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HỆ ĐẠI HỌC CHÍNH QUY
Deceased’ – urged them to ‘wake up’ to what the company had to offer.
This mailshot mishap is part of a nightmarish list of corporate data blunders drawn up for the Financial
Times by Detica, a business and information technology consultancy. It includes the tale of the insurance
company that was intrigued to discover the majority of its customers were astronauts – until further
investigations showed that lazy sales staff eager to close deals had simply chosen the first option available
on the pull-down menu of jobs.
Whether grotesque or hilarious, the bloopers have a unifying theme that any business ought to note. As
companies develop ever more sophisticated ways of using data to help win new business and cut costs, the
risk is that they pay too little attention to the quality and organization of the underlying raw information. At
best, this damages efficiency; at worst it can destroy relationships and hamper efforts in crucial areas such
as fighting fraud.
‘Firms have always seen the data as the water that flows around the system’, says Philip Powell,
professor of information management at the University of Bath’s School of Management. ‘They have
invested a lot in the system – the water pipes – without really recognizing the value of the water’.
It is a problem that has come increasingly into focus as technological advances have opened up new
methods of collecting, combining and storing data. Managers have greater quantities of information than
ever before, but are in some ways less well-informed because they do not order it well.
Bill gates, Microsoft chairman, claimed last year that almost a third of information workers’ time was
spent searching for data, costing $18,000 per person per year lost productivity.
Those hundreds of forgone hours are in part a consequence of the explosive growth of the space
available for information storage. While a bulging filing cabinet is a daily reminder of the need for data
discipline, electronic file dumps can grow to gargantuan proportions unseen. They are monitored and
cleansed only by computer experts, rather than by information management professionals applying a
librarian’s discriminating eye.
Information is sometimes duplicated or out of data. A common fault is that companies lack a single
docket on each customer, supplier or employee, instead spreading information across files held in numerous
places by many departments. In the absence of a master copy, updating is done piecemeal, generating
horrors such as the ‘Dear Mr. Deceased’ letters.
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study in your answer.

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CASE
CASE CASE
CASE

STUDY
STUDY STUDY
STUDY

1.2
1.21.2
1.2 SUPPLY CHAIN:
DEMAND FOR MORE DATA HAS WIDE IMPACT

For US electronics retailer BestBuy, having the right data really matters. Research carried out by the
company found that if a product’s height was wrong by as little as half an inch, customer returns increased
by 3.4 per cent. For a company such as BestBuy, the trend towards flat-screen TVs – which customers often

and frequency’, says Jeff Wacker, futurist at system integrators EDS.’ You need sophistication to ensure
that the information adds value to the decisions being made’.
Manufacturers might not want to share an entire recipe or bill of materials with a retailer, but the retailer
will want to know that the manufacturer can call up that information on a batch-by – batch basic, for example
if there is a product recall or a health scare. Retailers are also under pressure from consumers to provide
more data, either at the point of sale, online or in catalogues. But there is a strong chance that the financial
and technical burden for gathering and storing such data will fail mostly on producers and manufacturers; as
has largely been the case with electronic data interchange and more recently, RFID.
‘Retailers will only do something if they have to’, suggests John Davison, a vice-president at analysts
Gartner. ‘You could improve the operational efficiency of your company, but retailers are most likely to act if
it improves product availability on shelves’.
(Stephen Pritchard, FT.com site, published 19 September 2007)
Questions:
1. ‘Bad data can result in brand damage’. Explain this statement with reference to the case study.
2. The case study discusses a number of problems caused by poor quality information. Identify
and describe these problems with reference to the attributes of information quality.
3. Why do you think customers are starting to want know more about the products they buy ?

