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ISM Draft Plan for Acme Mexico City
Allan Henry Andrew Mitchell
Charles Manu Darnell Carter Donna Bush
Isaac Robert Brooks II Jerry Aziaka
Marcus Fleming Oluyomi .O. Alabi
Patrick Simon Paul Mathew Peter Heliotis
Sandra Minion Stacy Craig
Tia B. Coachman Vincenzo Fragomeni
AMBA 640 Section 9047 Professor Dr. Peggy Lee
March 7th, 2010
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TABLE OF CONTENTS
EXECUTIVE SUMMARY .................................................................................................................... 21. INTRODUCTION............................................................................................................................... 42.ACME’SINFORMATIONSYSTEMSMANAGEMENT................................................................... 42.1ISMSTAKEHOLDERS......................................................................................................................................... 62.2INFORMATIONREQUIREMENTSFORSTAKEHOLDER .................................................................................. 72.3CULTURALDIFFERENCESDEFINED................................................................................................................ 72.4ISMTRAINING ................................................................................................................................................... 92.5ISMBUDGET ....................................................................................................................................................10
3.PROFITCENTERS.............................................................................................................................113.1GENERALINFORMATIONSYSTEMS...............................................................................................................123.2DEPARTMENTALINFORMATIONSYSTEMS..................................................................................................133.3BUDGET .............................................................................................................................................................16
4.COSTCENTERS .................................................................................................................................164.1HUMANRESOURCES........................................................................................................................................174.2PAYROLL............................................................................................................................................................184.3IMPLEMENTATION...........................................................................................................................................184.4BUDGET .............................................................................................................................................................19
5.INFORMATIONSYSTEMSMANAGEMENTTRAININGANDSECURITY.............................195.1TRAINING ..........................................................................................................................................................205.2SECURITY...........................................................................................................................................................21
6.EQUIPMENT.......................................................................................................................................216.1HARDWARE.......................................................................................................................................................226.2SOFTWARE ........................................................................................................................................................246.3NETWORKS .......................................................................................................................................................256.4INTERFACES ......................................................................................................................................................266.5BUDGET .............................................................................................................................................................26
7.STRATEGICADVANTAGE ..............................................................................................................277.1AMC’SSTRATEGICADVANTAGE...................................................................................................................297.2FUTUREIMPROVEMENTSFORAMC ............................................................................................................30
REFERENCES..........................................................................................................................................34
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EXECUTIVE SUMMARY Acme Home Improvements has branched operation into Mexico City and will
need to leverage ISM to be effective in its pursuit of long-term and international growth.
The importance of ISM is the ability to store and retrieve information, secure personal
information and private data, increase portability of information through wireless devices,
and provide stakeholders the information that will make them educated and aware of
issues or knowledge that will help the overall success of the organization. Social and
cultural differences will need to be addressed when implementing ISM, from contracting
with local suppliers to acknowledging Mexican values. The CIO of Acme Home
Improvements will need to meet the needs of all shareholders through understanding
requests, and determining the appropriate means of providing solutions for those
requests. Costs centers such as Human Resources, Marketing, and Facilities use different
information to perform daily operations. While these cost centers will need security to
ensure vital information is not stolen, ISM will need to address how to interface these
systems with each other. Profit centers also need to address how information will be
stored, retrieved, and sent to suppliers and its corporate (home) office. Inventory tracking
and ordering uses ISM to allow sales floor employees to track inventory and reorder
based on sales trends or low inventory. Marketing can also use sales information to
predict future opportunities and will need to have access to that information.
When the departments needs are addressed the equipment for servers, terminals,
and all components needed to construct the infrastructure to handle the traffic, security,
and speed of transactions. Acme will use file servers, routers, and terminals located in
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the back of the store, and will be in a temperature controlled room safeguarded from
potential leaks and power outages. Backups will be taken nightly and stored at an offsite
location in the event of power or system failures. Choosing software and an operating
system will handle potential viruses and attacks while integrating with suppliers
information systems. In house programming will address customizations that are unique
to the organization. Acme will use a LAN or local area network to share information
across a series of computers. This will provide for real time transactional data and access
to documents on the file servers. The overall budget will include the equipment, training,
and support including upgrades and maintenance, and contractual service support. The
estimated budget for Acme Home Improvements will be approximately 2,933,075 MXN.
Fluctuations include the exchange rates between the Mexican peso with the US dollar.
