Craven Books Case Report

OIM Final Assignment: Craven Books Report

By Lucas Rodrigo Ribeiro Ostjen (@00503777)

M.Sc. in Project Management Course – Operations and Information Management Tutor: Mr. George Thomas University of Salford & Robert Kennedy College Salford Business School

16th July 2017

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Summary This paper aims to produce an analysis on the Craven Books case study, where a misalignment of strategy turns into a catastrophe, making the company lose 90% of their customers, because of it 60% of their employees become redundant, and Craven Books was forced to release them. The paper will review the business strategy using the SWOT analysis to point their strengths and weakness internally, and the opportunities and threats that the external market offer. Based on the requirement a business process model will be presented showing the actual flow of the business activities in contrast with a proposed model which could guarantee a safer environment when treating the customers’ orders. Once presented the business process models and the strategy analysis there will be presented a report containing an overview of the status of the Craven Books’ business with suggestions which could help the company to achieve a better performance through changes regarded to the mistakes when introducing a new digital strategy. Along with the report a table with some open source CRM software will be suggested the using of it to mitigate the relationship problems with their customers. The report gives some recommendations to Craven Books management and conclude that the lack of knowledge on information systems and poor managements were some reasons which explain why the company is losing market share. The last section concerns to the contribution made online during this module of studies with a self-assessment on these contributions.

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Table of Contents Craven Books Business Process Models and strategy analysis ............................................................... 4 SWOT Analysis Purpose: Craven Books CRM platform ........................................................................... 4 Craven Books Information System Report .............................................................................................. 7 Introduction ............................................................................................................................................ 9 Overview of the Company Background ................................................................................................ 10 Craven Books Unsuccessful Information System Strategy ................................................................... 10 What Craven Books must consider preventing and avoid the issues? ................................................. 11 Cloud-Based Open Source CRM Software ............................................................................................ 13 Recommendations ................................................................................................................................ 14 Conclusion ............................................................................................................................................. 14 References ............................................................................................................................................ 15 Reflection on the Contribution through online discussion ................................................................... 16

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Craven Books Business Process Models and strategy analysis After 40 years in the comic books market competing with several companies, in terms of agility, quality of product and services, Craven Books are facing difficulties concerning with the Information System and digital strategy chose to drive their business changes. The company which provided growth with profits expanded their activities along the north of United States and Mexico, furthermore, there is a plan to approach the European market using an Information Technology interface however the strategy chosen impacted oddly on the result which they pursued. In order to restructure the business and determine the right business approach an analysis of the business will be made using the SWOT method in order to define what are the Strengths and Weakness of the company and to analyze the Opportunities and Threats that market offers. “The SWOT analysis helps to get the maximum out of the future opportunities and alleviate the treats by working on its weakness” (Wikipedia, 2017)

SWOT Analysis Purpose: Craven Books CRM platform Below we show the actual business process model and the proposed business process which is the base to define our analysis;

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A. Strengths 1. Increase sales efficiency: the company which knows their consumer need are more reliable to achieve higher rate of loyalty from its customers 2. Ensure customer satisfaction: Turns the customer more dependable of the company avoiding looking for a competitor product 3. Knowledge on potential customers: Collecting data can improve the knowledge about the customers 4. Focus on finding customer who brings more profits: Customers are the key to increase profits and CRM improve this approach

B. Weakness 1. Insufficient defined activities: It refers to internal activities in organizations like process time and costs, employee productivity, data quality and coordination of tasks. (Haram, 2005) 2. Internal Clients lack of preparation: The implementation of a new system will impact on cultural changes among the staff of the company 3. Overload of unnecessary information

C. Opportunities 1. Customer satisfaction: CRM can predict the needs of the customer analyzing their data and business history

