Strategic Systems Integration Planning of the Heelz Boutique - Essay Example

Heelz: Strategic Systems Integration Planning Table of Contents Table of Contents 2 Introduction 3 Key Issues 4 Impact of OSS on Sally’s Future Plans 5 Decision Point: Software Selection 6 SSIP Process 8 Conclusion 9 10 Reference List 11 Introduction Heelz is a boutique shoe retailer that is located in England and the company is owned by Sally. After achieving fair bit marketing success in home country, the company has decided to expand its operation in European market. Therefore, international business expansion can be considered as strategic vision of Heelz. The company has increased its market presence and store concentration through formal business expansion and acquisition of ‘Zapatos’ in 2012 (a group of four outlets). At present, Heelz operates with 8 retail stores while 2 of the stores are located in Spain. As a result of the business expansion, Heelz has realized the importance of opening a new warehouse in the South of England. On the other hand, in order to penetrate the market in far more efficient manner, Sally has decided to launch an ecommerce site to sell retail merchandizes of Heelz through online platform. Launching ecommerce site can be considered as value proposition technique which is associated with low overhead cost. In order to address the lack of expertise in technology needs of the growing business, Heelz has hired OIM Consultants, which specializes in Strategic Systems Integration Planning (SSIP). After diagnosing the technology needs of Heelz, OIM Consultants has identified three key issues; Heelz and Zapatos have different IT systems, therefore, in order to establish system equilibrium; these two IT systems should be integrated simultaneously. This problem is directly related to Strategic Systems Integration Planning (SSIP). In order to ensure full customer orientation of brick & mortar retail operation and automation of ecommerce site, Heelz can either use expensive packaged software from commercial vendors or they can opt for low cost open-source software. In such context, selection of suitable packaged software (functional yet cost effective) is decision point for Sally who is owner of Heelz. This problem is related to customer dilemma regarding open source software. In order to address the research problems in precise manner, the study will focus only on the issue related to “open source software”. In order to address the topic, the study will analyze the characteristics, advantages and disadvantages of open source software in business context. The study will also explain the overall process that OIM Consultants may use address the IT systems related problems being faced by Heelz. Objective of this report will be to provide a clear understanding to Sally regarding IT integration strategy being proposed by OIM Consultants that has good fit with business needs of Heelz. Key Issues Choi (2014, p. 260) defined as, “software that is distributed with its source code under a license that sets out terms and conditions for use, modification, and re-distribution.” Subramanyam and Xia (2008) also provided similar kind of definition while describing the characteristics of Open Source Software (OSS). It is evident from the definition that OSS is being developed through geographically distributed software development platform and online community of volunteer developers. In the last two decades, Open Source Software (OSS) attracted significant amount of attention from business houses, researchers, governments and researchers, as a lucrative alternative to expensive packaged proprietary software from commercial vendors due to advantages like lower costs and flexibility (Noyes, 2011; Choi, 2014). Subramaniam, Sen and Nelson (2009) gave examples of renowned OSS such as Firefox (a web browser), MySQL (a relational database management system), Linux (operating system) and Apache (a web server). Open source development depends heavily on support of self-organizing community, users and business clients (Crowston, Annabi and Howison, 2003; Crowston et al, 2007). On the other hand, expensive packaged proprietary software from commercial vendors is being developed by paid software developers and such software is being rigorously tested by system engineers. On contrary, OSS is being supervised by volunteer members. Therefore, degree of systematic approach is pretty less for OSS in comparison to proprietary software. Generally, OSS is associated with lower developmental status while proprietary software is associated with higher developmental status. For example, open source Windows OS are written in C programming language but proprietary software are written in higher level programming languages (Sen, Singh and Borle, 2012). In order to decrease cost of development of OSS, developers use simplified languages. Due to use of simple programming languages, it becomes easier for users to understand the functionality of specific open source software. Traditionally, OSS is released under a license being approved by Open Source Initiative (Stewart, Ammeter and Maruping, 2006). In order to be freely shared, licensing term of any OSS needs to comply with guideline set by Open Source Initiative. Two important dimensions of OSS license are “copyleft” and “reciprocal or viral” provisions. Due to presence of such licensing norms, developers need to qualify stringent criteria in order to become eligible to take part in open source software development. Free/Libre Open Source Software (FLOSS) can be categorized as same or customized version of open source software. Meaning of FLOSS can be decoded in the following manner. F- Users have the freedom to see the programming code. L- The software can be accessed by paying minimum amount of licensing fee. OS- The software is derivative of collaborative development and it is widely available in open source community. FLOSS is relatively new idea of software development and it is being associated with “four freedoms” such as, 1- users can use it as par their wish, 2- the software can be redistributed, 3- users can copy the code of the product and 4- binary version of the software can be modified by the users (Noyes, 2011). Small and medium scale organizations can decrease the software development as well integration cost by adopting Free/Libre Open Source Software (FLOSS). Decreasing cost of software integration can positively affect the