Business Background
Bandon Group is a US family owned distributor of copiers, electronic printers, faxes, and other office equipment. The company was started by Bud Brandon, who bought a copier dealership in Phoenix in 1966. Through Bud’s entrepreneurial skill, motivation, and commitment to customer service, Brandon Phoenix aggressively gained market share and grew to $10 million in sales in the Phoenix marketplace by 1982. One of Bud’s greatest accomplishments was the creation of Brandon Leasing Company, which held leases on copiers and electronic printers and became a major source of positive cash flow.
Excellent customer service, technical support, and innovative products enabled the company to grow continuously through the 1980s, and profits enabled Bud to purchase another copier franchise in Salt Lake City. By 1995, the Salt Lake City dealership grew to $10 million in sales.
When Bud passed away in 1997, his two sons, Ed and Steve Bandon, continued the business. Their growth strategy was to acquire additional dealerships in growing markets. By 2010, Bandon had grown to four divisions in four different markets in the western U.S. Portland, Oregon; Phoenix, Arizona; Salt Lake City, Utah; and Denver, Colorado. Each division president is responsible for developing sales and marketing strategies that will meet customers’ needs in the particular market segment. This decentralised sales strategy enables divisions to meet the needs of their respective markets.
The corporate headquarters in Phoenix, handles central administrative functions and information systems support for order processing, billing, accounts payable, and accounts receivable. The divisions report to Ed and Steve Bandon, the co-owners of Bandon Group, Inc. The primary objective of senior management is to generate a 10% profit on sales, so profits can be used to re-invest into the overall enterprise and to purchase new division in markets that are growing in importance.
The mission, values, goals and objectives of Bandon Group, Inc., are expressed in the views of Ed Bandon, its co-owner: “Our objective is to provide office information systems supported by a networking infrastructure which facilitates information sharing and systems integration.” In addition, notes Steve, its co-owner, “Bandon Divisions can offer value-added services and technology integration which meets the needs of customers in their respective marketplaces. Our responsiveness to customer needs is key to our profitability and to our market success.”
One of the important elements of the company’s profitability is its excellent sales organisation and professional service organisation. Its salespeople receive extensive training from experienced sales managers. Its service technicians are among the best in the industry and maintain high levels of expertise in problem diagnosis, troubleshooting, and reconciliation.
The competitive environment includes large national manufacturers, such as IBM and Xerox, which are managed through branches in major metropolitan areas. Bandon Group and its divisions have effectively competed by serving the needs of mid-market companies (i.e. $25 – $400 million in sales) and by offering mid-tier equipment (e.g. copiers, faxes, electronic printers) at cost-effective prices in regional markets. Their ability to offer quality-manufactured products (e.g. Canon, Minolta, Kyocera Mita, Sharp) has given their dealerships a reputation for quality and superior service at cost-effective prices.
Information Systems Environment
In the 1990s, Bandon Group contracted with a software development firm to develop customer software for its industry. Its administrative information systems were developed over a ten-year time-frame and handles major administrative and accounting functions, including order processing, inventory control, accounts receivable, accounts payable, general ledger, and meter click billing. Most of the information systems functions for applications supporting the business are generic, but the meter click billing software is unique to the industry. As a result, it made sense to contract for proprietary, or customised, software to support the business applications. The software was written in Business Basic, and the applications ran on an HP server in a Unix operating system environment.
Acquisition of OMD
By 2009, Bandon Groups business expansion meant the company had outgrown its legacy systems. At the time, it hired a full-time Director of Information Technology, Brian Manning. The Director of Information Technology reported to the Vice-president of Finance, William Bruen, within the Corporate Headquarters of Bandon Group Inc. One of Brian’s first responsibilities was to search for a commercial off-the-shelf package that supported the administrative information system of Bandon Group, Inc. After a lengthy analysis, the company selected Office Machines Dealership (OMD), a package developed by a larger dealer.
The OMD System was being adopted by many dealers across the country because it included software supporting the meter-based billing application, used in the copier industry. Meter-based billing in the copier industry is similar to the meter-based billing in the utilities (e.g. gas) industry. In most cases, customers obtain a contract for a certain volume of copies per month, and their billing is based upon this contract. To monitor usage, customers report their meter reading, and any overage (above contract volume) is additionally billed. In some case, customer contract for a cost per copy basis, and they are billed according to this volume. The meter-based billing software within OMD was written in COBOL. Enhancements to the core OMD system included many sales management and service management reporting systems, which the prior versions did not include. OMD uses a dealer advisory board to obtain recommendations for future enhancements and modifications to the package. One enhancement is a web-based interface for customer entry of meter reading. This enhancement is called I-Manager.
