Business Information Systems

Questions (Individual Case Analysis)

1. Describe the main issue in the case. In other words, what is the big problem or challenge that needs to be addressed? Clearly describe why you see this as the main issue. (5 marks)

2. Analyze the qualitative and quantitative data that the case presents. What does the information in the case tell you about the main issue and the effect it is having on the company? Make sure you draw conclusions from your analysis. (5 marks)

3. Identify and describe two distinct alternative solutions to the main issue that your analysis suggests as being relatively likely to successfully resolve the main issue. Consider both the short and long term in formulating your alternatives. (5 marks)

4. What are the key 4-5 decision criteria that should be used to identify the best alternative? Make sure you define and clearly explain why these are the key decision criteria. (5 marks)

5. Recommend one of your alternatives that is the best solution to the main issue and justify your recommendation. Your justification should be based on the key decision criteria, and you must clearly explain why the chosen alternative is better than the other alternative. It is required that you use a weighted decision matrix as part of the recommendation justification. (5 marks)

6. Describe which implementation cutover strategy you would use and why? You must fully justify why this cutover strategy is the best one for the solution you recommended. (5 marks)

The Case

Covisint Technology (CT) is a medium sized manufacturer and supplier of electronic parts for the automotive industry. The founder and majority owner of Covisint Technologies is Mr. Bart Simpson. Over the past 10 years, CT has grown from a small operation in Ottawa, Ontario with less than 10 employees, to their current size of 750 employees located in 8 offices and manufacturing facilities across Canada. Last year, CT revenues were just over $110 million, and with a 15% profit margin the financial situation at CT was currently stable. However, in past years the company had experienced financial difficulties that had resulted in reported losses and some cashflow issues. The market for CT’s products has seen strong past growth, and it is projected that their market will grow by 20% year over year for the next five years. This growth rate is significantly larger than the projected growth rate of the overall economy. While the current Canadian industry only has a handful of players that can be considered direct competitors to CT, Bart is aware that several key international players are planning to enter the Canadian market, both manufacturing and as a supplier of competitive electronic parts. At this time, CT only sells in the Canadian market, but has looked at expanding sales to North America, Europe and Asia. Last year, overall expenditures (i.e., operations, development and support) on Information Systems (IS) / Information Technology (IT) were approximately $12 million.

CT has grown dramatically over the past few years, mostly through mergers and acquisitions. These mergers and acquisitions have helped the company grow, but at the same time have caused tremendous stress and pressure on the systems used at CT. There were now over 70 different operational and analytics systems used at CT, many of which are redundant or are unable to communicate and share data with other systems. These systems include a mix of proprietary, configurable purchased systems, Software as a Service (SaaS) and Commercial Off-the-Shelf (COTS) systems for Transaction Processing, Supply Chain Management, Accounting, Human Resources, Business Intelligence, Purchasing and Financial Planning. Many of these systems run on different hardware and software platforms, and some of the systems are very old (i.e., legacy). This overall situation has caused several issues at CT, including incorrect customer shipments and invoicing, missed payroll, and most recently, the publication of financial statements that later turned out to be incorrect. In addition to these problems, CT has had difficulties in their ability to access quality data to help make decisions.

Short-term thinking was evident in past IS/IT decision making, and Bart was concerned this would continue in the future. Over time, CT had acquired or developed a range of information systems that had been implemented to address specific problems as they arose. At present, the organization was operating and maintaining over 70 separate systems that addressed specific needs across different functional areas. Most of these systems did not interface with the other systems at CT or with their business partners (e.g., suppliers, wholesalers, etc.) Among the systems that had been introduced was one designed to administer employee compensation and benefits. This system had been developed by a small local vendor that had since ceased operations. As a result, human resources staff were regularly required to make “adjustments” to system data to support changes in employment regulations and legislation. Every second week the data from this system was exported to an Excel spreadsheet and sent to an online payroll service provider that was responsible for handling employee salary and benefit payments. Reports were generated by the payroll service provider after employees were paid and these reports were then used to manually update CT’s internal compensation and benefit system. Accounting and manufacturing staff experienced similar frustrations as both departments were using systems that relied on considerable manual data entry. The lack of integration between accounting and supply chain systems was also problematic. For example, although orders were entered into the accounting system (based on Excel spreadsheets that were used to initially record the orders), the details of these orders needed to then be transferred via other Excel spreadsheets to manufacturing staff. Manufacturing would then manually enter this data into the Supply Chain Management system to plan production, acquire necessary raw materials, and ship finished product to CT’s customers. Sales, marketing, purchasing, and accounting staff had only limited insight into raw material orders or the manufacturing process such that an email or text message was often necessary to determine the status of orders and verify the need for payment. In some instances, products had been shipped to customers without invoicing these customers. In other situations, incorrect products were shipped to customers, or even worse, products were not shipped but customers were invoiced. Issues such as this were embarrassing, and they were having negative implications for CT’s operational and financial performance. A recent problem with the compensation and benefit system that delayed payment of employee salaries led Bart to think once again about what to do with CT’s current mix of aging and incompatible systems. The current Chief Information Officer (CIO) was a long-term employee who seemed to be able to keep current systems running but the world, and more importantly technology had changed a great deal in the last ten years. CT’s customers and business partners were now highly connected with mobile technologies having become standard. Customers and business partners had come to expect mobile options and access to real time information concerning things such as order status, accounts payable/receivable, etc. Finally, Bart also had some serious concerns about the financial implications of their IS/IT spending as well as what he considered to be issues across the organization with inefficient business processes. From an IS/IT expenditure standpoint, Bart recently completed some research that indicated on average, companies in his industry had an annual IS/IT budget of approximately 8.2% of revenues. Bart wondered if the issues they were experiencing led them to spending too much on IS/IT, or if the issues were caused by them not spending enough? He also was aware that many of the business processes in place at CT had been developed on an ad- hoc basis as the company grew and may not be the most efficient way of running the business. Could these inefficient business processes be the cause of past and current issues, and what would be the best way to resolve this problem? You have been hired by Bart to advise him on the issues CT is currently experiencing, and what can be done to resolve these issues.