Information Strategy for Aalsmeer Flower Auction - Essay Example

Aalsmeer Flower Auction and Section # of BUSINESS INFORMATION REQUIREMENTS OF THE BOARD OF AALSMEER FLOWER AUCTION In order to analyze and obtain information requirements Aalsmeer Flower Auction must first need to define an effective information strategy. An information strategy is an organizations unique process for capturing, integrating, processing, delivery and presentation of information in a consistent and timely manner (Majid, 2007). Consequently, all information in an organization should meet a quality standard at the same time it should be well communicated within the organization to ensure that people have the right knowledge before they actually work on something (IBM, 2008). For the information strategy to work effectively the only requirement is that information should not be biased and should be obtained using utmost care and analysis. In the case at hand, the information will be obtained from the employees and the board members of the company. The IT development team will conduct user surveys and review user requirements individually (Hansen et all, 1999). They will strive to find out the roles played by each employee and will design a system that enables each individual to perform his or her role effectively. Similarly, the IT consultants will have to analyze the different use cases and the user scenarios which will affect the end product. The information needs will then be derived from the use cases. From the case the business requirements are to provide an online marketplace for buyers and customers to interact, place orders, enter details and feedback and receive goods through a logistics channel. Hence, Aalsmeer has to function in a manner where it not only keeps record of the financial transactions of the company but also the financial transactions that take place over their marketplace. Similarly, for their success they will have to market their offering to the customers which can be flower growers and flower merchants as well as the private buyers who want flowers and plants to be delivered to them for a non business purpose. In addition to this the Flower Auction will have to incorporate the feedback from the clients to the vendors so that the growers know what is being demanded in the marketplace and grow the same flowers and plants. Therefore, it will provide the growers the analysis of the demand in the market for the various types of plants and flowers. INFORMATION REQUIREMENTS FOR THE PROPOSED SYSTEM The information requirements for the proposed system can be divided into different entities. There would be different information stored for individual entities, i.e. growers and sellers would have their profile while the customers will have one of their own . Each seller and buyer will have a rating associated with their account, which will be updated after every transaction. Once, a transaction is over the customer will give feedback about the seller, quality of the flowers or plants, delivery status and the overall service. Hence, each seller will be rated accordingly; the ratings will give clients an idea about a seller before they actually perform a business transaction. In order to be fair, the sellers will also be able to rate customers in terms of their responsiveness, payment process, order placing and cancellations etc. Thus, sellers will also be able to get an idea about a customer before transacting with him. Financials The financial interaction in between the customer and the seller will also be recorded; a log will have to be maintained of all the transactions that have taken place between various sellers and buyers. Since, the company is providing the buyers and sellers a marketplace and facilitating business they will charge commission from both the parties for the transactions. Therefore, each order quantity, amount, buyer identification and seller identification will have to be maintained in a database. The database will also have the seller and buyer details and their respective ratings. Pricing Mechanism Prices of different flowers and plants will also be stored in a database. According to the information in the case, these prices will usually be world prices so will be referenced by other parties or they can also be prices that are agreed upon mutually by the two transacting parties. In both cases, the prices will have to be uniquely identified with each transaction and the users should be given the room for discounts and premiums. Hence, buyers can ask sellers for discounts on large orders while the sellers can ask for premiums for orders that need to be delivered urgently. The prices will also be updated regularly in order to reflect the current market price to buyers across different countries. The users will be shown the prices on the website, which will be updated every day to reflect upon the demand and supply of the various products. Logistics and Distribution Another important area where information has to be stored is the logistics and distribution. The system will also store the type of delivery vehicle selected and the logistics carriers for the different transactions. It will keep a record of the warehouse and storage facility at hand and will also allow the users the flexibility to order in bulk and then receive shipments of smaller quantities. The system will also store details about the consequent shipments of the bulk orders which are delivered in small shipments. It will also prompt the seller about the time and the date of the next shipment that is to be dispatched. It will also allow the retailers to place orders with different whole sellers and then package different products from different retailers into a single delivery. Hence, the buyer will be given the flexibility to order and regroup products from different whole sellers. For international orders the system will maintain a log of delivery times and will also ensure that sellers are notified of the delivery time so that orders are not delayed. As a result, the board at Aalsmeer Flower Auction will maintain and have access to various types of data relating to buyers and sellers. The critical data that will be stored and maintained in the system will be user details, user ratings, financial history, transactions history, prices of different products, logistics information, marketing information and support information for the clients. SWOT ANALYSIS OF AALSMEER FLOWER AUCTION Strengths The system will allow the firm to increase quality of service Differentiate from competitors based on information technology Better serve customers by maintain customer data Efficient pricing mechanisms Stronger management Control Weakness Low volume of retailers on auction site, it is more of a B2C solution rather than a B2B solution High transportation costs Discounts only valid on bulk buying Buyers and sellers may choose to ignore the auction site and deal directly amongst themselves Opportunities Expand to other regions Export flowers to countries where they cannot be