O slideshow foi denunciado.
Utilizamos seu perfil e dados de atividades no LinkedIn para personalizar e exibir anúncios mais relevantes. Altere suas preferências de anúncios quando desejar.

DEVELOPMENT AND MANAGEMENT

109 visualizações

Publicada em

  • Seja o primeiro a comentar

  • Seja a primeira pessoa a gostar disto

DEVELOPMENT AND MANAGEMENT

  1. 1. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM ORGANIZATION FOR THE MARKETING, SALES, AND CUSTOMER SERVICE DIVISION FOR A INDUSTRIAL CONSULTANT INTELLECTUAL PROPERTY LAW ORGANIZATION A DIRECTED STUDY PROJECT SUBMITTED TO THE FACULTY OF THE GRADUATE SCHOOL OF BUSINESS IN CANDIDACY FOR A MASTERS DEGREE IN BUSINESS ADMINISTARTION By Anthony W. Sublett STRAYER UNIVERSITY NEWPORT NEWS CAMPUS June, 2005
  2. 2. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM ii ABSTRACT This paper will define the steps required in developing and managing an Information Systems Organization that will perform the functional aspects of marketing, sales, and customer service for an Industrial Consultant and Intellectual Property Law Organization. Design, implementation, and departmental integration of system software will be addressed in this document as well. This paper will define in detail the steps required in developing and managing the marketing and sales department for this new Information Systems Organization that provides web oriented marketing and sales for a new Industrial Consultant and Intellectual Property Law Company. This paper will focus on developing a sales staff that is able to utilize the web in obtaining information that contributes to their developing a marketing niche for these specialized consulting services. Selection of target markets, influencing buying power, the buying decision process, evaluating and segmenting the market are key aspects of the marketing strategy and will be addressed in this paper as well. A risk analysis was performed and produced positive results, showing that the information system would net a large profit the first two years and be an asset to the organization.
  3. 3. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM iii ACKNOWLEDGEMENTS Professor Martinez Del Rio and DR. Hayes deserve special thanks for their guidance and insight in terms of helping me organize the specific subject areas of this paper as well as formatting it properly in order to ensure that it would be acceptable in accordance with the current DRP guidelines and specifications. I would also like to thank all of my other course instructors of the Department of Business at Strayer University Newport News campus as well as my online instructors that provided me with the theoretical knowledge which enabled me to perform the analysis necessary to complete this quantitative and quantitative analysis.
  4. 4. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM iv TABLE OF CONTENTS CHAPTER Abstract ii Acknowledgements iii List of Appendixes vi List of Figures vii List of Tables viii Chapter 1 Introduction 1 1.1 Strategic Planning 1 1.2 Strategic Management 2 1.3 Benefits of Strategic Management 6 2 Cash Flow Estimation and Risk Analysis 9 2.1 Cash Flow Estimation 10 2.2 Evaluation 12 3 Human Resource Management 17 3.1 Primary Function and Scope 18 3.2 Implications of Human Resource Management 19 3.3 Organizational Planning, Forecasting, Diagnosis, and Job Analysis 21 4 Management Implications 26 4.1 Management System 26 4.2 Management Implications on Human resources 27
  5. 5. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM v TABLE OF CONTENTS CHAPTER 5 Business Strategy 29 5.1 Environmental Scanning 31 5.2 Evaluation of Strengths, Weakness, Opportunities 34 5.3 Total Quality Management 36 6 Design and Development of the Strategic Information System 41 6.1 Definition Phase 43 6.2 Construction Phase 45 6.3 Implementation Phase 49 7 Network, Internet, and Intranet Design 51 8 Sales and Marketing 54 8.1 Influencing Buying Power 58 8.2 The Buying Decision Process 59 8.3 Problem Recognition 61 8.4 Geographical Segmentation and Positioning Strategy 61 9 Summary and Conclusion 63 Appendixes 66 References 68
  6. 6. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM vi APPENDIXES Appendix 1-A 66 Appendix 1-B 67
  7. 7. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM vii LIST OF FIGURES Figure 5-1 Basic Elements of the Strategic Model 30 Figure 5-2 Environmental variables 32 Figure 5-3 SWOT Analysis Flowchart 33 Figure 5-4 Work Flow Path 38 Figure 6-1 Business Flow Path 47 Figure 6-2 PC Network Workstation Layout 49 Figure 7-1 Microwave Satellite LAN Server Layout 53
  8. 8. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM viii LIST OF TABLES Table 1-1 Strategic Management Model 5 Table 2-4 Cash Flow Evaluation and Risk Analysis 13 Table 8-1 Three Companies-Perdue, Volvo, and Dominos-defined their vale 60
  9. 9. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 1 CHAPTER 1 INTRODUCTION The purpose of this paper is to provide a baseline of information from which an Information Systems Organization can be designed and managed to perform web based marketing, sales and customer service for an Industrial Consultant and Intellectual Property Law Organization. The product for this consultant and patent law organization is the consultation that the organization provides to the people or companies it represents therefore the marketing and pricing was performed differently then the normal methodology. Due to the limited number of patent lawyers (there is only one patent law firm on the entire peninsula) they can set the bar on the fees they charge their clients, they do not have to account for competition. 1.1 Strategic Planning Strategic planning involves three main factors: scanning, short and long term planning, implementation and evaluation. In general terms the Strategic Planning process is designed to help an organization clarify what business it wants to be in, decide how it's going to compete with similar organizations, identify the operational activities needed to support the competitive strategies. This process generates real commitment by making individuals and teams accountable for achieving specific goals. Long-range planning is undertaken to increase the probability that the risks the organization are taking are the right kinds of risks. It's important that risk be reduced to an acceptable level (O'Neil, 2001). “Peter Drucker defines long range strategic planning as the process of making current risk taking decisions with the best possible knowledge of their future consequences” (O'Neil, 2001, para. 2).
  10. 10. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 2 The planning exercises presented below will enable this new information systems organization to identify and develop their marketing and sales niche, i.e. their competitive advantage in reference to marketing these consulting and consultation services to targeted manufacturing organizations. There's a tendency today to put more and more products into the category of "commodity"(O'Neil, 2001, para.3). That is not the signal that this organization wants to convey to industry. Because these services are so specialized and involve evaluation of every facet of the customer’s organization, the difference in services that this organization offers compared to the services that other consulting firms and intellectual patent law firms’ offer must be clearly illustrated to targeted industries. This organizations service (product) niche is based on how their one organization can offer services that will enhance production and profit while providing legal protection at the same time. This company does not want their completive advantage to be based on low prices; this will be elaborated on more extensively in Chapter 8 Marketing and Sales. The time frame for strategic planning will vary in this type of industry. This organization will be subjected to dynamic, turbulent, and unstable shifts in their business environment; therefore planning will not be extended beyond two to three years. 1.2 Strategic Management Strategic Management is a functional tool used to design and manage this Information Systems organization as well as the parent Industrial Consultant Intellectual Property Law Firm, but this paper will only focus on the design, development and management of the Information Systems Organization. Wheelen and Hunger (2000) define strategic management as,” the set of managerial decisions and actions that determines the long run performance of the corporation. It includes environmental scanning (both external and internal), strategy formulation (strategic or
  11. 11. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 3 long- range planning), strategy implementation and evaluation and control. Strategic management will be used to monitor and evaluate external opportunities and threats in light of this company’s strengths and weaknesses” (2000, pg 4). In general, as the industrial and economic world changes, managers attempt to deal with these changes and help their organization to evolve through the fouling four phases of strategic management (Wheelen and Hunger, 2000): Phase1: “Basic financial planning: Managers initiate serious planning when they are requested to propose next year’s budget. Projects are proposed on the basis of very little analysis, with most information coming from the firm. The sales force usually provides the small amount of environmental information. Such simplistic planning only pretends to be strategic management, yet it is quite time consuming. Normal company activities are often suspended for weeks while managers try to cram ideas into the proposal budget. The time horizon is usually 1 year” (Wheelen and Hunger, 2000, pg 3). Phase 2: “Forecast-based planning: As annual budgets become less useful at stimulating long Term planning, managers attempt to propose 5- year plans. They now consider projects that may take more then one year. In addition to internal information, managers gather any environmental data –usually on ad hoc basis-and extrapolate current trends 5 years into the future. This phase often involves a full month of managerial activity to make sure all proposed budgets fit together. The process gets very political as managers compete for larger shares of funds. Endless meetings take place to evaluate proposals and justify assumptions. The time horizon is usually 3 to 5 years” (Wheelen and Hunger, 2000, pg 3).
