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YORK UNIVERSITY ATKINSON FACULTY OF LIBERAL AND PROFESSIONAL STUDIES School of Administrative Studies AK/ADMS 2511 - Management Information Systems MIDTERM EXAMINATION April 3, 2009 7:00 p.m. to 9:00 p.m. NOTE: Examples are graded as 2 marks in most o the questions. If the example is complete then you would give 2 marks (but it would have to be a good detailed example; good quality); if the example provided is not detailed enough (2 or 3 words, not a complete sentence, you have to guess what the student wants to say, and situations like this) then only 1 mark will be given. Please provide written feedback to students on their midterm exams (e.g., where they went wrong). It will take a little bit of more time however in the final exam we dont have to do this. Question 1 (6 marks - 14 minutes) The offshoring of IT help desk operations has steadily increased over the last decade. These operations have moved from Canada and the U.S. to countries such as India, Mexico and the Philippines. Jill, the chief executive officer (CEO) of Hunter, Inc., a manufacturing firm of LCD televisions has asked David, vice president (VP) of Shared Technology Services to improve the effectiveness and efficiency of the companys IT help desk operations. Jill has advised David to keep in mind that Hunters revenue is expected to grow tenfold during the next five years. After a month of mulling through information provided by his team and speaking to consultants, David decided that strategically, it was best for Hunter to offshore its IT help desk operations. The IT help desk is in charge of answering questions and assisting users when their computer doesnt work, when they have problems with their e-mail accounts, or when they need assistance with how to use a new software application. Required: A) There are many business pressures that confront modern organizations like Hunter. Identify and describe two of those business pressures and for each business pressure discuss how it has impacted Hunters decision to offshore its IT help desk operations. (6 marks) Solution: (One mark per identified and described business pressure, two additional marks for impact on Hunters decision. Pages 13-18) Business Pressure and Description (2 marks) Impact of business pressure on Hunters decision to offshore (4 marks)

Market pressure (Broader type): OR Global economy and strong competition (Sub-type): - emergence of global, web-based platform OR - lower labour costs in developing countries Market pressure (Broader type): OR Changing workforce (Sub-type): -IT has caused the workforce to become diversified - The workforce does not have to be situated in one central office location to perform their duties Market pressure (Broader type): OR Powerful customers (Sub-type): - need for real time operations Technology (Broader type): OR Technological innovation and obsolescence (Sub-type): - new and improved technologies rapidly create or support alternative service options Social/Political/Legal (Broader type): OR Compliance with government

- As help desk operations is not one of Hunters core competences, having a third party (situated anywhere on the globe) provide the service will help Hunter to focus on its core competences and remain competitive. OR - Due to an expected increase in revenue, Hunter is also expecting an increased dependence on its help desk operations. Therefore, Hunter must find a way to reduce costs associated with its help desk operations.

- All of Hunters employees can readily call the helpdesk irrespective of their locations - Therefore, impact to operations should be minimal and the objection of Hunters employees should be minimal

- Customer service needs to be operational 24/7 and by offshoring, Hunter is able to provide this service which otherwise would be too costly

- As a result of technological innovation, Hunters help desk requirements can be seamlessly supported by any third party service provider situated anywhere on the globe.

- Since Hunter is a manufacturer of LCD televisions, its data are not subjected to stringent government regulations as companies in other industries. Therefore, the offshoring of their IT help desk operations should face minimal, if any, government restrictions.

regulations and deregulation (Subtype): - government regulations regarding health, safety, environmental control and equal opportunity Social/Political/Legal (Broader type): OR Ethical Issues (Sub-type): - companies are now acting with ethics in mind as they want to be viewed as good companies in the public eye Social/Political/Legal (Broader type): OR Political Issues (Sub-type): - companies who obtain loans from the government are subjected to certain conditions imposed by the government (i.e. 90% of your operations must remain within the confines of the countrys geographical border) Social/Political/Legal (Broader type): OR Social Issues (Sub-type): - companies are now acting with social responsibility in mind when making business decisions Question 2 (15 marks - 36 minutes) A 1998 review of globalization in the computer industry concluded that personal computer (PC) makers in the United States had gained a strategic advantage by partnering with Asia-Pacific suppliers to remain competitive both at home and abroad. The study also noted that the potential loss of manufacturing jobs in the U.S. would be offset by the creation of jobs in other areas such as product design, software creation, and IT services. Another study that was conducted approximately ten years later observed that China has gone from a minor player in the computer industry to the worlds largest hardware producer. Therefore, the Chinese PC manufacturing sector has had a significant impact on the global computer manufacturing industry. - If Hunter declares that all affected employees will be reallocated within the company, Hunter would demonstrate social responsibility