grown naturally Providing people a universal platform Offering customized services Expanding to other business areas where the flowers are used as input like wedding decorations etc Threats Other auction sites Retailers who service client through physical shops PESTLE ANALYSIS Political Increasing political pressures from worldwide for universal platforms EU involvement in online auctions Economic High production cost Lesser selling cost as compared to physical vendors No land cost for a physical presence Social It is a retailers market they are getting smarter day by day Auctions cannot offer economies of scale Small scale order processing More recent way of selling things to people Technological Like other consumer goods, it is a good initiative to sell flowers online People are more technologically savvy these days hence it is better to approach them through the Internet Legal EU’s guidelines and framework for online businesses Environmental Unpredictable weather conditions Use of insecticides and pesticides for growing plants affect soil condition DEVELOPMENT METHODOLOGY There are many different methodologies or development models that Aalsmeer Flower Auction could use in developing the new information system. These development models could be used to properly plan and control the processes throughout the development of the system. These include, the waterfall model, incremental model, prototyping and spiral model. All models have their own pros and cons and it depends on the kind of project being developed, which development model to adopt. For Aalsmeer Flower Auction, the spiral model of development would be most suitable. The spiral model is best suited for projects where the requirements are volatile and are subject to change. Aalsmeer Flower Auction is faced with a similar situation of changing requirements. There is an emergence of alternative, electronically driven flower markets. Moreover, the dynamics of the market is also changing as the dominant role of growers in the chain is being over taken by the mergers of retailers and changing demands. Another important reason for choosing the spiral model is that it incorporates risk management processes into the development process. Therefore, the risks imposed by the changing requirements and needs of the suppliers and buyers could easily be met through the risk analysis and risk mitigation plans. (Parekh, n.d.) THE SPIRAL MODEL The basic idea behind spiral model is that it focuses on risk assessment and dealing with it efficiently. It requires the project to be broken down into smaller, more easily manageable portions that are worked on in separate phases. This makes identification of risks fairly simple during iterations, and also makes incorporating changes into the system simple. This is what is required by Aalsmeer Flower Auction because of their changing needs. During iterations, the project portions go through four steps: 1.identification of objectives, alternatives, and constraints (Plan); 2. Evaluate alternatives (Risk Analysis); 3. Develop deliverables and verify them (Engineering); and 4. Get customer feedback proceed to next phase if required (Customer Evaluation). (Selecting a Development Approach, 2008) THE OBJECTIVES AND HOW SPIRAL MODEL WOULD AID IN ACHEVING THEM The spiral model would start off by identifying the objectives of the information system being developed by Aalsmeer Flower Auction. The most basic requirement of the system is to provide a platform for the flower suppliers and buyers to interact with each other. The importers, exporters, wholesalers, retailers and other buyers would use this system to bid on orders and contribute in determining the market price of the different products. The problem, however, is that there have been three developments in the dynamics of the online flower auction industry and the flower market that will affect the development of the information system. Firstly, there have been a growing number of competitors entering the market. This means that Alsmeer Flower Auction would no longer be enjoying a comfortable position in the market as the growers and buyers of flowers have alternatives to choose from. The spiral model’s iterative approach would help deal with this problem. To stay on top of the leader board, Aalsmeer Flower Auction would have to continuously evolve its system specifications and keep adjusting its system to the changing requirements of the users. Also, it would have to keep monitoring what competition is doing to penetrate into their customer base and must adapt accordingly and as early as possible. The spiral model would be better than other models for this purpose, as right after the engineering phase, customer evaluation would help identify and resolve any potential issues and problems in the system and the system could again go through the iteration in order to incorporate the changes. Spiral model would also be helpful in adapting to the second problem of meeting the needs of the retailers. The retailers serve as the only customer touch point in the entire chain. They are aware of the customer needs and demands more than the growers themselves because they are interacting with the customers directly. The whole idea of a business is meeting the demand of the customer. Therefore, the previous mindset of the growers being the dominant players in the chain would have to be changed. This change must be reflected in the new system being developed. As we know that Aalsmeer Flower Auction also provides storage and logistics facilities, the system must better manage those facilities in meeting the requirements of the retailers. For instance, the minimum order quantity of orders for the buyer must be reduced and the lead time to deliver the order to the retailers or wholesalers should be made more flexible and customized for individual orders (Night et al, 2001). This is because flowers are seasonal products and the demand of different types of flowers fluctuates considerably throughout the year. Therefore, managing the ever changing inventory levels through the system accordingly would be very crucial in satisfying the customers and keeping them from switching to alternatives. Moreover, as we see that retailers are becoming more and more powerful through mergers and acquisitions, they are taking up a more dominant and professional role in the chain. They system must therefore provide to the retailers, features that enable them to place their bids and order more flexibility. They should be given the liberty to receive their orders in smaller quantities, utilizing their limited shelf space more efficiently through making use of the storage and logistics functions provided to them by Aalsmeer Flower Auction. Furthermore, as retailers themselves are also considering new, perhaps electronic, ways of doing business with their customers, this could be seen by Aalsmeer Flower Auction as an opportunity by Aalsmeer Flower Auction. The new system could provide to the retailers, an online shop of their own to interact with