Business Dilemma You have recently started selling a few new products including
ID: 470656 • Letter: B
Question
Business Dilemma You have recently started selling a few new products including customized CDs, customizable coffee presses, and coffee-of-the-month and tea-of-the-month programs. Each time you develop a new product you are forced to create an entire new system to track sales. You are not sure why the accounting system you purchased forces you to do this, but you are stuck with this system until you can replace it. You quickly notice that separate systems for each different line of business including coffee, tea, CDs, equipment, programs, etc. is going to hurt your business. You notice that each system works independently to perform its job of creating, updating, and maintaining sales information, but you are wondering how you are going to operate the business as a whole.
PROJECT FOCUS:
•Create a list of issues you will encounter if you continue to run the business with separate systems, performing the same operations, for each different product.
•What could happen to the cafe if you cannot correlate the details of each system?
•How could separate systems for each product hurt marketing campaigns?
•Be sure to highlight at least 10 issues where separate systems could cause problems running your business.
Explanation / Answer
Some of the issues in running the business with separate systems performing the saame operations with different products are:
- Takes longer to reconcile financials at each reporting period
- Sales forecasts become inaccurate
- Inventory management becomes difficult
- Employee performance management is impossible
- IT becomes inordinately expensive
- Implementation of any strategy has a multiplicative effect on effort needed
- Increased efforts on data consolidation and manipulation
- Extra expenses for data mining and correlation
- Extra procurement efforts and contract management efforts for management of the systems
Issues if we cannot correlate the details of each system
- Need for setting up an entirely new data warehouse system for meaningful analytics
- Incomplete information with many missing details as they are not available in all the different systems
- Delays in having meaningful data for decision making
Separate systems could hurt marketing programs in the following ways:
- Sub-optimal allocation of budgets among products
- Clash of marketing initiatives with those of one eating into that of another product
- Inconsistent brand image
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