Pine Valley Furniture WebStore: Systems Planning and Selection

Pine Valley Furniture WebStore: Systems Planning and Selection

Most businesses have discovered the power of Internet-based electronic commerce as a means to communicate efficiently with customers and to extend their marketing reach. As a systems analyst, you and a project team may be asked by your employer to help determine whether an Internet-based electronic commerce application fits the goals of the company and, if so, how that application should be implemented. The systems planning and selection process for an Internet-based electronic commerce application is no different than the process followed for other applications. Nonetheless, you should take into account special issues when developing an Internet-based application. In this section, we highlight those issues.

Internet Basics

The term Internet is derived from the term internetworking. The Internet is a global network comprised of thousands of interconnected individual

TABLE 4-6: Guidelines for Making an Effective Presentation

networks that communicate with each other through TCP/IP (transmission control protocol/Internet protocol). Using the Internet and other technologies to support day-to-day business activities, such as communicating with customers and selling goods and services online, is referred to as electronic commerce (EC), also called e-commerce. Note that EC can also refer to the use of non-Internet technologies such as telephone voice-messaging systems

FIGURE 4-19 Three possible modes of electronic commerce

that route and process customer requests and inquiries. Nonetheless, for our purposes, we will use EC to mean Internet-enabled business. The three classes of Internet EC applications are Internet, intranet, and extranet, as illustrated in Figure 4-19. Internet-based EC is transactions between individuals and businesses. Intranet refers to the use of the Internet within the same business. Extranet refers to Internet-based communication to support business-to-business activities. Intranets and extranets are examples of two ways organizations communicate via technology. Having an intranet is a lot like having a “global” local area network. A company may create an intranet to house commonly used forms, up-to-date information on sales, and human resource information so that employees can access them easily and at any time. Organizations that have intranets dictate: (1) what applications will run over the intranet—such as electronic mail or an inventory control system, and (2) the speed and quality of the hardware connected to the intranet. Intranets are a new way of using information systems to support business activities within a single organization. Extranets are another new way of using an established computing model, electronic data interchange (EDI).EDI refers to the use of telecommunication technologies to transfer business documents directly between organizations. Using EDI, trading partners—suppliers, manufacturers, and customers— establish computer-to-computer links that allow them to exchange data electronically. For example, a car manufacturer using EDI may send an electronic purchase order to a steel or tire supplier instead of a paper request. The paper order may take several days to arrive at the supplier, whereas an EDI purchase order will take only a few seconds. EDI is fast becoming the standard by which organizations will communicate with each other in the world of electronic commerce.

When developing either an intranet or an extranet, developers know who the users are, what applications will be used, the speed of the network connection, and the type of communication devices (e.g., Web browsers such as Firefox, Chrome, or Internet Explorer, smart phones such as an iPhone). On the other hand, when developing an Internet EC application, developers have to discern countless unknowns in order to build a useful system. Table 4-7 lists several unknowns you and your project team may deal with when designing and building an EC. These unknowns may result in making trade-offs based on a careful analysis of who the users are likely to be, where they are likely to be located, and how they are likely to be connected to the Internet. Even with all these difficulties to contend with, you will find no shortage of Internet ECs springing up all across the world. One company that has decided to get onto the Web with its own EC site is Pine Valley Furniture.

  Pine Valley Furniture WebStore

The PVF board of directors has requested that a project team be created to explore the opportunity to develop an EC system. Specifically, market research

TABLE 4-7: Unknowns That Must Be Dealt with When Designing and Building Internet Applications

has found a good opportunity for online furniture purchases, especially in the areas of:

• Corporate furniture buying
• Home-office furniture purchasing
• Student furniture purchasing

The board wants to incorporate all three target markets into its long-term EC plan but wants to focus initially on the corporate furniture buying system. The board feels that this segment has the greatest potential to provide an adequate return on investment and would be a good building block for moving into the customer-based markets. Because the corporate furniture buying system will be specifically targeted to the business furniture market, it will be easier to define the system’s operational requirements. Additionally, this EC system should integrate nicely with two currently existing systems, Purchasing Fulfillment and Customer Tracking. Together, these attributes make it an ideal candidate for initiating PVF’s Web strategy.

