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The Temper Tinglary SOHO Art Gallery - Case Study Example

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The paper "The Temper Tinglary SOHO Art Gallery " is a perfect example of a business case study. According to the current situation facing the SOHO Art Gallery, there is an imminent need to explore the Shire region. However, it is clear that the company has no information about the market opportunity in the Shire and its environs…
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Extract of sample "The Temper Tinglary SOHO Art Gallery"

Project Charter for Temper Tinglary SOHO Art Gallery – Yarra Valley Introduction The Temper Tinglary SOHO Art Gallery is an all-time art exhibition organization that was originally founded with an aim to promote the exhibition of local artwork and other works of artistry, pottery, photography and other collectables in Yarra Valley. Since then, the SOHO Gallery has expanded enormously in terms of scope and market coverage. With that in mind, the Gallery transformed from a not-for-profit organization and have thence operated as a for-profit upfront shop for the last six years. Considering the nature and identity of SOHO Gallery, the organization initially depended on donor funding and government grants. Otherwise, the transition to a for-profit status has enable SOHO Gallery to amass other sources of funding including direct sale, exhibition rates as well as other stakeholder support. All these have seen the organization through various developmental stages to the point when it hopes for external venture into the Shire region. However, SOHO Gallery has faced a number of challenges in steering its objectives. First and foremost, the Gallery has experienced unprecedented difficulty in relying on manual operations in matters relating to data management, sales, customer analysis, market forecasting and competing for government grants. Other areas of interest comprised slow rate of ROI, unpredictable market penetration, burden on manual labour as well as inadequate information about competitors and external customer behaviours. For these reasons, the management of SOHO Gallery has resolved to embrace modern technology in order to enhance community participation, easy the workflow and create reliable information data base. Furthermore, it seeks to implement a suitable program that will enable it to forecast future market trends and to improve organization’s positioning to compete for government grants. To that end, SOHO has identified five possible alternatives through which it endeavours to implement the best option for maximum output and achieving of its objectives and the Measurable Organization Values. That notwithstanding, members of SOHO Gallery have expressed the need to develop a system which will sustain its competitive advantage and improve their ability to work with other relevant organizations in Shire including the tourism industry and the local council. Moreover, the intended system should be relevant and useful is collecting, analysing and updating data on the previous exhibition activities and trends in Shire. This paper therefore explores the five alternatives so as to single out the most appropriate choice envisaged to offer maximum benefits in line with the desired impacts. Thus, the paper presents a succinct Project Charter for Business Intelligence System and a detailed justification for being the best alternative. Nevertheless, it is worth noting that the aforementioned alternatives include: Base Case model, Customer Relationship Management (CRM), Accounting Information System, Business Intelligence System and Website. Project Charter for SOHO Art Gallery – Shire Region Project Name: Implementation of Business Intelligence System This Charter officially authorizes a project to adopt and implement the Business Intelligence System for purposes of expanding the scope and horizon of SOHO Gallery into the new market domain in Shire region. In that light, a complete project plan shall be developed and presented for approval by the Project Sponsors. Specifically, the following item shall be included in the project plan: scope statement, schedule, budgetary allocations & cost estimates, resources, risk, stakeholder management along with the quality and communication controls (Olszak & Ziemba, 2007, p143). The purpose of the BIS project is to enhance strategic penetration of the online market with a view to increase customer base, profits and access to government grants. Moreover, the project will be quite instrumental in reducing manual work, streamlining supply of artworks as well as easing transaction operations and access to market data (Laudon & Laudon, 2006, p 241). These will be the synergy towards rapid realization of improved customer service, expanded body of knowledge about different aspects of art for the benefit of the community and international travellers and inspiration for current and upcoming artists. Considering these prospects, the BIS deliverables will stimulate access to dynamic market information to aid informed decision making, marketing and community participation. The founding members shall be the project managers for purposes of implementing the BIS model. They are hereby authorized liaise with the SOHO Gallery management, negotiate for necessary