  12. 12. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 4 Phase 3: “Externally oriented planning (strategic planning): Frustrated with highly political, yet ineffectual 5-year plans, top management takes control of the planning process by initiating strategic planning. The company seeks to increase its responsiveness to changing markets and competition by thinking strategically. Planning is taken out of the hands of lower level managers and concentrated in a planning staff whose task is to develop strategic plans for the corporation. Consultants often provide the sophisticated and innovative techniques that the planning staff uses to gather information and forecast future trends. Ex- military experts develop competitive intelligence units. Upper level managers meet once a year at a resort “retreat” led by key members of the planning staff to evaluate an update on the current strategic plan. Such top-down strategy formulation leaves the implementation issues to lower management levels. Top management typically develops 5-year plans with help from consultants but minimal input from lower levels” (Wheelen and Hunger, 2000, pg 3). Phase 4: “Strategic management: Realizing that even the best strategic plans are worthless without input and commitment of lower level managers, top management forms planning groups of managers and key employees at many levels from various departments and work groups. They develop and integrate a series of strategic plans aimed at achieving the company’s primary objectives. Strategic plans now detail the implementation, evaluation, and control issues. Rather than attempting to perfectly forecast the future, the plans emphasize probable scenarios and contingency strategies. The sophisticated annual 5-year strategic plan is replaced with strategic thinking at all levels of the organization through out the year. Strategic information, previously available only centrally to top management, is available via local area
  13. 13. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 5 networks and intranets to people through the organization. Instead of a large centralized planning staff, internal and external planning consultants is available to help group strategy discussions. Although top management may still initiate the strategic planning process, the resulting strategies may come from anywhere in the organization Planning is typically interactive across levels and is nom longer top down. People at all level are now involved” (Wheelen and Hunger, 2000, pg 3). This organizations management initiatives and organizational design were structured with these phases in mind. The Strategic Management Model below in Table 1.1 was the methodology used to formulate the mission statement, organizational goals, and objectives. Procedures and processes will be written to provide on the function aspects of the organization for training and management purposes. Table 1.1 Strategic Management Model (Wheelen and Hunger, 2000) Societal Environment: General Forces Task Environment Industry Analysis External Interna Structure: Chain of Command Culture: Beliefs Expectations, Values Resources: Assets, skills, knowledge Strategy Formulation Mission Reason For Existence Objectives What results To accomplish Strategies Plan to Achieve the Mission & objectives Policies Broad guidelines For decision making Strategy Implementation Programs Activities needed To accomplish A plan Budgets Cost of the programs Procedures Sequence of steps needed to do the job Evaluation And Control Performance Actual Results in terms of actual clients obtained and fees charged versus projected clients that should be obtained and fees that should be charged that are listed in chapter 2 (Analysis of Projected Cash Flows) Environmental Scanning
  14. 14. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 6 1.3 Benefits of Strategic Management Generally speaking, organizations that engage in strategic management out perform those that do not. Strategic management aids organizations in matching its environment with its business strategy, structure, and processes. This matching generally results in positive performance by the organization. A survey was taken of 50 different corporations that used strategic management. They found the following to be the 3 most highly rated benefits (Wheelen and Hunger, 2000): 1 A Clear sense of strategic vision for the firm. 2 A sharper focus on what is strategically important 3 Improved understanding of a rapidly changing environment However to be affective the strategic management initiative needs to be a formalized process. An organization has to ask some of the following target questions in order to develop goals, objectives, and formal strategic plan: 1. Where is the organization now? 2. If no changes are made, where will the organization be in 1 year? Two years? 5 years? 10 years? Are the answers unacceptable? 3. If the answers are not acceptable, what specific actions should management undertake? What are the risks and the payoffs involved? Mission Statement: The mission or reason for existence for this information systems organization is to aid the company’s industrial (project) consultants and intellectual property lawyers in marketing and
  15. 15. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 7 selling their services nationally and internationally to companies and entrepreneurs involved in manufacturing. Objectives: The objectives of this department once it has been developed, and is up and running will be to invoke the following: 1) Determine how to define what type of technology to use in terms of PCs and network systems. 2) Understand, utilize, and integrate the full capabilities of the hardware and software selected. 3) Develop and implement the Expert System Product Manager (PDM), to aid in managing company software that has been integrated into the company marketing, sales, client acquisitions and accounting processes of the company. 4) Research and seek software that is a close match and functions with in the framework of the processes and hardware that are in place. This will lead to higher productivity in all venues of the business and less cost in terms of training staff on new hardware. 5) Develop and implement a vision plan that is inline with the company goals and objectives. This plan will serve as a base line for laying the groundwork for the development and maintenance for the Strategic Information department. 6) Clearly understand and define the components of this department and their integration and expectations in aiding the company in becoming a nationally and internationally known Consultant and Patent Law firm. 7) Anticipate future impacts that software and system will have on the department as well
  16. 16. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 8 as the company, and the best way to incorporate these changes into the department and culminate them into company expansion. Management for this organization had to develop long run performance goals and objectives that paralleled those of the company. The research design was based on both a qualitative and quantitative analysis methodology used to gather and evaluate data. Before any of the objectives listed above could be achieved the organization was tasked with appropriating the right individuals for the right positions within the organization so that their diversified professional attributes could be collimated into objective orientated team goals that coincide with the organization’s goals. The bottom line is that any organization is only as good as the people it has working for it. Because strategic management plays a major role in developing and implementing an organization’s business strategy as well as developing the processes and procedures that will attribute to that organization meeting its objectives and goals, the basic strategic model is illustrated and discussed in greater detail in Chapter 5 (Business Strategy).
  17. 17. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 9 CHAPTER 2 CASH FLOW ESTIMATION AND RISK ANALYSIS A web based marketing and sales information organization for a New Patent Law and Industrial Consulting Firm can be a risky business venture to say the least. In order to avoid unnecessary costly risk this New Patent Law and Industrial Consulting Firm performed a cash flow estimation and risk analysis for their New Information Systems organization for their company. This organization performs the web based marketing and sales for the company. The company took numbers in these areas from other companies already established in the same industry and used them as a baseline for data for their cash flow estimation and risk analysis. The results of this analysis were used to formulate start up cost, operating overhead and gross income. There is however a risk with using forecasts to denote expected sales. In this type of industry the number of industrial organizations or their activities may diminish due to high production costs (Griffin 2005). The number of new inventions, and people suing or being sued for patent or copyright infringements may diminish with the heightened cost of production which minimizes an organization’s willingness to manufacture and market a new product (Brigham, Ehrhardt, 2002). This paper illustrates how the cash flow estimation and risk analysis were performed, the results of the analysis, the significance of the analysis, and the final recommendations due to those results. Due to the fact that adding the information system organization to the company as an additional asset may possibly be a greater risk than the company itself, an increase in cost capital was used to evaluate the project to reflect its higher risk.
  18. 18. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 10 2.1 Cash Flow Estimation Because this new organization represents a major capital expenditure capital budgeting techniques were used to determine if the expected cash flows would be enough to justify the added cost of the new organization (Brigham, Ehrhardt, 2002). This analysis was performed for a five year organization life cycle of the company. Cash flow gives the organization the financial stability to diversify. With a new organization such as this the cash flow that comes solely from the organization is more important then accounting income. Estimating the cash flow is the most important step in capital budgeting and evaluating whether a new project is worth the risk of capital invested in it opposed to investing that capital in another project. Accounting income is not important, but incremental cash flows are very important (Brigham, Ehrhardt, 2002). The marketing and sales department use their theoretical knowledge of elasticity, advertising affects, the state of the economy, competitors relations, and trends in the consumer’s demographics to forecast possible unit sales and sales prices; but that is for the consumer demanded product or consumable product. Analysis of Projected Cash Flows: The value of a suggested project depends on the free cash flow it generates. Like many projects a new project also requires some assets that will cost the company cash flow that it could otherwise use to invest in other projects, which is known as opportunity cost. The purchase of additional office space, computers, printers, and other office equipment are the main assets that have to be bought. Any cost associated with the shipment of any of these items was added to the actual cost of the equipment when the cost of the project was being determined (Brigham, Ehrhardt, 2002). Depreciation is not cash flow therefore depreciation was
  19. 19. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 11 added to Net operating profit after taxes (NOPAT) when the project’s cash flow was estimated. This organization is located in an 800 square foot office building adjacent to the main office that contains the consulting and law personal of the organization, both of these facilities are located in Virginia Beach Virginia. “For Class A, non-trophy space, landlords offered rates that ranged from $28 to $35 per square foot” (Office Finder 2005). A median price of $31.50 per square foot per year was used to calculate the lease price as follows: $31.50 (800) = $25, 200 / year This office will review Patent Infringement claims and provide an honest legal analysis. This analysis will be based on the merits, not on the number of billable hours. The organization’s attorneys will take cases on contingency, meaning they do not get paid unless they win the claim. Their incentive is to win and maximize the amount of the recovery. Keeping in mind that, “typical patent infringement lawsuits will cost several hundred thousand dollars to file and litigate” (Patent Infringement Law Suits Lawyers, 2005). The profit obtained from patent infringement litigation had to be roughly estimated as follows: 3 major cases the first year X $150,000 per case = $450,000 the initial year of operation 4-6 major patents = $160,000 Legal consultations =$700,000 Total legal estimated profit = $1,310,000 Total estimated industrial consultant profits =$ 800,000 Total organization estimated profit = $2,110,000 Table 2-1 is a duplicate of the spread sheet presented on the CD ROM is divided into five parts :( 1) Input Data, (2) Depreciation Schedule, (3) Net Salvage Values, (4) Projected Net Cash Flows, and (5) Key Output, (6) and (7) contain the risk analysis (Brigham, Ehrhardt, 2002).