Initiating and Planning PVF’s E-Commerce System Given the high priority of this project, Jackie Judson, vice president of marketing, and senior systems analyst Jim Woo were assigned to work on this project. As for the Customer Tracking System described earlier in the chapter, their first activity was to begin the project’s initiation and planning activity. Over the next few days, Jim and Jackie met several times to initiate and plan the proposed system. At the first meeting, they agreed that “WebStore” would be the proposed system project name. Next, they worked on identifying potential benefits, costs, and feasibility concerns. Jim developed a list of potential costs the company would incur to develop Web-based systems that he shared with Jackie and the other project team members (see Table 4-8).

WebStore Project Walkthrough After meeting with the project team, Jim and Jackie established an initial list of benefits and costs (see Table 4-9) as well as several feasibility concerns (see Table 4-10). Next, Jim worked with several of PVF’s technical specialists to develop an initial project schedule. Figure 4-20 shows the Gantt chart for this 84-day schedule. Finally, Jim and Jackie presented their initial project plans in a walkthrough to PVF’s board of directors and senior management. All were excited about the project plan and approval was given to move the WebStore project on to the analysis phase.

TABLE 4-8: Web-Based System Costs

TABLE 4-9: PVF WebStore Project Benefits and Costs

TABLE 4-10: PVF WebStore Feasibility Concerns

FIGURE 4-20 Gantt chart showing the schedule for the WebStore project.

  Key Points Review

1. Describe the steps involved when identifying and selecting projects and initiating and planning projects.?

Project identification and selection consists of three primary activities: identifying potential development projects, classifying and ranking projects, and selecting projects for development. A variety of organizational members or units can be assigned to perform this process, including top management, a diverse steering committee, business units and functional managers, the development group, or the most senior IS executive. Potential projects can be evaluated and selected using a broad range of criteria such as value chain analysis, alignment with business strategy, potential benefits, resource availability and requirements, and risks. Project initiation and planning is a critical activity in the life of a project. At this point, projects are accepted for development, rejected as infeasible, or redirected. The objective of this process is to transform a vague system request into a tangible system description, clearly outlining the objectives, feasibility issues, benefits, costs, and time schedules for the project. Project initiation includes forming the project initiation team, establishing customer relationships, developing a plan to get the project started, setting project management procedures, and creating an overall project management environment. After project initiation, project planning focuses on assessing numerous feasibility issues associated with the project in order to create a clear baseline project plan.

2. Explain the need for and the contents of a project scope statement and a baseline project plan.

A project scope statement and a baseline project plan are created during project initiation and planning. The project scope statement is a short document prepared for the customer that describes what the project will deliver and outlines all work required to complete the project; it ensures that both you and your customer gain a common understanding of the project. The baseline project plan contains an introduction, a high-level description of the proposed system or system change, an outline of the various feasibilities, and an overview of management issues specific to the project. Before the development of an information system can begin, the users, management, and development group must review and agree on this specification.

3. List and describe various methods for assessing project feasibility.

Assessing project feasibility can include an examination of economic, operational, technical, schedule, legal and contractual, and political aspects of the project. This assessment is influenced by the project size, the type of system proposed, and the collective experience of the development group and potential customers of the system. High project costs and risks are not necessarily bad; rather it is more important that the organization understands the costs and risks associated with a project and with the portfolio of active projects before proceeding.

4. Describe the differences between tangible and intangible benefits and costs, and the differences between one-time and recurring costs.

Tangible benefits can be easily measured in dollars and with certainty. Intangible benefits cannot be easily measured in dollars or with certainty. Tangible costs can be easily measured in dollars and with certainty. Intangible costs cannot be easily measured in terms of dollars or with certainty. One-time costs are associated with project start-up and development. Recurring costs result from the ongoing evolution and use of a system.

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