- Since Hunter is a manufacturer of LCD televisions, the information on their computer systems should not encounter any privacy issues - As such, offshoring to another country should not result in any ethical issues as Hunter has completed their due diligence in terms of assessing the impact should an information leak occur - As help desk operations is not one of Hunters core competences, it should only make up a small percentage of Hunters workforce - Therefore, if Hunter did obtain a loan from the government, there is a relatively small chance that it would violate a condition imposed by the government

- The words offshoring and layoffs go hand-in-hand in peoples minds

Currently U.S. based PC manufacturers are facing difficult economic conditions both at home and abroad. The promise of job creation as a result of the strategic partnerships has not been realized.
(Jason Dedrick and Kenneth L. Kraemer, University of California, Irvine. Computer July 2006. Adapted)

Required: A) There are many different strategies for U.S. based firms to be competitive in the PC manufacturing sector again. Identify and describe two strategies for competitive advantage and for each one give a detail and specific example of something a US firm could do to implement such strategy. (6 marks) Solution: One mark per validly identified and described strategy, two more marks for correctly associating a valid example p 42-43) Competitive Strategy and Description Cost leadership:
Provide services/product with the lowest internal costs.

Differentiation: Offer services or features that are significantly different (unique) from competitors. Innovation: Introduce new services or features or create new ways to supply them Operational Effectiveness: Improve the manner in which internal business processes are executed. Customer-orientation; Concentrate on making the customers happy

How US based firms would use it -Improve existing supply-chains to reduce inventories (better use of JIT) -Increase E-comm activities (website, eshop) to reduce costs in the sales process -Provide unique perspectives on products for local markets -Offer locally available service (drop-off) centers (or local phone support) -Use new technologies/components in products -Promote local research/development - Provide for feedback (via www) to promote organizational learning. -Create/improve alliances with other component suppliers -Increased use of automation -Allow for a dynamic management style to quickly adapt to changing business environments. -Create closer alliances with U.S. based resellers -Provide for improved locally based services

There are many valid examples, these are some selected ones for marking example Examples should indicate a reasonable action in alignment with the strategy

B)

The internet and world wide web have profoundly affected the competitive environment in which modern businesses operate. Identify and briefly describe three of Porters competitive forces that

have had a major impact on the U.S. based PC manufacturing sector and for each competitive force that you describe provide a detailed discussion about how the internet has impacted the U.S. based PC manufacturers industry. (9 marks) Solution: (one mark per force with description, two additional marks for reasonable explanation of internet based impacts. Pg 39-41) Competitive Force with brief description (3 marks) Threat of new entrants/competitors: Threat is high when it is easy to enter market, low when it is difficult (also acceptable, the threat that new entrants will take your market share) Bargaining power of suppliers: Supplier power is high when customers have few choices (oligopy) Internet makes access to larger pool of suppliers possible which effectively lowers suppliers bargaining power. Suppliers may contact other international supplier firms to create alliances that control international supplies. Internet increases power of customers. Provides more information to them, provides access to more Internet enables access to non-local markets which increases possibility of substitute availability. As familiarity with foreign suppliers grows, reluctance to substitute decreases Internet can increase firm rivalry by allowing more manufacturers to access that sector. Internet makes it easier for a competitor to know more about your business. How the internet has impacted this force in the U.S. based PC manufacturers industry (6 marks) (detailed discussion) Internet makes it easier for new firms to enter foreign markets, access to customers, enables ecommerce/fund transfers, simplified logistics management, etc

Bargaining power of customers Increases when there are more suppliers Threat of substitute products: Increases when there are many alternatives to choose from Firm Rivalry: The competition between firms, increases when there are many firms in the industry

Question 3 (15 marks - 36 minutes) E-Games Inc. (EGI) is one of the world's largest producers of electronic games and it markets its products through retailers and directly to consumers. They currently ship ten to fifteen thousand orders per day. While consumer product orders are placed through EGI's website, retailers' orders are received by electronic data interchange (EDI) or over the telephone by order entry clerks. EGI uses integrated supply chain management application software and data management methods to handle order-entry, inventory, warehouse and logistics (shipping) management.