  20. 20. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 12 Part 1, Table 2-4 the input data section, provides the basic data used in the analysis that was presented in the previous paragraph some of the input was obtained from literature research and some were educated “assumptions”, therefore $800,00 and $1,310,000 were the projected sales for consultant and attorney services respectively. The input of 40% is a factual value not an assumption. Other units like the projected growth rates are more speculative. If the sales or costs were to differ in either direction this would shift the Net Present Value (NPV) and Internal Rate of Return (IRR) in that direction (Brigham, Ehrhardt, 2002). 2.2 Evaluation Part 5 of Table 2-4 summarizes the evaluation criteria of whether the project should be implemented. It was assumed that sales prices and variable costs would increase at a rate of 2 percent per year, fixed costs would increase by 1 percent per year, and the depreciation charges would not be affected by inflation, cost of capital is 12 percent. The NPV was calculated using the following formula (Brigham, Ehrhardt, 2002): NPV= CFt / (1+k)t The NPV was a positive $1,639, 344 and the IRR and MRR both exceed the cost of capital of 12 %, and the pay back indicates that the project return will return the invested funds in .003 years. Based on this analysis the project should be accepted. A scenario analysis, which is a form of risk analysis that evaluates the base case, worst case and best case scenario, was performed to confirm or deny if the cash flow estimation was correct in its analysis that this project was worth the risk of investment. Table 2-5 which denotes the data illustrated on the probability graph shows the base case scenario of a 49% chance of obtaining and NPV of $1,639,344, and worse case scenario of a 24.5% chance of achieving a
  21. 21. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 13 possible $37,257. This worse case scenario will not bankrupt the organization. The possible best and worst case scenario were the only scenarios considered. These numbers further confirmed that this project is worth the financial risk and opportunity cost to the parent industrial consultant and intellectual property law organization. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 A B C D E F G H I Table 2-4. Analysis of a New (Expansion) Project Part 1. Input Data (in thousands of dollars) Key Output: NPV = $1,639,344 Building cost (= Depreciable basis) $25,200 Equipment cost (= Depreciable basis) $10,000 Market value of building in 2008 $18,000 Net Operating WC / Sales 10% Market value of equip. in 2008 $6,000 First year sales (in units) $2,110,000 Tax rate 40% Growth rate in units sold 10.0% WACC 12% Sales median price for all services comb $58,333.00 Inflation: growth in sales price 2.0% Variable price per client $47,500.00 Inflation: growth in VC per unit 2.0% Fixed costs $10,000 Inflation: growth in fixed costs 1.0% Part 2. Depreciation Schedule a Cumulative 1 2 3 4 Depr'n Building Depr'n Rate 1.3% 2.6% 2.6% 2.6% Building Depr'n $328 $655 $655 $655 $2,293 Ending Book Val: Cost - Cum. Depr'n 24,872 24,217 23,562 $22,907 Equipment Depr'n Rate 20.0% 32.0% 19.0% 12.0% Equipment Depr'n $2,000 $3,200 $1,900 $1,200 $8,300 Ending Book Val: Cost - Cum. Depr'n 8,000 4,800 2,900 $1,700 Cash Flow Estimation and Risk Analysis Years a The depreciation rates are multiplied by the depreciable basis ($25,200 for the building and $10,000 for the equipment) to determine the yearly depreciation expense. The correct depreciation percentages for the building depend upon the month that the b (Brigham, Ehrhardt, 2002).
  22. 22. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 14 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 A B C D E F G H I Part 4 of Table 2-4. Projected Net Cash Flows (Time line of annual cash flows) 0 1 2 3 4 2005 2006 2007 2008 2009 Investment Outlays: Long-Term Assets Building ($25,200) Equipment (10,000) Operating Cash Flows over the Project's Life Units sold 36 40 44 48 Sales price $58,333.00 $59,499.66 $60,689.65 $61,903.45 Sales revenue $2,099,988 $2,356,187 $2,643,641 $2,966,166 Variable costs 26,488 1,918,620 2,152,692 2,415,320 Fixed operating costs 10,000 10,100 10,201 10,303 Depreciation (building) 328 655 655 655 Depreciation (equipment) 2,000 3,200 1,900 1,200 Oper. income before taxes (EBIT) 2,061,172 423,611 478,193 538,687 Taxes on operating income (40%) 824,469 169,445 191,277 215,475 Net Operating Profit After Taxes (NOPAT) 1,236,703 254,167 286,916 323,212 Add back depreciation 2,328 3,855 2,555 1,855 Operating cash flow $1,239,031 $258,022 $289,471 $325,068 Cash Flows Due to Net Operating Working Capital Net Operating Working Capital (based on sales) $2,555 $235,619 $264,364 $296,617 $0 Cash flow due to investment in NOWC ($233,064) ($28,745) ($32,252) $296,617 Salvage Cash Flows: Long-Term Assets Net salvage cash flow: Building $19,963 Net salvage cash flow: Equipment 4,280 Total salvage cash flows $24,243 Net Cash Flow (Time line of cash flows) ($35,200) $1,005,967 $229,277 $257,219 $645,927 Part 5 of Table 2-4. Key Output and Appraisal of the Proposed Project Net Present Value (at 12%) $1,639,344 IRR 2781.42% MIRR 194.14% 0 1 2 3 4 Cumulative cash flow for payback (35,200) 970,767 1,200,044 1,457,263 2,103,190 Cum. CF > 0, hence Payback Year: FALSE 0.03 5.23 6.67 5.26 Payback found with Excel function = 0.03 See note below for an explanation of the Excel calculation. Check: Payback = 3 + 5,275/23,999 = 0.74 Manual calculation for the base case. Years Years The Excel payback calculation is based on the logical IF function. Returns FALSE if the cumulative CF is negative or the actual payback if the cumulative CF is positive. Then, we use the MIN (minimum) function to find first year when payback is positive $18,000 - (-$1,963) = $19,963. (Brigham, Ehrhardt, 2002).
  23. 23. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 15 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 A B C D E F G H I Cash flow due to investment in NOWC ($233,064) ($28,745) ($32,252) $296,617 Salvage Cash Flows: Long-Term Assets Net salvage cash flow: Building $19,963 Net salvage cash flow: Equipment 4,280 Total salvage cash flows $24,243 Net Cash Flow (Time line of cash flows) ($35,200) $1,005,967 $229,277 $257,219 $645,927 Part 5 of Table 2-4. Key Output and Appraisal of the Proposed Project Net Present Value (at 12%) $1,639,344 IRR 2781.42% MIRR 194.14% 0 1 2 3 4 Cumulative cash flow for payback (35,200) 970,767 1,200,044 1,457,263 2,103,190 Cum. CF > 0, hence Payback Year: FALSE 0.03 5.23 6.67 5.26 Payback found with Excel function = 0.03 See note below for an explanation of the Excel calculation. Check: Payback = 3 + 5,275/23,999 = 0.74 Manual calculation for the base case. Years The Excel payback calculation is based on the logical IF function. Returns FALSE if the cumulative CF is negative or the actual payback if the cumulative CF is positive. Then, we use the MIN (minimum) function to find first year when payback is positive (Brigham, Ehrhardt, 2002).
  24. 24. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 16
  25. 25. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 17 CHAPTER 3 HUMAN RESOURCE MANAGEMENT The industrial world is engulfed in the knowledge era where the capital asset is the knowledge that the employee or recruit brings to an organization. The quality of this organization is contingent on the quality of people, also known as the human resource asset, the organization recruits and retains as employees. Human resource management (HRM) is the key to the success and failure of any organization. The information obtained through the people that are hired, coupled with the synergies that they can potentially develop with existing employees, will play a vital role in enhancing the organization’s growth within its respective market. Because of the many different cultures of people that live within the United States, our country is one of the most diverse nations in the world. Recruiting individuals that are of different ages, and have different cultural and academic backgrounds will be conducive in promoting a diverse work environment within this organization. Adding the right employees to induce a diversified work environment is also key in promoting competition and increasing productivity; therefore matching a recruit’s characteristics in terms of their work ethics, self motivation, and innovative aptitude, with the correct work environment is as important as matching an employee’s skills with the right job, and shall be a prime directive of HRM for this organization. A careful recruit interviewing process will be implemented to ensure that the recruit is a good match for the job description. There will not be any language requirements, however strong pc skills, communication, manufacturing and legal experience are a must. HRM is one of the most important departments in an organization.
