Steve Cowan is the owner of a distribution company of salon hair products. The company, Professional Salon Concepts, (PSC) was growing and decided to upgrade their AIS to support the demands of the company. Steve hired Mike, his brother-in-law to assist him and the two of them began to research the different products available believing they could better determine the needs of the company than a consultant could. After a short time they bought first one and then changing their minds and bought a second system. After a short training period the new system was installed with some very problematic first few days. Eventually the system was up and running but never fully doing what they had originally wanted from the new system. Romney & Steinbart (2009).
Implementing new AIS is something that businesses everywhere have to consider at some point and time. The case of PSC and how they went about choosing and implementing their AIS is what we will be looking at. There are six main points of consideration I will be covering in this study. The first is a look at how good of a job PSC did in selecting, installing and implementing their new system. We will look at what they did wrong and what they could have done differently. We will try to determine how PSC could have avoided the missing features, the conversion and reporting problems they had.
Next we will review Steve’s analysis of his numbers and determine if his conclusions were correct. Looking at his new shipping system we want to see if there is a way that PSC’s customers can defraud the company. Finally, we will take a look at the level of service PSC received from the company where they purchased their new AIS and how it could have been improved. Steve’s Assessment
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Selecting the New AIS PSC spent months researching software and attending demonstrations. While doing research on their own is not a bad thing they however dismissed the possible use of consultants. Again not always a bad thing but when they did their research, it is not clear if they had a confirmed set of requirements of their needs in the new AIS. As a result PSC never compared companies through a request for proposals, (RFP); if they had they could have sent their requirements to the vendors. The vendors would then have sent back their proposals to PSC. After eliminating vendors that do not meet the minimum requirements, PSC could then do a comparison of the remaining vendors before making a final decision. Romney & Steinbart (2009). The key is the set requirements and minimum standards they were willing to settle for.
In the end they had decided on one system, paid for it and had started installing it when they changed their minds and went with a different company. The company, DSM was chosen almost on a whim. DSM could not demonstrate all of the features PSC had wanted and took a reassurance that they would get those features without documentation. PSC also did not do an extensive background check into DSM before they purchased the new AIS. Installation
Installation and implementing of the new AIS was anything but smooth. In retrospect even Steve knew they did not take the time needed to properly test or to train employees on how to use the new system. Three months was not sufficient time to try and work out the possible problems they would have with the new AIS. While Steve felt that training was very important he greatly underestimated the amount of time that was needed for proper training of employees on the new systems.
The operators should have been involved from the beginning to determine what was needed and how it was being implemented into the new AIS. Each of these operators should also have been included in the design of the interface they would be using. If their input was not a possible part of the design they should have at the very least been included in the original installation and testing part of the new systems to determine what the possible problem failures would be and to better learn the new systems. Missing Features
How could PSC have avoided the problem of the missing features? If PSC had gotten RFPs the problem of missing features in the system they chose would have been eliminated during the vendor selection process. However, in the route they did take those features that were important to Steve but were not included in the AIS could have been included by having a systems requirements list and a written contract with the specifications explicitly written out. Conversion and Reporting
How could PSC have avoided some of the conversion and reporting problems it faced? As I stated before, more time was needed in the testing and training portion of the conversion before the new AIS went online.
One trick I learned from our own system change at the city I work in is to train a few operators on the new systems during the testing phase and then have them train a few more in their own departments. By using your own employees to train each other they are gaining a better understanding of how the system works. This way on the day of the change you have more people who understand the system and how to fix or correct the things that can go wrong. The more people you can have trained this way before the system change the better off you will be at the critical moment. Steve’s Analysis
Steve’s analysis of the numbers is incomplete in my opinion. Steve looked only at the initial cost of the package but he did not look at recurring costs of up keep of the hardware and software, systems maintenance, conversion cost, training expense, cost of running the testing phase as well as several other things. The conversion alone cost him a 15% drop in sales and none of these expenses were calculated into the cost of the new AIS. Steve and Mike should have consulted an accountant to help with the crunching of numbers before they had purchased the AIS from DSM. One other mistake they made in this purchase was not to have the extra features written into a contract as a part of the cost. Shipping and Fraud
Is there a way PSC could be defrauded by the new multi-box shipments? After looking online for ways the only thing I could come up with was for the customers to claim that not all of the boxes were received. Because they only require one packing slip for multiple boxes, one of the boxes could just not make it to the stores or items could go missing from the shipments. I don’t think it would be hard to say that one of four or five boxes was missing an item. Without a packing slip in each box it would be easy for something to be overlooked when they are being packed. I’m not sure if there is another way the multi-box one packing slip approach could be defrauded. Level of Service
On a level of one to five, one being the best, I would probably rate DSMs level of service about three. DSM was not the worst company I have read about but they could have stepped up their service. One of the things they could improve on is their training. Training was something of a disaster judging from the first day. More of the employees should have been trained and trained much better than they were. Another area of improvement would be in the testing phase of the installation before the new system went online.
The sales person made assurances that it was apparent after the fact that they had no right to made or no intention of keeping. The extra features that PSC was told would be included in their package were only going to be added for an extra fee that PSC would have to shoulder the majority of. One feature was added at an additional cost of ten thousand but the second feature was never added. Conclusions
In the end Steve was satisfied with the new AIS. While the new AIS did decrease the turnaround time to only twenty minutes from five hours it never did do all the things they had wanted. PSC is negotiating with DSM to write the programs that will complete the processes he wants the AIS system to do, for an additional cost.
Upgrading from the system they had was necessary but, I can’t help wondering if they wouldn’t have been better off sticking with the original $20,000 purchase and having a company write the programs they were missing. The price PSC paid for the AIS from DSM was rather steep in comparison. In the end Steve said he was satisfied but I have to wonder if he really was or if he was just trying to feel ok with what had happened and what he paid.
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