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2. Improve relationship with customers: Utilizing the acquired data can help to be one step ahead regarding to the customer needs 3. Improve communication interaction: New technologies bring new approaches making a significant improve on the flow of communication D. Threats 1. Decrease of revenue: relying totally on CRM can invert the customer reaction and the revenue can decrease (Jayashree, et al., 2011) 2. Over automation: companies with a big network and a small number of staff relying too much on CRM can reduce the personal interaction resulting in losses. 3. Weak combination with the business strategy: If CRM is not aligned with the business strategy it can turns to a problem and will not achieve the proposed goals, companies must fill the existing gaps between these two. To achieve a significant competitive advantage within the market which Craven Books are positioned the use of CRM can have positive results. Each day the expectation of customers increases and business and services must walk holding hands with these expectations. CRM into the business will help to serve better their customers moreover the right CRM approach could guarantee the return of the clients which left the Craven Books’ network, using the new CRM platform effectively will bring new customers which could reflect on sales increase and consequently the return of revenue.

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Craven Books Information System Report By Lucas Ostjen

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Table of Contents Introduction ............................................................................................................................................ 9 Overview of the Company Background ................................................................................................ 10 Craven Books Unsuccessful Information System Strategy ................................................................... 10 What Craven Books must consider preventing and avoid the issues? ................................................. 11 Cloud-Based Open Source CRM Software ............................................................................................ 13 Recommendations ................................................................................................................................ 14 Conclusion ............................................................................................................................................. 14 References ............................................................................................................................................ 15

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Introduction As the advance on the technological field grow fast inside the business market, these advancements bring to the society pace in all activities they perform. Thus, the improvements had brought a scenario where Information System had change the way companies deal with their network in general. Information System (IS) could be described as the “interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization” furthermore Information System is often related towards competitiveness on the business market and it can modify the workflow of the enterprises which accept its strategy concept and apply it, reviewing the their business strategy in order to optimized and integrate different departments and areas within the company. The will of improving business achievement through better efficiency, effectiveness and competitiveness, combined with innovative applications of Information technology, has heightened the awareness of both IT and business managers towards more strategically oriented approaches for planning and management (Luftman, et al., 1993) Business and management society realized that there is a need to align strategically business and IT planning and it has been described as critically important however more and more problematic (Information Resources Management Association. International Conference, 1999). Taking advantage of technological advances in information systems and computing have made companies achieve some strategic developments, these could be new paths on the work performance in a certain organisation. Enterprises which have align their business and information system strategy properly are noticeably know in the business market on the other hand those who have not plan and focus on the subject have faced their market share decline in considerably proportions. Primarily, this paper has the objective to provide some details about the failure on the Craven Books IT system project. Furthermore, it will be provided some points that should have been considered to prevent what had been faced by the company. The discussion will also include a shorter analysis on a new information system project structure, part of this paper will also be the discussion about the concepts and application of Open Source Software as an option to restructure the business. Lastly, the discussion will also try to recommend what shall be done and it will eventually conclude how to avoid such failures on managing IS projects.

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Overview of the Company Background Craven Books is a comic magazine seller in Utah City, USA, with a 40 years life competing against other distributors of comics’ magazines, and books. The company was founded and evolve in the market place extending their presence along the North of the United States and Mexico. As the company has been able to encounter growth both in profit and in the number of their regular customers, the volume of sales accelerated considerably. In this regard, the company based on the growth strategy decided to develop a digital strategy, recruiting an IT specialist which was assigned to use a new information system as part of their business strategy. The investment has been made within a platform that would include all areas of the operation of the business from ordering, to processing, accounting, inventory and dispatch. Craven books aim that the new information system will ensure more effectiveness on logistics and a step ahead on the competitiveness of the market. However, as the project started its implementation the expectation has not been achieved and Craven books was destabilized losing market share and turning down their competitiveness.