  26. 26. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 18 3.1 Primary Function and Scope of HRM Fisher, Schoenfeldt, and Shaw (2003) suggest the primary function of our HRM department should be to provide an organization with the most efficient and affective work force possible. HRM’s organizational scope will be to conduct job analysis to determine what is needed recruit efficient people that can add value to the product and organization and fire those who don’t. The general functional areas of HRM will be as follows: Rewarding Employees: • Performance Appraisal- evaluating an employees performance and granting pay increases that is proportional to work production, job innovation, and adding value to the organization. • Direct compensation- evaluating if the organization is being cost efficient in the compensation it give for performance of a particular task and not over or under paying its employees. • Indirect Compensation- employees expect professional and academic growth, they expect the organization they work for to value them as an asset and support them financially in obtaining secondary education and training. Maintaining Human Resource Management: • Collective Bargaining with employee union reps in addressing union and employee rights issues. • Organizational Exit- terminating the employment of individuals that are not assets, and ensuring that another individual within the organization has the related skills of the individual that is about to be or has been terminated.
  27. 27. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 19 • Outplacement- which may include employee counseling and career enhancement and assessment, aid job searches, helping employees set career and academic goals. • Employee self worth- employees expect to have some input on the job that they are performing and be involved in some of the decisions that affect their direct and indirect job tasks. 3.2 Implications of HRM at the Strategic Level It is important that a HRM representative is placed at the strategic level so they can be part of the decision process in regards to the issues below that will have major implications on the organization: • Adding new types of equipment, deciding what, who, how, and when and individual should be trained. How much should be spent on their training? Will it be cost affective to train these people, when will these people be needed and can training be completed in enough time to fill the need to support the marketing and sales demands of the parent consultant organization? • Growth through acquisition, selection, and training, compensation, and outplacement • Taking on additional indebtedness to prevent takeover, compensation could be reduced, outplacement could force reduction in the onsite organization, operate with a large off site budget. • Pursue a low cost competitive strategy; implement strategies geared towards making the organization a cost leader. The HRM will investigate competitors indirect and direct compensation packages to ensure that the packages that are offered to recruits are competitive but not excessive.
  28. 28. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 20 HRM will use a universalistic approach to Strategic Human Resource Management (SHRM) in transforming the traditional HR six practices listed below into a limited set “correct” HR procedures and policies that will contribute to the bottom line success of the organization: 1) Selective hiring practices 2) A focus on teams and decentralized decision making 3) High pay levels 4) Extensive employee training 5) Practices that reduce status distinctions among employees 6) High levels of information sharing It has been stated that the strategic planning process should include and be linked to SHRM; this can be achieved by developing bundles of internally consistent HR activities that directly contribute to the firm’s strategic objectives and goals. This is why it is important to have a HRM representative in place at the strategic level prior to planning and implementing the organization’s business strategy. Development of an active partnership between line managers and HR staff is critical in achieving this objective. The six essential elements needed to develop SHRM are as follows: 1) Internally transforming existing HR staff and structure into operating in the most efficient and cost effective way possible 2) Enhancing Administrative efficiency 3) Integrating HR into the strategic planning process 4) Linking HR practices to business strategy and one another 5) Developing a partnership with line management 6) Focusing on the bottom-line impact of HR and measurement of that impact
  29. 29. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 21 in terms of the performance of the information system in regards to its ability to successfully market and sell the services offered by the industrial consultant and patent law organization. 3.3 Organizational Planning, Forecasting, Diagnosis, and Job Analysis Forecasting Forecasting the demand for labor is performed after HR planners have collected information from both internal and external sources. Assumptions such as sales forecast as well as the geographical location of the organization are attributes considered when forecasting demand for labor. The number and type of employees who are required to perform the desired tasks in this organization in the future will be obtained from the departmental managers. Demand forecasting can be divided into two categories: Judgmental and mathematical. This organization will use the judgmental method. The judgmental method takes into consideration quantitative data, as well as, intuitive interpretation and are used by companies with new HR departments and do not have complex data bases in place and is the preferred method for new organizations or organizations that are in transitions like our organization. Performing a detailed diagnosis will play an essential role in forecasting other aspects of HRM planning. Diagnosis: Diagnosis and bench marking will be used to asses the current state of the company and provide a baseline for the Information Systems Organization to use as a point of reference and target why, where, how, and within what time frame can the organization implement methods to improve production and the quality of products and services the continue reaching organizational goals and objectives. Research has shown benchmarking is internal and should start with customer diagnosis input, which will give the organization the customer’s perspective of the
  30. 30. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 22 organizations strong and weak points in terms of products and services that we will provide. This organization will use an additional tool of benchmarking and evaluate the functional aspects of other leaders in industry and use them as points of reference in facilitating changes within the organization that should be conducive in improving production and the quality of products. This is important, because managers often try to improve production or quality by motivating the employee when essence the problem may be systemic or vendor related. Managers and owners can contribute to training and motivating the employee opposed to using them to addressing the real problematic issues with materials, processes, procedures, machine operation, and vendor issues. Affects on Organizational Culture and Human Resources: Managers often attribute poor production, poor management, or quality of work to a poor attitude or effort on the employee’s part instead of evaluating whether there were problems with raw materials, production, or inappropriate signal processes. Managers try to improve production or quality by motivating their employees, when in essence the problem may be systemic or vendor related. Managers and owners can contribute unnecessary resources to training and motivating their employees, as opposed to using those resources to address the real problematic issues with materials, processes, procedures, machine operation, and vendor issues (Fisher, Schoenfeldt, and Shaw, 2003). Management’s evaluation should not be based on what managers personally like in an employee. Instead, the appraisals should be objective and evaluate an employee’s ability to use and learn various skills needed to perform their job related tasks, as well as be cross trained in
  31. 31. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 23 other areas that may have a direct or indirect affect on their job. Managers must also access the hygiene theory, satisfaction, and dissatisfaction that contribute to the effectiveness of the employee as an individual and as part of the team and contribute more resources to enhancing and developing these positive elements. A lack of production should not just be blamed on the individual, instead all of the issues involved with and affect that individual’s job should be evaluated. A systematic documented performance appraisal enables Human Resource management (HRM), as well as department and line managers, to give feed back to the workers. When an individual is given positive feedback, it adds value to the employee’s job thus giving them a since of worth and value, which leads to a more productive worker as opposed to a disgruntled worker who spreads doubt and dissention among his or her peers within the organization. It is human nature to want to achieve and do a good job. If negative feedback is to be given to an employee, it should be performed by management behind close doors, and expressed as constructive criticism. If management wants to give an employee negative feedback, it is important that management starts and ends the conversation with highlighting some of the tasks that the employee is performing well before highlighting the tasks that the employee is not performing well and adhere to HRM policy etc. A system’s thinking approach should be used in designing and performing performance appraisals. A written performance agreement based on a one to three point system is how the employee will be evaluated. One representing needs to improve, two representing consistently achieves, and three representing excellent level of achievement.
  32. 32. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 24 Managers must look at everything involved in the employee completing a task, from the number of employees that the employee has to interface with, i.e., how many people the individual has at their access to collaborate and coordinate with in exchanging knowledge in terms of using job related machines and software, and the availability of materials. Constant appraisal of teams and individuals should be used and followed by constant feedback and appraisal. Pay raises and promotions based on performance agreements builds competition, but it can also lead to jealousy and dissention amongst workers that can lead to a lack of collaboration, information exchange, and team work. Therefore, management must be careful in assigning tasks with high visibility amongst employees that work in the same group that perform similar tasks. Using an electronic formal appraisal system to evaluate the goals and objectives of the organization and the goals of the employee is essential in analyzing whether or not the organization’s goals are in line with the goals of its employees. It is important that the employee’s goals align as closely as possible with my organization’s goals. TQM visible alignment will make it more readily possible for the organization to fulfill its part of the implied contract in attributing to the employees professional development through training and secondary education. This will go a long way in adding value to my organization. Knowledge and training gained by employees, will lead to a direct proportional increase in value added to the organization. This new training and education obtained by employees will allow them to make innovative changes, suggestions, and more readily highlight and adhere to lessons learned, which will increase production as well as improve the quality of products and services the organization provides.
  33. 33. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 25 Job Analysis Fisher, Schoenfeldt, and Shaw (2003) states job analysis is a good tool for human resource planning and recruitment, and can be used for sound employee selection. Job analysis provides a baseline of information from which training and appraisal programs can be used to set wage rates. An organization must decide how they are going to use the job analysis data, what type of information is needed and from where that information will be obtained. The job analyst can use a number of job analyst procedures to perform a functional job analysis. This organization will be using the functional job analysis, because it provides the best methods of obtaining and utilizing data that is useful in identifying worker traits that are needed to perform the job as well as providing information to base performance evaluations. Functional job analysts (FJA) observe workers review materials, and interview present employees and supervisors to obtain information relative to the functional tasks of the job. Other incumbents that is familiar with the job review then review the information to ensure the validity and plausibility of the information. Obviously FJA will play a highly functional role in forecasting and diagnosis, the other aspects of HRM planning.