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1. INTRODUCTION
With the expansion of Acme Home Improvements into Mexico City and phase 1
of constructing the foundation under way, it is important to define the roles ISM will
have in the success of the company. ISM will support the goals and mission of Acme by
providing support, ways to access data, secure information, allow departments to use
information to improve operations, justify changes and allow management to see trends
and make decisions on those trends. ISM will support cost centers such as marketing to
track advertising and its effectiveness, while also supporting profit centers such as sales
with fast processing of purchasing data and restocking inventory through wireless
handheld scanners. It will be crucial to have an ISM presence that will increase
processing speeds, store large volumes of data, and provide statistical representations that
will allow acme to adapt to our dynamic environment, and forecast weakness areas that
would not allow Acme to optimize its sales and goals.
2.ACME’sInformationSystemsManagement
What constitutes an ISM team? An ISM team can vary depending on the size and
configuration of an organization. For a large organization such as Acme with locations
around the world, the ISM team is generally led by the Chief Information Officer, Chief
Technology Officer, Chief Security Officer, and a Chief Privacy Officer. These
executive level positions tend to reside at the corporate headquarters location. Typically,
each location has an ISM Manager. ISM at Acme Headquarters and Mexico City will be
organized according to the organizational structure pictured in Figure 1.
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Figure 1: Acme de Mexico ISM Organizational Chart
Skill set inconsistencies among IS staff is an area of concern for ISM. Lack of
technical skills and experience with large scale projects can negatively impact the level of
collaboration between regions and headquarters. Such inconsistencies can also prevent
the use of a parallel development approach to ISM. In addition, lack of knowledge by
headquarters of individual location business practices and culture can provide a hindrance
to the success of organizational expansion from an ISM perspective. According to
Akmanligil & Palvia (2004), some companies address this problem with a strategy that
attempts to gather representatives from different locations, organize and document their
local requirements, and then join everyone together at a central location to work at
conflict resolution which leads to definition of a common structure (pg. 47).
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IT personnel must be technically qualified to work with computer hardware,
software, and information systems. Employees are either hired with these skills or must
be trained to perform effectively with existing systems. Skilled IT personnel are critical
at the local level in order to obtain the knowledge needed to construct the various
subsystems which are then connected through bridges or integrated to the larger corporate
system. When called upon to complete such a task, a design team is formed consisting of
system and user personnel from multiple sites. Team members gather at a designated
location for months to work on the system design. Such interactive participation by all
parties not only creates a design that meets the requirements of all regions, but also
increases the likelihood of the software being accept from both a functional and standards
perspective. However, the cost of this strategy is reported to be high. Furthermore, the
team composition is very important to the success of the project (Akmanligil & Palvia,
2004). The overall goal of ISM is to provide the organization with the ability to deliver
information in a variety of ways to a variety of users at all levels.
2.1ISMStakeholders
The stakeholders for the ISM group are located throughout the organization. The
Merriam-Webster online dictionary defines a stakeholder as one who is involved in or
affected by a course of action (Merriam-Webster, 2010). This definition means that the
stakeholders for ISM at Acme Mexico include: the employee working the cash register,
the employee cataloguing inventory, the employee working on the loss prevention team
and monitoring the surveillance cameras and the manager sending out an email to
corporate headquarters. In addition to these ISM stakeholders, Baltzan and Phillips
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(2009) indicate that the list also includes customer service, Finance, Sales and Marketing,
IT Operations, Operations Management, HR and Security (pg.8). Each stakeholder has
its own use for the data with some data being used by more than one stakeholder.
2.2InformationRequirementsforStakeholder
Often shareholders require information, hardware or software that is commonly
used across functional areas. For example, most, if not all companies require access to
and use of Microsoft’s operating system with the Office software package that includes
Work, Excel, Power Point and Outlook. In addition, telephones, fax machines, and
copiers are common to cross functional areas and must be easily accessible. However,
there are some specific requirements that are intended for specific departmental use. For
example, the finance department needs to have access to financial software such as
QuickBooks or Quicken. Sales and Marketing requires a Customer Relationship
Management (CRM) tool such as Netsuite. Operations require a mechanism to capture
product inventory, as well as a method to track employee hours. SAP would be a good
option for handling both of these tasks. Rather than turn to an additional software to
meet HR requirements, SAP could be utilized for this function since it is fully adaptable
for this function.
