Mis Fall 16 CW2 PDF

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP
In Semester Examination
Fall 2016
Group Case Study &
Presentation
Module Name: Management Information Systems (COMP 0380)
Maximum Marks: 100
Duration: 5 weeks
Submission Date (Proposal): 30/11/2016
Submission Date (Case Study): 28/12/2016
Presentation Date: 04/01/2017(Session B)
Context of the Coursework
You are required to complete coursework for the module Management Information
Systems (COMP 0380) which contributes to 25% towards the overall coursework marks
Assignment Objectives:
The objective of this Group Case Study and presentation is to strengthen the core knowledge
of business information systems used by different business organizations.
Assignment Purposes and Aim
1. An overview of management information systems.
2. A demonstration of how the effective and collective use and dissemination of
information is vital to organizational functioning.
3. An opportunity to explore the issues associated with the management of data and
communications in an organization.
Assignment Learning Outcomes
1. Describe the types of information systems and data used in business operations
2. Formulate the business rationale for an information system
3. Assess the threats and opportunities of adopting an e-commerce model
4. Demonstrate an understanding of how organizations can be managed better by
intelligent use of information systems
Task Guideline for Case Study:
You are expected to choose any one of the case studies and prepare a report by
answering all the questions at the end of each case study.
All Task (Task 1, 2 and 3) are compulsory.
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This is a group assessment and each student is expected to give equal

contribution to it. And each student is expected to write/prepare the individual
contribution list.
Maximum of three members for each group.
Power point presentation must not exceed three slides per question.
You can make use of the library resources to find information with reference to
the following questions
Internet resources can also be used to search for information
Do not copy-paste directly from the resources, if you do so, then present the
relevant references at the end of the assignment document.
Marks will be awarded for the content written in your own words.
Your report must include the following Sections: introduction, literature review,
conclusion, findings, and other details.
Use Harvard Coventry style for referencing .
Evaluation:
Task 1: Work proposal
Task 2: Analysis, Knowledge of the Case Study, & Documentation
Task 3: Analysis and Knowledge of E-Commerce, & Documentation
Task 4: Presentation
Zero Marks will be given if student is absent from the presentation.
All Tasks are compulsory.
10 Marks
60 Marks
20 Marks
10 Marks
Report Guidelines
Follow the guidelines mentioned below for your assignment.
Y o u are required to submit your assignment in Moodle along with a detailed report of
your assignment containing the following:
Title Page: Title Page should contain the following information.
Assignment Name
Session
Student name
Student ID
References: References should include:
Author name, Book Title, Publisher, Year in case of books
In case of web site references type the full path of the web page along with
accessed date.
In case of magazines/periodicals type article name, magazine name, Issue
Number and date
Note:
The report document should be well presented and neatly done.

Prepare for the presentation of your final work on the date mentioned.
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LATE SUBMISSION
Penalty for late submission - 5% of the marks obtained specified for the assessment will be
deducted for each working day.
Assessment documents submitted beyond a period of one week after the last date of
submission will not be accepted and will be marked as zero for that assessment.
Note: Must follow all instructions
FEEDBACK TO STUDENTS
Feedback, on assignment will be provided to the students (through Moodle) within two
weeks, after the submission date.
RULES & REGULATION
If any answer of an assignment is found copied from another student, then marks will be
deducted from both assignments.
Assignments with 3 or more identical topics will be awarded 0 Marks.
Zero Marks will be given if student is absent from the viva. The performance will be
evaluated through viva and there is no mark for viva.
The purpose of assignment is to do some research work so you can consult books in
Library or use internet or computer magazines or any other source.
PLAGIARISM POLICY
As per MEC policy, any form of violation of academic integrity will invite severe penalty.
Plagiarized documents, in part or whole, submitted by the students will be subject to this policy.
A. First offense of plagiarism
a. A student will be allowed to re-submit the assignment once, within a maximum period of one
week. However, a penalty of deduction of 25% of the marks obtained for the resubmitted work
will be imposed.
b. Mark deduction: When the work is resubmitted, the marking will be undertaken according to
the marking criteria. In compliance with this policy, the 25% deduction is then made on the marks
obtained. For example, in an assessment that carries a maximum of 50 marks, suppose a student
were to obtain 30 marks for the resubmitted work, the final marks for that assessment will be
22.5 (after deducting 25% of the marks obtained for the resubmitted work).
c. Period of resubmission: The student will have to resubmit the work one week from the date
he or she is advised to resubmit. For example, if the formal advice to resubmit was communicated
to the student on a Sunday (latest by 5 pm), the student will have to resubmit the work latest by
next Sunday 5 pm.
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d. If the re-submitted work is also detected to be plagiarized, then the work will be awarded a
zero.
e. Resubmission of the work beyond the maximum period of one week will not be accepted, and
the work will be awarded a zero.
B. Any further offense of plagiarism
a. If any student is again caught in an act of plagiarism during his/her course of study (either in
the same module, same semester or any other semester), the student will directly be awarded
zero for the work in which plagiarism is detected. In such cases, the student will not be allowed
to re-submit the work.
