Information systems and enterprise resource planning implementation at Dirt Bikes

Dirt Bikes Case Study

Analytics software

Collaboration Software including e-Mail

e-Commerce and Online Ordering

Web-based Supply Chain Management and Enterprise Resource Planning (ERP) Software

Administration and Information Technologies (IT)

Pervasive use of analytics and key performance indicators to measure IT system performance and level of mfg. efficiency

(Hopkins, 2011).

Intensive use of Intranet portals for posting HR policies; support bulletins posted for all employees; intensive use of e-mail for collaboration & communication (Kolbus, 1992).

Use for indirect procurement materials and supplies the company needs to support ongoing operations (acting as a buyer for materials).

Managing costing and pricing structures in addition to defining the long-term goals for supply chain mgmt. And ERP system performance over time

Customer Service

Using analytics to troubleshoot customer service and support processes that are not delivering high enough levels of customer satisfaction

(Bijmolt, Leeflang, Block, Eisenbeiss, Hardie, Lemmens, Saffert, 2010)

Use for coordinating between customer service department experts & customers, service partner collaboration using e-mail and portals (Kolbus, 1992).

Providing bug fixes and up-sell-based products and services to the customer installed base; catalog and content support for existing products online.

Using Supply Chain Management (SCM) and ERP systems to schedule product introductions and define when products will be available for sale; defines training schedules

Design and Engineering

Intensive use of analytics for designing the next generation of mountain bike; use for evaluating strength of product designs .

Intensive use of portals for supporting the coordinated design of next gen bikes and accessories

Buyer of services and products to aid in the product development strategies and programs

Use of SCM and ERP systems for planning the next generation of a product; defining when new products will launch.

Executive Offices

Analytics for evaluating the core functions of the business including P&Ls, CGS, Marketing expense and ROI

(Todd, 2009)

Support for defining and executing strategies across business units; knowledge sharing across business units (Kolbus, 1992)

Using these platforms to buy products & services critical to the functioning of the company

SCM and ERP analytics to manage the business strategically; create budgets and timelines for performance

Human Resources

Evaluate staffing levels and productivity (Nolan, 2011)

Coordinate with internal departments; define performance goals.

Uses for recruiting, by purchasing banner ads; buying services.

Using ERP to define when additional production and factory workers will be needed to build more bikes

Manufacturing

Production & Transaction costs; production yields

(Yigitbasioglu, 2010)

Mfg. scheduling and production; develop mfg. schedules and costs

Purchasing materials to be used in production.

The core systems mfg. relies on are SCM and ERP; they own these systems and the data they contain

Marketing

Marketing Pgm. Effectiveness; CRM system effectiveness (Ranjan, Bhatnagar, 2011)

Coordinate on marketing. strategies and communicate w/customers with sales programs

One of several channels used for selling; intensive use for advertising & promotion.

Use of SCM to define lead times for products; ERP for competing production forecasts; tight integration

Shipping and Receiving

Logistics and supply chain cost management (Yigitbasioglu, 2010)

Intensive use for supply chain coordination and integration tasks

Use in purchasing supplies and materials for logistics.

Essential for defining when production will be finished and products will ship

How Dirt Bikes Could Benefit from a Marketing Intranet

Of all the areas of a business that can benefit the most from an Intranet, it is marketing. The many functions of the marketing department require close coordination and synchronization if a business is going to attain the growth and profitability it is potentially able to (du Preez, 2003). Marketing is one of the most critical departments in any company, as it must continually concentrate on how to correctly and thoroughly have the unique value proposition communicated to the field and customers. The marketing departments of companies also are given the responsibility of ensuring consistent training and support to all sales channels, even indirect channel partners who rely in marketing to stay up-to-date in product and services being offered (Paswan, Wittmann, Young, 2004). For Dirt Bikes this is especially a critical concern as nearly 10% of their revenue on a fairly consistent basis are form international channels. The need for keeping all channels coordinated globally on the latest Dirt Bikes promotions will reduce the error rates on production levels currently being experienced and also reduce the Cost of Goods Sold (CGS) that is escalating rapidly throughout the time period of the case study. Because of the multiplicity of needs, that the marketing department at Dirt Bikes has to quickly release new product introduction plans, information, pricing and programs and have them immediately understood by channel partners. The amount of information that marketing departments produce is very significant, as this department must keep existing product information updated, refresh the competitive data available, and also create an urgency on the part of its own dealers and international affiliates to consider me bikes to resell. All of these many activities must be ultimately aimed at generated a very high level of interest and enthusiasm on the part of customers so they will purchase the bikes and tell their friends about them.