2.3CulturalDifferencesDefined
In every orderly society, there are certain behavioral patterns controlled by
different standards of values, that essentially establish the rules and regulations that
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govern the manner in which individuals react and behave in society. The complexities of
human societies are characterized by patterns of relationships between individuals and
their cultural values. There also exist similar patterns of relationships and agreements
between organizations that sometimes deviate from the orderly method of management
desired by a society. In today’s society of inevitable social relationships and the
sustainability of global organizations in dynamic economies, the actions of some
individuals in a society offers various forms of management adaptation challenges that
require a clear thought process in order to make the appropriate management decisions to
address systemic issues of an organization. The growth of most organizations relatively
depend on how effective their management focuses on cross-cultural values of various
societies where the organization conducts business and how well the management can
adapt to different societal cultural values. According to Fred Walumbwa’s (2007) article
on cross-culture investigation, we expect individual differences to play a critical role in
the way individuals respond to different leadership styles whiles the implicit leadership
theory suggests that perceptions of leadership are based on hierarchically organized
cognitive prototypes that help individuals interpret leadership styles that are compatible
with their own cultural values or orientations (Lord, Foti, & De Vader, 1984).
According Geert Hofstede, management is essentially the process of coordinating
the efforts of people such as subordinates, clients, customers, suppliers, authorities and
the general public towards a common set goal of an organization (Hofstede, 2007).
However, it is highly imperative to take into consideration the complexity of individuals
and applying the appropriate management practices in achieving these goals. He further
elaborates on culture as the collective programming of the mind, which distinguishes
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members of a certain group of people from another group, based on a set of shared
attitudes, goals, values, practices and work ethics (Hofstede, 2007). In the determination
of the appropriate management technique to apply, it is important to carefully evaluate
the cultural dimensions or orientation of the individuals involved in the task being
implemented and the overall cultural orientation of the society. The most important
cultural dimension that serves as the core element in determining an individual’s
preference of certain states of affairs over another is the cultural values. Management in
essence, is subject to the cultural values shared by individuals in society. According to
Lord, Foti & De Vader (1984), individuals in society process information and respond to
certain types of management styles similar to their prototype of effective management,
therefore responds positively and in a more accepting manner (Lord, Foti, & De Vader,
1984).
2.4ISMTraining
In today's global context, organizations today have expanded beyond local shores
to increase organizational success. With global partnerships and expansion, locally and
internationally, workplace diversity seems to be a pivotal management factor for most
organizations. Thus, it is imperative for organizations to implement and develop its
organizational strategies while also increasing its workforce participation rates for the
diverse groups of individuals and cultures within an organization. The organizational
strategies are immensely influenced by the type of information technology culture
adopted, which consequently affects the ability of the organization to compete in the
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global market. An overview of the extent of training required will an extensive training
program on how to maintain an information-functional culture that encompasses quickly
marketing the products and creating a view of its entire business from sales to billing.
In this dynamic economy where emphasis is placed on strategic business operations,
training and developmental programs are critical to the performance of the organization.
The structure of the training is mostly technical with emphasis on proficiency in using the
available information systems resources to collect data and transform into valuable
information that the organization can use in making strategic decisions. This however
limits the extent to which our training and developmental programs fosters diversity.
Most manufacturing organizations focus on mostly on the technical aptitude and skills of
an employer, rather than interpersonal relationship building and management styles.
2.5ISMBudget
Acme de Mexico ISM Budget Budget Category Amount Salaries & Benefits $ 640 Data Center $ 569 Security $ 161 Wide Area Network & Local Area Network $ 172 End User Support $ 337 Other $ 117 Special Projects $ 196 Total $2,192
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3.ProfitCenters
A profit center is a business unit or department that is treated as a separate entity
enabling revenues and expenses to be determined so that profitability can be calculated.
Profit center management is equivalent to running an independent business within a
larger organization because the duties of a profit center manager is to drive up sales
generating activities in order to increase cash inflows and at the same time reduce cost
generating activities so as to reduce cash outflows.
Product Groups in Profit Centers
The ACME Mexico City store has been divided into five major product groups
for accounting and customer service purposes. The product groups are:
1) Plumbing and Electrical supplies
2) Building materials
3) Hardware and Tools
4) Seasonal and Garden/Yard items
5) Paint, Flooring and wall coverings
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Each of these product groups is headed by a manager who reports directly to the
overall store manager. One of the reasons why the store is divided into five different
departments or product group is to make it easier for customers to find products. The
other reason is to make it possible for the company to track how profitable each product
line is.
3.1GeneralInformationSystems
The store shall employ a single login system for all employees. Every employee
shall have one user name and one password to login into the company’s intranet. Once
login has been successful the employee will automatically have access to only their own
outlook email, e-learning class, personal information, online pay check and other
information that are personal to them. They will also have access to the store’s POS
software/application.