C. Guidelines
a. Type 1: In a case of plagiarism is detected in any component or part submission (submitted at
different times) of one assessment (Assignment), the deduction in marks will be applicable for
the whole assessment (assignment), even if only the component or part submission alone needs
to be resubmitted.
b. Type 2: In a case of plagiarism is detected in a group assessment, all students of the group will
be considered as having committed an act of plagiarism irrespective of whether plagiarism is on
account of the act of all or a few or only one member. The policy will then be applied to all
students.
c. Type 3: Combination of Type 1 and Type 2: In case of plagiarism is detected in any component
or part submission (submitted at different times) of a group assessment (Assignment), the
deduction in marks will be applicable for the whole assessment (assignment), even if only the
component or part submission alone needs to be resubmitted. All students of the group would
be considered as having committed an act of plagiarism irrespective of whether plagiarism is on
account of the act of all or a few or only one member. The policy will then be applied to all the
students of the group.
d. Type 4: Variation of Type 1 and Type 2: In cases where the assessment consists of components
or part submissions that could be a group assessment component (e.g. group assignment) and
an individual assessment component (e.g. individual reflection), the following will be applicable:
1. If plagiarism is detected in the group assessment component, all students of the group will be
considered as having committed an act of plagiarism, irrespective of whether plagiarism is on
account of the act of all or a few or only one member. The policy will then be applied to all
students of the group. In such cases, the group assessment component will be resubmitted as
per the policy.
2. If plagiarism is detected in the individual assessment component, the individual assessment
component will be resubmitted as per the policy. The policy will then be applied to that student
alone.
3. In both cases (a) and (b), the deduction in marks will be applicable for the whole assessment
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(assignment).
D. Amount of similar material
a. The total amount of similar material in any form of student work from all sources put together
should not exceed 30% (including direct quotations).
b. The total amount of quoted material (direct quotations) in any form of student work from all
sources put together should not exceed 10%.
c. The total amount of similar material in any form of student work from a single source should
not exceed 7 percent. However, cases having a similarity of less than 7 percent in such cases may
still be investigated by the faculty depending on the seriousness of the case.
d. If the faculty member finds enough merit in the case of a student work with a similarity (with
a single source) of more than 7 percent as not a case of plagiarism, the faculty member should
provide detailed comments/remarks to justify the case.
FEEDBACK SCHEDULE:
Assessment #
COMP 0380
Assessment Type
Case Study +
Presentation
Date of
Assessment
Date of
Giving Feedback
Type of Feedback
28/12/2016
18/01/2017
Written Feedback on Moodle
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Task 1: (Work Proposal)

Submit a work proposal for this assignment in Moodle, which must include the understanding of
activities in Task 2 by 30th November 2016.You are required to submit the proposal with the
following details
a. General description of the information system used for the respective case study.
b. Work plan showing the division of work between group members and the time required
for each task.
(10 marks)
Task 2:
Case Study 1
Read the case below [taken from: [Management Information Systems Cases, Gerald V.post,
Copyright2012] understand and answer the questions in context of Management information
system.
Reebok and Adidas
The athletic shoe industry in the United States was an $8.25 billion market in 2003. By 2010,
industry revenue had hit $21.9 billion with sales of over 362 million shoes a year [Ibis World].
The four largest companies (Nike, New Balance, and Adidas-Reebok) controlled 70 percent of
that market [Cassidy 2004]. The industry grew from almost nothing in the early 1980s to a global
powerhouse. Reebok (ticker: RBK) can trace its history back to Joseph William Foster, who made
some of the first spiked running shoes by hand in Londonin 1895. In 1958, two grandsons
started a companion company known as Reebok. But, the modern version was born in 1979 when
Paul Fireman saw the shoes at an international trade show and negotiated for North American
distribution rights. At $60 a pair, the shoes were the most expensive running shoes in America
[www.reebok.com].
In 1982, Reebok helped launch the aerobic dance industry with a shoe specifically targeted to
women. With explosive growth, the company went public in 1985. Growth con-tinued,
supported by the Step Reebok program in 1989. By 1995, the company had grown from $50
million in sales to over $3 billion in a decade. Reeboks 1993 sales of $2.9 billion placed it
second behind $4.4-billion Nike, Inc. The nearly $1 billion increase in sales from 1989 to 1993
indicates Reeboks success in gaining market share.
Paul Fireman, president and CEO of Reebok
Paul Fireman founded Reebok in 1979 and remains the largest shareholder. From 1986 to 1990,
Fireman was one of the ten highest paid executives in the United States. Under his control,
Reebok sales grew from $1.5 million in 1980 to $1.4 billion in 1987. In 1988, Fire-man
relinquished the CEO role to spend time working on other projects, including develop-ing golf
courses in Puerto Rico and Cape Cod. In the late 1980s and early 1990s, Reebok suffered from
two weak marketing campaigns (Reeboks Let U.B.U. and Physics behind the Physique). More
importantly, the aerobics fitness craze began to subside. Women aero-bics shoes were a major
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component of Reebok sales, so the sales decline hit them especially hard. In 1992, Fireman
returned as CEO.
Tom Trainer, CIO
Tom Trainer joined Reebok in 1991 as the chief information officer (CIO). He noted that his role
is to enable the kid in Reebok to stay fresh and creative while also allowing the grown-up
corporation to compete in global markets [Pulliam and Pereira 1995]. To accomplish these
objectives, Trainer implemented videoconferencing, computer-aided design, the Internet, and
laptops for the sales force. The goal was to improve communications among employees, faster
development of products, and more effective sales presentations.
