Shopko and Pamida: Systems Triumph or Tragedy? Essay

* The chief aim is at supplying the client with ware which is ever available as advertised. so. the company has to do a determination and explicate action program to work out organisation job.

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VIII. Conclusions/Detailed Action or Execution Plan

* They need to implement Information systems that facilitate the acquisition. transmutation. and distribution of information. Information systems can better determination devising. heighten organisational public presentation. and assist increase steadfast profitableness. therefore lending to corporate value. * Besides. they need to be after proficient attack to information systems that emphasizes mathematically-based theoretical accounts to analyze information systems and the physical engineering and formal capablenesss of information systems.

Case Study – ShopKo and Pamida: System Triumph or Tragedy? 1. Measure the function of information systems in the manner ShopKo and Pamida run their concern. How of import are they?

ShopKo and Pamida’s information systems are really of import to the successful direction of the concerns. However. the traditional information systems are uneffective and are non assisting the companies achieve their concern aims. The new information systems are supportive of the businesses’ demands and enabling the concerns to accomplish their overall aims. ShopKo uses its information system to find appropriate markdown monetary values for overstocked points. The traditional system determined a product’s markdown monetary value based on the clearance monetary value used in old old ages. Since the information system was unable to factor local geographics and civilization into the equation. a product’s clearance monetary value was the same at all shops. The traditional information system was uneffective. in that ShopKo was losing money. and the system was non assisting the company recognize its concern aims. In contrast. the new system ( Markdown Optimizer ) allowed the company to monetary value its merchandises based on assorted factors.
including season. geographics. local gustatory sensations. and historical demand.

The Markdown Optimizer “stores the old recommendation for each point in each single shop so that it can measure past consequences and so bring forth recommendations for the closeout of the current rhythm. ” Because of the improved system. ShopKo saw a 25 per centum addition in its gross border. decreased paysheet costs by 24 per centum. and the per centum of unsold goods was reduced from 7 per centum to 2 per centum. As the instance scenario indicates. Pamida’s scheme is to keep a high in-stock-rate. However. Pamida’s traditional system did non assist the company accomplish its nonsubjective. Shops were out of stock on points. while the same points were sitting in Pamida’s warehouses. Although Pamida changed its warehouse from a flow-through installation to a full-service distribution centre. it did non update or replace its repositing package.

Harmonizing to Pamida’s CIO Dan Nicklen. the ground the warehouse direction package was non updated was because “the package had been working all right under the old distribution system. ” As a consequence of the unequal warehouse direction information system. constrictions occurred. net incomes declined in the first nine months of 2001. and ShopKo lost $ 6. 7 million in overall gross. As a consequence of the merchandise supply deficit for the 2000 vacation season. estimated gross revenues losingss were $ 5 million. and cases were filed by stockholders. It is obvious that Pamida’s current engineering did non back up the passage from a flow-through installation to a full-service distribution centre.

2. Measure the importance of Pamida’s distribution centre consolidation undertaking for both Pamida and ShopKo. What direction. organisation and engineering factors prevented Pamida’s new distribution centre from working successfully?

The distribution centre consolidation undertaking was really of import for both Pamida and ShopKo. One of the ends of the distribution centre was to enable Pamida’s shops to keep a high in-stock rate. Additionally. ShopKo wanted to spread out its Pamida shops into little towns. The distribution centre was cardinal to accomplishing these direction aims. The direction challenge was to travel Pamida’s distribution centre from a flow-through installation to a full-service installation. The organisational elements include providers. the warehouses. and the single shops. The engineering included utilizing outdated Catalyst. International warehouse direction package and mainframe systems.

Unfortunately. the CIO assumed that the bing engineering would fulfill direction aims because the engineering had worked all right in the yesteryear. The instance points out that the bing engineering was inflexible and required the new distribution centre to conform to the engineering. as opposed to holding the engineering back up the new direction and organisational demands. This is a really good illustration of why it is of import to analyze the direction. organisation. and engineering dimensions of an information system. and that you can non merely presume that bing engineering can fulfill current and future concern demands. 3. Are ShopKo and Pamida utilizing information systems efficaciously? Why or why non? How much value do their systems provide to the concern?

The traditional systems described in the instance were really uneffective. Because of its traditional system. ShopKo was utilizing a markdown scheme that was dearly-won. time-consuming. and non really utile. Pamida’s traditional system caused the company to hold excessively many out-of-stock points and a decreasing gross border. However. ShopKo’s new information system enables the company to more efficaciously find markdown pricing schemes for each merchandise within a given shop. This improved system has helped the company increase its gross border. lessening paysheet costs. diminish the sum of unsold goods. and cut down paysheet disbursals. The instance scenario references that Pamida has implemented a new distribution centre and that ShopKo is confident with the new system. The value of the systems is really evident from the instance scenario.

When the systems were non working decently. the systems were a hurt to the company. as opposed to being an plus. The systems were doing the companies to lose money. points were either overstocked or under stocked. and employee clip was inefficiently used. In the instance of Pamida. stockholders sued the company. However. when the systems were improved and aligned with direction aims. the information systems enabled ShopKo and Pamida to accomplish aims and gain a net income. 4. If you were the CEO of ShopKo. how would you hold addressed the job? If you were the CEO of Pamida when it was purchased by ShopKo. would you hold recognized the job? Explain. How would you hold solved the job?

Students will supply different replies for this inquiry. As CEO of ShopKo. pupils should acknowledge that the consolidation undertaking required alterations in the information systems for both companies. These alterations require an scrutiny of the direction. organisation. and engineering dimensions of the information systems. It is evident from the instance that direction wanted the distribution centre to accommodate to the engineering. as opposed to the engineering being upgraded to turn to the new demands for the distribution centre. As the CEO. pupils should acknowledge that the direction demands and organisation demands should be identified. and so the engineering required to fulfill these demands can be identified and so implemented

5. What direction challenges does this instance analyze illustrate? Explain your reply.

ShopKo faces several direction challenges. including strategic concern. information architecture and substructure. information systems investing. and duty and control challenges. Strategic Business Challenge. Pamida’s determination to go on utilizing its bing warehouse direction package instead than update the package shows the involuntariness of the company’s direction to research how engineering can be used to assist the company accomplish a strategic advantage. Information Architecture and IT Infrastructure Challenge. ShopKo’s determination to utilize Spotlight Solution’s Markdown Optimizer and Pamida’s refusal to upgrade to new warehouse direction package are good illustrations of the information architecture and substructure challenge. ShopKo’s move to the Markdown Optimizer shows the company’s willingness to modify its information engineering substructure in an effort to run into both current and future concern demands.

After altering its substructure. ShopKo so changed its information architecture. This is evident by its ability to now pull off and orient markdown pricing schemes for each of its shops. Pamida’s unwillingness to do alterations in its implicit in substructure caused the information systems to go out-of-date and unable to fulfill the company’s current concern demands. Information Systems Investment Challenge. ShopKo did turn to the information systems investing challenge. It appears that the company did measure the possible benefits and costs for the new information system. The new system did supply the company with a ample final payment and has decidedly increased its value. In contrast. Pamida should hold examined in more item how investment in an improved information system could hold provided the company with a better final payment and increased corporate value.

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