There shall be a minimum of 2 non - cash registers in each department for
associates to issue invoices to customers after they have selected the items they want to
buy. There will be 10 cash registers located near the entrance of the store where
customers can pay for the items they picked. Once customers pass the cash register after
payment they will not be able to go back into the store again unless they take the exit
door and come in through the main entrance again. The cashiers shall be assigned a
specific terminal with a cash register.
The purpose of single sign in is to enable management track the performance of
each associate so that evaluation of performance can be done. It also helps track were
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each associate is going on the company’s intranet. Various levels of restrictions can be
put in place depending on the position of the owner of the user name and password.
Associates login shall give them access to the entire company’s inventory so that they can
order and ship items that are not available in the store to the customer’s address.
Every employee shall be issued an identification card with bar code that can be
scan by the cash register to sign into the ACME software to be able to access the data
base. While accessing the software the employees can accept money for the items being
sold and access to the data base to check inventory.
3.2DepartmentalInformationSystems
Each section will ensure they have the following items:
1. All departments
a. A station with two cash registers and 2 drawers per register. This ensures that
two employees can use the same cash register without mixing their change
funds and sales together.
b. One credit card machine per cash register with Internet and phone access.
Electronic credit card machines use the Internet as the main source to gain the
information if a card is good or bad. The phone lines are used as a back-up
system if the Internet should go down. This ensures there are two ways to gain
the customer’s credit information is good and very rarely does the system goes
down.
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c. One phone with two lines per station. On line is for the store internal phone
systems. Cashers are able to contact management or other departments if
needing assistance. The second line is able to call outside the store to inform
customers of orders that arrived or that customers can call that department for
any type of information
d. Microphone that is connected to the store intercom system to inform
customers of sales or information. Also the system can be used to inform
customers of lost children or any emergency situation.
e. Two computers per station for multiuse function. They can be used to access
inventory to see if items are stocked, empty, or have been ordered. They
would also be able to show when the item will arrive. Staff can use computers
to perform special orders for customers or to order large quantity of items.
2. Flooring, wall and covering specific items
a. Two floor computers accessible by customers that can be used for home
decorating software loaded with all the store paints, wallpaper and flooring
designs. Customers can bring a picture that can be scanned or bring a flash
card, disk, or portable drive show what their house will look like with
different colors before they buy the products. This ensures that fewer items
are return for not matching the customer’s designs. These computers will be
stand alone computers not connected to any system for security reasons.
3. Gardening and yard items specific items
a. Two floor computers accessible by customers with all the information of all
the plants, grass and flowers sold by the store. Customers can look at when the
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best season to plants is and what type of soil is best for the plants. The data
base will have tips on the best ways to use all the yard equipment.
4. Seasonal department – is special in that there is no designated section where it can
be and will use portable devices. Items sold will be to sell seasonal items that
customers don’t buy all the time and only during those special dates.
a. One portable station with one cash register and 2 drawers. This ensures that
two employees can use the same cash register without mixing their change
funds and sales together.
b. One credit card machine for cash register with Internet and phone access.
Electronic credit card machines use the Internet as the main source to gain the
information if a card is good or bad. The phone lines are used as a back-up
system if the Internet should go down. This ensures there are two ways to
verify if the customer’s credit information is good and creates a slim chance
for the entire system to fail.
c. One phone only connected to the store internal phone system and can’t
connect outside the store. These areas will not have special orders so there is
no need for it to be able to connect outside the store.
5. Plumbing and Electrical/Building/Hardware and Tools
a. Two floor computers accessible by customers with all the information of
all the plumbing and electrical supplies, hardware, and tools sold by the
store. Customers can look at what the different options are for the
hardware and what each tool is used for. They will also be able to get
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quick in-store tutorials on plumbing and electrical work with tips on what
things they will need to purchase.
3.3Budget
a. Each credit card phone line will cost $30.00 (384MXN) a month. It will be
used for one purpose only and will use a local number or toll free number.
$30.00 x 5 = $150.00 (1,919MXN)
b. Internet access for the credit card system will cost $40.00 (512MXN) a month,
per machine. $40.00 x 5 = $200.00 (2,559MXN)
c. An outside phone line will cost $50 (640MXN) a month for local and long
distance calls. The calls to be made will be in Mexico City and the
surrounding areas. $50 x 2 = $100 (1,280MXN)
d. Electric bill for IT related expenses-- These devices will need to be on for at
least 12 hours a day in each department. In the off season, the seasonal
department will not be selling items and therefore the cost will be half the
price. $200 for yard & decorating department and $100 for seasonal
department. $300 (3,839MXN) per month.
e. The total for the above expenses adds up to $750.00 dollars a month
(9,597MXN) or $9,000 (115,164MXN) annually.