Before Trainer joined Reebok in 1991 as vice-president of information systems, the information
systems area was less than up-to-date, with no global information system or way to look at data.
Communications, primarily by telephone and fax, between the manufacturing partners and
worldwide distribution network were slow. Turnaround on new products was equally slow. This
was a critical problem because Reebok is a fashion-oriented business with three product cycles
a year in footwear and five in apparel. While sales representatives from Nike were walking in
with laptops to display their lines, reps from Reebok were walking into offices with bags of shoes.
Trainers early days were spent accomplishing short-term projects that got him points with the
board of directors. He fired six of eight senior staff. He kept 85 percent of the old programming
staff, retraining many of them. In addition to his IS responsibilities, Trainer drove the reengineering process in the company. To do so, he spent a great deal of time on the road, building
relationships with Reebok executives around the world. He also studied Sony Corporation to
learn ways that it meets customer needs.
To accomplish his re-engineering, Trainer formed five mega processes that stream-lined
procedures for production, sales and marketing, research and development, administration,
finance, and distribution. In 1992, he presented a four-year, $75-million strategic information
systems plan to Reeboks executive committee. The board approved it on the condition that it
give Reebok strategic advantage.
To improve its communications, Reebok installed a privately designed architecture for voice,
video, and data. Reebok communicates not only with its worldwide distribution base but also
with its ad agency and other suppliers. IT currently developed an electronic image library to
enable product shots to be distributed to every country where Reebok does business. The
system dropped the new product lead time from six months to three, and, in some cases, 30
days.
Before the new ordering system was installed, orders were first printed out locally and faxed to
the international headquarters in London. London would take all of the faxes and send them to
the United States to be entered in the mainframe. Different standards for shoe sizes from
different countries added to the delay. Once the information was entered in the mainframe,
production and manufacturing would evaluate the orders.
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To improve this process, Trainer developed a software package called Passport. Passport
rationalizes product codes and shoe sizes. It also gives small distributors and sub-sidiaries access
to the system through personal computers. It can also function as a module by plugging into
larger systems.
Laptops were also given to the entire Reebok sales force. When orders were paper based,
replacing material in a shoe to change its price from $95 to $65 might take 30 days and mean a
lost sale. With the new system, these changes could be made almost automatically. Salespeople
are able to check inventory and look into special orders. They can also access two years catalogs
with full motion video and sound clips of Reeboks advertisements. Lotus Notes is used to store
the catalogs with mail links through cc:Mail.
Another Reebok initiative is to use electronic data interchange with 10-15 percent of its retailers.
This commitment enables goods to be tracked through shipping companies, customs, and
warehouses. Hoover, a data capture system to suck in information from da-tabases around the
world, is linked to customer databases that track what customers have ordered and what they
want.
Reebok experienced some problems implementing the new systems. Particularly difficult was
the effort to integrate the Canadian operations into the U.S. business operation. Concentrating
development and support in the United States did not take into account the specifics of invoicing
under the Canadian law. This mistake added time and resources that had not been budgeted to
the project.
Reebok early 1990s
In the early 1990s, facing continuing declines in the aerobics market, Fireman changed the focus
and tried to expand into other areas. To a large extent, Nike was killing the competitionlargely
by focusing on star athletes and spending more than 10 percent of its revenue on marketing. In
the early 1990s, Fireman knew that he would have to compete directly in the sporting world
[www.reebok.com]. His basketball market strategy copied a page from Nike, and relied on the
new Shaq Attaq line supported by Shaquille ONeal from the Orlando Magic. While sales did
increase, they did not reach the 25 percent levels predicted by Mr. Firemanreaching only 20
percent market share. Additionally, Fireman estimated in 1993 that the outdoor-wear division
would sell $350 million worth of shoes in 1995. Outdoor sales fell far short of the goal, reaching
about $110 million.
More importantly, expenses skyrocketed, increasing from 23.6 percent of sales in 1991 to
32.7 percent in June 1995. Experts say shoe company expenses typically average about 27
percent of sales. Investors blamed most of the increase on the cost of endorsements.
Nike Late 1990s
At the same time that Reebok was suffering, Nike reported a 55 percent jump in first-quarter
1995 earnings, with revenue increasing by 38 percent. Part of the increase was from expanded
international sales, with a 34 percent increase in orders from France and Germany. Sales in Japan
increased by 65 percent. Nike also expanded sales of tennis shoes, partly through endorsements
from tennis stars Andre Agassi and Pete Sampras. In the first quarter of 1995, revenue from
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tennis shoes increased by 92 percent with a 42 percent in-crease in orders.

At the same time sales were increasing, Nike managed to decrease its expense ratio. Selling and
administrative costs dropped to 22.3 percent of revenue from 25 percent in the prior year. Much
of the improvement came from an improved distribution system, including a new warehouse in
Belgium that consolidated operations from 30 different facilities in Europe.
Beginning in the late 1990s, the footwear industry lost its luster. However, Nike revenue
increased from $3.4 billion in 1998 to $9.0 billion in 2000 to $9.5 billion in 2001, to over $10
billion in 2003 [annual report]. In 2001, Nike installed a customized retail supply chain system
from i2 Technologies, Inc. The implementation, including ties to other ERP systems, did not go
well, and Nike faced a serious inventory reduction and misplacement. Nike management was
disappointed in the problems, and Nike chairman questioned: This is what we get for $400
million?
