Problem/Issue Statement
1-888-Junk-Van operates
in the waste collection industry. Waste collection is generally perceived to be
a “rough” business, characterized by unreliable customer service and a lack of
professionalism. It was also considered to be a commodity service, and so as competitors
increasingly entered the market prices began to fall. Achieving operational efficiencies
in this challenging environment was difficult enough for global companies that
benefited from significant scale economies, but was almost impossible for local
companies like the Canadian based Junk Van run by Marcus Kingo. To reduce high fixed
startup costs, Kingo opted to create a simple virtual business model. As
business grew, however, so did operational complexity, and inefficiently and
errors became common place. Drivers relied on instructions deliveries through
an email system, and when this information was incomplete or incorrect,
customers suffered the consequences. Information holding errors were pervasive and
the business was losing customers.
The key
problem is to find an affordable IT system that met Kingo’s operational
requirements and allowed the business to grow. While the system had allowed
1-888-Junk-Van to grow initially, information errors and inefficiencies were
now negatively impacting operations and increasing costs. The scope of the
problem is that since the business model is a virtual business model with no brick
and mortar store locations, all communication and information transmission
would be electronic meaning if there were communication error’s they would
greatly affect the business. Kingo could not afford to keep wasting time
putting out these fires in a very competitive job market.
The case touches of
a few of the symptoms which include:
- Simple administrative tasks (e.g. contracting helpers, going back to the customer site to collect money) took up a lot of the driver’s time.
- Even though some templates existed for drivers to send their information to the data clerk, they rarely used them, so delivers data consolidation was very time consuming.
- Customer service quality was suffering, which damage the company’s reputation.
- Errors in customer contact information, forgotten emails, manual calculations, and billing mistakes caused negative customer interactions.
The most serious
problem originated with the data clerk who would accidently send the wrong version
of the database to the morning operation, and as a result some jobs were
already booked no longer showed in the database and did not make tier way onto
the spread sheet used by the drivers. Fixing the database was extremely time
consuming and meanwhile no new reservations could be taken as there was only
one live copy.
Situation Assessment
The context of the problem is that Junk Van was running an inefficient
unsustainable virtual model given the growth of their business along with the
errors of their employees. The company employed
two call center operations, one data clerk, three drives and helpers, all under
Kingo’s direct virtual supervision. The
mistakes were becoming costly and customer retention began to slip resulting
with customers wanting to switch to another waste removal provider.
The decision criteria for situation are having a
central database for the company, the system needs to be remotely accessible,
and automated emails to customers. The system needs to be easy to implement and
operate for all the employees. It will also need to be flexible and robust
enough to handle revolutionary changes in the marketplace or industry.
List of Plausible Alternative Courses of Action
Kingo's business was
too small to justify hiring a dedicated IT worker and since Kingo did not
personally have an IT background, the solution had to be easy to implement and
operate. Ease of use was also critical since his staff did not possess very
high IT skills; yet you have to rely heavily on the system on a daily
basis. Vendor support was also essential. Kingo knew the company needed a
central database, and that internal information should no longer be transmitted
by an email. The database should be accessible remotely since everyone would be
working on it simultaneously from different locations. Emails to customers
needed to be sent automatically from the system in order to avoid mistakes and
the resulting delays.
There were 5
apparent options for King to evaluate:
Microsoft Access Database: Upgrading from MS-Works to MS-Access could be
done within a relatively short time and on a small budget. Access could be installed
locally on multiple computers, or it could also be installed on a centralized
server to access remotely through the internet and a secure virtual private
network (VPN). Local installations in several computers had an advantage in
that Kingo could easily person the installations himself. Licenses were prices
at $179 per computer. Kingo believed he could find time during evenings or weekends
to create the new database, and that could be ready in a couple of weeks. This
option would not allow for remote access, and so each instance of the database
would have to be updated manually updated every day. Choosing this option would
require Kingo to spend a significant amount of technical information, and he
could not rule out the possible need of extra help in order to get it right.
The number of required user licenses would depend on how many people would be
working on the program concurrently. Kingo would also need to consider the
costs of hosting the shared server, as well as required professional
development assistance.
Google Docs: Google Docs offed online applications that could be used to create text documents,
spreadsheets, slide-based presentations, and forms. The forms application was
of interest as it could be quickly created and shared with employees. Users could
work simultaneously on the same file in a collaborative system environment.
Google Docs was free for up to 10 user accounts, and for small businesses there
was a fee of $5 per user per month. Kingo believed he could migrate to a Google
Docs system in a matter of a couple of weeks. However, with this option all
data would be input into an online spreadsheet, and could not be cross referenced
in the way it usually is in relational databases. Another downside was Google
Docs’ lack of formal customer support; the only available assistance was
through online blogs and forums. A common concern of cloud computing was that
users did not own the tools and resources used to store sensitive company data
which raised some confidentiality issues, and made people wonder what would
have if Google decided to suspend or even cancel the service.
