In order to produce an upwards swing in revenue, Toy World must track its customers buying trends with more accuracy and more detail. The Point of Sale system that they are currently working from can be improved and made to reduce after-market inventory. Trend data can be used for a wide variety of purposes. One of the first problems is the store design and layout of items. Sale items and hot merchandise must be as strategically positioned as possible to allow a prospective customer to locate and remove the item from the shelf quickly and painlessly. By analyzing customer data, the new system must be able to sort items not only by popularity, but also by genre. Once data is collected, new stores can be quickly designed around the products.
Some trends never die, seen by the toy world market data. Comparing one toy with another is extremely important in order to decipher just why its a big seller. The POS system should be able to lay out all pertinent information about a toy obtained from sales data, and compare it next to a variable number of other hot sellers. Data can be compared with toy descriptions after analysis of the item, and research of the toys advertisements and media exposure. Also by doing this, under- stocking and over-stocking shelves can be prevented.
A hot toy can be kept in stock if the retailer orders a large quantity ahead of time after POS analysis. What of the items that dont sell much when the POS data is analyzed? The system should be able compute the quantity to order, to keep in the stock room, or to totally remove the item from inventory. At the snap-shot of this case, Toy Worlds tactical strategic position was decent and had room for expansion, but the tactical position was lacking in many areas. If you ask the CIO of any successful company that has been around for about 25 years, he will agree that for maximum results and increased overall cash inflow, a large portion of the budget should be spent on IT. More funds towards improvement of the POS system would have increased revenue two or even threefold. Much of the data network at Toy World is too slow to handle the amount of traffic necessary to sufficiently analyze POS information.
From IT Planning (Exhibit 5) the MIS spending plan as a fraction of sales, decreases from 0.9% in 1987 to 0.8% in 1988, around $4000. This shows a clear lack of good prediction when this % of sales data is compared with the revenue (Exhibit 3) of $10 million. IT spending could have been increased by 50%, (1.8-2.0) percent from 1986 to 1987 with practically no negative side effects. Strategically, the company was looking towards the future of sales.
One of the major ideas that were worked into Toy Worlds electronic future was e-commerce. If they were to win that race, the sales would predictably skyrocket. Toys are the perfect product to purchase online for tech savvy moms and dads at Christmas time. Though the technological problems were many, Toy World was still a leader in toys manufacturing and sale. As the CIO of Toy World, I would have a comprehensive and competent staff working in a team-oriented workplace. The new management team positions would be Systems Analysts would be hired in order to redesign the POS system. The system would keep the same base coding and structure but certain descriptive items must be added to the data analysis. This team would be in charge of analyzing the system and would work closely with the team of programmers to design the best way to integrate additions to the POS system.
The Lead Programmers would work closely with the Systems Analysts with the intent of upgrading the IT systems of Toy World. They must be competent in ANSI C, C++, SQL, Visual Basic, ORACLE, UNIX (AIX), and any other database systems. Web Support and Development Experts would be in charge of an E-commerce storefront and the development of a company website. This team of web savvy programmers and web designers would maintain the web system and servers. The team would also update the web page with new items.
The analysts would specifically choose these new items from the new POS data. Telecommunications personnel would be in charge of the phone line services and satellite connectivity between the points of Toy Worlds stores and business offices. Small three or four man teams would have to be positioned at each store for maximum results and ease of communication and synchronization. The POS systems analysts should be an elite hand picked team that knows the toy business and what makes function the best. This team would analyze computer POS data and also work with the Lead Programmers to design the POS system. After all, they are the personnel that will ultimately be benefiting from the POS IT system.
Technical Support Managers and Personnel would be in charge of troubleshooting systems and setting up small, business computer systems as needed. The managers would be trained by the team of Lead Programmers and would, in turn, instruct the larger number of Technical Personnel. This group of professionals would be serving under a Vice CIO/ IT Financial Manager who would oversee problems and make financial decisions along with the CIO. This plan of new technicians will be modified and strengthened by new professionals as the need arises.
4.) The corporate strategy from Toy World did not support its future IT agenda. The Toy World Corporate Strategy was: 1.) Increase sales per store 2.) Increase the number of stores to expand leverage from overhead and support expenses 3.) Convert more sales dollars to profit Information systems applications were explicitly identified in support of the latter issue only. This clearly does not mesh well with the future of IT. Toy Worlds IT budget decreased, while more stores were to be created? Increasing the number of selling points should means more funds needed at the IT level to support the growing need for communication and support the volatile expansion of store volume and customer base. However, the AT&T sponsored Information Technology Management was a great plan that can only lead to a higher competency level in any corporations IT division. Similarly, the role of the external consultant should be to guide the MIS department at Toy World with solutions to problems and methods of IT that have been proven to work.
The consultant should strategize the MIS plan, which Rothstein and OMara did, specifically the Opportunity/Impact plans. The planning and integration of ITM into Toy World would be an asset to the companys revenue and profit. Vendor Ticketing and the Electronic Shopping Aid are methods that consultants should come up with, especially when they are tailored to the exact needs of that particular IT division. 5.) Using the aforementioned team of programmers and analysts, the new POS system will be implemented in specific stages over time.
This will increase the efficiency of the system for the short term because of user friendliness and to keep the learning curve from getting too steep. Key items would be implemented right away, with other descriptive data fields available down the road. By designing the new POS system around a SKU and UPC code structure, communication speed will increase and costs will stay low. Large, unwanted packets of data can be avoided since all information can be coded into the SKU number for that item. This 7 to 10 digit number can contain up to 4 or 5 descriptive qualities about t …