Reebok Late 1990s
In 1990, Nike surpassed Reebok in footwear sales. In the year ending in August 1995, Nike had
$4.7 billion in sales compared to Reeboks $3.37 billion. One of the largest battle-grounds was
the retail Foot Locker stores owned by Woolworth Corp. The 2,800 retail stores sell 23 percent
of U.S. sport shoes, representing $1.5 billion of the $6.5 billion U.S. market for athletic shoes.
Sales at Foot Locker stores account for almost 60 percent of the 1$ billion U.S. sales gap between
Reebok and Nike.
Insiders note that the problems between Reebok and Foot Locker go back to the days when
Reebok shoes were selling rapidly. Foot Locker wanted concessions on price and wanted Reebok
to make some styles exclusively for them. Reebok was busy selling to other outlets and was
unwilling or unable to alter its production and distribution systems. Nike was eager to build
custom products for Foot Locker and offered a dozen products exclusively at the chain. Exemployees at Reebok note that the company had additional problems providing samples and
design plans to Foot Locker, claiming that Sometimes the samples would come in late and
sometimes not at allwhich got Foot Locker mad. . . . Sometimes, fashions last less than six
weeks; if you dont get it in right then, there goes a major sale.
Mr. Fireman responded by trying to improve relations with Foot Locker. He also offered to begin
building exclusive styles for Foot Locker, but the introduction of the products was uncertain. He
also noted that Reebok was working hard to cut costs and improve its order and information
tracking system. One problem that remained was that the clerks at Foot Locker stores tended
to push the Nike brands harder.
By September of 1995, major shareholders were getting upset with Reebok management. One
of the leading outsider shareholders, Glenn Greenberg of Chieftain Capital Management, noted
that The major shareholders have no confidence in the management of this company. If it was
up to us, they would have changed horses or sold the company a long time ago.
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Reebok and the Internet

Like other shoe manufacturers, Reebok relies heavily on celebrity endorsements. Signing Alan
Iverson (NBA rookie of the year in 1996) and Venus Williams (tennis sensation) gave Reebok
greater visibility in 2000. In 2000, Reebok also increased its visibility by sponsoring the Survivor
television show with humorous ads. Their Web site followed these themes.
In 1997, Reebok installed Radnet Inc.s WebShare groupware system to maintain its Web site.
The system has tools for e-mail, discussion groups, and bulletin boards. The goal was to add
interactivity to the site and build a community of users. Marvin Chow, Reeboks director of
interactive marketing noted that If you just try and use the Web to sell them products,
something is missing [Cole-Gomolski 1998]. More importantly, the system makes it easy for
Reeboks managers to add content. They can add data and pass it to salespeople and retailers
automatically using a workflow engine.
The company used QuickTime from Apple to create CDs for its salespeople. Using Macromedia
on its Internet site, the company was able to update pricing, styles, and even new photos and
displays on the fly. The data was downloaded directly to the sales laptops [Dillon 1998].
Interestingly, the Web site is largely independent from the IT department. Roger Wood, vice
president of electronic commerce at Reebok reports directly to the CEO and controls his own
technology budget. He observes that I am able to take down and build up features (of the Web
site) without some IT overlord telling me what is good or bad [Cole-Gomolski 1999].
In 2000, Reebok stopped selling shoes direct from its Web site. It was concerned about
competing with the traditional retail outlets. So now the site focuses on image, technical
information about products, and then directs consumers to the retail partners.
In 1995, Trainer went to Eli Lilly [Information Week 1995]. The company ultimately replaced him
with Peter Burrows as chief technology officer (CTO). Burrows knew that he needed to replace
the aging, custom software that was being used to run the company. The problem was that
nothing existed. In late 1995, he sent a dozen Reebok workers to an SAP R/3 coursethe goal
was to show SAP that its system could not handle the complex details of the apparel industry.
Most products are created by hundreds of contract suppliers, generally in Southeast Asia.
Product designs change constantly, and the company has to coordinate shipments to thousands
of customers. Ultimately, Burrows convinced SAP to develop a custom add-on system called the
Apparel Footware Solution (AFS) module. To convince the company to spend the money, VF
Corp., the company that makes Lee and Wrangler jeans, also signed on to the project. The two
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companies helped design the specifications for the new software. The project was far more
complex than SAP anticipated, and the initial version was three months late. Leroy Allen, the
CIO at VF commented that I think SAP underestimated the amount of change that had to be
made to standard R/3 [Steadman January 1999].
Burrows was counting on the system to handle the major transactions at Reebok, so he could
avoid the necessity of rewriting the old applications to become Y2K compliant. By May, 1999,
the system was still not fully operational. Among other problems and bugs, the system was too
slow to check product inventories and raw material stocks when retailers and distributors placed
orders. Burrows noted that Were not out of the woods, but SAP is responding. Its not
something were taking lightly, and neither are they [Steadman May 1999]. In the meantime,
another 60 apparel and footwear makers had purchased the sys-tem by early 1999.
By 2000, Reebok was running the system in only a couple of divisions, such as golf shoes. The
company deferred implementation of the full system until at least mid-2001. Burrows noted
that he was waiting for additional functionality scheduled for Release 2.5 [Steadman 2000].