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mostly tractor units for semi-trailers or rigs – each year. The standard European warranty on these vehicles
is one year, with some vehicles covered by a 300,000 km warranty.
‘With current production levels, and some good will campaigns, 200,000 to 300,000 trucks could
produce a warranty claim or produce a problem that ends up in the analytics system’, says Micke Rydbeck,
project manager for warranty systems at Volvo Truck Corporation. To add to the complexity, in Europe the
vehicle could be taken to any one of 1000 service points or, in North America, one of 350 sites. Added to
this, the vehicles Volvo produces are simple, commodity items. Within the annual production total, perhaps
as few as two vehicles might be identical, such is the range of variants and configuration options available to
customers.
An in-warranty failure might be the result of a particular, and quite possibly very rare, combination of
components. The new system is much more effective at narrowing down the list of vehicles fitted with a
particular part to those that are most likely to have problems. ’It might not show up as a battery problem on
each and every truck, but only when two parts are used in combination’, says Rydbeck.
The business case for Volvo’s project was based on achieving more efficient warranty claims, reduced
fraud, better reporting and improved recovery of warranty costs from suppliers. The warranty tool acts as a
valuable early warning system, helping to pick up any potential faults before they occur in a truck. Improved
trend analysis is a valuable feature of the new system: previously, quality control staff had to use three main
tools and three data sources in what was still, largely, a manual process. But the earlier the company
identifies a problem, the cheaper it is to fix. Advanced warning allows more vehicles to be examined and
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repaired during regular servicing. This reduces Volvo’s costs but critically, keeps customers’ trucks on the
road for longer.
The system also helps Volvo to give customers a wider range of configuration options without
compromising on the manufacturer’s standards or increasing support costs. ‘ We need to have a situation
where we can produce trucks built to customers’ specifications that still nurture our core values of quality
and safety’, Mr. Rydbeck explains.
Another important part of the analytics-based approach to warranty management is that it helps Volvo’s
design and manufacturing teams react to after-market problems with the trucks, and prioritise design or
production changes. These are all important benefits for Volvo customers. The project has had a significant


CASE
CASE CASE
CASE

STUDY
STUDY STUDY
STUDY

2.2
2.22.2
2.2 AIRPORT CHECK-IN:
BOARD YOUR FLIGHT BY MOBILE PHONE

Ubiquitous and well entrenched as mobile phones may be, some potential uses have yet to catch on
in a big way. Such is the case with mobile check-in at airports. A passenger survey at the end of last year by
the International air Transport Association (lata) found only 2 per cent of respondents had checked in via an
SMS (text message) on their mobile phones. But that number looks certain to rise as more airlines introduce
mobile check-in – those that already have are as enthusiastic about the service as are their passengers. ’To
have your boarding pass on your mobile should be something that really excites the customer’, says Patrice
Quellette, Air Canada’s director of customer service platform, e-commerce.
Last June the airline launched mobile check-in for customers on domestic flights without baggage.
Between one and 24 hours before departure, passengers can enter basic details about themselves and their
flight into their mobile phones, then print out their boarding pass from a self-service kiosk at the airport. In
the next few weeks, Air Canada plans to start pilot testing an ‘E-Boarding passes’ service, in which 2D
barcodes would be sent directly to mobile devices of customers checking in at Montreal for domestic flights.
The customers participating in the pilot would scan their device at airport security and proceed to the gate.

barcoded boarding pass (BCBP) team this year – currently North America, the European Union and Japan
each have a preferred 2D barcode to use on mobile phones for ticketing and other applications, and the
challenge will be to agree one global standard.
There are other obstacles, too. The biggest challenge, says Finnair, is the airport authorities’
requirements for paper boarding passes at the airport service points. ’In Finland, the airport authorities and
customs have accepted our text message confirmation as proof of travel’, says the airline. ‘At most of the
airports in the world that is not the case.
Air Canada, meanwhile, is working with Canadian authorities on its Montreal “E-Boarding passes”
pilot. Talks with authorities about starting the pilot on a limited basis in June were successful, and then
further implementation would be subject to the results of the test and continued working with authorities.
Finnair notes other provisos. Mobile devices must contain the required features by default, removing
the need for customers to install software. Secondly, multimedia message service (MMS) provides a method
to deliver a 2D barcode to a customer but mobile operators need to read – just their pricing policy, says the
airline. It says roaming pricing, in particular, can be ‘a real killer’.
(Andrew Baxter, FT.com site, published 14 May 2007)

Questions:
1. What are the advantages and disadvantages of mobile check-in ?
2. How does being one of the first companies to adopt technologies such as mobile check-in
confer competitive advantage? Refer to the concepts covered in BIS and Strategic Advantage in
your answer.
3. What barriers are there to the widespread adoption of mobile check-in ?