profitability and return on investment for the company which is using FLOSS. Impact of OSS on Sally’s Future Plans Author of this report is working as consultant with OIM Consultants and while consulting with the client, it has been found that Heelz needs robust as well as effective software integration in order to support its business growth strategy. Heelz can either use expensive packaged software from commercial vendors or they can opt for low cost open-source software. SWOT analysis of OSS usage for companies can be conducted to get clear direction in decision point. Strength Heelz can exploit the low cost of ownership benefits (can be acquired by paying minimal or no licensing fees) of using open source Customer Relationship Management (CRM)/ Enterprise Resource Planning (ERP) software. New contribution to open source are open source CRM/ERP software is being peer reviewed and program codes are widely available. For example, Apache HTTP Server project follows stringent quality criteria such “review then commit policy”. Therefore, Bugs and security threats in the server can be quickly identified and fixed. As a result, quality of security for open source CRM/ERP software gets increased. Due to availability of program codes, OSS can be easily modified by system programmers of Heelz. Due to peer review practices, many open source software are far more rigorously tested than expensive packaged software from commercial vendors. Open source CRM/ERP software is distributed by multiple individual vendors. Therefore, Heelz does not need to depend on single vendor for software support (Ven, Verelst and Mannaert, 2008). Weakness Many open source CRM/ERP software are elementary in nature and does not provide end to end solution. While using open source software, no product related training will available for employees in Heelz. Open source CRM/ERP software is not entirely free (in monetary terms); licensing fees are indirectly added to the additional features of the software package. Complicated intellectual property and patents issues (when code of proprietary software is being illegally copied) are related to open source software (Ven, Verelst and Mannaert, 2008). Opportunity Heelz can adopt open standards to decrease the effort to adjust with the functionality of Open source CRM/ERP software. For example, software team can compile their C++ program to platform JavaScript of open source system. While working with open source, Heelz can capture “intellectual energy” such as knowledge of the effective process, programming codes and low cost support knowledgeable software developers (Ven, Verelst and Mannaert, 2008). Threat While using OSS, Heelz will not have much control on outsider open source developer community. For example, variability of product release cycle for open source CRM/ERP software cannot be addressed by Heelz. The company will be dependent on a virtual community for any software up gradation or technical support. Due to poor quality of documentation, Heelz may face problem in understanding functionality of many open source software (Ven, Verelst and Mannaert, 2008). Decision Point: Software Selection Considering the business needs of Heelz, it can be said that the company is seeking for low cost IT solution so that they can use the additional financial resource to execute other business level strategies such as retail merchandises diversification, increasing distribution points in European market, executing integrated marketing communication (IMC) activities and others (Samoladas et al., 2005). A comparative analysis of Open Source Software (OSS) as against expensive packaged software from commercial vendors can be conducted in order to provide a decision support to business needs of Heelz. Table 1: Comparative Analysis Business needs of Heelz OSS Proprietary Software Ensuring security of ecommerce site While using OSS, IT division of Heelz can access the peer reviewed support and online available programming code in 24*7 manners. Due to extensive peer review of most of the OSS, security threats or chance of bug intervention gets decreased. As a result, Heelz can quickly as well as safely update security measures and fix bugs. Proprietary software vendors use patented programming codes. In case of online security threats, Heelz will have to depend on slow bug fixing procedure proprietary software vendors. Delay in addressing security threats will negatively impact the profitability of e-commerce offering of Heelz. Operating cost Apart of licensing fees for additional features of OSS, cost of ownership of the open source software package will be pretty low for Heelz. Cost of ownership for proprietary software is will be pretty high. Further cost will be incurred for Heelz if it wants to access additional support after completion of license contract. Online and Offline Customer Relationship Management and Sales Support Due to available programming codes in online community, IT teams can customize the functionality of the software as par their requirements. The company will not need to depend on particular one vendor. Adopting open standards can further increase the ease of managing the FLOSS for Heelz. After finishing of support terms, it will be difficult for Heelz to access the service vendor of proprietary software. Due to non-availability of programming codes, it will not be possible for IT division to customize the customer relationship management software after completion of terms of agreement with proprietary software. (Source: Greenlees, 2007; Feller and Fitzgerald, 2002) Verdict: after analyzing the synergy between businesses needs of Heelz and benefits of using open source software, the study has came to the verdict that Sally (owner of Heelz) should use open-source software to integrate the online and offline retail offering to customers. It is being suggested that IT division of Heelz should access and read all the necessary documents of the respective open source software. IT division of the company should use their expertise to understand necessary details of respective open source software and such practices would enable IT division of Heelz to provide software training to its employees. Legality of using of the accessed OSS should be checked from Open Source Initiative (OSI) (Greenlees, 2007). SSIP Process It is being recommended that Heelz needs to use OSS platform that can be fully integrated with the retail store operation (selling merchandises to customers directly or delivering online ordered merchandises to customers via courier). In order to execute the mentioned recommendations, Strategic Systems Integration Planning (SSIP) should be used (Basahel and Irani, 2009). Objective of the OSS platform integration will be to provide strategic business solution rather than solving only technical problems for the Heelz. As part of SSIP process, there will be 5 phases such as, 1- managing the organizational change, 2- assessing the current IT support requirement of Heelz, 4- identifying key issue, developing IT strategic plan and 5- developing IT tactical plan (Huang and Hu, 2007). Phase 1: consultants will conduct meeting with business managers and IT division of Heelz. As part of integration of ICT (Information and Communications Technology), scope and work plan for the project will be determined in such meetings. Team of change agents will be developed and this team will discuss issues regarding IT system integration between ‘Zapatos’ and Heelz. Phase 2: existing IT system of Heelz will be diagnosed by team of experts in OIM Consultants. By taking help of the business managers of the client, business situation will be analyzed through mechanisms such as market sizing, industry force analysis (Porter 5 Force Analysis), industry trend analysis, customer segmentation and others. On the other hand, with the help of IT division of the client, OIM Consultants will analyze data centres, telecommunication infrastructure, deployed application, development process and application interfaces (Huang and Hu, 2007). Phase 3: team of change agents will identify concerning issue regarding IT integration in functional areas of operation, inter process relationship and process modelling (Checkland and Holwell, 1998). Identifying issues regarding IT integration in e-commerce operation will help OIM Consultants to develop the potential solution so that sustainable system integration can be done. Phase 4: as part of strategic IT plan, information as well as application architecture for the open source software (open source CRM/ERP is suitable in this case) will be developed. As part of data architecture definition, issues like data service level requirements, data storage, disaster recovery and restorations will be considered. In order to provide processing level support, open standards of OSS will be adopted so that IT systems of ‘Zapatos’ and Heelz can be integrated over a same platform (Checkland and Holwell, 1998). Phase 5: based on cost-benefit analysis and risk assessment, implementation and training program will be designed. OIM Consultants will use open source software and customize the programming codes in order to address customer relation and sales process related issues regarding retail store operation of Heelz (selling merchandises to customers directly or delivering online ordered merchandises to customers via courier). After doing the necessary customization and gathering knowledge about detailed functioning of the respective OSS, OIM Consultants will install the software in the server of Heelz. After successful test run, full installation of the software will be done. End to end product training will also be provided to employees in Heelz. Conclusion It is evident from the above discussion that adopting OSS platform can help Heelz to not only address their dilemma regarding selection of appropriate IT infrastructure but also help the company integrate the online and offline retail offering to customers. The report has proposed 5 phase SSIP process to help the Heelz improve its technological infrastructure of value proposition. It is being expected that the client will address most of IT infrastructure related issues by implementing above mentioned recommendations. In order to control the external risk and variance associated with recommended SSIP process, project team will OIM Consultants will provide supervisory support. Reference List Basahel, A. and Irani, Z., 2009. Evaluation of strategic information systems planning (sisp) techniques: Driver perspective. European and Mediterranean Conference on Information Systems, July 13-14, pp. 1-15. Checkland, P. and Holwell, S., 1998. Information, systems and information systems: Making sense of the field. Michigan: Wiley. Choi, N., 2014. The application profiles and development characteristics of library Open Source Software projects. Library Hi Tech, 32(2), pp. 260-275. Crowston, K., Annabi, H. and Howison, J., 2003. Defining open source software project success. Seattle: Proceedings of the 24th International Conference on Information Systems. Crowston, K., Li, Q., Wei, K., Eseryel, U. Y. and Howison, J., 2007. Self-organization of teams for free/libre open source software development. Information and Software Technology, 49(6), pp. 564-575. Feller, J. and Fitzgerald, B., 2002. Understanding open source software development. London: Addisson-Wesley. Greenlees, J., 2007. Open source or proprietary: Which software model is better for the consumer? [online] Available at: [Accessed 5 July 2014]. Huang, C. and Hu, Q., 2007. Achieving IT-Business strategic alignment via enterprise-wide implementation of Balanced Scorecards. Information Systems Management. 24, pp. 173-184. Noyes, K., 2011. Open source software is now a norm in businesses. [online] Available at: [Accessed 3 July 2014]. Samoladas, I., Bibi, S., Stamelos, I., & Bleris, G. L., 2005. Exploring the Quality of Free/Open Source Software: a Case Study on an ERP/CRM System. Thessaloniki: Department of Informatics, Aristotle University. Sen, R., Singh, S. S. and Borle, S., 2012. Open source software success: measures and analysis. Decision Support Systems, 52(2), pp. 364-372. Stewart, K., Ammeter, A. and Maruping, L., 2006. Impact of license choice and organizational sponsorship on success in open source software development projects. Information System Research, 17(2), pp. 126-144. Subramaniam, C., Sen, R. and Nelson, M. L., 2009. Determinants of open source software project success: A longitudinal study. Decision Support Systems, 46(2), pp. 576-585. Subramanyam, R. and Xia, M., 2008. Free/libre open source software development in developing and developed countries: A conceptual framework with an exploratory study. Decision Support Systems, 46(1), pp. 173-186. Ven, K., Verelst, J. and Mannaert, H., 2008. Should you adopt open source software? Software, IEEE, 25(3), pp. 54-59. Read More