resources and do all that appertains to this project for successful adoption and implementation of BIS in the Gallery. Besides, the founding members will be fully in-charge and responsible for planning this project, regulating costs and leading the M&E team in measuring performance and instituting necessary adjustments in due course. Following the submission and approval of the complete project plan by 30th January 2012, the management shall assign necessary resources for the commencement of the BIS implementation project within 14 days. This initial stage will include acquisition of the computerized BIS, preliminary baseline research and training of the Gallery staff on the use of this system. Thereafter, the project will proceed as per the guidelines provided in the schedule for the next three years. Finally, this Charter acknowledges that the BIS project hitherto shall operate within a budget of $56,670 inclusive of a 10% contingency appropriation. This project will be funded by the sponsors of SOHO Gallery. Other funding sources may be solicited from government grants for community participation. Sponsor Acceptance Approved by the Project Sponsor (s): __________________________________________ Date: ______________________________ Signature ____________________________ Justification of the project According to the current situation facing the SOHO Art Gallery, there is imminent need to explore the Shire region. However, it is clear that the company has no information about the market opportunity in Shire and its environs. Therefore, it is important to adopt a business projects that will help the organization to gather up-to-date market information, increase data management, increase its productivity and market share in Shire. On the other hand, SOHO Art Gallery require a system that will enhance community participation, reduce operational costs, create a suitable platform for market forecasting as well as improve its position to compete for government grants. While all these are important factors for consideration, the MOVs for SOHO Gallery cannot be overlooked. Thus, the need to improve revenue by 25%, increase competitive advantage in the new market, enhance positioning to compete for government grants and improved customer service are essential components to be considered in the proposed project. Primarily, BIS scored 6.18 in the comparison weighted matrix. This was the highest score followed by the cumulative 6.0 scored by Accounting Information system alternative. Compared to other options, BIS remained the most preferred alternative. In terms of MOV, the Business Intelligence System would successfully increase revenues of SOHO Gallery by 25% as desired by the organization. On the other hand, it is the most useful tool in improving the organization’s position to compete for government grants. While CRM will be ideal for promoting better customer service with revenue increase 25%, it does not influence the ability to compete for government grants. Besides, the alternation does not reduce burden on manual workload. The remaining alternatives have no potential of attaining the 25% annual increase in revenue. Despite the fact that the BIS alternative will initiate an ROI of 27%, its net present value for the implementation period is estimated at $81,080. This is the second highest value after that of CRM. On the other hand, BIS will ensure a breakeven point of 588 units at an average cost of $51 within a payback period of 9months. This is quite plausible in relation to the need to compete for government grant which all the remaining alternatives do not offer. Whereas the Website Alternative will increase artist network by at least 10% and additional 100 customers each year, it has a breakeven point of 863 units and loss of 12% in the first year of its operation. Further, this option has other cost implications such as additional $8,000 for research and $1,500 indirect loss of productivity. Lastly, the payback period for this alternative is approximately 20months with no promise to reduce manual work of book keeping or improving ability to compete for government grants. Considering the Base Case alternative, the project will assume status quo with a revenue increase of 10%, return on investment of 25% and a discounted net present value of $53,912. From the face value, this option is relatively good with no cost implications above the normal operational costs. However, Base case will neither generate any information about the previous exhibition activities in Shire nor improve the organization’s competition for government grants. Besides, the burden of manual works will continue to persist and the SOHO Gallery will not be able to successfully penetrate the envisioned new market. To that end, it is modest to note that the Alternative 1 will not improve the current problems facing SOHO Gallery. Alternative 2 will not influence organization’s ability to compete for government grants. Alternatives 3 and 5 will neither influence the Gallery’s ability to compete for government grants nor will it improve revenue by the desired 25%. From a different note, the AIS Alternative also scored highly. However, it would only aid the increase of external market share by a weighted score of 4 compared to score of 8 achievable through BIS. In terms of customer satisfaction, BIS has a higher