One of the limitations of OMD is that it was not built using a relational database. As a result ad-hoc query and reporting is difficult, and managers have to stick with periodic reports provided by the system. Most of the reports are obtained by request to the systems group since generating these reports require knowledge of the OMD report generator. Some managers complain about OMD’s lack of flexibility, and attempts were made to transfer data extracts from the OMD data files into microcomputer-based database files using Microsoft Access so that the managers can make these queries and generate on-demand reports. However, the complexity of the OMD database makes it difficult to create these data extracts and to refresh them on a timely basis.
Connecting the Divisions
Another major responsibility of the Director of Information Technology is to serve the IT needs of the division. By 2010, the four divisions were connected to the central OMD system. Brian spends a major proportion of his time designing and maintaining a telecommunications network with T-1 capability to connect each of the division to the central OMD administrative system in Phoenix.
Sale Prospecting
The office systems dealership industry depends upon effective sale prospecting. The typical sales representative uses a prospect database to make 25 calls each day. Of these 25 calls, five translate into an opportunity for an equipment demonstration. Of these five demonstrations, one or two might lead to an actual sale. Sales prospecting is critical to the success of the sales representatives throughout the industry.
In 2007, Bandon Salt Lake acquired Pivotal, a sales prospecting tool, which supported adhoc queries in a relational database environment. Sale support analysis use external market databases within Pivotal, and these were used to support the sale representatives. In addition, existing customer data was re-keyed into Pivotal from the OMD customer database because Pivotal and OMD were not integrated. In 2008, Bandon Phoenix and Bandon Portland adopted Pivotal as their sale prospecting tools. In 2010, Bandon Denver adopted Pivotal. These divisions adopted a similar strategy of importing from external market databases into the Pivotal database to create sale leads. As with Bandon Salk Lake, internal customer data had to be re-keyed from OMD into the Pivotal database because OMD and Pivotal were not integrated. Over time, this created inconsistencies between the OMD and Pivotal datasets and resulted in a duplication of effect in maintaining these two dataset environments.
Across the divisions, the Pivotal databases were used to varying degrees. At Bandon Salt Lake City, external market data and internal customer data were entered into the Pivotal databases to create sales leads. At Bandon Portland, external market data and internal customer data were used for sales prospecting as well. At Bandon Denver, the Pivotal sale prospecting system was introduced, but the licenses fell out-of-date, and data was not entered periodically. As a result, sales representatives created their own local prospect databases, using the contact management tool within Microsoft Access and GoldMine, a popular microcomputer-based sales and contact management system.
At Bandon Phoenix, a number of sophisticated Pivotal-based Customer Relationship Management (CRM) applications were developed by an internal systems developer between 2005 and 2010. For example, Pivotal applications developed at Bandon Phoenix generates service alerts when a particular customer calls in a service call more than three times in one month. Another Pivotal report, an excess volume report, generates a customer alert when ever copier volume on a particular unit runs 150% over its recommended volume. This information enables the sale representatives assigned to this customer to follow-up with the customer to determine if an upgrade is appropriate. To date, over 50 CRM applications run in the Pivotal environment at Bandon Phoenix. These applications support territory management, lead sales forecasting, customer retention, sales analysis, and sale compensation.
Evaluating CRM Solutions
The importance of sales prospecting to the division led the division presidents at Bandon Portland, Brandon Salt Lake and Bandon Denver to seek alternative sale prospecting and CRM software solutions. Since each division tries to meet the needs of its respective marketplace, the division presidents sought software solutions that supported their application requirements. The division president in Portland, Salt Lake City, and Denver considered adopting the Pivotal CRM applications, which had been developed in Phoenix, but they felt these applications were too extensive and complex to meet their needs and did not meet their unique requirements. One important achievement in Phoenix was the creation of a data migration path between the OMD database and the Pivotal database. With the help of Brian Manning, the Director of Information Technology for Bandon Inc., data from the OMD database is used to refresh and update the Pivotal CRM database in Phoenix on a weekly basis.
