Business case: Analyze the following business case and provide your recommendati
ID: 3884900 • Letter: B
Question
Business case: Analyze the following business case and provide your recommendations.
Big E. Bank
John Adams is the chief information officer of Global Consultants (GC), a very large consulting firm with offices in more 100 countries around the world. GC is about to purchase a set of several Internet-based financial software packages that will be installed in all of their offices. There are no standards at the application layer for financial software but several software companies that sell financial software (call them group A) use one standard to enable their software to work with one another's software. However, another group of financial companies (call them group B) use a different standard. Although both groups have software packages that GC could use, GC would really prefer to buy one package from group A for one type of financial analysis and one package from group B for a different type of financial analysis. The problem is that then the two packages cannot communicate and GCs staff would end up having to type of same data into both packages. The alternative is to buy two packages from the same group—so that data could be easily shared but that would mean having to settle for second best for one of the packages. Although there have been some reports in the press about the two groups of companies working together to develop one common standard that will enable software to work together, there is no firm agreement yet. What advice would you give Adams?
Explanation / Answer
Today, the most important aspect of computers is
networking.
The Internet is every-
where, and virtually all computers are networked. Most corporations are rapidly building
distributed systems in which information system applications are divided among a net-
work of computers. This form of computing, called client–server computing, will dramati-
cally change the way information systems professionals and users interact with
computers. The office of the future that interconnects microcomputers, mainframe com-
puters, fax machines, copiers, teleconferencing equipment, and other equipment will put
tremendous demands on data communications networks.
These networks already have had a dramatic impact on the way business is conducted.
Networking played a key role—among many other factors—in the growth of Wal-Mart
Stores, Inc., into one of the largest forces in the North American retail industry. That process
has transformed the retailing industry. Wal-Mart has dozens of mainframes and thousands of
network file servers, microcomputers, handheld inventory computers, and networked cash
registers. (As an aside, it is interesting to note that every single microcomputer built by IBM
in the United States during the third quarter of 1997 was purchased by Wal-Mart.) At the
other end of the spectrum, the lack of a sophisticated data communications network was one
of the key factors in the bankruptcy of Macy’s in the 1990s.
In retail sales, a network is critical for managing inventory. Macy’s had a traditional
1970s inventory system. At the start of the season, buyers would order products in large
lots to get volume discounts. Some products would be very popular and sell out quickly.
When the sales clerks did a weekly inventory and noticed the shortage, they would order
more. If the items were not available in the warehouse (and very popular products were
often not available), it would take 6 to 8 weeks to restock them. Customers would buy
from other stores, and Macy’s would lose the sales. Other products, also bought in large
quantities, would be unpopular and have to be sold at deep discounts.
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