Despite the problems in getting the software developed, apparel manufacturers had few other
choices.
By 2001, Reebok had 115 retail stores running the AFS system. Burrows was pleased with the
ability of the system to maintain accurate inventory records for the stores [Mearian and Songini
2001].
In January 2002, SAP shipped Release 3.0 of AFS. With the bug fixes and new features, Reebok
continued to rollout the system in its divisions. Burrows planned to gradually implement Release
3.0 over a few years. Burrows continues to push for new features such as a Web-based system
to handle business-to-business transactions with suppliers. In 2002, competitor Nike completed
rolling out AFS 2.5 to its 5,000 end users [Songini 2002].
Competition and the Future
There is no question that the shoe industry is competitive. There is also no question that it is still
dominated by Nike. Yet, Reebok has made gains in the mid-2000s. The retro-trend bolstered
sales for Reebok when it re-released older models. (It also convinced Nike to buy Converse.)
Competition to sign new stars is also intense. Most observers believe Alan Iverson has
significantly boosted Reebok sales. In 2004, Reebok struck a huge note in the inter-national
market by signing Yao Ming to market a line of shoes in China. Reebok will also market a line of
Yao Ming shoes in the United States [Marcial 2004].
Somewhat surprisingly, Reebok did well in 2003 selling a line of shoes endorsed by Rap stars
(Jay-Z and 50 Cent). The shoes were also popular in England [Thomaselli 2004].
On the other hand, Reeboks 2003 sales gain was also attributed to the feud between Nike and
Foot Locker. In 2002, Nike pulled its top products from Foot Lockertrying to negotiate better
prices. In November 2003, the companies resolved their problems and Foot Locker again began
carrying more Nike shoes. Foot Lockers clout grew even more in 2004 when it purchased 353
Footaction stores from bankruptcy [Cassidy 2004].
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Although Nike is still the strongest seller in the U.S. market, it has struggled to find a management
team. In 2006, William D. Perez stepped down after only 13 months as CEO. Reportedly, Perez
often clashed with Nike co-founder Philip Knight. Knight promoted Mark G. Parker to the CEO
position. The change reminded observers of the situation in 2000 when Mr. Knight returned to
the CEO position to replace Tom Clarke as sales fell from 1994 to 2000 [Lublin and Kang 2006].
Adidas
In 2005, Adidas-Salomon AG in Germany agreed to purchase Reebok for $3.8 billion. The price
represented a 34 percent premium over the existing stock valuation. The sale was closed in
2006. Adidas, a pioneer in the shoe and sporting-goods industries had been struggling in the
U.S. trying to find a way to compete with Nike. Adidas was largely considered the engineering
leader and produced some of the technically best shoes on the marketbut it lacked the
marketing flash appeal of Nike. For example, the company introduced a $250 running shoe
containing a sensor and small motor that enabled it to adjust the tension and support based on
the terrain. Shortly after the acquisition was closed in 2006, Paul Fire-man left Reebok [Reebok
Web site].
A key element in the decision was Reeboks appeal in the urban marketdue to its embrace of
50 Cent and Jay-Z rappers. Herbert Hainer, CEO of Adidas noted that we will expand our
geographic reach, particularly in North America, and create a footwear, apparel and hardware
offering that addresses a broader spectrum of consumers and demographics.
The global market for athletic shoes is about $33 billion and about half of that total comes from
America. In 2004 combined, Reebok and Adidas had about 20 percent of the U.S. market
compared to Nikes 35 percent [Karnitschnig and Kang 2005].
Adidas was formed by Adi Dassler after World War II. It gained attention by creating soccer cleats
that helped Germany win the 1954 World Cup. In the 1970s, the company dominated sales in
U.S. sporting goods. In 1984, the company passed on the chance to sign Michael Jordan as a
rookie. When Nike signed Jordan and created a shoe and advertising campaign around him (Air
Jordan), sales and market share skyrocketed. In the meantime, Adidas had been struggling. Mr.
Dassler died in 1978, his wife followed in 1984. The couples son Horst took over and began
restructuring the company, but he died of cancer in 1987. By 1990, the companys share of the
U.S. market fell to 2 percent. The company re-structured under new management and went
public in 1995, but lacked marketing strength in America. In 2003, Adidas dropped out of the
bidding to sign basketball wunderkind LeBron James. Nike signed him to a seven-year, $100
million endorsement contract. Adidas said it preferred to focus on broader contracts instead of
one superstar. In 2004, the company spent $100 million to sign eight NBA rookies. Adidas also
signed Mohammad Ali, David
Beckham, and Sean P. Diddy Combs; driving sales among urban consumers and soccer fans
[Karnitschnig and Kang 2005].
In 2007, Adidas announced a drop in first-quarter profits, but reported a backlog in sales at
Reebok, indicating increased demand [Mengewein 2007]. For the same time frame, Nike
reported a 32 percent increase in profits [Casey 2007]. Adidas remains the leader in soccer
(football) shoes and gear [2006 Annual Report]. Information Technology
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Adidas is learning that the sports-shoe market depends heavily on customer sentiment, and
there are many ways to get feedback from customers and listen to the market. In 2006, Adidas
started selling the Predator soccer shoe in Europe. Several customers complained that the colors
quickly faded. But, Adidas learned about the problem almost immediately. The company pays
VML to run its computer program Seer to scan Internet blogs for com-ments about the company.