  34. 34. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 26 CHAPTER 4 MANAGEMENT IMPLICATIONS The speed in which electronic data interchange can obtain, store, and distribute electronic information will yield added advantages and disadvantages in the organization producing quality products and services (Fisher, Schoenfeldt, and Shaw, 2003). In order to efficiently and effectively use electronic data interchange as a strategic tool, management must use electronic data interchange within a productive management system. A system in general is composed of interlinking parts that affect each other to produce a total product. 4.1 Management System Total Quality Management (TQM) is such a system; TQM will be implemented to address all the issues the organization is faced with as well as ensure that its goals and objectives are met (Fisher, Schoenfeldt, and Shaw, 2003). TQM is based on the principal that doing high quality work the first time improves productivity, and reduces inspection and rework cost for the organization. In this system, employees are encouraged both individually, and in a team setting, to make suggestions on how to improve the process or quality of the product (Fisher, Schoenfeldt, and Shaw, 2003). Training employees to recognize customers that need the product or service is a major part of this process. Statistical analysis, which is used to detect variances from the required results and the results that are actually produced, is a major part of this system. The key to TQM is employee acceptance, involvement, and internalization of quality goals in developing and using the systems. Without the acceptance of employees and commitment, using this system
  35. 35. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 27 would likely result in failure. TQM is activity-based, not result-based, which can lead to management focusing on the activities instead of the results achieved by the department or the organization it self. Another problem with TQM is that it sometimes overemphasizes the, “do it right the first time approach”, which has led to lack of change or product innovation. Electronic data interchange can have a great impact on TQM, because it provides a vehicle to gather and distribute electronic information that will be used in training and e-mail correspondence between employees and management (interfacing between middle management, line supervisors, and employees). This will facilitate the acceptance, involvement, and maintenance of an open line of communication between management and employees. A systematic approach in providing quality services and products the first time will lead to gaining a larger client base and retaining those clients as long term customers (Fisher, Schoenfeldt, and Shaw, 2003). 4.2 Management Implications on Human Resources The effects on human resource management is that all employee activity from the work being performed, to web site access, to training pursued and achieved can be retrieved electronically and used in a more factual evaluation that is more conducive for the company. This will make the employees aware that their work can be monitored and systematically reviewed at any given time in lieu of their performance agreement. This will make the employees aware that their work can be monitored and systematically reviewed at any given time in lieu of their performance agreement. Managers must be careful evaluating an individual’s performance, and awarding promotions and salary increases. In tasks that require a shared pool of knowledge
  36. 36. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 28 and collaboration, a lack of collaboration due to competition induces selfishness among employees, which can be detrimental in a high tech organization such as ours where a lot of computer software and e-commerce information and other formalized training used for marketing, sales, and accounting databases will be collaborated amongst a group of employees (Fisher, Schoenfeldt, Shaw, 2003).
  37. 37. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 29 CHAPTER 5 BUISNESS STARTEGY Implementing electronic data interchange as this organization’s business strategy’s prime objective, is essential if this company wants to have a competitive advantage over its competitors. A brief synopsis of today’s present day economic environment was given in previous chapters as a prelude to introducing this organization’s new business strategy. Management must utilize electronic data interchange to support the marketing venue of the organization Innovative Industries Consulting and Patent Law Inc. Management must facilitate the company directives and address the issues of competition, market and increase sales, reduce overhead, and monitor the affects on organizational culture and human resource management. As discussed in Chapter 1 strategic management which is the driving force in any successful business strategy, consists of 4 basic elements: 1) Environmental scanning 2) Strategy formulation 3) Strategy implementation 4) Evaluation and control Figure 5-1 below illustrates how these elements interact with each other.
  38. 38. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 30 Figure 5-1 Basic Elements of the Strategic Model (Wheelen and Hunger, 2000) Environmental Scanning Strategy Formulation Strategy Implementation Evaluation And Control
  39. 39. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 31 5.1 Environmental Scanning Environmental scanning can be described as evaluating the cultural and industrial environment of an organization and its competitors, in order to find out both of their strengths and weaknesses (Fisher, Schoenfeldt, Shaw, 2003). Socially, the vast markets in the world today are becoming more integrated and the means of production has become more globally distributed (Kurtzman, 1993). This organization must stay in tuned with the customs, values, and beliefs of the different cultures of today’s society. This will enable the organization to cater to its customers and produce and market the products and services that the customers want, need, and are willing to pay for. Environmental scanning is the monitoring, evaluating, and disseminating of information from the external and internal environments to key people within the corporation. The first step in developing any successful business strategy is to perform a SWOT analysis. A SWOT analysis is an evaluation of an organization’s strengths, weaknesses, opportunities, and threats (Griffin, 2005).
  40. 40. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 32 External Environment: The external environment is composed of both threats and opportunities that are outside the organization and are not usually within the short- run control of top management (Wheelen and Hunger, 2000). Figure 5-2 below Figure 5-2 Environmental Variables (Wheelen and Hunger, 2000) Task Environment (Industry) Special interests Groups Competitors Employees Suppliers Communities Customers Creditors Trade Ass. Governments Share Holders Internal Environment Structure Culture Resources Social Environment Sociocultural Forces Political-legal Forces Economic Forces Technological Forces
  41. 41. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 33 The flow chart below in Figure 5-3 denotes the steps and process involved in performing a SWOT analysis and accessing the organization’s strengths weaknesses, opportunities, and threats. This analysis will provide the organization with a baseline of information from which it can develop goals and objectives. After the goals and objectives have been developed, management can use electronic data interchange to address the issues of competition, reducing overhead, increasing sales, establishing and maintaining diversity, and human resources the our organization (Griffin, 2004). Figure 5-3 SWOT Analysis Flowchart Mission Statement The organization fundamental purpose Environmental Scanning SWOT Analysis Strategies that support the mission statement Good Strategies • exploit opportunities and threats • Neutralize threats • Avoid weaknesses Internal Analysis Strengths External Analysis Opportunities Weaknesses Threats
  42. 42. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 34 5.2 Evaluation of Strengths, Weakness, Opportunities and Threats Competition An organization must be aware of the following five competitive forces if it is to enjoy a competitive advantage: 1) The threat of new entrants into its specific market arena 2) Rivalries between other competitors 3) The threat of substitute products or services as well as the growing trends in using complimentary goods or services 4) The buying power of the customer 5) The power of suppliers of similar goods or services (Griffin, 2005). In order to ensure the organization’s success against its competitors, it must first ask itself the following questions: 1) Where did the companies in its industry fail in adding customer value to their products and services? 2) What products or services could they have provided that would have constituted a perception of quality and satisfaction amongst their customers? 2) Has the organization evaluated its competitors in terms of them using their physical resources effectively and efficiently within the confines of the manufacturing industry? 4) Did competitors attempt to implement some form of scientific management to improve the efficiency of their individual workers? 5) Did competitors make the mistake of using qualitative goals? However, qualitative goals do not serve as good indicators of success or failure. Using a combination of quantitative and qualitative goals to evaluate the direction or misdirection that an
  43. 43. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 35 organization is heading towards provides more viable indicators for the organization to evaluate. By performing analysis on these five major areas and making subsequent changes in problem areas of the organization that parallel the same or similar subject areas of an unsuccessful organization, we can prevent our own organization’s demise as well as make it more competitive in industry (Gale, 1994). It is important that organizations are kept cognizant of new and existing government regulations and the business relationships between its customers and the government, as well as the relationship between its competitors and the government, i.e. the political legal dimension (Griffin, 2004). A major organizational strength that this organization possesses, which its competitors (other industrial consultant firms and patent law firms) do not have is that this organization performs both services. The consultant department of the organization can use the electronic data interchange as a knowledge sharing tool to provide manufacturing organizations with detailed analysis on their current position in terms of production and the quality of products and services they provide. This also enables the organization to provide it customers with vendors for outsourcing purposes. Many organizations are using electronic data interchange to provide information for work that they use to perform themselves, but are now contracted out for vendors to do instead (Zilliox, 2001). The organization can use the electronic information transmitted by various vendors, manufactures, and government agencies for diagnosis and benchmarking to access the current state of its customer’s organization and to provide the organization with a baseline or reference point in targeting why, where, how, and within what time frame can the organization implement methods to improve its customers rate of production and the quality of products and services it
  44. 44. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 36 provides. Diagnosis and benchmarking should start with customer input, which gives the organization the customer’s perspective of the organization’s strong and weak points in terms of products and services that they provide (Fisher, Schoenfeldt, and Shaw, 2003). An organization can use benchmarking to evaluate the functional aspects of other leaders in the industry. These points of reference can facilitate changes within their own organization that will constitute improvement in production and the quality of products and services they provide. This information can then be entered into a database of information that will be constantly updated with a rapid influx of vendor, material, production, manufacturing, and cost analysis information. This will give the organization a major advantage over its competitors in terms of gathering and furnishing pertinent information to its customers (Bruner, Harden, Heyman, 2000). 5.3 Total Quality Management Total Quality Management (TQM) is the management system that the organization will use to implement electronic data interchange to support the marketing aspects of the business strategy and that will address the issues previously listed. This paper will show the possible managerial implications in using TQM and the affects it will have on employee development and behavior. Managers should take an intuitive approach in performing an integrating production and marketing activities of the organization with the subconscious of achieving the overall goal of the organization. Management is responsible for planning, leading, and organizing the organization’s resources in an effort to affectively achieve company goals and objectives. Collectively, the two key components of productivity that management needs to focus on is