Craven Books Unsuccessful Information System Strategy As mentioned, due to the objective to have an integrated and efficient distribution system the management of Craven Books decide to hire an Information Technology (IT) Specialist to align the Information System (IS) strategy along with the business strategy, besides that a new store manager has been hired to manage the distribution of the products between the warehouses around the country. The management planned to approach the European Market with their products through the same platform and once the system was working at the local market, there would be a built in multiinterface and e-commerce to have a digital presence, promoting their products into the new market. Craven Books’ IT specialist has opted to outsource the digital strategy to an independent consultant, who decide to set-up technological tools for the internal and external process. A weighting machine was added in the production process to help the store to check the order through the weight check, following the same philosophy a mapping machine was added to link the customers’ orders from the digital interface and locate the relevant items. For the external process (orders and marketing approach) it has been decided to create a Customer Relationship Management (CRM) cloud-based interface to help both customers and employees to interact with each other with transactions and electronic payment. The new approach was expected to provide more competitiveness and agility on their process. However, after a year of outsourcing the digital strategy Craven Books has failed and they lose 90% of their customers in consequence the company faced a situation where 60% of their employees were redundant for the business and they had to be released. Regarded to the actual situation where Craven Books find themselves, the following can be considered as the pleadings for their unsuccessful digital strategy approach. One of the reasons that the company failed on their IT systems was the inability of the IT specialist to define and present the appropriate IS strategic plan and align it with the business strategy, the lack of knowledge was shown when a decision for outsourcing was made, and here we find the second reason for their failure, Craven books’ IT specialist relied too much on their 10

consultant and the system suppliers, the choice to create a CRM interface specific for them was made without the certainty if the project would really works, beyond that, this solution should have been compared against the existing software packages available on the market in terms of effectiveness and efficiency, another instance that shows that Craven book management relied too much on their consultant, is the fact that they allowed to interfere on the production process when the weighting and mapping machines were added on the business workflow. A code bar tracing system, as a feature on the CRM system, could avoid the use of these machines, making the counting of the products per unit, not per weight (which is quite trick), and mapping the customers’ package with a unique code to allocate them in the right warehouse. Seek for advice is not a wrong thing to do, however what is given is an idea, one of thousand paths that can be chosen, and belongs to Craven’s management to decide with consciousness and balance the things out to have a better trade-off. It’s not very clear how the project was structured but it seems that no one was assigned to managed the project, there is no project team assigned which shows a lack of commitment between the parts, as nobody from Craven books had the accountability to handle with the necessary requirements to make the project successful, this can be pointed as a major issue as well.

What Craven Books must consider preventing and avoid the issues? As the reasons, why the IS strategy of Craven Books failed have been presented, it is necessary to discuss the instances which the management should consider assuring the success of the project. Some important points shall be taken in consideration when trying to create or install a system. Well Craven Books case shows that they can’t identify a suitable software for the company, as well they couldn’t align the Digital Strategy along with the Business Strategy and besides that there was no preparation or pre-activities planned before launch the solution. To mitigate the consequences which are faced by Craven Books the following points should be considered before implement the new system. 1. Selection of appropriate strategic model: Strategic models will be helpful, to assure that the changes made by the information system are executed effectively. A framework of evaluation shall be made based on the drivers which align both Information System and Business strategy, there’s a need that Craven Books must understand these drivers using “how” and “why” questions, and to understand the dimensions that may affect such justification, using the “what” questions. As what are the IS strategic drivers that affect Business Strategy. (Basahel & Irani, 2009) 2. Contingency Plan: A plan should be developed to act when the system fails, procedures must be clear in case of a breakdown of any part of the business process and for the new system. 3. Realistic Project Scope & Benchmarking: The project scope should have realistic targets and benchmarking with other company could be an interesting approach as this technique will allow to compare the best practices from other industries with similar business activities. Benchmarking will help Craven books to understand and evaluate the current position of the business in relation with the “best industry practices” and to identify areas where improvements must be made. 4. End user support: Training must be given to all employees and end users, to prepare them to handle the new system, moreover end user’s concerns shall be taken in consideration to avoid negative feeling on the new system.