Based on the immediate feedback, Adidas told customers to treat the shoe leather before
wearing them [Patrick 2007]. Adidas (and Nike) are also using new-media approaches such as
YouTube and Second Life to market their products [Devaney 2007].
Adidas also beat Nike to the market with low-profile shoes. The low-price, and low-top shoes
caught on quickly in Europe and were picked up by U.S. skateboarders. Sales of the shoes grew
to $4.7 billion in 2006exceeding that of basketball shoes. John Shanley, an analyst with
Susquehanna Financial Group, noted that it takes a longer period of time for them to adjust to
some of the fashion shifts in the market. They want to make sure this lifestyle trend has legs and
they wanted to make sure before they pursued it aggressively
[Stepankowsky 2007].
Adidas is working to integrate its supply chainparticularly creating closer ties to retail stores.
Its World Class Supply Chain initiative aims to share sell-through data from retail stores directly
with suppliers. The goal is to use real-time demand to pull products through the supply chain
[2006 Annual Report].
In 2007, Greece surprised Europe by winning the European soccer championship. Adidas, as a
leading provider of sportswear for soccer needed to respond quickly. Within days, the company
delivered more than 145,000 blue and white Greece team jerseys to stores across Europe. The
company used an advanced supply chain management system to synchronize orders across
suppliers and subcontractors in a dozen countries [Puryer et al. 2007].
Reebok 2010
By 2010, Reebok had an online store up and running on the Web. Customers could now purchase
shoes and other apparel directly from the company. Many items were sold at list price, but the
store occasionally offered discounts on specialty items [Reebok Web site]. At least at the
financial level, Reebok had become integrated into the Adidas Group. In 2010, Adidas Group net
sales were almost 12 billion euros, with 1.9 billion attributed to Reebok [Annual Report]. The
Adidas strategy, from their Web site, emphasizes the importance of using information
technology to create a flexible supply chain. The company wants to share information from
point-of-sale down to the production lines to ensure everyone has the cor-rect information to
produce and ship the right products to each market. The strategy also emphasizes the
importance of creativity and innovation.
For the first three years after the merger, sales at Reebok fell [Torry and Schwab 2011]. In 2009,
Reebok introduced a new toning shoe which marketing claimed would help people
particularly womenimprove specific muscles simply by wearing the new shoes. By 2010,
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Reebok was number two in the new market with a 42 percent market share be-hind only
Skechers. Herbert Hainer, CEO of Adidas noted that It took a bit longer to turn Reebok around
because the brand was in worse shape than expected, but the fact is, today, with our two-brand
strategy we can definitely reach more customers. We've positioned Reebok for fitness and
training and we think fitness will play an ever stronger role in society in the future. Some of the
major changes were to pull Reebok out of the low-end market stores such as Wal-Mart and
Tesco. Additionally, due to increasing raw-material costs, Hainer determined it was necessary to
increase the prices [Brady 2011].
In mid-2011, Reebok settled a lawsuit filed by the U.S. Federal Trade Commission and agreed to
pay $25 million in customer refunds to settle charges of false advertising regarding the toning
shoes [Mattioli and Randall 2011]. Reebok denied the allegations and continued to sell the shoes
with a modified marketing message. David Vladeck, director of the FTCs bureau of consumer
protection noted that The FTC wants national advertisers to understand that they must exercise
some responsibility and ensure that their claims for fitness gear are supported by sound science.
Little information is available about the day-to-day operations and information technology at
Reebok and Adidas. Based on job ads, the Adidas Group Global IT department has about 950
employees and relies on the SAP ERP system, including modules for Retail Inventory
Management, BW, AFS, MM Logistics and LE. [Adidas job ads Web site]. A job ad in fall 2010
listed the open position for Head of IT in North Americacontrolling a team of only about 50
employees at four sites in Portland OR, Canton MA, Spartanburg SC, and Toronto. Based on these
numbers all of the operational IT must be running on the German SAP systems, with a core group
of e-commerce specialists for the U.S. market.
References:
Case Studies From Post, Gerald V. Management information systems: Copyright 2012.
Case Study Questions
1. Provide a detailed description and explanation of Rebook's Information System. And how has
Reebok been hampered by its information system?
(20 Marks)
2. Why is business integration important to Reebok?
(20 Marks)
3. When problems arise with the network, or the software, how can they be identified and
resolved? How do we set up an IS group to solve problems and help users?
(20 Marks)
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Case Study 2
Read the case below [taken from: [Management Information Systems, 13/E Ken Laudon
Jane Laudon] understand and answer the questions in context of Management information
system.
Tennessee Valley Authority (TVA)
The Tennessee Valley Authority (TVA) is a quasi-public federal organization headquartered in
Knoxville, Tennessee, that was founded in 1933. Technically, it is listed as a corporation owned
by the Federal government. It provides electric power; flood control; navigation; and
agricultural, economic, and industrial development through the Southeastern United
States. It is the nations largest electric utility. It makes most of its money ($6.9 billion in 2003
increasing to $10.8 billion in 2010) by selling electric power to regional power associations. It
provides power to more than 160 municipal and cooperative power distributors who service
more than 7 million consumers. In addition, special projects are funded by Congress (amounting
to $135 million in 1992). The 12,500 employees in 2010 (down from 19,000 in 1992) are divided
into several business units, including finance, power generation, market-ing, and navigation.
