V8 (Graphics Program). Advantages over existing system and Option One are enormous. Option Two includes a complete system upgrade whilst ensuring year 2000 compliance, Internet access, a complete online data system, online ordering, available account access for all users. Microsoft Office 97, Stock Control, Graphics Program and many other features. The system upgrade will increase general speed of all computer operations grant full access to all information over the Internet, improve stock control, and improve general office needs. It will improve sales by taking The Kilkenny Bookshop into the Internet age and giving The Kilkenny Bookshop an online presence. 1.5.3 Option Three. Option Three is a basic upgrade system with general office capabilities. System upgrades will be made on all current computer's ensuring systems requirements are meet and that all systems are year 2000 compliant. Upgrades would include Office 97 minimum, Email and Internet Software would also be included. Systems Upgrades Minimum Intel 333MMX ProcessorWindows NT Operating System.Upgrade to Windows 2000. Avail.Internet, Email AccessMicrosoft Office 97.Coral Draw V8 (Graphics Program). Advantages over existing system are enormous. Option Three includes a complete system upgrade, whilst ensuring year 2000 compliance and Internet Access. The system upgrade would improve general speed of operations, software upgrades including Microsoft's Office 97 and Coral Draw V8 for all graphical needs. This option will increase the speed of general computer operations and ensure reliability. The disadvantages of this option:Online orders are not available.No available Data SystemsNo Accounting Systems. 1.6 Recommendations/Justification The following section will provide The Kilkenny Bookshop with a professional recommendation. We will justify our recommendation and give an overall cost analysis on the upgrade. Taken into account are competitive advantages The Kilkenny Bookshop wishes to gain by this upgrade. Taking into consideration the situation analysis given earlier, Brynik Systems recommends Option Two as the preferred system upgrade. The option addresses sales growth, cost reduction, system automation, data access restrictions, manual data entry problems and the every day needs of an office. By providing The Kilkenny Boohshop with an Internet presence increases general market exposure, the more of the market you are exposed to the greater the chance of increased sales. By installing an online data systems increases the access to this data. The staff at the The Kilkenny Bookshop are currently limited to what information they can access, online data would include accounts, stock, and statistics. Option Two includes a complete system upgrade, the cost of the upgrade will be: $1200 per computer. Basic software costs $35,000 (Including rights to software). System adjustments billed at $120 per hour. One Year Limited Support. Limited Training. 1.7 Implementation Plan. Implementation is one of the most important procedures in information system upgrades. This section will describe the issues that affect this procedure, how the implementation plan addresses issues raised in the Situation Analysis and provide an overall summary. The option that has been recommended is a complete technological upgrade. An upgrade of this caliber is quite a long and delicate process. This must be accomplished in steps. The first step would include the upgrade of Computer Systems and Hardware. Once this has been accomplished Step Two would be the import of existing data into the new system. At this stage the Internet Graphical Design Team will be hard at work designing the Kilkenny web presence. Once the Data Import process has been completed and the Web design has been finalised we move onto the Third Step. Step Three will include training and implementation of the new software. 1.7.1 Summary. Take into consideration that the earlier recommendations have been put to the Kilkenny Bookshop for evaluation. All features are fully integrated into one complete management solution. 1.8 Conclusion. The Kilkenny Bookshop has indeed a limit to its growth. The objective of the report was to evaluate The Kilkenny Bookshops competitive situation and recommend a suitable Information System. Brynik Systems has recommended to The Kilkenny Bookshop Option Two: The Total Management Solution. This solution recommends a total systems upgrade of all hardware and software. An accounting package, online data system and online access to all information whilst bundled up in one user friendly software package.