CP 571 Business Information Sytems - Case Study # 2 : BLUE Books

Dear Students,
This is the case Study #2 called : BLUE Books

Dead Line : 29 February 2008

Case Study No. 2

Blue Books

Blue Books is a sizeable high street bookshop in Kuala Lumpur. It has occupies several floors of a prime high street location. In addition to selling books it also sells videos, DVDs and CDs and has a coffee shop on the fifth floor. Blue Books has a history of innovation, it was the first bookshop in Kuala Lumpur with electronic point of sales systems, and the first to provide customers with PC based catalogue browsing instore. Increased competition and declining profit margins led to the move into CDs and DVDs and more recently into select, upmarket stationary. A large amount of Blue Books’ business is derived from overseas visitors to Kuala Lumpur but there is a substantial local customer base and repeat business from Australian visitors to the store.

There are 16 checkout positions, most of which have two electronic cash registers linked to a central database. The cash registers have limited processing power and can not access the inventory system directly to answer customer queries. The systems has worked very well for the last 6 years but the hardware started to show signs of failure The software is efficient but limited and it is very difficult to carry out data capture on customers or to carry out sophisticated queries on the database for marketing purposes. Blue Books is a good business but in order to maintain its health it needs to market and merchandise more effectively and this means replacing the exist hardware and software with something which is better aligned with the business plan. Consequently a replacement system has been commissioned.

Eric Kruger handles all IS/IT support for the Kuala Lumpur store. He was closely involved in the development of the system which is now due for replacement. He was promoted to the position of IT manager two years ago. He started at Blue Books nine years ago, joining the company after graduating with first class honours in Computer Science. He has since completed a Graduate Diploma in Business with a view to taking an MBA at a later date. The directors decided to put Eric in charge of the project to replace the older hardware and software and has he has been told to reduce costs where possible.

Eric has followed a traditional systems development approach and has taken the trouble to confirm the user requirements for an integrated software system that can handle sales, inventory, transaction processing, and marketing. The software uses a single server and PCs with barcode readers to function. The company offered to provide a turnkey (ready to use) system for around RM360,000 (include installation) with ongoing software and network licensing costs of RM80,000 AUD per year. Eric has taken the trouble to price up everything that he would need to build the system and realises that he could save over RM60,000 by sourcing all the equipment locally and bringing in contract staff to handle the changeover. His procurement list included a new network, PCs to use as both electronic tills and for handling customer enquiries, a further 12 PCs placed on the shop floor to allow customers to browse the online catalogue and to place orders. The database server is a state of the art dual processor model. Eric made sure that he specified conformance to the network and hardware standards specified by the software supplier in his purchase orders. Sensibly, he has arranged for the system to be installed over a long weekend. Since the networking cabling was upgraded two years ago, it is quite capable of supporting the new systems and does not need to be replaced, however the new system requires updated networking software.

Work began on dismantling the old system as soon as the store closed its doors on Friday evening and by midnight this part of the project was complete. By 9.00am on Saturday the new hardware is in place and the software has been installed. The project is nearly 20 hours ahead of schedule. Eric tests the system by scanning a book – and finds that it fails to operate. Realising that he has only a short period of time to sort the problems out, he telephones the software company, the business that supplied the server, the PC supplier and the network software vendor in an effort to understand the problem. The network people blame the server company, the server company in turn point to problems with the PCs and networking. The PC company say that they manufacture to widely used, international standards and have never had any such problems before. The network software company points out that its product is used world wide in many different applications.

Eric realises that he has two and a half days in which to sort this problem out or his future with the company looks bleak. It crosses his mind to walk off the job and tender his resignation. Right now he has 6 contract staff standing around waiting for instructions.

Questions

1. How did Eric manage to get himself into this mess?

2. Would walking off the job and resigning be a reasonable option? Why?

3. What should Eric do immediately?

4. What should be done in the short term?

5. What should be done to resolve the problems on a permanent basis?

6. What revisions to policies and procedures should be made to prevent a recurrence?

7. Should Eric be allowed to keep his job? Why/why not?

Zainudin Johari