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5. Stakeholder’ involvement: All parties involved on the project must understand the purpose of the project, critical issues shall be addressed by the moment they are evolving. Here is where Craven books management shall keep special attention. 6. Software Selection: As noticed Craven books management do not have the knowledge to select on their own the software which would be suitable for their application, however the advice here is to procure advisors and consultants with a high level of expertise both technical and operational for software selection. However, this approach could have an expensive cost and knowing that Craven Books is not able to acquire new expenses as per their actual losses an Open Source Software (OSS) can be the exit for the business optimization. As mention on point 6 open source software (OSS) should and option as a low cost CRM solution for Craven Books, nowadays there are several cloud-based interface packages offered free with many application which is necessary to run a business, furthermore, these solutions can be customized with a lower cost when comparing to a system developed from zero, unfortunately as per the actual business situation Craven Books is not in the position to invent the wheel, even more, most of these software offer support and training what fits on the actual business scenario of Craven Books. Below is a table showing the comparison of what the OSS available in the market could provide and help the company to run their business.

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Cloud-Based Open Source CRM Software Software

Free Support

Insightly

Online Community Really Simple Full Service Systems FreeCRM Not Available

Free Storage

Free Contacts

Free Users

Email Marketing Capabilities

CloudBased

SelfHosted

Upgrade Fee

200Mb

2500

2

US$12/user/mo

100Mb

Unlimited

2

US$14/user/mo

Unlimited

1 Million

100

US$29,95/user/mo

5Gb

Unlimited

12

US$39/user/mo

Bitrix24

Not Available

Raynet

Full Service

50Mb

150

2

US$19/user/mo

HubSpot

Full Service

Unlimited

Unlimited

Unlimited

US$10/user/mo

(A & Cara, 2017)

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Note that each system mentioned at the above table will serve some companies better than others so deep study on the available software must be made by the Craven Books management and advisors before chose blindly a software. What is mention here is just a few packages of the many available on the market, however as Craven Books has lost 90% of their customers, a strong marketing campaign to revert it shall be placed into the business strategy and in this case, the Hubspot CRM can give a good help. The service is provided with full support, and this is a key feature to train the system users moreover it has many unlimited features as storage and users which reduce the cost of Craven Books when it comes to acquire new hardware, beyond that, the software is cloud based which makes no need to invest on expansion of network. Hubspot is a well know company which offers software products for inbound marketing and sales and that’s why they offer their CRM software for free as this software is intended to be a gateway system to their marketing automation software (Hubspot, 2017), which Craven Books could acquire in a later stage when the business starts to move forward again.

Recommendations The result on the implementation of the digital strategy was a catastrophe for Craven Books, in addition there is nobody who could be direct responsible for the mistakes, said that, the project must be called off immediately, the hired IT specialist and the consultant must be removed. Craven Books now should seek for an experienced consultant with a valuable experience in OSS as the situation requires cost reduction, once selected the right consultant, the next step shall be the early involvement between parts to understand the business strategy to develop the right information system approach. Craven Books should not rely completely on the consultant’s judgement and they should carefully review the advice, collect all the necessary opinion and benchmarking will help to find where improvements shall be made. The management must discuss cautiously the feasibility to implement the new system seeking for a better outcome for future of the company. Thus, the planning and the stakeholders’ involvement will be a crucial step to drive these new alignments, the contingency plan must be made and put in action to cover any issue which could happen from the new system platform as the business must be running independently if the system works or not.

Conclusion It is clear the use of information system inside the business can have completely different impact when the companies do not align or are not able to align the strategies between Information System and the Business. Indeed, IS have given to the people the opportunity to create new perspectives where decision-making capacities, communication, geography, different political scenarios and dataprocessing has no limits. Industries require information technology, to position themselves inside of the marketplace with a strong competitiveness and agility, beyond that, information technology give freedom to companies to act in any place where they find the market attractive for their products and services. Hence Craven Books needs to solve their internal problem and keep competing into the marketplace they must realize that planning and preparation is the key when implanting a new approach either for their internal and external customers, to prevent facing issues which can bring a scenario where there may be no turning back. 14

