Case Study: Success of Starbucks Mobile Payment Application

Starbucks redefined highly competitive coffee shop business and successfully created an uncontested market by turning the simple coffee drinking experience into a way of life experience by drastically redefining the coffee shop environment by adding music, Wi-Fi, relaxed seating and luxurious interiors. Till Starbucks disrupted the traditional coffee shop market most of the focus was on the price, location and quality of coffee shops. Starbucks innovative value proposition includes wide variety of mostly coffee based menu along with other types of drinks that catered to wide range of audience who are willing to pay top buck for the luxurious and relaxed interiors that are perfect environment for socializing with friends and relax. Another important aspect that Starbucks focused was on the quality of customer service with an exclusive aim of maximum customer delight and they meticulously recruited and trained the best talent in the industry that has added huge value to their brand reputation. Starbucks successfully created an aspirational brand that created highly loyal and delighted customers who repeatedly come to Starbucks for the unique experience it is offering.

For years Starbucks has been successfully maintaining its dominant position in the coffee shop market despite the market becoming highly competitive with many players offering similar product and service offering of Starbucks. There has also been a rise in strong competition from fast food chains such as McDonalds and Dunkin Donuts that now offer premium coffee, which is threatening the market share of established players. In order to hold onto its competitive advantage and create new value proposition for its customers Starbucks has started to focus on the use of information technology, mobility and particularly social media.… Read the rest

Charactristics of Business Information

Information is a fact, datum, observation perception or any other thing that adds to knowledge. In the words of Gordon B. Davis “Information is data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or prospective decisions”.

Information is obtained either by direct observation or by communication. Most of business information is obtained through communication. Even in the simplest responsibility center, the manager could not observe with his own senses everything that is going on, nor would he want to devote his time to doing so, even if it were possible. Instead, the manager relies on information that is communicated to him in various ways, ranging from informal conversations to formal reports.

The characteristics of information used in business systems are:

  • Purpose:  Information must have purpose at the time it is transmitted, otherwise it is simply data. Information on communicated may have many purposes because of the variety of activities of people employed in an organization. The basic purposes of information are to inform, calculate or persuade and information is needed for identifying problems, living problems, decision making, planning and controlling. The purpose or supplying information to machines is to give instructions to get upon.
  • Frequency: The frequency with which information is supplied affects its value. Financial statements prepared weekly may not be very useful as they show very little change, whereas annual financial statements may be very useful to the recipients as they show changes big enough to indicate hundreds.
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Management Information and Control Systems (MICS) Installation

The decision to establish a formal Management Information and Control System (MICS) becomes almost inevitable in today’s business climate. The accelerating needs for uniform, concise and timely information by all levels of management dictates the establishment of such a system. The results can be better control of and greater profitability from the enterprise. Essentially the functioning of a MICS involves transmission of all pertinent data necessary to the conduct of a business to one or more management information centers, where it is maintained mid then disseminated in discrete form to all levels of management. This description provides no reference to computers or any other specific type of data processing equipment. This is to emphasize that possession of data processing equipment is not a pre-requisite for a MICS. Computers, punched card equipment, data collection and transmission equipment, etc., are excellent tools that can, if costs and volume warrant, be extremely useful in a MICS programme.

Reluctance of much management to undertake a MICS programme can be traced to the confusion and lack of understanding surrounding the subject of information systems, and how they can be effectively installed: Management is continuously -faced with the frustrations of receiving inadequate, incorrect or untimely information. As a result the validity of management decisions and actions based on this type of information is at times questionable. Timely, adequate and correct information – the means through which management can effectively monitor, control, and plan is becoming increasingly elusive businesses grow in size and complexity.

Progressive companies recognizing this situation are at various stages on development and installation of Management Information and Control System.… Read the rest

ERP Software Cost

Enterprise Resource Planning (ERP) packages are very expensive. Let us be clear. If you have already have some system or not, once you decide to go for ERP, you need to plan well. The entire project cost is not the only the ERP Software cost. It includes hardware, software, implementation, consultation charges, sensitizing employees to ERP and training them. Hence, if you come across some one indicating only the ERP software cost, do not get carried away.

Every ERP implementation needs careful planning. Once the Enterprise identifies a few specific ERP software, ERP companies or their consultants may be asked to give you some presentation as to why should their ERP software be bought. Do not expect to get the total ERP implementation costs including ERP software cost in this presentation stage.

You need to technically evaluate all the suitable ERP software packages. If you have internal expertise or a very strong IT team, you may evaluate yourself. Alternatively, you may hire a consultant, who will have the knowledge of different ERPs, their strengths, ERP software cost as well as all other costs involved. This consultant may be an individual or a company, guiding you and he/she/they may not actually help you in ERP implementation.

Once the ERP software package is identified, your actual work of scoping begins. Here, you identify the actual requirement in terms of modules to be implemented and number of licenses per module, based on users in that functional area etc. The ERP software cost depends on the number of people using the given module at any given point of time.… Read the rest

ERP Tutorial

Enterprise Resource Planning (ERP) implementation needs lot of attention and dedication from all the concerned. The top management role is generally limited to the approval of the ERP package and taking care of ERP budgets. The top management identifies a person as ‘Champion’ to take the decisions as required. Once the company decides to go for a specific ERP, all the employees who are likely to be affected shall be taken into confidence and each of the end user shall be provided with ERP tutorial for their function. While there are more than one standard ERP tutorial, it may be better for the consulting company or the company’s IT department to device their own tutorial.

While ERP application is being customized, the concerned are consulted and their inputs are taken. Once the customization is done, the system integration and testing are done. At this point of time the users are required to undergo training using the ERP tutorial. This enables the users to know how their new system is going to be and there will not be any surprises.

The ERP consultant generally takes the responsibility of training too as a package deal. However, they may have a standard training or a standard ERP tutorial based on different functional department. However, this may not be effective, if lot of customization is done and the tutorial does not reflect the customization done specifically for the company.

It is the responsibility of the Information Technology department to draw up a training chart and also provide the required ERP tutorial for the user.… Read the rest

ERP Support and Maintenance

You have some decent computerized applications running in your enterprise. But you feel that you are actually leveraging the benefits of automation. Your inventory levels have not come down and items in slow moving category are on the rise. You are not getting the required Management Information Reports (MIS) as you would like to get. You realize that it is time to have a fresh look at your systems. You may approach a company that offers ERP consultancy as well as ERP support services. Generally these kinds of companies have expertise in business process re-engineering, project life cycle management. They may offer ERP support services like Enterprise Information Technology Policy, Planning, Requirements Analysis, Product configuration, Product Integration, Test and Evaluation etc.

Based on your consultant’s recommendation, you may go for ERP implementation. There are many companies approved by ERP vendors who undertake ERP configuration, customization and implementation. These companies bring in all their resources, implement and leave the Enterprise, once their contract ends. These companies may charge a hefty Annual Maintenance Charges (AMC) for ERP support, beyond the warranty.

Luckily, there are many other companies that offer ERP support services. They understand ERP tools, their capabilities and limitations. They also study your system as implemented and offer maintenance support. Their experts are well qualified and are efficient to manage your ERP application , either on site, at your Enterprise or off-site, from their own support facility. They can help fine tune your current ERP system as well as suggest changes, if required.… Read the rest