The IS department consists of 683 employees (down from 925 in 1992) and has an annual
budget of $100 million [Garvey 2003]. However, the company employs 4,000 union trade
workers (such as electricians) on a seasonal basis to handle maintenance [Hoffman 2004].
Year
Revenue
Net Income
2010
10,874
972
2009
11,255
726
2008
10,382
817
2007
9,326
423
2006
9,185
329
2005
7,794
85
2004
7,533
386
2003
6,953
444
2002
6,796
73
2001
6,999
(3,311)
2000
6,762
24
1999
6,595
119
$ Million. Source: Annual Reports.
Like other businesses, the TVA faces a changing environment with deregulation. For years, it
was the only supplier of electricity in its regioncooperatives and municipalities signed
agreements to purchase power solely from TVA. Many of these contracts had ex-tended time
frames of 35 to 50 years. Many of these contracts were due for renegotiation in the 1990s, and
other utilities are eager to expand their markets. Additionally, the federal government is
encouraging competition in the production of electricity. As a result, TVA has to become more
cost conscious. As of 1994, the Energy Policy Act of 1992 effectively frees customers to choose
the electric company they wish to use. Wholesale corporate utility customers can already buy
their electricity from a variety of sources.
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It is unclear at this time whether individual households will have the option of selecting power
providers. The act is primarily designed to provide multiple choices to large factories, power
distribu-tors/resellers, and municipal utilities.
Management and Employees
The TVA is governed by a three-person board of directors, with one of them appointed as the
head of the board. The three members are appointed by the U.S. President, and the spots are
often given to financial backers as political patronage. The day-to-day activities are governed by
the general manager, the comptroller, the general counsel, the chief budget officer and the
director of information. The separate business units are largely independent of each other. They
have separate divisional leaders, separate budgets, and different objectives that occasionally
conflict. Also, many of the offices are located in different cities.
The TVA has an interesting history in terms of management and labor relations. Although it is
technically an agency within the federal government, its employees are not subject to Civil
Service regulations. Congress decided that because of the technical nature of the agency, it
required highly trained employees, so it should be free to hire employees from the national job
market without the political considerations involved in the Civil Ser-vice system. In 1940, TVA
became the first U.S. federal agency to adopt collective bargain-ing. By 1977, 99 percent of
eligible trade and labor employees were members of a union. Even management level and
white-collar employees are members, with 87 percent of eli-gible salaried workers belonging
to an employee union.
At the TVA, membership in unions is encouraged by personnel rules and practices. Employee
promotions and raises are based on merit evaluations. As part of the employee merit evaluation
system, membership in a union is considered a sign of professional competency, merit, and
efficiency. Hence, membership in a union virtually guarantees job tenure and merit raises.
Because TVA is a federal agency, an unusual problem has arisen. The TVA Act of 1933 that
established the agency set a maximum salary of $10,000 for members of the board of directors.
More importantly, it stipulated that no employee could receive a higher salary than the amount
paid to the directors. Because this value was fixed by Congress, it could only be changed by
Congress by passing new legislation. Consequently, the value is not changed often and the TVA
has had trouble hiring and keeping professional employees. As a result, the agency has a history
of relying on outside consultants who are not directly affected by the salary cap because they
are paid for individual tasks.
TVA in the 1970s
The GAO reports that the TVA was experiencing a huge growth in the use of electricity in the
late 1960s and early 1970s,
when power sales were growing at a steady rate and were
expected to double every 10 years. In the Tennessee Valley,
the number of electricity customers rose to over 2 million in
the 1960s and about 30 percent of all the homes were heated
with electricity. By 1970, TVA customers used nearly twice as
much electricity as the national average. At that time, TVA
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was experiencing an annual growth rate of about 8 percent

in demand for electricity, and TVAs forecasts through the
mid-1970s were showing continued high growth in demand.
In 1966, TVA announced plans to build 17 new nuclear plants in seven states. Many other utility
companies announced similar (though less ambitious) plans. The oil crises of 1973 and 1978, the
Three Mile Island disaster of 1979, and construction problems and cost overruns caused most
companies to cancel the construction of the majority of nuclear plants. A changing regulatory
environment of the 1980s also encouraged electric utilities to focus on conservation instead of
new construction. Encouraging customers to add insulation, purchase more energy-efficient
appliances, and employ newer heating and cooling systems resulted in a significantly smaller
growth rate in consumption. By 1984, after investing $5 billion in construction, TVA canceled 8
of the 17 plants.
Of TVAs nine remaining nuclear sites, three were operational in 1995 (Browns Ferry 2, Sequoyah
1 and Sequoyah 2). After 22 years of construction, Watts Bar 1 was beginning final testing and
expected to be placed on-line in early 1996. One unit (Browns Ferry 3) began operations but was
shut down because of repeated problems. Four other units were placed into mothball status,
pending an analysis to determine whether they should be continued, converted to alternative
fuels, or shut down completely. Total TVA spending on nuclear facilities is more than $25 billion,
of which only $5 billion applies to functional plants. TVA is the only U.S. utility still actively
constructing nuclear plants. The $25 billion constitutes the bulk of the $26 billion debt (mostly
public bonds) of TVA, but the nuclear plants generated only 14 percent of TVAs total power
supply in 1994. In 2004, TVA announced plans to reopen Browns Ferry 1 at an anticipated cost
of $1.8 billion [Hampton and Ichniowski 2004]. If it opens on time in 2007, it will be the first new
U.S. nuclear plant since 1996.