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sight. And customer relationship management (CMR) technology – systems designed to give companies a
single, integrated view of their customers and maintain a mutually beneficial dialogue with them – has a
patchy record of success. Richard Boardman of Mareeba CRM Consulting emphasizes the dichotomy: ‘The
brutal reality is that the majority of CRM projects produce, at best, marginal benefits to the purchaser. Which
isn’t to say’, he adds, ‘that CRM technology doesn’t produce the results; there are also plenty of
organizations enjoying very high returns’. As Spanish football fans, electronics aficionados and British bank
customers can perhaps testify.
CRM is a business problem which technology cannot solve, according to Aki Ratner, chief executive
of the enterprise software group Attunity. He says: ‘It may change the way businesses run, but it does not
address the fact that the knowledge that gives a company competitive edge is not held in structured
databases or processes but within the people who actually run the business. It is people- driven activities,
not process- driven ones, that define the real success of an organisation,’ And there are thousands of ways
to improve the customer experience, many of them involving little technology and little cost. Ed Thompson, a
senior analyst with the Gartner consultancy argues that it is a matter of expectation setting, feedback and
how organisations deal with these issues. He points to the example of Disneyworld, where the introduction
of a simple measuring stick meant an end to the disappointment felt by children who had queued for a
particular ride only to find they were too small to be allowed on board. ‘Another example is Southwest
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airlines in the US, a no-frills, low-cost airline that was looking for ways to improve customer satisfaction. It
discovered that the best way was for its staff to smile. It put in place a smiles programme and found a
positive correlation with its customer satisfaction scores.’ Mr. Thompson concludes: ‘Employees often have
the biggest impact on the customer experience. Ask customers what they want and they will often say
employees that have the power to “step outside the process”. Customer satisfaction scores are driven most
by delivering on the basics that customers expect – like stock on the shelves, clear transparent pricing, good
build quality and innovative design,’ IT only goes so far in helping with that.
Alan Cane, Financial Times, 13 June 2007 (abridged version ) Question:

use of TPS.
The company and its customer service objectives:
 17,000 commodities
 aim is for no more than five commodities to be unavailable at any one time
 order lead time 24-48 hours
 distribution centres mange deliveries of 11 million cases to 335 stores.
How is Sainsbury’s helped by TPS technology ?
 Improved customer service through more choice, lower prices, better quality of produce and full
shelves.
 Improved operational efficiency by automatic links to suppliers and better information on product
demand and availability.
 Assessment of the effectiveness of product promotions through availability of better information.
 Marketing through customer loyalty schemes.
How does Sainsbury’s use technologies ?
 At the till – EPOS and EFTPOS
 On shelves – auto-price-changing LCDs
 On trolleys – ‘ self-scanning systems’
 At home – direct wine sales from the Internet Barclay Square site
 For banking – TPS are vital to providing customer statements and cash withdrawals
 In the marketing department – the effectiveness of marketing campaigns and loyalty card schemes
can be assessed using information on transactions stored in data warehouses. This type of system
is covered in more detail in Chapter 4

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Questions:
1. Draw a diagram summarizing the links between all the parties who access Sainsbury’s TPS.
2. What benefits will Sainsbury’s gain compared to the time before the introduction of TPS ?
3. Can you think of any problems with using TPS so extensively? What can be done to counter
these problems ?

management, it can be user fast track to under licensing. And once users are on the back foot, suppliers can
pretty much dictate the terms of the next licence.
Seasoned negotiators encourage users first of all to get to grips with the terms and conditions of the
software licence. The focus should be to negotiate the best possible terms and then to concentrate on
fulfilling their part of the deal.
One caution from independent advisers is to beware the new trend for subscription licences.
Traditionally, licences were bought in perpetuity with a one-off payment. Subscription licences, by contrast,
offer no ownership, just renewal at regular intervals.
This advice is reiterated by the Surrey Police Force, which has just moved from a Microsoft Office of
Government Commerce Enterprise Agreement to the Home Office Master Agreement, designed specifically
for the police and criminal justice sectors.
‘We buy perpetual licences’, says Russell Fowler, ICT technical support manager. ‘The major
disadvantage of a subscription licence is that you never own it. As a result, you are never able to step out of
the agreement. If you want to use a particular product, you have to continue to subscribe – you cannot take
a break from the agreement.
And all users need to be mindful of support clauses. Within subscription licences, support is often
packaged with a ‘right to use’ aspect. Support needs to be measured and prompted by service level
agreement in the same way as an outsourcing contract.
‘The worst mistake is to think that just because you have the right of termination, you do not have to
build in other remedies’, says Kit Burden, partner with law firm DLA Piper Rudnick Gray Cary.
‘Using the “H-bomb” is not a palatable remedy. You need to incentisive suppliers properly to get it
right the first time.’
Case study: Banking on change
Burden recently negotiated a software licence for an investment bank that was procuring an online
trading application. The rate card price of the standard licence - £8.3m – was just the basis for the
negotiation.
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An important consideration was how long the user envisaged using the application. A warning signal
for Burden was that the supplier was offering a five-year licence while his client envisaged using the