Platform as a Service: PaaS was similar to Google Docs in that it
was delivered on a cloud computing infrastructure. PaaS was defined as the
provision of computational resources – namely hardware, storage, network capacity
and some basic software functionality – on demand through the internet. PaaS differentiated
itself through the fact that users could utilize common applications, as well
as build their own unique applications, using a shared computing platform that
was provided and hosted by a third party. Kingo was not sure he possessed the necessary
IT skills to take advantage of the independence Paas seemed to offer. Another
benefit is that the vendors of PaaS offer on-site trials so business owners can
get a hands on idea of how the system would work for their individual business
and implementation, including data migration, would only take about three days.
Service package costs ranged from $300 to $600 per month, depending on how much
storage space and how many user licenses and applications were needed. If
customization was required, more time and money would be needed, as this option
was charged extra on an hourly basis, at about $180. Fortunately long term
contracts were not required; he could scale the service up or down at any
point, or cancel the service with one months’ notice.
ERP System: ERP were built around a central database. They were designed to accessible
remotely, and claimed to integrate business processes by covering every aspect
of the business, from purchasing, sales, and customer service, to finance,
human resources, and e-commerce. Upon doing some research Kingo found that
even though these options were meant for small businesses they were very
expensive. The average small firm option is built to have 20-25 users and the
cost for licenses would be around $2,500 per user per year. It was likely that license
prices would be higher for company with fewer users. Another disadvantage for Kingo is that the
various packages come with many options most of would not benefit Kingo's
business model. The systems appeared static and focused mainly on production
and finance models, which were not top priorities for his company.
Evaluation of Alternatives
Some key theoretical concepts
that should be included in evaluation of the alternatives:
- Cost effectiveness- Decide if the strategy is worth the cost to implement
- Time implementation- How quick can the strategy be implemented
- Ease of use- How easy is the strategy is to use for non-technical people
- Adaptable- if the strategy is flexible to meet needs of changes in the business or market place
- Long term solution- If the strategy can be implemented for the long term
- Vendor service and reliability- Does the vendor provide quality service and is the company reliable with a good track record or with little to no experience.
Recommendation
Based on the needs of Kingo and the potential alternatives,
my recommendation is to use two of the alternatives – Google Docs for the
immediate future and PaaS over the long term. To service our immediate IT
issues using Google Docs would be to quickest, cost effective, and requires the
shortest learning curve. On Google Drive
you can set different user profiles, for example, one proving full access to
files, another for editing forms, and a third limited to reading information. A
key element for customer relations with Junk Van is email distribution, which
can be supported on Google Docs. For example customers could send an email with
a link to a form, which they could then complete and return online without
having any miscommunication of data or payment information. Taking into account
that it would be one large spreadsheet and could not be cross referenced, this
still could be the first step in the IT solution for Kingo. Despite no formal
customer support, there was still enough information in forums and blogs that
could help Kingo and employees with trouble shooting.
To help with future long term IT needs, it is recommended to
use Platform as a Service. Paas similar to Google Docs in that it was delivered
on a cloud-computing infrastructure. Users cold utilize common applications, as well as build their own
unique applications, using a shared computing platform that was provided and
hosted by a third party. This could allow for Junk Van users to use some of the
applications they were using in Google Docs and create the more robust IT
applications it needs for success in the long run. Kingo discovered there were
a few Paas providers operating in North America who provided different Paas
solutions. Being able to customized and tailor your solution with an infrastructure
that uses cloud functionality is a key
selling point. Since businesses are constantly changing, there is a huge
benefit to having an IT solution that can be tailored to one’s specific
business needs. It is important for Kingo to determine how much of a platform
he wanted to support his business, but Paas would provide him with flexibility
by scaling his service and down at any point and there were no long term
contracts. Basic implementation took only 3 days which would be a nice transition
and compliment to using Google Docs.
In the short run, using Google Docs is a good solution to
solve some of the preliminary problems and migrate into using a PaaS solution
in the future. By having a duel
solution, Junk Van will be able to satisfy its clients, provide employee collaboration
and accountability, have quality assurance checks, and provide time to discover
and determine what IT solution is best for a long term business objectives of
the company.
Reflection
After hearing the presentation from RKR Group I think moving
forward with the PaaS IT system. It provides the most logical and sound model
to implement for Junk Van. Some of the key benefits of PaaS are remote accessibility,
vendor support, future process improvements; emails sent by system, reliable
system, central database creation, and can handle change. The PaaS system will
be able to improve Junk Van’s current operational inefficiencies and facilitate
expansion. Some of the inefficiencies are: operation inefficiency, customer
service, inability to handle more customers, and increasing revenue. In regards to facilitating expansion, the PaaS
system will help with expanding its business while maintaining its level of quality
service and expand their business while still keeping a virtual mode. The PaaS system
also answers Junk Vans key problem that faces their company. The PaaS system provides
a reliable IT structure that will help drive business performance with little
to no errors with respect to the future franchising in other cities. With moving
forward with PaaS, Junk Van will also get an increase in sales as it will help
to handle more customers and improve overall quality of the business. I agree
with RKR Group recommendation of implementing the PaaS System.
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