their customers and supply them their products through the Aalsmeer Flower Auction system directly without going through the hassle of physically storing the orders with themselves first. This would give Aalsmeer Flower Auction a competitive edge over others as well by bringing the entire chain, starting from the growers of the flowers, to wholesalers, to retailers, and finally, the customers, all on the same platform. All these, and many other such changes, would have to be applied to the system regularly. This means that the new system being developed will have to keep evolving with time to satisfy the demands of the users, and the best way to do that is to use the spiral development methodology. THE IMPACT AND EFFECTIVENESS OF A NEW SYSTEM Information systems provide their users with increased flexibility to perform their day to day operations. A database is simply there to provide data, but an information system provides the best information the user needs to perform day to day tasks more effectively. It also takes into account that different users have different information requirements and will perform their own specific tasks (Benefits of an Information System). Hence, the same information can also be presented in different forms to assist different users. Information systems have a very deep impact on an organization and they are mostly used to streamline the processes and manage effectively. The new system will be effective for the organization as it will enable better and proper information storage (Ahituv, 1989). The stored information can then be analyzed to reveal trends and perform forecasting. Similarly, it can also be used to infer about the customers and the nature of business in specific months during the year. The information system will also allow the organization to store functional data such as financial data of the company. The new system will also impact the organization in terms of the time it takes to perform certain actions. With information system in place the time required for day to day business operations will decrease (Larry, 2000). The organization will be able to cater to a wide variety of customers, from different parts of the world. Therefore, there will be new avenues for business for the organization. Above all the new system will have a store for data. Data is extremely critical for an organization such as Aalsmeer which is a service organization as their revenue is directly linked with the data of their customers (Jonathan et al, n.d). That is the revenue of Aalsmeer is a percentage of the business provided to them by their clients. Similarly, in order to differentiate themselves from other electronic markets they will perform analysis on the data to reveal trends and industry analysis for their customers. This information system will have its effect on the management of Aalsmeer too. Such systems are needed by managers because of the increased complexity and rate of change of today’s business environment. For example, the firms marketing manager will need information about the websites performance and trends, the finance manger will need information about the returns and the human resource manager will need information about the worker productivity Thus, different managers will require different data and information to perform their duties effectively. The information system will provide the managers with the specific marketing, financial and personnel information that is required to support their decision making responsibilities. Advantages of the system to the management Information systems help in planning activities. They improve the quality of the service by providing relevant information for sound decision making. Which is necessary as the size and complexity of organizations increases it becomes exceedingly difficult to manage everything by hand (Various Advantages of Management Information Systems). The system will minimize information overload. As the amount of data increases and the number of customers’ increases, it will become extremely difficult for the management to keep track of the buyers and sellers and their respective ratings. The system will change the large amount of data in to summarized form and there by avoid the confusion which may arise when managers are flooded with detailed facts. The system will encourage decentralization, i.e. it will monitor operations at the lower levels. It will measure and record the performance of individual buyers and sellers and will update their ratings and profiles regularly in order to reflect a true picture of buyer and sellers. It will make co ordination activities easier by facilitating the integration of specialized activities and by keeping each department aware of the problem and requirements of other departments. It will connect all decision centers in the organization. It will make control easier for the management and the board. The system will serve as a link between managerial planning and control. It will help the management to evaluate and improve performance of individual workers at a reduced cost because of the use of computer systems. CONCLUSION As a result, the introduction of an information system in the organization will cause a complete overhaul of all the business processes. It will enable the organization to perform its operations more easily, with lesser time and increased efficiency while at the same time reducing cost to a minimum. Consequently, the firm will be able to provide its customers’ i.e. the sellers and buyers a differentiated marketplace for their business. But there is one factor that needs to be addressed very carefully and that is the user acceptance. An information system may do wonders for one firm while fail in yet another and this depends on the users. The success of the system will be dependent upon the user acceptance. Hence, they will have to be trained and told beforehand about the scope and the limitations of the system. REFERENCES Abai, M. (2007) Your Organization needs an Information Strategy. [Internet]. Available from < http://www.cioupdate.com/trends/article.php/3667451/Your-Organization-Needs-an-Information-Strategy.htm> [12 April 2010] IBM. (2008) The Importance of an Information Strategy. [Internet]. Available from < http://whitepapers.techrepublic.com.com/abstract.aspx?docid=918009> [12 April 2010] Hansen, M.T et al. (1999). What’s Your Strategy for Managing Knowledge?. Harvard Business Review, Vol 77, No 2, pg 106 – 116. (2008). Various Advantages of Management Information Systems.[Internet]. Available from < http://www.management-hub.com/information-management-advantages.html> [12 April 2010] (n.d). Benefits of an Information System.[Internet]. Available from < http://www.the-database.co.nz/information-system.html> [12 April 2010] Ahituv, N. (1989). 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A Survey of System Development Process Models. Center for Technology in Government. Available from http://www.buzzle.com/editorials/1-13-2005-64082.asp. [Accessed 11th April 2010] Read More