  45. 45. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 37 being effective and being efficient. Effectively planning, controlling, and making decisions that will contribute to the efficiency of the organization in a timely manner and accomplish organizational goals should be the primary directive of management. Management can be effective in contributing to the organization’s efficiency by capturing lessons learned and maintaining an open line of communication so employees can make suggestions, and assist management in correcting and preventing errors. Management should take a systemic approach in improving the ability of the organization’s functional operations in accomplishing company goals. This can be done by limiting the expenditure of resources in one area, so that they can be used in an area where they are needed more (Griffin, 2005). Business managers must operate within the confines of a national economic system. This national economic system is the managerial playing field that is defined by the nature of competition, rules, and regulations prescribed by the government, the level of technology, social and cultural norms, and the physical environment. External managers must accommodate and interface with the three different market areas: other businesses, other organizations (which may be a government agency), and consumer markets. Internally, the organization will perform the following two main activities: product creation (production), and gearing marketing efforts toward the customer. This involves monitoring and generating product ideals. Management must coordinate within the organization and set priorities for each functional area in addressing these two main activities (Tilton, 2004). The success or failure of a company in today’s economy is based on information and technology. Basically it is contingent on how much and how fast pertinent information can be obtained and delivered to individuals within the organization that effectively use it. Due to the fact that this is the technological information era, technology is the prime directive in this new
  46. 46. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 38 business strategy. The main focus of management is to use electronic data interchange to support new client and customer acquisition, as well as, improve e-commerce, sales and marketing schemes. The definitive flow path below in Figure 5-4 highlights the origin and destinations of the electronic information, as well as, the utilization, management, and possible limitations of the information through out this organization. Figure 5-4 Work Flow Path Management of Marketing and Sales: Due to the fact that the patent law department either represents clients that are attempting to procure patents for new designs or defend individuals or organizations that are being sued for patent right infringements, it would greatly benefit perspective clients to retain a patent attorney that is very knowledgeable in reference to potential threats from other designers that have similar designs (http://trentbaker.com/SERVICES.htm). Data Base Stores & transfers MI & PI info PCs obtain and Store info in data base Production Information (PI) Industrial Consultant Clients Manufacturing Information (MI) Patent Law Clients
  47. 47. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 39 The organization will obtain and distribute electronic information on different company’s backgrounds in terms of products, areas of focus in production, and cost analysis. Employees will forward this electronic information to the inventor of the proposed design so that they can evaluate if their design will infringe on a similar product. Customers that retain the organization’s services as consultants can benefit from its legal expertise, and use that legal information to cover themselves from being sued for implementing designs that infringe upon other patents. The wealth of shared electronic data obtained from the functional operations of both aspects of the services the organization provides, can be used in terms of marketing and sales. Providing the customer quality service is important in developing the reputation of the organization in its specific industrial arena. Web responses and other correspondence will be essential to developing and gaining a competitive edge in the industrial market. Statistical analysis will be used in evaluating the effectiveness of web based marketing, as well as, the other marketing venues used to obtain new customers (Bruner, Harden, Heyman, 2000). Reducing Overhead: Electronic data interchange will aid the organization in training, obtaining and storing valuable client information from off the web, as well as other electronic correspondence activities that will be performed to attribute to the organization’s specialized services. By implementing the electronic data interchange into some of the functional training aspects of the employees, overhead will be reduced dramatically. Using electronic data interchange to retrieve data from the web and other databases, transmitting data, and storing it electronically will cost less then the traditional techniques of retrieving information over the phone, filing and
  48. 48. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 40 storing data on paper, which would require more storage space. This will result in a reduction in overhead in terms of man-hours, supplies and storage space.
  49. 49. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 41 CHAPTER 6 DESIGN AND DEVELOPMENT OF THE STARETIGIC INFORMATION SYSTEM This department will be managed by one information systems (IS) expert trained in computer software, and web technology. It will have one technician and one secretary both of which will perform research and various other functions the position may require. A primary task for management will be to develop and implement an IS Plan that will generate the marketing, sales, and screening for potential clients, which should result in national corporate visibility, constantly increasing profit margin, and corporate growth respectively. In addition management must task the staff with setting up an Intranet system of company data bases and the e relevant software to perform the tasks listed below and delivers the information needed to the staff that needs it in a timely fashion; note due to the limited staff this system should have the capability to be accessed remotely via telephone line connection. They must also provide internet browsers that are listed on the network to access the information of competitors and vendors utilized by the company as well as potential clients. In order to efficiently utilize the information system upper and middle management must have and convey a concise understanding of the information and tasks that the system is to produce and perform on a departmental level as well as corporate level. The informal system by which the company operates must be used as a base line for developing the parameters of all technical aspects in terms of hardware and training of individuals that will use these systems. The system should address the following key elements: 1) Boundary: The parameters of the elements within the system being analyzed And which are outside; it is automatically assumed that the elements inside the system can be more readily change then those outside.
  50. 50. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 42 2) Environment: Is defined as everything outside the system, the environment provides economic assumptions constraints, and inputs, to the system. 3) Inputs: Resources from the environment that are consumed and manipulated within the system, i.e. data, materials, supplies, energy. 4) Outputs: Resources or products provided to the environment by activities within the system, i.e. information, reports, documents, screen displays, materials. 5) Components: The activities or processes within the system that transform inputs into intermediate forms that generate system outputs, components may also are considered as a system or subsystem. 6) Interfaces: Is the place where two components or the system meet or interact; systems may need special sub components that serve as filters for translating, storing and correcting whatever flows through the interface. 7) Storage: Holding areas for permanent and temporary information, energy, materials, and etc..; storage which provides a buffer between system components to allow work to be performed at different times and to allow different components to share the same data resources. Storage is especially important in IS because data are not consumed with usage; the filing, 8) Separation, and storage of data is crucial to the functionality of handling large volumes of data. Management will implement a three phase systematic approach in developing this information system; these three phases and the impact they will have in developing the Strategic Information System and integrating its functional aspects are defined in the following chapters.
  51. 51. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 43 6.1 Definition Phase Definition phase, the CEO and managers of the respective three departments (i.e. managers of the strategic information systems, industrial consulting, and patent law departments) will conduct a multi step analysis on future business operations and the information system’s main areas of concern. Detailed description of system requirements pertaining to information processing and data orientated notations will be researched and developed to ensure all aspects of company procedures and processes are incorporated into and addressed within the system design. In order to design and develop an IS department for the company A comprehensive definition of the departments and their functional aspects within the company were defined as follows: 1) Administration, marketing sales and client procurement will be under the IS umbrella. This department will be responsible for all administrative tasks necessitated by the consultant and patent departments. The IS department is also responsible for marketing the industrial consultant and patent services offered by the company as well as screening potential clients through web oriented software and questioners (see Appendix A) to determine the feasibility of the respondents becoming potential clients on either the industrial consultant or patent law side of the house, as well as the accounting and finance aspects of the firm. 2) The industrial consultant’s phase of the operation main function is to evaluate the applicants, which have been deemed as potential clients by the IS department. If client potential is justifiable to them they will contact the company by phone and perform a phone interview at that point. The consultant will ask the client,” what is your company’s target gross in dollars and production for this year, the next three years and the next five years”. Their second question will be, have they met those goals, if their response is no,
  52. 52. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 44 the consultants next question is, “what departments failed to meet their objectives and how did this contribute to your company not reaching their goals”. The answers to these questions will aid the consultant in developing projected target areas that need to be addressed. 3) Patent law phase of the operation phase of the operation main function is to evaluate the applicants, which have been deemed as potential clients or companies by the IS department. If client potential is justifiable to them they will contact the potential client or company by phone and perform a phone interview at that point. The lawyer will asked the client what is the product they are trying to procure a patent for, “why do they think a patent is justified for this product, and what background do they have that stipulates the design, and functional as phase of the operation main function is to evaluate the applicants, which have been deemed as potential clients by the IS department. If client potential is justifiable to them they will contact the client or company by phone and perform a phone interview at that point. The definition phase defined above will assist management and IS personal in understanding and providing a detailed description of the flow defining the types of information and the paths that must be accessed to obtain that information, how the information should be processed, what is the end result being sought after processing has been performed, as well as the paths the information will flow in after each particular phase of processing has been performed. The flow of information aids the designing the system, primarily the networking aspects of the system.