4.CostCenters
Cost Centers that are essential to Acme’s business but that do not account for any
profit are the Human Resources department and the Payroll department. Finance and
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Marketing Information Systems will be handled at the corporate level. The data and
capabilities needed for the information systems are described below.
4.1HumanResources
Human Resources will need an information system that houses all employee
information including that of the management, the sales force, the cashiers, and the
customer service employees. It needs to be a database with search and sort capabilities. It
also needs to allow for analysis of the data. Data that the Human Resource Information
System should include is:
• Time Management - Attendance, vacation time, schedule, sick time
• Personal Information – Full name, address, contact information, social security
number
• Benefits – enrollment, status changes
• Training – online classes, tracking of training received, score received
In addition, the information system should contain company guidelines, employee
safety handbook, and an applicant database with resumes and interview information. The
system should be accessible not only to HR employees but also to the staff. This would
allow each individual employee to go online and update their personal history, sign up for
benefits, and input their time to name a few applications.
A performance review system would also be a useful tool within the HRIS. It should
allow for objectives and reviews to be inputted for each individual employee by the
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supervisor. The employee should have access to be able to see their objectives and review
so that they can be discussed with their supervisor.
4.2Payroll
The payroll department is a subset of HR and will therefore have its own set of
requirements. The data can be housed in the same database as the HR Information
System but will only be accessible to payroll employees and individual employees to see
their own information. The payroll system will need to include salary, position, raises,
bonuses, incentives, and an employee’s history related to those areas. Each employee
should have access to an employee self serve website that shows their paychecks, and
allows them to update their direct deposit and tax withholding information.
4.3Implementation
When implementing the HR and Payroll Information Systems, Acme needs to
remember that the culture in Mexico is much more social than in the United States. Elvira
and Davila explain that it is “important to consider the extent to which family and
friends’ networks, and, within firms, vertical networks between managers and
subordinates will impact the applicability of this e-HRM practice” (as cited in Olivas-
Lujan, Ramirez, & Zapata-Cantu, 2007, p. 418). Acme will need to work with the
employees to change their mindset so that they will feel comfortable using technology for
HR and Payroll functions instead of dealing with real people.
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4.4Budget
The initial cost for the HR and Payroll system will be between $20,000 and
$40,000, or between 254,717 MXN and 509,434 MXN. There will be an annual
maintenance cost of $5,000 or 63,679 MXN which will cover changes and updates such
as updating the employee database for new employees, changes employees’ personal
information, and updating salary data. It will also cover any assistance that the HR and
Payroll personnel may need.
5.InformationSystemsManagementTrainingandSecurity
With ACME Mexico City implementing a robust Information Systems
Management in order to effectively and efficiently manage the flow of information
between operations and sales, the company will need to implement training and security
measures in order to ensure an uncompromised system where users are safe with
information at all times. The company will be implementing an ISM for the store to
include hardware, software, processing/procedures and staffing recommendations. With
this system successfully in place, ACME Mexico City will be able to collect, process, and
report data throughout the organizations in support of a credible and reliable flow of
information. The ACME IT staff will be responsible for oversight of training, security,
and generic support of the ISM system. Emphasis will be placed on personnel
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confidentiality so as to prevent security breaches and comply with U.S. and Mexican ISM
policies.
5.1Training
The ACME IT staff will ensure that all personnel who will have access to ISM
systems acquire and maintain certain training requirements each year. This training will
be a two-day course taught by the ISM manager that teaches employees the nuances of
using systems to collect, process, and report on data. This training will be done in a
hands-on environment where personnel are provided computers in the class and perform
functions as they are taught. This will give instructors an immediate gauge on who needs
additional training at the end of sessions. Employees will be taught how to run queries,
develop graphs, interpret data, and present information from ISM to senior management.
The plan of the ACME IT staff is to eventually produce this training course via
the web. The training will be an annual requirement where personnel will be required to
take the course every year and present evidence to their respective managers. Requiring
the training annually will ensure that personnel do not become complacent in the
utilization of the ISM in merging operations and sales at ACME.
There shall also be an e-learning class on the company’s intranet that will provide
training and product information to associates for every new product introduced so that
they can explain the products to customers better during the sale process. Every employee
will be required to pass the knowledge test at end of the online training. This type of
training will be as often as there are new products introduced.
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5.2Security
Maintaining a secure ISM system where personnel data and information are safe
will also be the responsibility of the ACME IT staff. This will be done in several ways.
User name and password requirements will be stringent to avoid possible hacking. Also
users will be required to change their passwords every 90 days. Passwords developed by
users will not contain any form of identifying combinations associated with the user.
