Background
Chocoholic is a well-established small to medium business enterprise (SME) in the Canberra market. The idea is fairly simple – the business replaces fresh flowers in bouquets and gift arrangements with chocolates and beverages (as shown above). They have been in operation for about four years and have recently launched off into franchising operations. This has been very successful with 60 franchises signed up in 6 months to December 2011. The franchises operate in NSW/ACT (20), Queensland (15), Victoria (15), WA (5) and New Zealand (5); and typically cost around $70,000 to establish. Total company turnover is steady at approximately A$8 million per annum. In September 2011, Chocoholic signed an exclusive deal with Myer to supply gift hampers for the Myer online business.
In addition, Chocoholic has just installed three distribution centres in Sydney, Melbourne and Brisbane. They are managed by Toll Logistics and are yet to be fully integrated into the Chocoholic business. When fully operational they should cost around $15,000 per month to operate, but should provide business benefits of twice that amount (approx.. $30,000). The Toll Logistics support agreements will run for five (5) years before being renewed.
About the very innovative owner: Louise Purvis, owner of Chocoholic Pty Limited was a past Australian Capital Territory (ACT) Winner of the 2011 Telstra Business Women’s Awards in both the Yellow Pages ™ Business Owner and Nokia Business Innovation Award categories. You might say that she really knows how to start and run businesses.
Your Report
You are a consultant for ANUCONs, an IT consulting organisation that has been appointed by Louise to provide advice and guidance on the future strategy and operational development/re-development of IT systems at Chocoholic.
You can make the assumption that Chocoholic has a very small IT footprint with a simple Local Area Network (LAN) that connects 20 desktops/users, including email and web server that services the sales and e-Commerce functions of the business. Additionally, Louise has purchased a 1300 number service from Telstra to handle public enquiries and orders.
Areas to look at in the project
Some project areas where you might focus some attention and resources:
• D1 – IT Strategy and Planning. While Louise started small, her business continues to grow. She has some ideas to expand into Singapore and the United Kingdom in the future. Some IT strategy, planning and governance for the future might be considered useful. The idea might be to see what parts of the business have value that is yet to be unlocked using technology;
• D2 – Data Management and Enterprise Systems. With a growing business and new distribution centres coming on line, Louise and her team are now handling more data (eg, chocolate and beverage inputs, pricing, labour rates, sales). This means that the data needs to be managed in some coordinated way (eg, data management systems and software) and systems need to talk to each other (eg, Chocoholic, distribution centre and franchise systems need to communicate and exchange data). Some ideas and solutions to assist Louise with this part of her business might be helpful;
• D3 – E-Business and E-Commerce. Chocoholic operates an e-Commerce system for sales and marketing. Louise also operates a corporate website branding service for her corporate customers (ie, they can display that they offer Chocoholic products on their site). In order to expand her business, Louise might look at larger or more complex systems. Some advice in this area might be useful;
• D4 – Mobile and Wireless Systems. Louise has always been intrigued by the use of mobile and wireless systems for the exchange of information with customers and suppliers. Unfortunately, being more hands-on and ‘old school’, means she has not had a lot of experience with these types of technologies (eg, Apple iPhone). The use of social media – Facebook, Twitter, Zeebox and so on – might be considered as part of the broader management approach for IS/IT at Chocoholic. Some options for how these technologies and systems might be integrated into her business might be useful;
• D5 – Franchise Management. The Chocoholic expansion in this area means that it needs to be able to manage its franchise arrangements. Franchise networks require collaborative working arrangements between several parties, including the Franchisor company, franchisees, suppliers, and customers. There is an estimate that a good Franchise Management System (FMS) may increase Chocoholic net revenues by $100,000 per year (assume the FMS would have a four year operating life and would be replaced in year five). Some advice on the way forward for a consolidated franchise management system may help to get this aspect of the business right; and,
• D6 – Business Security and Continuity. Some of the other things that have escaped Louise’s attention is the need for securing all her business information, and the potential problems that might occur if her facilities were to suffer a catastrophe like the Canberra bushfires. She desperately needs to understand what might happen if her business or systems suffered a major failure. Some timely advice may just jolt her into taking some long needed action.
Your Task
You are to provide a consultancy project report for Louise and her team of employees on the possible benefits and disadvantages or difficulties for managing the transformation of her business information systems, noting that small to medium size enterprise resources are often limited (ie, the project may have several phases and take say two years to complete). In this respect you could assume that the total project budget would be approximately A$300,000. At a minimum, your report should contain:
• An IT strategic plan for Chocoholic (Item D1 noted above);
• An outline of what each of the five system developments/re-developments (eg, Items D2-D6 as noted above) would entail (remembering that your audience is a small business owner and her employees who are not necessarily familiar with what IT is about);
• A discussion of the leadership challenges that would need to be faced, the risks and returns from undertaking the system development work, the system development approach and change management plan, given its current situation.
• Your precise recommendations as to why and how to proceed; and
• Any other relevant analyses or points that may arise, such as (for example, but not necessarily only) whether similar IT approaches may work in other less or more sophisticated businesses.
Report Structure
You should:
•Provide a title page and table of contents;
•Organize the contents of your assessment into appropriate sections, with appropriate headings. It should not be simply one long essay;
•Include a list of quality references that you have used, and cite them in the text;
•Word Limits (expected): MINIMUM: 5,100 words. MAXIMUM: 6,000 words, not including the Appendices;
•Use DOUBLE SPACED PARAGRAPHS throughout the assessment;
•Use Times New Roman 12 fonts in your assessment only.
•Use diagrams, figures and photographs to illustrate your advice and recommendations where appropriate. Use appendices where you feel it is appropriate (eg. for some analyses).
•If you do not have enough information on which to base your arguments, given the background presented above, make any plausible assumptions you need (making it clear what you have assumed for the purposes of your argument).