  53. 53. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 45 6.2 Construction Phase Construction phase, involves the design and testing of the system software and hardware. If system hardware and software that will perform the functions necessitated by the company does not already exist, then software and hardware capable of performing these functions will be developed. Software: SAP highly regarded industrial function software already exist, therefore software does not have to be designed from the ground level. SAP is an enterprise resource planning system (ERP) developed by a company in Walldoff Germany. SAP is composed of several modules. SAP will also serve as the customer relationship management system. It will integrate the warehouse data base variables (such as purchase orders, material scraped, material used and in what application, and many others) with the sales and marketing venues of the companies seeking consultant assistance as well as the marketing venues of the consulting company it self. A key aspect of efficiently using SAP within the company was the high level of integration of the software with the business processes of all departmental venues of the company. SAP can be divided into seven applications: 1) Supply chain management 2) Product life cycle management 3) Human capital management 4) Financials 5) Business Intelligence
  54. 54. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 46 6) Customer relationship management 7) Electronic commerce. SAP can be used as transaction processing system to carry out accounting functions, i.e. accounts payable and accounts receivable. The other two modules that SAP logistic capabilities allow the software to perform the sales and product data management functions of the company. The modules in the administration category is capable of placing client info in the respective databases, perform scheduling functions, pay company employees, as well as process accounts receivable transactions. It allows employees to access, review, and change their own address data as well as submit travel expenses reports, view and edit vacation and attendance reports. The financial category modules will allow the CEO and upper management to work with and interpret company financial reports in terms of sales and payroll the flow paths will be in line with those presented below in Figure 6-1below. Data warehousing, a contact management system will be implemented where contacts of possible clients off site will be maintained, the system will store distinct profiles on the personal as well as relative information about the company it self. Tracing database that capable of tracking company activity in terms of product procurement, company acquisitions, and vendor interaction and activity will be implemented. This database will have the capability of being linked with clients where house databases if that client uses some form of SAP for purchase order, material inventory and other material inventory functions.
  55. 55. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 47 Figure 6-1 Business Flow Path Support Software: All PCs used in the company will use windows XP as the operating system and Microsoft Office 2003 as the applications software. Norton antivirus, popup blocker, firewall protection, and hacker protection will be used on all systems to provide encryption protection and ensure the security of business transactions, detour electronic tampering, and secure all information within the system (note the Microsoft router also comes with its own firewall protection as well. Vendor Accounts Payable Vendor Invoices Checks Rejected Invoices Accounting Purchasing Payable documents Purchase Orders Vendor Information, Stock Receipts
  56. 56. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 48 Hardware: Dell PCs with Pentium IV 500 MHz processors with 20 gig hard drives will be the PC used within the company; all systems networked together with a Microsoft hard wire router (see chapter VI for details). Hewlett Packard (HP) 600 all in one printer fax combo units will be placed in each office and linked together computer through the hard wire network previously mentioned, this will give all the computers (Pc terminals) within the network the capability to access any of the computers at any time. The HP all in one units are self feeding fax and printing units capable of receiving up faxes to 20 pages per minute (ppm) black an white and 12 ppm color, and print and Xerox 26 ppm black and white, and 15 color. The number of printers purchased will be contingent on the number of personal utilizing the PCs at any given time as well as the office positions (seating assignments) of those individuals. See Figure 6-2 below for Schematic of the Microsoft LAN network. A star topology was used where a the Microsoft server is located in the center ant the PCs workstations as well as printer stations are hard wired to the network which is wired to and controlled by the multiplexer(see Network, Internet, and Intranet Design chapter for component details)
  57. 57. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 49 Figure 6-2 PC Network Workstation Layout Note: All PCs have access to all printer/fax/scanner locations 6.3 Implementation Phase Implementation phase, a vendor would be contracted to install and maintain the system software, this individual would work with the company IS professional to collectively ensure that all desired system company requirements are met and the system performs at maximum efficiency in addressing daily function able tasks. Discir, a SAP consulting firm will be used as the consulting agent to serve in the above mentioned capacity. The following sub phases list the steps involved in the implementation phase: 1) Installation of the system should be contingent upon recommendations made and questions asked by the end users, a testing phase should be at the end of this sequence and should proceed the actual implementation of the actual system it self. Server And Multiplexer PC Work Stations Printer/Fax/s canner Printer/Fax/s canner Printer/Fax/s canner Printer/Fax/s canner
  58. 58. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 50 2) Operations, the systems ability or lack there of in terms of data bases query applications, system processing capabilities, and most importantly efficiency of the system in terms of completing departmental functions as well as company tasks. 3) Maintenance on system hardware and soft ware should be performed on a quarterly by a team composed of an offsite IS consultant, a company administrative employees and a departmental manager. This will facilitate a more detailed analysis on problem areas relative to departmental functionality and integration of the system.
  59. 59. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 51 CHAPTER 7 NETWORK, INTERNET, AND INTRANET DESIGN SAP will be networked with satellite internet applications so that the consultant company can pull material data, i.e. purchase orders, requisition, and discrepancy reports that detail how material was either misused or inappropriate for the subject application, resulting in scraped material and inflated overhead cost. Overhead cost is a key factor in developing a baseline for evaluating the success of the company being analyzed by the consulting company. Networking or telecommunications is an essential element of the IS system, because it gives the individuals using the system the ability to exchange information between PCs within the company as well as with individuals outside the organization at different geographical locations. The fundamental functions carried out by the telecommunications system are as follows: 1) Voice transmission of the data used in the network. 2) Processing,” making sure that an error-free message or data packet gets to the right destination”. 3) Editorial, data being transmitted is checked for errors and is put into a standardized format. 4) Conversion, involves changing in the coding system or transmission speed that be necessitated when moving the data from one device to another. 5) Routing, is choosing the most efficient path, which is extremely important aspect in this IS system design due to the complexity of the information being exchanged and taking into account that information will be exchanged between PCs from both on site and off site locations.
  60. 60. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 52 6) Network Control, tracks various elements of the system status on servers and if access lines are busy it directs the system to another access line that is not busy; it also periodically checks each user to see if they have a communication to send. The interface part of the system is a critical part of the system which makes the network user friendly in terms of allowing the user and management to send communications. Due to the fact that computer data is composed of strings of binary digits or bits (strings of zeros and ones) and noise in a telephone line could easily be interpreted as a one or vice versa therefore a digital signal is preferred opposed to analog signal. A DSL Microsoft server (LAN) will be connect by a hard wire to the network cards installed, which will be installed on all the PCs on site. This land connection will be in a star configuration with a multiplexer serving in the capacity as a controller. A twisted pair (LAN) with a transmission speed of 4mbps-100 mbps will be used as the transition medium. On site (of the Consulting and Patent law office)the LAN will be hard wired to a microwave, sub station (sub station l) allowing the network to be interlinked via satellite connection with other microwave substations which are in close proximity, due to the line of sight principal, with other microwave stations located at customer locations (see Figure 7-1 below).
  61. 61. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 53 Figure 7-1 Microwave Satellite LAN Server Layout Note: Microwave Station #1 is located at the Industrial Consultant and Patent Law home office site; microwave station #2 is located at the client company site. Earth Microwavestation#1 Microwavestation#2 Satellite B Satellite A
  62. 62. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 54 CHAPTER 8 SALES AND MARKETING Selling is only a small part of marketing, marketing is the process by which individuals and groups obtain what they need and want through creating and offering to consumers products and services of value. The success of this company will be contingent on knowing the target market intimately and developing a market offering that meets their needs and demands (developing a marketing niche) (Tilton, 2004). The next step is to develop a market offering that will satisfy those targeted consumers. This part of marketing is especially important when it comes to offering specialized services like industrial and patent law consultation. This step will involve tailoring the consulting and legal services to the targeted consumer’s needs and wants, and setting an appropriate price. It also includes selecting the write distribution channel that will make these services available when and where the customer wants them, and communicating with the target market in a way that will grab their attention and spark their interest ultimately creating product value in the customers mind. The ultimate goal of the marketing team is to create satisfied customers and create repeat customers that will refer other customers (Kotler 2000). The new economy is based on the Digital Revolution and the management of information. Information has a number of different attributes it can be customized, personalized, and dispatched to numerous individuals connected to a network (Brown, 1999). Negating wasted time lost in face to face presentations and expediting the process through selective targeted internet marketing is the wave of the future (Mc Kinsey, 2005). It saves both the selling agent and the potential customer time and money. The information system organization will track the number of potential customers that frequent the web site. The company will then put this
  63. 63. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 55 information into a database and enhance it with information, thus putting them in a better position to customize offerings and services to specified customers (Kotler, 2000). Management will be tasked with the following:  Establishing a sales staff that is equipped with both a legal and technical base line of knowledge that will enable them to develop a customer interactive web service that provides a detailed summary of the industrial consultant and intellectual property (patent or copyright) law services that the company provides to entrepreneurs, small businesses, and fortune 500 hundred companies.  Determining whether the customer is in need of Industrial Consultant Consultation or Patent Rights Assistance from the information obtained from the customer via web-site, e-mail, mail correspondence or telephone by asking the following: A. If a customer is in need of industrial consultant consultation the staff should ask the client the listed questions in Appendix A-1. This form denotes the basic info about the company where the company has been in terms of production and assets and what are there objectives and projections in terms of growth. B. If a customer is in need of patent right assistance the staff should ask the client the list of questions listed in Appendix B-1. This form obtains the information which allows the customer service staff to ascertain the validity of the product in terms of procuring a patent as well investigating if the product or design in question already existed, which would conflict with the clients claim to patent their product. Organization of the data obtained and used in the marketing and sales venues will be facilitated by the SAP customer relationship management system (Brown, 1999)
  64. 64. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 56 (Note, the Sap software will not be implemented until two years after the initial start of the business). C. Customers will also have the capability to ask questions online with discussion forum, direct e-support, or a natural language tool: Dividing up the market is the starting point in any marketing campaign. The ability to market specialized services, i.e. Industrial Consulting and Intellectual Property Law Representation lies within the marketing manager’s ability to correctly identify the market segments which are superfluous in developing a target market. The scope of the marketing group’s job specification will be to know and understand the customer so well that these services can be tailor made for each customer or organization (Kotler, 2000). The most important aspect of marketing is to know and find out the customer’s needs. The questioners in Appendixes A and B will serve as a tool in acquiring and developing a market segment for these specified services. Baring in mind that this is an information division for a relatively small company composed of five to six employees and has a limited cash flow, the marketing, sales, consulting, and attorney representation are all inner related. This adds a personalized touch and is a major contributing factor in customizing the organization’s product or service niche in this case. The best people to market any service are the individuals that provide these services on a daily basis. They are more familiar with the functional aspects of the services and how they can remedy target organizations of present, ongoing, and possible future problems. For example consultants can tell their client how much, when, and why they should divert funds to other departments to increase production. Intellectual property (or patent) attorneys can tell organizations how to procure patents in order to protect them selves from having their designs stolen.
