ACCT3323, Three simple answer,need it in 2 hrs
Question 1 Nova Parts Limited (NPL) is a large, 25 year old profitable national wholesale distributor of automotive parts. NPL is privately owned and has 12 distribution depots across Canada. They have 40 sales persons and 4 regional sales mangers. NPL sells to approximately 2,500 customers (primarily small garages and auto centres) across Canada.
NPL is considering the acquisition and implementation of a CRM (Customer Relationship Management) system to improve its marketing and sales activities. Sales and profit growth rates have not met targets over the last three years as competition has increased. The proposed new CRM would be acquired from a leading software vendor. Total estimated costs for this project are $260,000.
NPL currently has a three-year-old Accounting Information System (AIS) that was developed internally using an IBM relational database management system (DB2) on NPL’s IBM mainframe computer and operates over a wide area network (WAN). NPL has recently completed a “sales automation project” (providing notebooks in the field to all sales persons) to facilitate order taking. All office and sales staff are connected to the corporate network via local area networks (LAN) at each regional office. NPL has a staff of 10 IT professionals who have been overworked maintaining their IBM system and the sales automation project.
Tom OneUp, the Director of Data Processing is championing the CRM project, as he believes that this technology is needed for NPL to become a technology leader in their industry. Janice Smith, the Marketing and Sales VP, is less supportive as she feels that her sales force is just getting used to the sales automation project which took a year longer than anticipated to implement and too many of their sales staff are resisting the use of technology. Sales staff are slowly beginning to use the query and report generation features of the system. Tom Collins, the VP of Finance, believes that the CRM project is affordable.
ACME Parts (NPL’s largest customer) has asked NPL for continuous access to NPL’s inventory levels so it can better manage its shipping and warehouse costs. NPL has not provided this as of yet. NPL has more than 300 suppliers who provide more than 12,000 different car and truck parts.
NPL currently has a website www.NPL.com, but it is used predominately for internet presence and public relation purposes only. No products are sold over the web. All orders (both sales and purchases) are made via the phone, fax, or mail. Delays and errors occur on a frequent basis.
John McAvoy, the owner and CEO, knows that several of his competitors have recently implemented CRM systems, but he is also concerned that IT costs are growing faster than any other expense area. He has asked you to provide answers to various questions regarding NPL’s current and future IT activities.
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Be sure to state any and all assumptions:
a. Briefly explain what a CRM is and what benefits it would provide to NPL (6 marks)
b. Briefly outline the 3 most important management, organizational, technology and control issues which should be considered by NPL in making this CRM decision? Describe why each is important (12 marks) State your assumptions.
Management Issues and why important :(3 marks)
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Organizational Issues and why important: (3 marks)
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Technological Issues and why important: (3 marks)
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Control/Governance issues and why important (3 marks)
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c. Assess the level of risk associated with this CRM project and explain how the risk should be managed. (5 marks)
d. What is your recommendation for this $260,000 CRM project with your justification. (4 marks)
e. Can information technology provide an organization with sustainable competitive advantage? Explain your answer. ( 3 marks)
Question 2 You are the owner of a 10 year old highly successful national widget manufacturing company (Maritime Widgets Limited). You have just returned from a large industry convention. At the convention one of the keynote speakers was promoting the use of Data Warehouse technology as a means of solving the problem that too many organizations share, namely they find themselves “ Data Rich Information Poor - Knowledge Starved”. You agreed with the speaker as you found the same situation existed in Maritime Widgets even though you felt that you had a good IT infrastructure, which according to your IT Director, that even though most of the technology was older it was working well. Regional Sales managers however seemed to be complaining about the inadequacies of their sales analysis reports. You pull out one of the handouts from the speaker’s notes (see below) and you reflect on how this new technology (data warehouse) might solve this problem.
- Do you agree with the speaker’s assertions that many mid to large sized companies find themselves “Data Rich Information Poor - Knowledge Starved” even though they are spending lots of money on IT? Why or Why not? How could this have happened in today’s world of technology? Explain (8 marks)
B. Briefly describe what a data warehouse is. Would it solve the problem above? Why or why not? (4 marks)
Question 3a. As organizations utilize more information technology in their business operations, “ information systems reliability “ becomes critical for the success of their business.
Why is this the case? (4 marks)
b. Also, identify and discuss two information systems management policies or internal control practices that will help to improve systems reliability. (4 marks)
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c. With respect to internal controls, many organizations over or under control out of ignorance. Discuss. How much control is enough? (5 marks)