When a product order is received it is entered into the database as three types of records: an event (uniquely identifying the order); a partner (information about the customer); and line-items (one record for each type of inventory item in the order). Once every second, the warehouse management system (WMS) checks and processes all the new orders that have been entered in the last second. Each order is first processed by the transportation management system (TMS) to determine an appropriate carrier (shipping company) and produce shipping documents for the order. These orders are then displayed on a monitor in the warehouse, from which a supervisor selects a group of orders for picking, packing and labeling. This manual process for picking and packing has proven to be the most effective means for efficient workflow within the warehouse. This manual selection process also updates inventory records showing the depletion of the inventory items on the selected orders. Warehouse staff will then pack the orders and attach the automatically generated labels that identify the contents of the box and the related order number. Required: A) For each of the following terms, describe the term, and provide a detailed example of the term that pertains to EGI as described in the case. (6 marks) Solution: (page 111, 1 mark for description, 1 mark for applicable example, pertaining to case focus - some shown below, others acceptable) Term Description of term (3 marks) Detailed example of term pertaining to EGI (3 marks) Attribute - A characteristic or quality of a particular Event / order number entity (also known as a field) Order date Order delivery date Partner / customer number Customer shipping address Customer billing address Line-item / inventory item number Quantity ordered Price charged Entity - a person, place, thing or event about Event / order which information is maintained (also Partner / customer known as a record) Line-item / inventory item Primary key An attribute/field that uniquely identifies the record (so it can be retrieved, updated, sorted) Event / order number Partner / customer number Line-item / inventory item number

B) Modern organizations experience a number of difficulties in managing data. Describe three of these difficulties and provide a detailed and specific example for each that is likely applicable to EGI's order fulfillment process described above. (9 marks) Solution: (page 108-109, 1 mark for description, 2 marks for reasonable example, some included below) Data management difficulty (3 marks) Detailed example from EGI's order fulfillment (6 marks)

- Amount of data increases exponentially with time

- large number of orders (now 10-15K per day) in a successful business is likely increasing, creating large amounts of data t0 be processed & stored

- Data are scattered and collected by - website, EDI and manual data entry (from telephone orders) are many individuals using various input sources from worldwide operations. (Fortunately, EGI data methods and devices, (stored in is stored in a common database) many locations) - Data comes from many sources (internal, external) - Fortunately, for order fulfillment, EGI data is stored in a common database

- Data security, quality, and integrity - EGI has better chances of good security, quality, and integrity are critical, but easily jeopardized since they are using an integrated database New sources of data are constantly being developed Data decays over time - EGI order entry now has 3 data sources, - may develop more in future, such as voice input for telephone orders - EGI must have thousands of customers, some long term repeat (s.a. retailers), some one-time (eg. consumers). It will need to maintain accurate current data, cull non-active customers from operations database These are acceptable answers ONLY IF THE STUDENT INDICATES (implicitly or explicitly) IN THEIR EXAMPLE how these problems are minimized/reduced by use of a database / DBMS at EGI - EGI's database provides one source of data for a number of functional areas / business processes (order entry, warehouse, shipping, inventory management) - Order entry, warehouse, shipping, inventory management applications access the same data

NOTE: The following points relate to the problems related to data storage WITHOUT use of Database approach /DBMS Data redundancy: multiple copies of the same data is stored in different system across the organization Data isolation: data can only be used by applications associated with it. This is a problem since data cannot be shared across applications Problems with data inconsistency, data quality: Data can be incomplete, erroneous. Data security: ensure that data is accessed by those who are authorized. Data integrity: this is the same as problems with data inconsistency and data quality

- Order entry, warehouse, shipping, inventory management applications share the same data - A common location for data requires only one access security system, - All users will be governed by same security standards - Identical / same data integrity standards / edits are applied to data for/from all sources that access the common database

Data independence: same description as in Data isolation.