Analysis, data and plans for advertising strategies, competitive analysis, customer success stories and reference contact information, and results of demand generation strategies are all often included on intranet sites. These documents are crucial for ensuring cross-functional coordination throughout a company as it relates to generating interest, trial of the Dirt Bike brand, and the development of effective promotional and pricing strategies. Also included on intranet set are marketing strategic plans, their results, pricing studies, plans and results of website strategies, and the results of social media strategies as well. All of these elements (competitive data, pricing and product information) are crucial for training resellers and ensuring they have the necessary material to sell and service customers' profitability (Paswan, Wittmann, Young, 2004). All of these elements of marketing information are also crucial for maintaining sales levels over time, by equipping sales teams across all channels with competitive and pricing data as well (Clark, 2001).

Marketing, product and pricing data are all crucial for the ongoing selling activities of Dirt Bikes, including the development of off-line and online promotions. It's also crucial that the integrated marketing communications strategies be communicated and tracked online using the applications and data on a marketing intranet as well. The need for ensuring website analytics and demand generation programs be coordinated across all sales teams is also critical, and intranet sites have over time proven to be the most effective as a platform for this purpose (Bijmolt, Leeflang, Block, Eisenbeiss, Hardie, Lemmens, Saffert, 2010). In addition to all of these uses of intranets within marketing departments in general and for Dirt Bikes specifically is pricing and competitive analysis. As the data provided with the case indicate, the market is getting more commoditized, as evidenced by price cuts, higher Cost of Goods Sold (COGS) all leading to greater levels of competition. Marketing, in the majority of bike companies, handles competitive analysis, as they must define the relative market position, unique value proposition and positioning relative to competitors. This is where the value of an intranet site in terms of increasing efficiency and productivity pays off the greatest, in quickly getting pricing updates and competitive data to direct sales teams, channel partners and sales managers quickly. The speed and accuracy of competitive information can often have a significant impact on sales of commodity-like products, with the greatest contribution of competitive intelligence being to durable goods and product purchased with disposable income (Jaworski, Macinnis, Kohli, 2002). As Dirt Bikes cater to sports enthusiasts, pricing and competition are foremost in the customers' minds when comparing one type of dirt bike to another. The Intranet site becomes critical for making sales to distributors, dealers and channel partners but also for educating the sales force to sell effectively to customers as well. A second area where a marketing intranet site can increase the efficiency and productivity of Dirt Bikes is to better manage the forecasts for the Enduro 250 and 550, Moto 300 and 450 models as well. Marketing and Sales at Dirt Bikes can coordinate on the forecasts for each of these bikes an additional configurations, creating a more effective new product introduction plan with them as well. The most critical event for any business is the launching of a new product as it generates up to 60% or more of product revenue in any given financial period (Su, Rao, 2011). The use of a marketing intranet site for enabling a highly effective product introduction can also contribute to a turn-around of Dirt Bike's financial condition. The $1.4M loss that has been recorded for the latest fiscal year is evidence that new product introductions may not be delivering as much revenue as they potentially could. The focus needs to be on how to use the marketing intranet site to drive greater revenue generations throughout the company globally, concentrating on new product introductions and the potential they have for making Dirt Bikes profitable. The idea of using new product introductions to make a company more profitable rapidly has been a successful strategy across a wide range of industries (Su, Rao, 2011).

Case Study Two: Developing a Disaster Recovery Plan

The greatest threats to Dirt Bike's systems today have to do with taking a minimal, low-cost approach to enterprise system security, leaving large areas of their system platform vulnerable to competitors and hackers to steal their sales, finance and product design data. The second most likely threat they face is having their systems hacked into by disgruntled employees, who are seeking to get revenge for either being fired after the loss of $1.4M or for not getting what they may have been promised when they were hired. The third potential threat is to have the entire server stolen their financial systems are running on, as most likely it is not secured in a computer room, which is an assumption based on how small the comp[any is. Data theft of customer records is a fourth potential threat, as are the theft of transaction data of their financial systems which may be not authentication levels to protect them from advanced hacking techniques and approaches. A fifth threat is that of natural disasters including tornados, earthquakes and other extreme events that no one can predict. Taken together, all of these factors point to the need for creating an enterprise-wide disaster recovery plan that can quickly respond to the needs of the company for system uptime and performance. While these several factors are the most critical threats, Dirt Bikes senior management needs to anticipate there will be many more potential threats as the level of sophistication for breaking into systems increases. In defining a disaster recovery plan, Dirt Bike senior management and IT teams need to also consider how the escalation of threats will potentially affect their business over the long-term. Creating restore points for applications and data sets will be critically important, and must be managed with the help of disaster recovery services experts and system planners.