ACME will also in the future develop a web-based training on maintaining the
integrity of the ISM for personnel. Personnel will then be required to take the training
annually to learn about different scenarios under which to prevent security failures.
Maintaining the security of the system will also be to the benefit of ACME customers, as
some ISM systems will contain customer data.
ACME IT policy will establish appropriate measures to be taken in cases of
security breaches both internally and externally. The company will not take lightly those
who advertently seek to obtain company ISM data through illicit means. The company
will appropriately care for those people so as to ensure that others are discouraged from
doing so. Overall the company anticipates maintaining a highly secure ISM due to
measures to be put in place and training required for personnel.
6.Equipment
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Critical to the opening of AMC is the planning of the equipment (hardware,
software and networks) to be installed. Keeping track of inventory, selling inventory,
managing employees and overseeing an entire operation without the use of computer
hardware, software and networks would be virtually impossible in this day and age.
AMC would not be able to keep up with the competition and would fail before it got
started. Computer hardware and software is what helps a large enterprise to run
efficiently.
6.1Hardware
The following are hardware recommendations for AMC:
File Server - A file server is a computer attached to a network whose main function is to
provide a location for shared storage of computer files that can be accessed by the
workstations that are attached to the computer network.
Workstations – User computers connected to a network are called workstations.
Network Interface Cards (NIC) – provides the physical or wireless connection between
the network and the computer workstations. The network interface cards help in
determining the speed and performance of the network.
Routers – A router joins multiple wired or wireless networks together, translating
information from one network to another.
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Firewalls - a technological barrier designed to prevent unauthorized or unwanted
communications between sections of a computer network. This can be a physical device
or a software application.
Tape Back-up System – A tape back-up is needed to back up large amounts of storage for
archiving and disaster recovery purposes. A tape back-up will periodically copy the
contents of all or a designated amount of data from its usual storage device to a tape
cartridge device. A tape back-up can be done manually, with appropriate software or can
be programmed to take place automatically.
Standard Printers – laser or inkjet printer for all printing needs in the store. The laser
printers are faster and produce a better quality output. Toner cartridges can be expensive
but go further in between replacements. Inkjet printers are slow and the ink cartridges do
not last nearly as long as a toner cartridge. Quality is good but not better than the laser.
For a busy home improvement store, I would recommend the laser printer especially in
areas servicing customers.
Barcode Scanners – scanners that are either hand-held or stationary is an input device
used to capture and read information in a barcode. The barcode scanners consist of the
scanner, a decoder and a cable that connects to the computer. Most if not all inventory
items will be coded with a barcode so the AMC will need scanners at every workstation
in order to efficiently assist customers.
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Cash Registers, Cash Drawers and Receipt Printers – cash registers for calculating and
recording sales transactions, cash drawers for storing cash and receipt printers for
printing receipts will be needed at each work station where customer purchases will be
wrung up. Registers can also be PC based and networkable saving money where both a
PC and a register are needed.
6.2Software
Once all the hardware needs have been identified and set-up, software needs to be
installed to complete the package. When considering the software needs of AMC we
need to keep in mind that this store will not only be servicing customers who are
purchasing products but that this store is also a place of employment for employees. That
being said, AMC will need human resource management software. Software that will
prepare and keep track of timesheets, assist with benefit administration, performance
management and payroll.
Software will also be needed for inventory control, point of sale and accounting.
These software packages will keep AMC posted with the most recent transactions
anywhere on the network. The accounting software will assist with accounts receivable,
accounts payable and tax reporting. Inventory control software will assist with
stock/inventory control, vendor management, and order and customer management. An
SQL Database is designed for managing data in relational database management systems
(RDBMS) and could be used for tracking inventory, orders, customer accounts, etc.
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Point of sale software will assist with bar codes and label printing and sales event
management.
6.3Networks
There are several different types of networks that AMC could incorporate into
their information systems management (ISM) plan. In order to select the most appropriate
type, ISM professionals should have a working knowledge and a thorough understanding
of each. A network consists of multiple computers and devices interconnected via
communications mediums. A network’s functional purpose is to facilitate
communications tools for a user community and it also allows users to share resources.