chance with a weighted score of 7 compared to weighted score of 5 attained by AIS. Although the AIS option is less risky, BIS was seen to be the most aligned to the Gallery’s strategic objective with the highest probability of realizing the MOVs. It follows therefor that Alternative 4 – Business Intelligence Service remains the most ideal project towards achieving the target objectives of SOHO Gallery improvement plan. Stakeholders Stakeholders are important players in every community based project. Thus, their goodwill and acceptance determines the overall performance and sustainability of the project as observed by (Schwalbe, 2006, p 70). In line with such understanding, SOHO Gallery has stretched its ideologies across the region to the extent of attracting several stakeholders including the government and local council of Yarra Valley. Moreover, the following stakeholders have been pertinent in the existence and operations of SOHO Art Gallery even as it looks forward to implement the new BIS project. These comprise the original founders, book keepers, customers, exhibiting artists, local communities and the local authorities in Shire. Needless to say, current SOHO partners such as the national Gallery of Victoria, the Beechworh studio and Benella studio are also important stakeholders in this project. Appendix 2 provided an overview of stakeholder analysis and their impact in proposed project. BIS Project Description and Scope The Business Intelligence System refers to an automated structure through which an organization can collect, organize, analyse, report and update business organization on a continuing basis (Olszak & Ziemba, 2007, p 138). For that reason, BIS will enable SOHO Gallery to mine all facts and details about the previous exhibition activities in Shire. Moreover, the project will be instrumental in assuring timely recording of sales transactions as well as updated records of artist inventory throughout the implementation period. In a broader perspective, BIS is the basic instrument for the transcription of market data into meaningful sets of information and knowledge. In addition such BIS generated knowledge defines a more liable ground for formation, rationalization and implementation of apt decision making. According to Laudon & Laudon (2006, p 241), Business Intelligence System works on the principle of integrated information for improved competiveness. As a result, business organizations find BIS to be quite reliable in exploring the new markets or in pursuing the viability of a new product. In the same way, BIS will avail updated analytical information about precious exhibition trends, customer behaviour, competitor rationale and market projections as reiterated by (Olszak & Ziemba, 2007, p 145). All these will definitely be valuable for SOHO Gallery to penetrate Shire and increase its competiveness for government grants. Another essential component of the BIS project is that, it will enhance automation of data relating to inventory and sales. As such, BIS opens a new door for reducing bulk of paper work and manual work. On the other hand, BIS presents a platform for forecasting future market trends especially at the regional level. These will include data on the feasibility of opening external exhibitions in Shire and the likelihood that artists in the regions would prefer SOHO Gallery for their exhibitions. If the organization adopts the BIS project, its implementations will influence the following areas. First, the model will expand the organization’s regional market share thereby increasing revenue by at least 25% annually. Secondly, the project will enhance competitiveness for government grants in additions to uplifting its efficiency in keeping with dynamic market trends as argued by Schwalbe (2006, p 79). Apart from offering a better understanding of the organization’s performance, BIS will enable the management of SOHO Art Gallery to reduce productions bottlenecks and improve profitable customer analysis. The project will also make it possible for the organization to improve accurate decision making, reduce overheads and successfully execute future exhibitions in Shire region. The scope of this project intends to impact four specific areas. Firstly, the project will enhance accurate reporting and recording of information relating to sales and inventory flow. This will increase speed in handling lots of exhibitions and customer orders. In the same way, the project will significantly reduce human errors associated with manual data handling. The second area of concern revolves around the prospects for improved ROI. Olszak and Ziemba (2007, p 139) observed that BIS stimulates well-researched decision making. As a result, the management gets to understand the gist of every market occurrence prior to investing in a given territory. In the long-run, investments decisions are based on viable prospects and updated trends towards an intended sales projection. This has been seen to improve sales performance across multidisciplinary industries (Schwalbe, 2006, p 81). It is therefore possible that its adoption will as well impact positive investment returns on SOHO Gallery expansion. The third area relates to improved customer service. As observed, BIS improves internal and external data flow. It also enhances rapid handling of orders and customer queries. As