1-888-JUNK-VAN Case Study

Problem/Issue Statement

The problem in the 1-888-JUNK-VAN case is that the company does not have an adequate IT system that can support, sustain and help grow its operations. Several symptoms of this problem are referenced in the case. They include: information errors and inefficiencies that were negatively impacting operations (extremely time consuming process of fixing the database, forgotten emails, low customer service quality and loss of customers) and increasing costs (driver’s data consolidation reduces their productivity, billing errors). The scope of the problem includes every aspect of the company’s operations from ownership, operation, data entry to drivers and helpers and inevitably, the customers. Due to the poor design of the system and its inadequacies, personnel cannot efficiently devote their time to their daily tasks.

Situation Assessment

1-888-JUNK-VAN currently employs two call center operators, one data clerk, three drivers and three helpers, all under the owner’s (Kingo’s) supervision. Operations begin with customers calling reception and operators imputing job information (customer contract details, time and date for the job) to a custom-built MS-Works database. At the end of the day, operator creates and mails work order spreadsheet for each driver in each location that includes job details for the following day, and also emails the updated database to the data clerk. Upon receipt of the information drivers plan their schedule and inform helpers. The following day they perform services, email the data clerk details regarding jobs performed, weights, invoices, payments received and hours worked. The data clerk integrates the information into the central database, manually processes credit card payments, and forwards updated database to the morning operator. Payroll and administrative activities are performed by the data clerk and the owner. Any accounting related documentation (invoices, expense receipts) are forwarded to an accounting firm for bookkeeping purposes. All of the activities are very manual and subject to errors and inefficiencies.

The decision criteria considered by Kingo when exploring possible solutions to his business problem include: better operational system, central database, remote accessibility, automatic email notification system, ease of implementation, flexibility and robustness capable of accommodating future grown and evolutionary changes in the market of the business, vendor support, timeliness of implementation and associated cost.  

List of Plausible Alternative Courses of Action

Possible information technology solutions referenced in the case would meet some, if not all, of the requirements specified by the owner. They include the following:

- Microsoft Access Database – this solution would be ready in a couple of weeks and would not be expensive. Access can be installed on multiple computers locally as well as on a centralized server to be accessed remotely through the Internet and a VPN.

- Custom Application – this web-based system is built as a completely customized application for the business. It would meet requirements of a central database and provide remote access as well as provide some basic functionality. It could be built within 4 weeks at an upfront cost of $2,000 and maintenance cost of $60 per hour.

- Google Docs – this online application allows quick creation and sharing of documents. It allows many individuals to simultaneously work in one file and in collaborative system environment. Option supports different user profiles, email distribution, is low in cost, easy to use, and could be implemented quickly.

- Platform as a Service (PaaS) – This option is delivered on a cloud-computing infrastructure and would provide network capacity as well as some basic functionality on demand and through the Internet. Users could utilize common applications, build their own unique applications using a shared computing platform that is provided and hosted by a third party. The application is relatively easy to use and quick to implement. Service package ranges from $300 to $600 per month depending on how much storage space and how many user licenses and applications are needed. Long term contracts are not required and service can be canceled or expanded at any time with a one month’s notice.

- Enterprise Resource Planning (ERP) – built around a central database, this type of system is designed to be accessible remotely and cover business processes that reflect every aspect of the business. The implementation is very costly and expects a larger number of users at a cost of $2,500 per user.

Evaluation of Alternatives

Each one of the solution types referenced above has advantages as well as disadvantages. One of the main factors that should be considered in this case is the value, functionality and possibility to accommodate the growing business in the future. When implementing any of the solutions, Mr. Kingo should deliberate on the following with regards to each option:

- Microsoft Office Database – while the implementation of this option would be timely and inexpensive ($179 per computer) Kingo is planning to invest his own time in developing the database and therefore forgoes potential opportunity cost associated with sacrificing his own time to develop the tool, as opposed to using his entrepreneurial skills and growing the business (this aspect should be evaluated with each option). We do not know how many licenses would be needed. We need to consider cost of hosting the shared server and possible professional developer assistance. This selection would not meet the expectation of allowing for remote access and thereby would not eliminate the errors associated with manual updates.

- Custom Application – implementation of this option would be timely but the total cost is difficult to estimate due to inability to predict how much maintenance would be required. Quotes provided to Kingo also do not include data migration. Although a completely customized application would be web-based, allow for remote access and meet functionality requirements, Kingo would not be able to assess whether the developer understood the business needs and whether the application is user friendly beforehand. Since there is a high potential for misalignment of requirements, future rework and support can become costly.

- Google Docs – while the implementation of this option is inexpensive and timely, and the collaboration and functionality would accommodate most of business requirements, it would not eliminate the problems accompanying management of a large database in a single excel spreadsheet. Furthermore, lack of formal customer support, potential security and sustainability concerns need to be carefully considered.

- Platform as a Service – although Kingo was not sure if he possessed the necessary IT skills to take advantage of the independence of PaaS offering, he could use external IT services to overcome this obstacle. Before making a decision, Kingo would need to understand how much of a platform he would want and how much he is willing to pay. Customization of the platform is available at $180 per hour therefore it is in his best interest to have a very good plan and layout of requirements based on the familiarity with the trial he observed with the sales representative.

- ERP System –Kingo finds it difficult to extrapolate the cost estimates to his business and is unsure of the particular applicability of the package to suit his business needs. Furthermore, the application offers modules that appear static, focus mainly on production and finance, which are not a top priority for his company.

Recommendation

Based on the understanding of business requirements, evaluation of the alternatives, characteristics and commercial terms of each option, I believe that the logical and quality recommendation that will best suit the business needs would be to select the Platform as a Service Option. This option will provide the business with better operational system, central database, remote accessibility, flexibility and robustness capable of accommodating future grown and evolutionary changes in the market of the business. There is also ability to customize the application that will allow for automatic email notification system. The system is easy and quick to implement, and offers vendor support should any problems occur.

Presentation

If I were presenting the case, I would walk through the current state to highlight the problems and manual processing caused by the lack of applicable IT system. Furthermore, I would clearly state the requirements and how each of the available options fits and meets, or does not meet, those requirements. I would utilize a tabular presentation form to depict this comparison.  This type of presentation will ease the decision making process. I would also highlight, when making the IT system choice, that while it is great to have control of one’s business, Mr. Kingo will benefit from relying more on a robust business solution so that he can focus his efforts on applying his entrepreneurial skills and growing the business.