‘We have upwards of 40 servers running various applications that all need to be licensed and
maintained’, Fenton says.
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He has just moved to a new licensing regime with his back-up supplier, Computer Associates. The
health authority now pays on the basis of total raw storage capacity rather than per server, and the licence
can be scaled up incrementally.
It is a big improvement on the previous regime, both financially and in terms of simplifying and
reducing administration.
‘The price we secured was embarrassingly good’, says Fenton, who states he saved ‘thousands’ on
the previous licensing bill of £40,000.
Savings accrue chiefly because licensing on the basis of capacity, rather than individual servers,
better suits Trafford’s pattern of deployment; as servers proliferated within its project-led culture, server-
based licensing incurred a financial penalty.
This was compounded by the fact that in the per server model, CA charges both for the software
running on the central back-up server, and for ‘agents’ that run on the application servers that are backed
up.
Keeping track of the annual maintenance charges for the separate agent licences was a major
headache. Every additional back-up agent that ran on the application servers had to be licensed, and the
maintenance fee renewed each year.
‘Potentially, we had loads of different licences to maintain, all expiring on different dates’, says
Fenton.
In addition, the overall cost of the model had become unpalatable, ‘In such an environment, each
time we bought a new server, we were talking about another £750 or more in licence fees’, says Fenton. At
the same time, server costs were falling below the £2,000 mark, making licence costs proportionately
greater.
This licensing overhead had accumulated over time, creeping up on the health trust, which, like
other former Unix users, had no previous experience of licensing back-up.
Before moving to Windows, Trafford had used Unix boxes, which have back-up built-in. Each Unix
server came with its own low-capacity tape drive, and applications were accompanied by a script for the

to show they control the media on which the software is distributed. Examples of control might include a
single point of contract for receipt of a disc, its safe storage, and an approval process for signing it out. A
supplier could cite a lapse in control as breach of contract.
The outsourcing clause
Supplier may try to insert into terms and conditions their right to renegotiate the licence should the
management of a asset be moved to a third party. This can be invoked for an outsourcing contract, even
when the software and server remain onsite. Suppliers may also reserve the right to charge an
administration fee to transfer the licence to the third party. Beware: the transfer fee could run into thousands
of pounds.
Enterprise licence
If you are underlicensed and on the back foot, the balance of power shifts to the supplier, who may
insist you sign up to an enterprise licence. Such a licence may appear to be all-inclusive and cover every
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eventuality, but the reality is that it will likely be accompanied by a hefty three-year or more service and
support charge that adds no value.
Source: www.computerweekly.com/Articles/2006/07/25/217102/licensing-how-buyers-can-flex-their-muscles.htm

Question:
Summaries the main differences between ‘traditional’ software licenses and ‘subscription’
licenses including their respective advantages and disadvantages.

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- Warehousing and distribution;
- Manufacturing;
- Finance.
All information recording and internal communication is paper based and relies on range of
preprinted documents which are then used as appropriate.
The sales department
LFFL has a diverse customer base, ranging from small health food shops to major supermarket
chains. Orders can be one of two types: standard orders placed in advance for delivery in a specific week or
priority orders placed for immediate delivery.
Orders are placed either directly through sales office ‘account handlers’ or through field sales
persons (each customer has one sales person). Each customer is allocated an account handler who acts as
the main liaison point within LFFL. Besides receiving orders, the account handler is responsible for cash
collection, ensuring satisfactory progress of the order and handing day-to-day queries. Customers are also
placed into sales categories based on geographic location, volume of business and type of customer (e.g.
specialist store vs supermarket chain). The sales director is apt to change his mind about which category a
customer is in and which category means what.
Order processing
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Once an order is taken, it is recording on a preprinted order form. One copy is retained by the sales
department and two copies are sent to warehousing and distribution.
Warehousing and distribution sort all order forms into date order. When an order is due to be
delivered, products are picked from the warehouse and loaded into the appropriate vehicle.
When an order is delivered, it is accompanied by a consignment note and an invoice. The customer
is required to check the delivery against the invoice and note any errors on the consignment note and if any
errors are noted a corrected invoice is sent to the customer.
Warehousing and distribution
LFFL stores finished products, bought-in products and raw materials in the warehouse. The
warehouse in divided into three areas:
- The general zone, comprising a high-rise bulk storage area with a floor-level picking area;