Between November 2012 and August 2013, the other divisions analysed and evaluate the other sales prospecting and CRM applications. Robert North, the Division President at Bandon Portland, decided to pilot the new Microsoft CRM package and to customise it for their use. One of the advantages of the new Microsoft CRM package was its integration with Microsoft Office applications, including Excel, Outlook, and Access. A limitation, however, was its lack of integration with the proprietary OMD database and proprietary OMD operating system. Robert hired a consulting firm to address the challenge of creating a data migration path between the existing OMD database, so customer data from OMD could continuously refresh the CRM database.
Edmund Scott, the Division President of Bandon Salt Lake, decided to implement a sales prospecting package, which had been developed by another copier dealership in Pittsburgh. The Soaring package supported lead management and sales prospecting. In addition, the Soaring package used a Microsoft SQL Server database, permitting ad hoc queries and on-demand reports. One of the major advantages of Soaring package was its integration with the OMD legacy system database, and this permitted the migration of customer data from OMD to Soaring for customer account follow-up and analysis purposes.
With Phoenix using, Portland piloting the Microsoft CRM, and Salk Lake City, implementing Soaring, John Werner, the Division President of Bandon Denver decided to rely upon local microcomputer-based sales prospecting software, including the contact management system within Goldmine, until such time as one of the solution was proven to be most cost-effective. John did not want to spend a lot of money and time on an expensive CRM application, when other more cost-effective solutions existed.
The lack of integration among the four different sales prospecting / CRM environments and the central administrative information systems and customer databases posed a problem to Brian Manning, the Director of Information Technology at Bandon Group Inc. It was difficult for him and his small staff to support numerous sales prospecting applications, each of which required data migration from the OMD database to the CRM environment on a periodic basis. While the Soaring software was integrated with the OMD database, it had limited functionality outside the traditional copier line of business, and the other division presidents felt strongly that their CRM tools needed to support new and emerging lines of business, including information systems consulting, document outsourcing, colour graphics, and document management.
An Information Systems Study for Bandon Group
Ed and Steve Bandon, the co-owners of Bandon Group Inc. felt that it was time to do an information systems study to determine how Information Technology (IT) could best support the overall mission, goals, and objectives of the corporation over a three to five-year period of time. While they recognised that each division had a right to pursue autonomous CRM and sales prospecting applications, they saw that this approach created duplication of effort, sub-optimised the outcome, and caused a great deal of extra expense. In addition, the central IT staff managed by Brian Manning, was small and had trouble providing data migration, network support, technical support, and training for four different local sales prospecting and CRM solutions.
Another factor motivated the information systems study. Other large copier dealerships were beginning to implement enterprise systems solutions, including SAP and Oracle ERP. These enterprise system solutions provide administrative systems, grounded in relational database technology, which allowed cross-functional integration. This integration included support for front-end applications such as CRM, which were integrated with the ERP and SCM systems.
Many competitive dealerships were moving towards e-Business solutions, which enabled web-based supply ordering, service call entry, and meter click reporting. In this competitive environment, Ed and Steve Bandon felt it was time to move forward toward e-Business solutions. However, the legacy OMD system had a propriety database and was not integrated with the various CRM solutions adopted by the division, making it almost impossible to move towards implementation of an e-Business solution. E-Business requires a foundation in administrative systems supporting order entry, service call management, customer service, and supply ordering, and the foundation enterprise systems were not in place at Bandon Group Inc.
Need for an Information Systems Study
With these pressing issues in hand, Ed and Steve Bandon decided to bring in an external information systems consulting firm to analyse the current information systems environment, to assess problems with the current environment, and to propose changes in systems to enable the company, including its respective division, to achieve the sales and service objectives.
In addition to assessing the feasibility of implementing enterprise system solutions, Ed and Steve wanted the consultant to address senior management concerns, such as the need for more information for tactical and strategic management, the need to standardise business processes, and the need for more targeted marketing. The centralised versus decentralised organisation of IT was a dilemma. Over the last ten years, the sales prospecting and CRM applications had become totally decentralised and under the control of each autonomous division. Though this provided flexibility and control over data, it added considerable expense and made it difficult for centralised IT to support this environment.
In the current environment, addressing the issues of e-Business and data integration is difficult. Managers within all the division were seeking better management information, but with the current systems, it was almost impossible to provide ad hoc queries and on-demand reporting. It seemed that each new IT issue was being address by a piecemeal or ‘fire-fighting’ plan to spell out directions for central and decentralised IT and to enable divisions to achieve strategic marketing objectives.