a result, the project will reduce retrieval time to ensure that orders are delivered in time and customer inquiries are responded to expeditiously. Moreover, artists will be able to keep track of their exhibitions and customers. The synergy in these events incorporates customer needs, supply expectations and organizational capacity to satisfy its stakeholder as reiterated by Wilkinson et al (2000, p 214). This is the essence of customer satisfactions in an A2C model. The last component revolves around knowledge management and performance. According to Olszak and Ziemba (2007, p 146), BIS creates a strategic hierarchy of matrices through which to focus on and measure organizational business performance. The project will instill objective minded efforts towards making use of the BIS date for purposes of competing favourable against other exhibitions in Yarra Valley and Shire region. Budget Summary The total up-front costs of acquiring the BIS software, installation and upgrading of the system database was estimated at $32,000. Other on-going cost of training and system management was determined to be $6,000. The last cost item comprised supervision and maintenance. These included two project managers, 2 programmers and a systems analyst. For the entire implementation period, these personnel shall accrue hourly-based remunerations amounting to $11,200, $560 and $1,050 respectively. Following successful implementation of the BIS project, the management shall outsource strategic marketing team to mobilize the community. The team will also undertake innovative measure to woo the present and potential customers. Furthermore, the choses marketing strategy will also integrate suitable modalities of attracting upcoming artists and interested stakeholders. In total, the marketing activities thereon will run for 2 weeks at an estimated cost of $2,708. On the other hand, the project has accounted for any short-falls at an appropriated 10% contingency amounting to $5,152. Therefore, the total cost for this project is $56,670. While these are just but a summary of the budget, detailed account of each cost item is outlined in Appendix 1. Risks Management According to Schwalbe (2006, p 175), every organizational undertaking has some risks. However, the magnitude and importance of such risks are largely dependent on the nature of the project. Whereas the proposed BIS project will be ideal for achieving the desired MOVs and organization goals, it presents two major risks. Primarily, the current employees of SOHO Gallery do not possess any knowledge pertaining to the use and maneuvers of BIS. This may result in classiness, misjudged data input and unauthenticated transcription of inventory reports. Thus, the struggle to get acquitted with the system may result in delayed deliveries and loss of customers. The second risk is that, SOHO Gallery has no information about the previous exhibition activities in Shire. Thus, the general assumption that this organization commands some competitive advantage might be disapproved if indeed Shire happens to host several well established artists who will present stiff competition against the SOHO Gallery. On the other hand, Shire might not have any enthusiastic artists or customers. Thus, the ROI prospects will drastically decline with an increase in payback period. In order to amicably manage these risks, SOHO Gallery ought to be strategic enough as follows. First, it is important for the organization conduct a though baseline survey on the viability of the targeted market. Secondly, the need for market and customer forecasting is also paramount for the success of this project. While the third strategy calls for employee training, it is important for SOHO to conduct a pilot of the proposed project as well. In that way, SOHO Gallery will be able to gauge its last positioning strengths, avert potential risks and understand competitor approaches in Shire. Otherwise, BIS is an alternative with lots of achievable prospects. References Laudon, K. & Laudon, J. 2006, Management Information System: managing the Digital Firm. Upper Saddle River, NJ: Pearson/Prentice Hall Muhammad, Z. 2009, ‘Accounting Information Systems (AIS) and Knowledge Management: A Case Study’, American Journal of Scientific Research, vol.10, n.4, pp.36-44. Olszak, C. & Ziemba, E. 2007, ‘Approach to Building and Implementing Business Intelligence Systems’, Interdisciplinary Journal of Information, Knowledge and Management, vol.2, pp.136-147. Schwalbe, K. 2006, Introduction to project management. Stamford, CT: Cengage Learning. Wilkinson, J. Cerullo, M. Raval, V. & Wong, B. 2000, Accounting Information Systems: Essential Concepts and Applications. New York, NY: John Wiley and Sons. Appendix 1: Budget Summary Resource Type Std. Rate Ovt. Rate Duration Cost/Use Up front Cost BIS Software - - - 20,000 SQL Server - - - 6,000 System Upgrade $50/hr - 8hrs × 1wk 2,000 Data transfer - - - 2,000 On-going Cost Training - - - 5,000 Maintenance - - - 1,000 Supervision & Implementation Project managers $50/hr $57.45/hr 2ple×8hrs×2wk 11,200 Programmers $20/hr $38.50/hr 2ple×2hrs×1wk 560 System Analyst $30.45/hr $37.50/hr 1psn×2hrs×2wk 1,050 Marketing Company 65,000/y 65,000/y 2wks 2,708 Sub Total 51,518 Contingency 10% of TC - - 5,152 TOTAL 56,670 Read More
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