In defining the most critical systems to Dirty Bike's operations, the transaction flow of orders must first be considered, followed by Supply Chain Management (SCM) and Enterprise Resource Planning (ERP) systems that are used for procuring the products used in making the bikes and then scheduling the manufacturing of them. All of these systems are crucial for the successful operation of the company, as without them, not a single bike could be produced. The website and e-commerce systems supporting it are also critical, however the company could feasibly survive without them for 24 hours until they were brought back up again. Without the SCM and ERP systems that make it possible to get the necessary supplies to build the bikes and the ERP systems to schedule production and price them, the company would come to a grinding halt, incapable of producing anything to sell. In addition to these systems also rely on the financial and accounting applications that provide costing data for use in completing transactions. If the accounting or financial management systems ceased to function, the company would also quickly go out of business. The company could feasibly survive less than a month of the accounting and finance systems, logistics and ERP systems went down at the same time. If one of the three systems went down, they could feasibly operate in manual mode for about 45 days, yet the lack of accuracy and efficiency in orders would be very costly. The net effect would be a major disruption to sales, with the loss deepening past the $1.4M mark over time.

The accounting and finance, SCM and ERP system applications and data files must be backed up daily. Each of these systems needs to also have full fault redundancy engineered into their back office performance requirements. There also needs to be data redundancy across all the data sets including the Accounts Payable, Accounts Receivable, General Ledger and advanced account systems. The supply chain systems need to have fault-tolerant back-up of all supplier quality management systems and data, all the application components, and the costs associated with each configured and Bill of Materials (BOM). The Bill of Materials (BOPM) as defined in the case study need to also have the history of pricing captured from the beginning of each fiscal year so trending analysis and Total Quality Management (TQM) metrics can be completed on product quality also stored with these figures. The cost of quality needs to be captured in these system back-ups and programs from the supply chain systems as well. The ERP system is the most critical of all to back up, and also have configured for fault redundancy, as it orchestrates in-bound logistics of materials, keeps the BOMs organized by product line so they can be used to guide the production process of each specific model, and also the scheduling of production resources for each unit being produced. In short, the ERP system keeps the costs, production resources, and resources all in synchronization across the company. Due to all of these factors, the ERP system at Dirt Bikes must be completely fault-tolerant and have multiple instances running either on secured, hosted platforms or on Software-as-a-Service (SaaS) architectures that are used for data storage and replication when the ERP system is running within the company's data center or IT department. The ability to switch over to a hosted or SaaS ERP system in the event of a system failure of catastrophic system loss due to a natural disaster could mean the difference between Dirt Bikes being able to continually operate and sell their products.

There are literally dozens of disaster recovery services that specialize in small business, and the two most aligned to the needs of Dirt Bikes is i365, a division of global hard disk drive and storage solutions provider Seagate, and Iron Mountain, who specializes on enterprise-wide back-up systems. Both companies have a great depth of expertise in managing small business backup and disaster recovery services, with each being offering their services for over a decade. Iron Mountain takes a more taxonomy-driven approach to creating their backup instances for enterprise-wide systems and data files, and has an online Backup that is configurable across 25 different servers simultaneously. The Iron Mountain solution also has a series of authentication technologies defined for ensuring data security and redundancy, in addition to defining scenarios when data will be selectively updated or not. The Iron Mountain solution cannot however support a mirrored instance of the accounting, finance, supply chain management or ERP systems. They can replicate and restore enterprise systems to third party secured location, minimizing the impact on productivity and performance for Dirt Bikes. In the event of a disaster, having all data backed up to an Iron Mountain server instance will make its restoration very efficient, yet this solution costs well over $100,000 for the configuration of systems and servers the company has. The second solution is from i365, a subsidiary of Seagate. This approach to data replication is entirely Cloud-based and also supports application-based replication to third-party servers through virtualization technologies the company has developed. I365 also creates a mirror or ghosted image of each application instance, and then replicates the data sets throughout the network over time. It also has a series of replication techniques that allow for data redundancy across multiple hosted platforms, either within the company or outside with a 3rd party provider. The EVault product series also provides for real-time back-ups of all critical accounting, finance, supply chain and ERP-related data in real-time. The system is also compatible with a variety of internal networking protocols in legacy manufacturing environments. As Seagate is the parent company of i365, the investments in virtualization technologies and continual evolution of disk mirroring and replication are outpacing many other competitors at the low end of the market. Due to these investments in R&D and the continual evolution of the technologies inherent in data replication, security and redundancy, and also given the flexibility of using the SaaS platform, it is recommended that Dirt Bikes go with the i365 solution.