You are part of the external consultancy team. You have been provided with a detailed seven-step plan of action for the information systems study (see Table 1), and given additional support material (see appendix).
conduct the information systems study for Bandon Group Inc., using the interviews, supplementary materials, and resources provided in appendix. Your work will advise Ed and Steve Bandon as to the feasibility of adopting enterprise systems solutions, including CRM and e-Business, within the Bandon Group Inc. You will follow the process outlined in table 1. The documentation needed to complete the study is included in the appendix. Your part of the project is outlined in the “Things to Do” section associated with each step. Steps 6 and 7 will be formally assessed as part of this assignment. 50% of the total relates to an executive recommendation (step 6), i.e. to critically address whether Bandon Group Inc. should or should not pursue an enterprise systems solutions. 40% of the total mark relates to a commercial plan, i.e.: a critical evaluation of alternative commercial enterprise system solutions, for use within Bandon Group Inc. (at least three); a recommendation of a commercial solution that best meets their needs; and a detailed 3-5 year implementation. 10% of the mark relates to the commercial presentation material (i.e. group presentation slides + slide documenting personal contribution). All parts should be included in a separate section (i.e. commercial presentation / summary slide).
Table 1: Detailed nine-step plan of action for the information systems study.
Step Strategy Activity Documentation Things to Do
1 Purpose and scope of study Define the purpose and scope of the MIS study. Purpose and scope of the MIS study
(Appendix 1) (NOT ASSESSED)
2 Document high-level business direction Executive management interviews Transcripts of executive management interviews
(Appendix 2) (NOT ASSESSED)
3 Identify key information needs and measures Executive management and team interviews Matrix: goals, critical success factors, measures, IT needs.
(Appendix 3) (NOT ASSESSED)
4 Determine detailer business requirements In-depth interviews with division presidents and teams Interview findings: problems, goals and opportunities, IT needs, priorities
(Appendix 4) (NOT ASSESSED)
5 Determine gap between current IT situation and desired IT direction Follow-up interviews with division presidents List of IT priorities
(Appendix 5) (NOT ASSESSED)
6 Determine feasibility of an Enterprise Systems solution Assessment of the feasibility of enterprise systems (i.e. ERP, CRM, SCM, KMS) Web-based resources on enterprise systems implementation; articles in trade publications; vendor resources
Write an executive recommendation to critically address whether Bandon Group should or should not pursue an enterprise systems solution?
7 Determine Enterprise Systems design issues Assessment of alternative enterprise systems solutions External research on enterprise systems solutions, with consideration of integrated CRM capabilities (e.g. trade publications, vendor reports, web-based materials) 1) Evaluate alternative commercial Enterprise solutions for use within Bandon Group (at least three), and make a recommendation of a solution that meets their needs.
2) Provide a detailed 3-5 year implementation plan.
Appendix 1
Step 1: Purpose and Scope of the Study
Objective of the Study
To determine the major initiatives that the MIS organisations and business management must accomplish over time to move the company from the current situation to the development of an integrated information management strategy that will enable the organisation to achieve its business objectives.
Benefits
a) Assures that IT plans support business plans.
b) Provides a basis for linking IT expenditures to the business direction.
c) Provides a context within which functional area managers and MIS professionals can make decisions.
d) Communicates the overall direction of information use and management throughout the organisation.
e) Provides tighter integration of common systems and networks while simultaneously decentralising the technology and operational activities.
f) Provides guidance in selecting vendors for workstation-based, local area network-based, and web-based solutions to problems.
g) Provides a context for using IT to gain a strategic advantage.
Appendix 2
Step 2: Executive Management Interviews
The executive interviews with four division presidents and the chief financial officer for Bandon, Inc., provide insight into business objectives, marketing strategies, and future opportunities. Based upon these five interviews, develop a list of major objectives to be achieved by an integrated information system.
Robert North, President
Bandon, Inc., Portland.
Executive Management Interview
1) Charter, Mission, Vision, Values, Goals, Objective:
a. What is the mission and vision of the organisation? Address the needs of 6000 companies with >25 employees and specific technology-dependent target markets.
b. Are there any other high-level business direction statements like values, credo? Value-added marketing approach Customer centric; understanding the customer. Experience the difference; differentiation of services. Providing strategic outsourcing services
c. What are the goals and objectives of the organisation? Revenue growth from $23 to $30 M Grow our network and imaging out-sourcing business; Only focus on our targeted markets / customers
d. Is there a goal in terms of market position? Growth in service base. Network and document and document infrastructure consulting.