  65. 65. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 57 Marketing management must select target markets and continue getting customers through creating, delivering, and communicating superior customer value. The marketing task at hand is to find ways to connect the benefits of the services with the target organizational needs and wants. The buyer or customer is already aware that they need the service either to make their organization more profitable or to protect themselves legally. The target organization will ultimately base its decision on the service that delivers the most value. Value can be seen as a combination of quality service and price (QSP), other wise known as customer value triad (Kotler, 2000). Transaction or Relationship marketing can be defined as objectively building long lasting relationships which perpetuate new long term customers that generate referrals. If this is achieved transaction cost is drastically minimized and cash flow is increased. Components of a marketing information system (MIS) are: people, equipment, and procedures to gather sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. The company’s marketing information system should represent a cross between what manager’s think they need, what managers really need, and what is economically feasible.
  66. 66. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 58 8.1 Influencing Buying Power The starting point for understanding buyer behavior is the stimulus response model shown in Figure 8.1 on the next page. Marketing and environmental stimuli enter the buyer’s consciousness. The buyer’s characteristics and decision processes lead to certain purchase decisions. The marketer’s task is to understand what happens in the buyer’s consciousness between the arrival of outside stimuli and the purchase decisions. A consumer’s buying behavior will be influenced by cultural, social, personal, psychological, and in this case industrial factors or trends. An individual’s cultural factors exert the broadest and deepest influences. Cultural Factors: The fundamental determinant that dictates a person’s wants and behavior is culture. The growing child acquires a set of values perceptions, behaviors, preferences and behaviors through their family Children growing up in the United States are exposed and expected to have the following values: achievement and success, activity, efficiency and practicality, progress, material comfort, individualisms, freedom, external comfort, humanitarianism, and youthfulness (Kotler, 2000). Each culture is composed of smaller subcultures, in this case Industrial and Manufacturing Cultures. A diversity marketing program which is a specialty marketing program that will be geared to target industry and manufacturing corporations will be strategically developed by the marketing team, due to the fact that generic marketing campaigns will not produce the sought after results in terms of procuring new customers and establishing long lasting business relationships.
  67. 67. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 59 Social Factors: “In general consumer’s behavior is influenced by social factors as reference groups, family, and social role issues’. In terms of gearing marketing campaigns that provide specific services for manufacturing, the industrial roles that these organizations play in industry as well as the functional aspects of the parts they produce must be evaluated. Reference Groups consist of all the groups or organizations that have a direct or indirect influence on a person’s or in this case organization’s attitude, behavior or corporate objectives. Membership Groups or organizations are those groups of people or organizations that have a direct influence on a group or organization. Secondary Groups such as professional, trade groups, vendors that supply raw materials for the organization tend to be less formal and require less continuous interaction. Organizations are also influenced by groups to which they do not belong and whish to become a part of such as Aspirational Groups or organizations. Roles, status and personal factors will not come into play in regards to marketing industrial consulting and patent law services to manufacturing organizations. However industry trends, prices and industrial culture in the manufacturing world will be a contributing factor in developing marketing schemes, tailoring the services and communicating those services to organizations (Kotler, 2000). 8.2 The Buying Decision Process Marketers have to identify who makes the buying decisions for their respective manufacturing organizations, the types of buying decisions they make, the services the need and use, and the steps in the buying process.
  68. 68. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 60 Since the target market are manufacturing organizations opposed to individual clients the buying roles are defined differently. Table 8.1 Three Companies-Perdue, Volvo, and Dominos-defined their vale proposition (Kotler, 2000) Buying Roles: There are five distinct roles that people portray in a buying decision: Initiator: The person in the organization who first suggest the ideal of buying the product or service. Influencer: The person in the organization whose review or advice influences the decision. Decider: The person in the organization who decides on any component of buying decision: whether to buy, what to buy, how to buy, or where to buy. Buyer: The person in the organization who delegates if the actual purchase is made. User: The organization or department that consumes or uses the products or services. Marketing Stimuli Product Price Place Promotion Other Stimuli Economic Technological Political Cultural Buyer’s Buyer’s Characteristics Decision Process Cultural Problem Recognition Social Information Search Personal Evaluation of Psychological alternatives Purchase Decision Post purchase behavior Buyer’s Decisions Product Choice Brand Choice Dealer Choice Purchase timing Purchase amount
  69. 69. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 61 8.3 Problem Recognition The buying process starts when the buyer recognizes a problem or need, in this case when the organization recognizes that they have a need for either the intellectual property law or industrial consultation services being offered. The key will be for the marketers to identify the circumstances that trigger a particular need by gathering information from other organizations and vendors in the same industry. For example, if three to four new contracts were obtained by UPS which increased the weekly quantity of overnight letters that come through their Memphis Hub weekly from 30, 000 to 45, 0000, how could UPS be consulted on how to decrease their process time, decrease cost, and increase their volume of overnight letters handled? A targeted recognition action would be aware of new and upcoming new contacts in the shipping area, i.e. overnight letters. 8.4 Geographical Segmentation and Positioning Strategy Geographical segmentation will play a key role in defining and contributing to a focused marketing effort that will include all manufacturing organizations in the United States. The country will be segmented geographically into four zones east, west, north, and south, so that industry within each zone can be carefully evaluated in terms of size, growth, and production potential. Also organization’s specializations or product niches can be evaluated in terms of tailoring service specifically geared for their needs. Kotler (2000) “defines positioning as the act of designing a company’s offering and image to occupy a distinctive place in the mind of the target market. The end result of positioning is the successful creation of a customer-focused value proposition, a cogent reason why the target market should buy the product or service.
  70. 70. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 62 Table 8.1 shows how three companies-Perdue, Volvo, and Dominos-defined their vale proposition given their target customers, benefits, and prices. Service specialization is the marketing niche that this organization provides, because all manufacturing industries can use industrial (project) consulting information to increase production and profit. These same organizations can use legal representation to procure patent or copy rights for designs, processes or procedures that their employee design or develop litigation representation for either suing or being sued for patent or copyright infringements, as well initiating and developing contracts. One close nit organization composed of industrial project consultants and lawyers that discuss details of new contracts, patents, and copyrights procured for a manufacturing organization, and are augmented by the ability to exchange details on how new contracts and patents will call for more raw materials, different vendors, and possible new plant locations will give customer organizations a vast competitive edge. The factor that is most detrimental to any organization is the loss or lack of information, but this can and will be negated, because this valuable information will be obtained stored and used by one structured organization opposed to being shared and lost by three or four. This is the positioning strategy of this new organization and will contribute immensely to its success.
  71. 71. DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 63 CHAPTER 9 SUMMARY AND CONCLUSION In summary the information provided in this paper can be used as a base line for developing a Strategic Information Department for an Industrial Consultant Company and Patent Law Firm that can be readily integrated into the marketing, sales, and client procurement processes of the company. However variations in software, type and speed of PC used, variations in servers, type of networks used for intranet and internet, as well as variations in output devices may be implemented depending on the detailed information that is used, processed, and stored by both the Consultant and Patent Law company for who the system was designed, as well as the information the information that is processed by and sent from client companies. A clear precise definition that encompasses the types of information that is to be obtained, processed and stored by the information system both in the present and foreseeable future must be developed by a team composed of the following: 1) The Departmental Information Systems Manager 2) An outside Information Systems Consultant 3) Upper Management 4) Middle Management 5) End Users (which is the most important member of the group due to the familiarity with departmental and company processes and procedures that they present in terms of what is necessitated by the system as to the functional capabilities the system needs to possess).

×