Google Docs meets most of Kingo’s requirements. It creates a central database, eliminating theneed to transmit information via email, is accessible remotely via smartphone or tablet, andallows forms to be emailed to customers, reducing typographical errors. Google Docs can beimplemented quickly and is easy to use, aligning with the company’s virtual business model. Inaddition, it aligns with Junk Van’s cost focusstrategy in that it is priced at just $50 per year.Platform as a ServicePlatform as a Service (PaaS) is another available solution. This service differentiates itself byallowing users to utilize common applications as well as build their own unique applications.Allowing users to build unique applications runs the risk of creating a number of differentapplications for the same process. As we read in the Harvard Business Review article‘Investing in the IT That Makes a Competitive Difference’, Cisco experienced a similar issue in2001. Similar applications were built using different repositories to pull information, resulting inconflicting reports throughout the company.This option aligns with Junk Van’s cost focus strategy to the extent that there is no long termcontract, service can be scaled down and cancellation is permitted with one months notice. Allof these options are useful in terms of keeping costs down. On the other hand, this option
would significantly increase monthly overhead costs (between $300-$600). In addition to anincrease in monthly overhead, there is the potential need to hire a dedicated IT worker tomaintain and/or troubleshoot the applications. Since the industry is highly competitive in termsof pricing, the cost incurred cannot be passed on to customers.Enterprise Resource Planning (ERP)Another solution available for Junk Van is an Enterprise Resource Planning (ERP) System. Thisoption supports remote access and integrates all facets of the business (customer service,finance, sales etc). Implementation of an ERP system could optimize business processes andimprove efficiency of the company’s operations. Currently, Junk Van is experiencing informationhandling errors. ERP could reduce redundant processes and simplify data input, resulting infewer errors and more accurate order records. Given ERP’s scope, it is likely the companywould need to significantly modify business processes which would be challenging toaccomplish in a virtual business model that lacks face-to-face interaction with employees. Based on Kingo’s preliminary research, an average small business implementation would runaround $2,500 per user per year (based on 20-25 users). Kingo expects individual license costto be even higher based on the fewer number of licenses he needs for his business. There isadditional uncertainty around the ERP system’s ability to adapt to meet the company’s specificneeds. Any type of customization would most likely increase implementation time and cost.
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- Spring '17
- Rashmi Jain
- Junk Van