References A, C. & Cara, W., 2017. Capterra. [Online] Available at: http://blog.capterra.com/free-and-open-source-crm/ [Accessed 09 July 2017]. Basahel, A. & Irani, Z., 2009. EVALUATION OF STRATEGIC INFORMATION SYSTEMS PLANNING (SISP) TECHNIQUES: DRIVER PERSPECTIVE. Izmir, European and Mediterranean Conference on Information Systems. Educational Media Australia (Firm), 1999. The Great Information Technology Horror Story, Melbourne: South Melbourne : EMA. Haram, A., 2005. Development of a framework to retain customers through customer relationship management. School of Computing - Dubling institute of Technology, pp. 4-8. Hubspot, 2017. Hubspot.com. [Online] Available at: https://www.hubspot.com/our-story Information Resources Management Association. International Conference, 1999. Managing Information Technology Resources in Organizations in the Next Millennium. Hershey: Idea Group Inc. Jayashree, S., Pahlavanzadeh, S. & Shojaee, S., 2011. A critical analysis of Customer Relationship Management from strategic perspective. Hong Kong, IACSIT Press, pp. 340 -345. Luftman, J. N., 1996. Applying the Strategic Alignment Model. Competing in the Information Age – Strategic Alignment in Practice, pp. 43-69. Luftman, J. N., Lewis, P. R. & Oldach, S. H., 1993. Transforming the enterprise: The alignment of business and information technology strategies. IBM Systems Journal, pp. 198-221. Maylor, H., 2010. Project Management Fourth Edition. England: Pearson. Slack, N., Chambers, S. & Johnston, R., 2010. Operations Management 6th Edition. England: Pearson. Stevenson, W. J., 2012. Operations Management 11th Edition. New York: McGraw-Hill. Steyn, H., 2008. Project management: a multi-disciplinary approach, 2nd ed. Pretoria: FPM Publisher. Wikipedia, 2017. Wikipedia. [Online] Available at: https://en.wikipedia.org/wiki/SWOT_analysis [Accessed 12 July 2017].

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Reflection on the Contribution through online discussion Along this module, I have been quite absent from the online discussions, however I follow up through the email each and every point from my colleagues, most of my posts were quite late and there was not too much interaction. I would consider my participation irrelevant as some external issues (personal & professional) put me away from the platform. However I would like to express my gratitude to everyone that participate with commitment, their point of views helped to clarify many doubts that I had through the module and understand and improve my critical thinking. Below are the links of my few participation. Unit 1 https://campus.college.ch/forum/posts/50115-unit-1-activity?page=2 Unit 2 https://campus.college.ch/forum/posts/50264-unit-2-activity?page=2 Unit 5 https://campus.college.ch/forum/posts/50427-unit-5-activity?page=2Unit 6 https://campus.college.ch/forum/posts/50465-unit-6-activity?page=2

80+

70-79

60-69

50-59

40-49

0-40

Quality of contributions

Made several good contributions and one or more outstanding contribution.

Made several good contributions.

Made a few good contributions

Made a few valid contributions

Made 1 or 2 postings, of poor quality

Did not contribute.

Attribution of references

Clear referencing of well-chosen and highly relevant sources

Clear referencing of all sources, some relevant...

Clear referencing of all sources.

Sources generally referenced.

Used ideas/ words of others without attribution.

Cut and paste or absent contributions.

Evidence of collaboration/ facilitation skills

Skill shown in weaving contributions into the discussions and wiki, and following up on contributions of others.

Skill shown in weaving contributions into discussion and / or wiki, or following up on contributions of others

Some evidence of links to contributions of others.

Basic recognition of contributions of others.

Little or no recognition of contributions of others.

None

Reflection on online contributions (in reflective summary)

Deep reflection shown, with clear and substantial evidence from online discussion and wiki

Good reflection, with clear evidence from online discussion and / or wiki

Reflection and evidence offered, limitations in one of these

Reflection and evidence offered, limitations in both of these

Superficial reflection, very limited evidence

Very little or no reflection/evidence.

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