- Data definitions (contents. Format, structure) are governed by the DBMS, independent of the various applications that use similar data.

Question 4 (14 marks 34 minutes) Global Office Interiors (GOI) sells office furnishing systems throughout Canada. GOI carries a broad range of furniture, fixtures, storage and wall systems from many manufacturers, to fulfill the needs of many types of business customers, for both small and large office spaces. GOIs customers include organizations who will use the furnishings, as well as contractors who design and install complete office systems. Customers can view and purchase GOIs products through several regional sales centres, in person, by phone, fax or online. At any given time there are hundreds of active customer orders. Customer needs range from single, cash and carry furniture pieces to multiple staged deliveries of complex office furnishing systems for huge commercial building developments and renovations. To meet the project and product requirements of their customers, GOI must obtain and relay timely, accurate information on orders, and collaborate with their suppliers and customers to design office spaces, expedite and problem solve. GOI has an intranet, an extranet, and a web site that is used by customers and suppliers. By recognizing and effectively responding to the office design needs of modern businesses, GOI has grown quickly to become a national organization. GOI has established business partnerships with many manufacturers of furnishings and office design consulting firms, and has merged with a number of regional firms to establish its national presence. Required: A) Would an enterprise resource planning systems (ERP) system be appropriate for GOI? Provide four detailed reasons to justify your answer as they would apply to GOI (8 marks) Solution: (2 marks for each valid example appropriate to GII. Ch 8 p. 243-245;) Reasons for implementing ERP: Coherent organizational structure ERP could provide basis for consistency in operational and reporting processes amongst many sales offices and distribution centres, and regional operations More precise and timely information information can be transferred automatically from ERP system for all product sales, at all offices to inventory system, distributions centres, suppliers errors will not be introduced by repeated human interaction with the data or transfer through interfaces of incompatible systems Potential for better decision making

due to precise, timely, consistent information from ERP system

Unified technology platform for all sales and distribution centres, also for functional areas that are integrated within ERP system Efficient and customer driven operations due to timely information directly from customers (and interior design system if integrated with ERP system)

Reasons for NOT implementing ERP: Way of doing things must be changed new, consistent ERP system requires adaptation from different regional offices integrated functional areas will need to adapt their processes and data formats to "fit" ERP system Expensive and time consuming to implement (or - High technology and training costs) GII needs to purchase new ERP software, GII may be too small to justify this cost as well as technology platforms to support this integrated environment GII will need to train IT staff in management of new technology GII will need to train business staff in use of new technology, new processes

Complex and inflexible frustrating? business staff may be frustrated by required changes in business processes may not 'fit' the responsive manner of meeting customer needs that has been fundamental to GII's success Potential loss of strategic advantage by moving to a standard software system Other office system providers may be using the same ERP software, GII's customer service operations may present a similar image to competitors, not differentiate its products and services well Other office system providers may be using the same ERP systems, may be using the same business processes, tactics. It may be more difficult for GII to identify, apply competitive advantages if ERP software will not support them.

B) GOI has an extranet that is used to communicate with its suppliers and large, corporate customers. Describe two major benefits of extranets. For each benefit, provide a specific example illustrating how GOI, its suppliers or customers could use the extranet. (6 marks) Solution: [Chapter 8, p. 256-257] 1 mark for description of benefit and 2 marks for each valid example, tied to the benefit Benefit of extranet (2 marks) Example how GOI, suppliers or customers could use the

Faster processes and information flow:

extranet (4 marks) - GII could directly access manufacturers inventory systems to determine availability of equipment or timing of delivery - GIIs customers could directly access their fitness instructor schedules to determine timing of availability or book an appointment - large clients could add new members directly and maintain their member information, view billing status

Improved order entry and customer service:

- booking of group fitness classes could be completed by large clients directly into GIIs systems - GII and clients could collaborate on the development of new group exercise classes

Lower costs (eg. communication, travel, administrative overhead):

- clients could check on the fitness usage of their members - Direct orders to equipment suppliers would reduce costs of orders by reducing human involvement/input - employees of corporate clients could check fitness class schedules and availability and book employees into a class

Overall improvement in business effectiveness:

- customers could receive information faster, improving satisfaction and triggering increased memberships and referrals - increased problem solving ability by having information from multiple locations accessible

End of examination