Specific business issues
There are a number of specific issues which relate to the activities of each department. These are
detailed below.
Sales
- The status if an order cannot easily be determined without pestering the warehouse.
- Many customer complaints occur due to delivery of wrong products, orders delivered too late,
incomplete orders and faulty products.
- Warehousing does not deliver the most important orders first – small orders are often given priority
over larger orders from major retailers.
- Orders often cannot be delivered on time because manufacturing produces too late and in
insufficient quantity.
Warehousing and distribution
- Many items have a limited shelf life – warehousing often fails to rotate the stock properly.
- Actual stock levels are rarely in step with the recorded stock levels – this may be due to pilfering,
poor update of stock records or both.
- The sales department often accepts priority orders for products which are not in stock.
- Manufacturing bypasses the normal requisition procedures and simply takes raw materials as
required – it also often fails to return unused materials to warehousing.
Finance
- The sales returns from the account handlers are often incomplete.
- There are several bad debts which cannot be recovered – this is attributed to poor credit control
procedures.
- Management accounting is very difficult due to a general lack of accurate information from other
departments.
- Financial accounts are often published late due to lack of accurate information.
Manufacturing
- Warehousing is slow to respond to requests for raw materials, thus necessitating correct procedures
being bypassed (especially when the sales department is applying pressure).
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Explain and justify your answer.
2. Assuming that LFFL decides to go down the route of purchasing off-the-shelf packages, what
steps do you recommend it takes to ensure that the applications which are selected meet their
requirements ?
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CASE
CASE CASE
CASE

STUDY
STUDYSTUDY
STUDY
7.3
7.37.3
7.3 LLOYDS BANK
INSURANCE SERVICES APPLIES RAD

When marketing people spot a business opportunity, it is often IT people who have to think and act
the faster.
Systems have to be put in place that meet the stipulated deadline, that work first time, and that fulfil

But first the new system had to be built. There already existing another application at Bournemouth
– BIQS (Building Insurance Quotations Service) – but this ran under DOS, so what would almost certainly
be a Windows system could not merely be tagged on.
Jacklin and his team had been looking at development toolsets and the RAD concept earlier in the
summer. They had been particularly attracted by a RAD specialist, MDA Computing, and has already met
the Croydon-based soft-ware house at the end of July.
Suddenly, with the new business-critical requirement looming, the need for RAD became urgent.
‘We had no hesitation going back to MDA. They obviously knew what they were talking about and we were
in urgent need of a system’, says Jacklin.
Some of the main attractions of RAD included the delivery of a workable first version within a very
short time-scale, testing that is integrated within the development cycle, flexibility of the specification, and
user involvement throughout the whole process.
Within days, Jacklin and his colleagues had agreed with MDA the RAD methods to be used. The
software house underlined the need for an appropriate development environment, and recommended
Enterprise Developer. This versatile toolset from Symantec had all the advanced features of a second
generation client/server development system, and this was precisely what the LBIS team sought.
Such systems are repository-based and scaleable, and – specially important according to Jacklin –
are driven by business rules so that future changes are easily made as business needs change. MDA
evaluates every tool that comes on to the client/server market and felt that Enterprise Developer offered the
best set of second generation facilities.
Next step was a demonstration of the Symantec toolset at MDA, ‘The demo convinced us. We had
looked at other development tools but they did not seem meaty enough for our needs. And although MDA
had never built anything with Enterprise Developer they were clearly keen to do so.’ Following that demo
and an agreement of project scope, work began on August 24th.
The key requirement was for a front-end system that would enable telesales staff at 30 screens to
capture a caller’s details and generate an immediate MUDI quotation. The system would be in Windows 3.1
and GUI based, essentially a classic PC LAN application. It would run a Compaq server using Novell.
However, MDA’s first task was systems analysis. At the early stage, LBIS had not formulated all
their needs – not even the design of the ‘forms’ that would appear on the screen. So MDA used RAD
techniques to work out what the requirements would be, and spent three days at LBID in Bournemouth

have been possible, and we have sold more than we would have done. It had to be in at the right time or we
would have missed the boat. From a technical point of view, it forced us to go to Windows which was always
our eventual intention. All this, and the system will pay for itself before Christmas!’

Source: www.dsdm.org
Questions:
1. Why and how did the company choose the RAD approach used for this project ?
2. What disadvantages of the RAD method can you identify from the study ?
3. Do you think that Lloyds can be confident that future RAD projects will be successful ?