Problem Description

At present, Dirt Bikes cannot differentiate which members of its organization are best suited for advanced training and development, in addition to attending online training sessions to further their skills. While the comp[any has in the past spoke often about creating a learning culture, the HR systems do not support this goal. The intent of this report is to better understand how to modify the existing HR$ systems to support the development of personnel development systems and strategies. The goal is to keep the employee base as educated and current on key technologies as possible.

Description of the problem and its organizational and business impact.

The catalyst of all competitive strength within a company is the expertise, insight and knowledge that companies' employees bring to their tasks daily. Without this focus on continual learning, companies fall behind rapidly and lose their competitive edge.

Proposed Solution

Create a relational database that captures the current status of training and development by employee, concentrating on their aptitude testing. This will also concentrate on measuring their ability to gain greater insights into supply chain, logistics, manufacturing, and service and for those in marketing and sales, better channel selling skills.

Proposed Solution and Objectives

The proposed solution concentrates on creating a relational database structure that is populated with initial testing results, organized by department. Initial testing will concentrate on functional areas each member of a department needs to know in terms of baseline skills. Using Six Sigma-based techniques, strategies will be devised for adding increasing levels of training and development until each departments' training is at a level that is considered best in class industry-wide. This approach to benchmarking performance will ensure each department continually improves until the entire company attains its learning objectives.

Information Requirements

The information requirements include basic demographics from the employee, in addition to testing scores from each round or iteration of skill test over time. Also required is the level of training time each employee takes in studying for the tests as well.

Management & Organizational Issues to Be Addressed

The management issues that need to be addressed include the defining of the testing program, the change management strategies to enable employees to use the knowledge they have gained, and the ability to create revised job descriptions based on their growth through education. All of these factors will contribute over time to the need for Dirt Bikes to modify their organizational culture and structure to allow for more upward mobility based on higher levels of performance attained from enhanced education and knowledge. The issue for management is how to capitalize on the significant amount of knowledge and expertise the employees have to propel the company forward to its objectives. This is a critical success factor for the entire program.

Business Process Change

The management issues that needs to first occur centers on how best to create a program that will allow employees to flourish given the expertise they attain over time. This upward progression of careers is essential for the company to stay competitive globally, and also keep its employees focused on the continual improvement of how they do their jobs. The process changes include revamping the approach taken to creating lines of promotion, redefining how the business creates potential upward paths for Case Study 5 International Expansion

The regions that have the fastest growing economies today include Brazil, India, China and Russia who are often referred to as the BRIC nations. The combined per capita income growth of these countries is during certain economic periods faster and more significant than the U.S. (Stone, Ranchhod, 2006). Taken together, these countries also are driving the majority of purchases for alternative forms of transportation including traditional motorcycles and dirt bikes as well (Droege, 2010). The countries experiencing the most growth therefore in dirt bike sales are the BRIC nations (Droege, 2010). The per capita income in these nations however is lower than the U.S. And other westernized countries. Of these four nations in the BRIC consortium, China has the fastest rising per capita income of $4,300 a year. Both Brazil and India continue to gain however, which will eventually prove to be highly effective markets for the Dirt Bike products. China is by far the most attractive market segment to target for international expansion based on income alone. The continual growth of the Chinese market shows significant potential for Dirt Bikes to see into the rural regions of that nation, where the majority of its inhabitants live. In addition, the company could set up operations in Shanghai and Beijing, two cities that are becomes quickly westernized, reflecting the rapid economic growth of the region overall.

In devising a Web strategy to address the BRIC nations, localization and translation are critical for the websites. The translations also need to take into account the specific requirements and needs of the regions of the countries being served as well. Studying the dialects in India for example will most likely lead to several websites being created. The development of content that stresses the unique value proposition of the bikes by region is also a critical success factor. Shanghai and Beijing are metropolitan and urban in scope. It would therefore be critically important to modify the product strategy to meet the needs of these markets. The website would need to rely on personas, or representations of these key market needs personified into a specific set of attributes, for the messaging to stay in track and targeted. All of these attributes would then need to be included in the context of a unified, global Web strategy that integrated to quoting, pricing and product configuration workflows. The focus would need to be on how to customize these specific bikes for the unique requirements of each market. Once that was accomplished on a per website strategy, Dirt Bikes would be ready to unveil the websites and begin selling globally.