The most popular types of computer networks include the local area network (LAN), the
metropolitan area network (MAN), the wide area network (WAN), and a storage area
network (SAN). A local area network is generally your smallest network. It can span a
home, an office or an entire building. One building may have multiple LANs inside. A
metropolitan area network is a network that connects multiple LANs across a
geographical distance, typically a city. A wide area network differs from a metropolitan
area network in that it can connect networks over a very large geographical area to
include cities, states or even countries. A storage area network is a network that houses
large amounts of data and connects that data to servers. Less popular networks, but still
ones that may be applicable to AMC’s ISM needs include wireless local area networks
(WLAN) and campus area networks (CAN). A wireless local area network is a local area
network facilitated over wireless means. A campus area network is one that’s smaller
than a MAN but connects multiple LANs over an area that’s includes multiple buildings.
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An example of a campus area network is a network found on at a university or any local
business site.
The networks AMC will need are local area networks, campus area networks, and
wide area networks. The local area networks will be necessary for users to access
communications resources and to service customers. Incorporating a campus area
network will allow the entire AMC site to be interconnected, allowing users to maximize
resource accessibility and communications capability. The wide area network will allow
ACME headquarters and if necessary, other ACME locations to connect to AMC. This is
ideal for polling and inventory purposes.
6.4Interfaces
An interface, as it applies to AMC and its ISM strategy refers to the capability of
AMC to integrate its inventory systems with that of its suppliers to be able to alert
suppliers to inventory levels in real time. This information will allow for the prompt
delivery of goods and the adequate meeting of supply and demand. Some interfaces
employ radio frequency identification (RFID) technology that identifies and tracks
products using tags or labels. Both AMCE Mexico City and its suppliers will get valuable
information regarding stock levels that will allow for an efficient and effective inventory
strategy.
6.5Budget
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The total budget for this equipment will be approximately $230,000 US
(2,933,075 MXN), the majority of which is attributed to the point of sale (POS) systems.
The cost for the (POS) systems will be $15,000 US (191,287 MXN) per register for a
total cost of $180,000 US (2,295,450 MXN), assuming 12 registers (“How Much”, 2006).
It is imperative that AMC chooses its POS vendor carefully. Although other, less
expensive POS systems are available, this particular system includes the workstations,
software (including HR management software), routers, firewalls, printers, barcode
scanners, cash registers, cash drawers and receipt printers. This vendor will also provide
ongoing technical support (24 hours a day, 7 days a week), training for the staff, and data
backup. Moreover, it will ensure that one of the POS stations will act as a temporary
server so the POS systems have the ability to still function if the main server goes down
(McCarthy, n.d.). The cost of the main server has been budgeted at $50,000 US (637,625
MXN) (“Benchmarking Costs”, 2007).
7.StrategicAdvantage
Strategic advantage, also known as competitive advantage, is defined as “when a
firm sustains profits that exceed the average for its industry” (QuickMBA, 2007). This
definition means a strategic advantage is some advantage a firm has over its competitors
within the same industry. A strategic advanatage is something every company strives for,
as it will increase the company’s status in its respective industry.
Strategic (or, competitive) advantage can also be defined as “a product or service
that an organization’s customers place a greater value on than similar offerings from a
Acme’s ISM Plan
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competitor,” (Baltzan & Phillips, 2009). This definition means the advantage is any one
thing that the organization offers along with its product or service that no other
competitor does or can.
A strategic advantage is very important for a company to have. It separates them
from other companies in the same industry. The strive for market share, increased
profits, and customer loyalty forces organizations into a battle of strategy in order for
them to gain the advantage over others. Because these advantages are usually temporary,
it is very hard for one competitor to keep the majority of market share within an industry,
(Baltzan & Phillips, 2009). Strategic advantages are usually identified by competitors
who reverse engineer these advantages in order to keep up with technology and increase
profits.
There are several different strategic advantages a company can possess. First
mover advantage, cost advantage, and differentiation advantage are just a few types.
First mover advantage happens when a company comes up with a new technology,
service, or product and markets this new advantage first, (Baltzan & Phillips 2009). Cost
advantage occurs when a company can provide consumers with the same product or
service, but at a lower cost to the company. Differentiation advantage occurs when a
company can provide a product or service that exceeds the expectations of the consumer
and exceeds the benfits of existing products, (QuickMBA, 2007).
Having a strategic advantage has proven to benefit all companies in all industries.
By increasing profits, lowering costs, and increasing customer loyalty, and organization
can position itself higher in their repsective industry and increase market share. Both of
these areas help companies grow and push out competition.
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7.1AMC’sStrategicAdvantage
AMC will be able to use the strategic advantage gained from robust information
systems technology. AMC will order inventory based on customer’s demands.
Replenishment cycles will be set to optimize profits and reduce excess inventory on hand.
The reduction of excess inventory is one aspect of the use of a strategic advantage gained
by robust ISM. Additionally, AMC will negotiate vendor discounts for rapid moving
items and increase profitability.