2) Strategies, Business Priorities for the Year, Critical Issues for Year:
a. What are the specific strategies or business priorities for the year, in order of priority? Ability to focus on higher-margin accounts. Effective relationship building with customers. Effective contact management. Effective customer information gathering and utilisation
b. What must we accomplish this year to remain competitive? Technical expertise. Effective customer service. Product knowledge. Better defined targeted markets
c. What critical issues face the organisation today? Accurate and timely billing; Accurate and timely collections; Effective sales support; Inventory management; Retention and recruitment of quality people.
d. What critical issues face the organisations in the future? Increasing integrating of information / network services with traditional lines of business; Diversity of services and solutions offered to the our targeted markets; Dealing with the limitations of OMD – Inability to bill for non-copier related services; Inability to handle on-line transactions (on-line meter collection).
3) Business Information
a. Are any acquisitions or growth anticipated? Expansion of the IT consulting business.
b. Are there any changes in business market in the future? Trend to selling information services and network-based services (e.g. document management).
c. Who are our customers? Mid-market companies (e.g. law firms, manufacturing, country clubs, professional services firms, construction-related companies, health care).
d. What makes customers buy from us versus the competition? Value-added: service-based approach Our knowledge of their industry.
e. What are your basis product lines? Copying, network services, information services, imaging, document and network infrastructure design and implementation.
f. What has the growth rate been over the past several years? Our growth in output related solutions has been steady but still single digit. In information systems consulting, the growth has been dynamic.
g. How many employees are at your location? Do you anticipate this to change? We have between 90 and 100 people and this should remain steady for the next three years.
4) Industry:
a. What share of the market do you have? Two percent in region.
b. What industry associations of affiliations do you participate in? Copier Dealers Association (CDA)
c. What trends, developments or changes are taking place in your industry? Evolution towards selling information services and network-based services. Copy volumes are declining. More Services are being outsources
d. What are your customers requesting of you? More knowledge of technology and its impact on business today. Easier ways to do business with us. Better return on investment. More accountability.
e. What competitive advantage do you currently have? Effective customer service and support. Our people and their tenure. Our vendor relationships (e.g. Canon, in particular). Network infrastructure design and implementation team. Knowledge of industry-specific software applications.
5) External Factors:
a. Are there any external environmental factors? Fast pace of technology. Finding food people.
b. What challenges do you face in the marketplace? Increasing number of electronic prints and scans versus copes. Getting the customer to understand the complexity of some of the solutions today.
c. What are the external opportunities or threats? The shrinking cost per copy on our traditional business. Many companies are competing on price. High-volume print applications. Convergence of documents, networks, and data under the document management umbrella. Customers looking for one point of accountability for technology development
6) Internal Strengths and Weaknesses:
a. What are the internal strengths of your organisations? Our people. Network knowledge. Our ability to handle every aspect of document management (e.g. creation, conversion, storage /retrieval management / security, distribution, output).
b. What are the internal weaknesses of your organisation? Our central information system’s handling of other services outside of document output.
c. What internal challenges, opportunities or threats exist in your organisation? Turnover of people, Missing opportunity based on not seeing the proper path to capitalise on technology. Waste of resources.
7) Information Technology (IT):
a. What areas must IT improve? Account profitability report (margins/customer). Web-enabled customer support. Automated customer contact solution (e.g. emails). Sales and marketing data and marketing analysis reports. Better resources for obtaining industry specific information. Web-enabled access to information. PDA compatible solution for database access, contact management, and calendars. Customer feedback. Billing system for information consulting services. Web-based project tracking and reporting. Invoicing solution that utilizes fax, email, Internet, and paper invoices. Service management reports (e.g. need response time reports). Accurate cost tracking and reporting.
b. What do you know about the IT of your competition? They are working with Oracle and other ENTERPRISE SYSTEMS vendors.
c. What IT related features or functionality can they offer that you currently cannot? Their web applications are better. National account tracking and reporting.
d. What business decisions are difficult or impossible to make give existing information available from IT? We move our resources, not based on a plan but based on the “squeakiest” wheel.
e. How are decisions being made currently? By the management team.
f. Who needs the information to make these decisions? Division presidents. All managers.
g. What boundaries or desires do you have with respect to this IT planning process? It would be nice to understand what IT will provide, change, or develop in the next year. What is out total cost of IT? Is it justifiable? Is it consistent with industry standards?