AMC will use business intelligence and environmental scanning to strategically
place and market products. As noted by Baltzan and Phillips (2009), environmental
scanning and business intelligence are needed by organizations to keep their strategic
advantage (p. 25). The use of ISM technology will help analyze data gathered from
internal and external data sources. This data will be used to place products within the
store as well as to price the products to ensure optimal sales. Sales profit margins will
also be used to determine what product lines need to be eliminated from AMC.
Additionally, information gathered from competitors will help AMC order popular
product lines to ensure we meet customer demands.
ISM will also give AMC the ability to optimize employee schedules to meet the
needs of customers. Analysis of data gained through sales records will give AMC the
ability to forecast when customers will be in the store and what areas will need more
coverage at peak times. This will help optimize employee schedules to meet customers’
needs and give AMC a strategic advantage on customer service. Further, this will help to
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reduce payroll expenditures by reducing the number of employees at the store during off
peak hours.
7.2FutureImprovementsforAMC
Acme’s information systems management plan is developed with the purpose of
helping them gain a strategic advantage over their competitors. This plan focuses on the
use of business intelligence and environmental scanning to strategically place and market
products (Balzan and Phillips, 2009). While the plan is well composed, a focus remains
to increase functionality and efficiency, which is made possible by future improvements
to the current system.
One future improvement to the current plan is the implementation of a self-
assessment tool. This self-assessment tool will help assess the viability of the current
system by analyzing 4 core competencies. The competencies being analyzed by the self-
assessment tool will consist of the following:
1. Communication:
• Public relations
• Communication of the organizational, mission, vision, objectives
and priorities
• Ability to provide and receive constructive feedback
• Team building techniques
• Facilitation of group dynamics
2. Leadership:
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• Situational application of leadership theories
• Encouragement of decision-making
• An organizational climate that encourages teamwork
• Ability to encourage a high level of commitment to the purpose
and values of the organization
• Promote and manage change
• Anticipation and strategies for overcoming obstacles
3. Professionalism:
• Strong ethical foundation
• Consequences for unethical actions
• Professional development
4. Business skills
• Ability to analyze and evaluate information to support decisions
• Integration of information through all levels of the organization
• Identification of alternate solutions to problems experienced
(Competency assessment tool, 2010).
Acme’s implementation of the self-assessment tool will focus on the analysis of
the above 4 competencies. By doing so, they will be able to address issues they are
facing and make important improvements to the functionality of the current system.
Another future improvement to Acme’s ISM plan involves the multitude of data
necessary to keep the company running. This data includes the following:
• Human resources data involving all employee information,
including that of the management, the sales force, the cashiers, and
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the customer service employees. This data will also contain
company guidelines, an employee safety handbook, and an
applicant database with resumes and interview information.
• Payroll data that includes salary, position, raises, bonuses,
incentives, and an employee’s history related to those areas.
This data will be implemented through the use of a file server attached to a
network whose main function is to provide a location for shared storage of computer files
that can be accessed by the workstations that are attached to the computer network.
Given the importance of managing this important data, the ISM application will greatly
benefit from the implementation of sampled data compression. According to Wegener,
most organizations are unaware of the benefits of real time compression for their
multitude of data, which will drastically reduce their bandwidth and storage bottlenecks
of their network (2009). With an important goal of the current ISM plan being to allow
multiple workstations to access company data/information via a file server, they run a
major risk of lagging system performance due to the storage capacity needed for this
enormous amount of data on the file server. Modern real-time compression technology
allows for data compression ratios as high as 30:1, without sacrificing any of the data
itself (Wegener, 2009). This information alone is enough justification for the
implementation of this technological improvement to the current ISM application.
8. CONCLUSION
ISM has a vital role in the survival of organizations today from addressing the
needs of their internal business functions to exploring ways to ensure customer
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33
satisfaction. Acme will use ISM to make more informed decisions by collecting
information and analyzing historical trends with the present time needs. Understanding
the information that ISM will provide will allow Acme to consider alternative suppliers,
changes to procedures, and allow management to optimize the organizations profit. With
the appropriate hardware and software in place, ISM will allow Acme to interface with
third parties, and support customer demand. Networks will allow faster processing and
provide employees with information that will allow them to be more productive. Lastly,
Acme will analyze the culture and its surrounding environment, economic influences, and
political climates that provide more qualitative data to help management and other
departments make more informed decisions. This will lead to identifying ways of
increasing strategic competitive advantage and a unique service that distinguishes Acme
from other home improvement stores.
Acme’s ISM Plan
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