TVA in the 1990s
TVA is under federal mandate to fund its electricity production from ongoing operations. By its
internal accounting methods, TVA is meeting this mandate; however, $14 billion of the nuclear
construction debt is not being financed from current operations. In 1995, TVA had a total debt
of $26 billion, with financing costs of $1.9 billion a year (35 percent of its power revenues). TVA
faces a Congressionally imposed debt ceiling of $30 billion, and TVA expects to increase its debt
to about $28 billion by 1997in part to cover final production costs at Watts Bar, in part to cover
interest payments on its debt. As a federal agency, TVA cannot sell stock (like most traditional
utilities), so all funds must be raised from bond sales. Although these sales are not guaranteed
by the federal government, some investors believe that the federal government will not allow
TVA to default on the bonds. Conse-quently, TVA has a slight advantage over potential
competitors in terms of interest rates. Similarly, TVA does not pay federal income taxes.
TVA also anticipates the need for substantial expenditures to improve existing hydroelectric and
coal-fired plants. Additional expenses will also be incurred in bringing all of the coal-fired plants
into compliance with the Clean Air Act. Based on preliminary estimates, TVA anticipates
spending between $1.1 and $1.6 billion between 1995 and 2015 (in constant 1994 dollars). By
2003, TVA was still reporting total debt of about $25 billion [annual report].
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In public statements, TVA repeatedly emphasized that they had not raised electrici-ty rates in
nine years, and they are trying to hold them stable for at least 10 years. Nonetheless, TVA is not
the lowest-cost producer in the area. However, for the immediate future, other firms are
prohibited from selling electricity to TVAs customers.
As part of the Energy Policy Act of 1992, TVA is conducting an integrated resource planning (IRP)
processlargely to determine future goals, changes in production and operations, and the leastcost means of providing power. TVA is conducting the plan with sever-al interdisciplinary teams:
Issues and Values Translation Team
Evaluation Criteria Team
Load Forecasting Team
Existing Capabilities Team
Supply-Side Options Team
Customer Service Options Team
Environment Team
Rankings Team
Strategy Development Team
Uncertainties Team
Integration Team
Each of these teams is responsible for identifying problems, making forecasts, and presenting
and evaluating alternatives. Many of the teams use statistical and computer simulation
models to test assumptions and evaluate the alternatives. The final report will present the
reduced list of options to the governing board.
In 1998, the TVA chairman became frustrated with negotiating with Congress. He offered to
drop all federal subsidiesin exchange for complete control of the company and its resources.
He is beginning to concentrate on the opening of the electricity market to competition. On the
other hand, several people have complained about the possibility of losing federal subsidies for
the administration of thousands of acres of land and lakes open to the public.
TVA Financial Performance
In 1995, the Congressional Government Accounting Office (GAO) undertook a comprehensive
investigation of TVA and its problems. The GAOs financial comparison of TVA with potential
future competitors is particularly useful. Additional comments and statistics are available in
the total report.
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Comparison of Key Financial Ratios for TVA and Neighboring IOUs, 1994
(figures in percent)
Utility
AEP
CP&L
DR
DP
ENT
IL
KU
LG&E
SC
TVA
IOU Summary
Average
High
Low
Financing
costs to
revenue
16
16
19
16
20
14
15
14
18
35
16
20
14
Fixed financ- Net cash from

ing costs to operations to
revenue
expenditures for
PP&E and CSD
8
90
7
132
9
86
7
81
13
121
11
115
6
54
6
82
9
92
35
57
8
13
6
95
132
54
Accumulated de
preciation/ amor
tization to gross
PP&E
38
35
34
36
32
31
40
35
31
17
35
40
31
Deferred assets to gross

PP&E
1
2
5
4
2
5
4
1
4
47
3
5
1
Notes: CSD: Common Stock Dividends; PP&E: Property Plant & Equipment;
AEP: American Electric Power; CP&L: Carolina Power and Light; DR: Dominion Resources; DP:
Duke Power; ENT: Entergy; IL: Illinova; KU: KU Energy; LG&E: LG&E Energy Corp.; and SC:
Southern Company.
Source: GAO analysis of 1994 annual reports.
Key Statistics for TVA and American Electric Power
(Dollars in millions)
TVA 2010
TVA 2006
TVA 1994
AEP 1994
25,913a
System capacity (MW)
37,188
29,776
23,670
System sales (in millions of
173,662
171,651
122,574
116,714
kilowatt hours)
Net total assets
$42,753
$34,308
$31,842
$15,713
Total debt
$22,389
$22,900
$26,136
$6,309
Operating revenue
$10,874
$8,983
$5,401
$5,505
Net interest expense
$1,294
$1,264
$1,772
$887
Depreciation and amortiza$1,724
$1,492
$639
$572
tion expense
Represents dependable capacity currently in service. It excludes about 2,230 MW of capaci-ty for
Watts Bar 1 and Browns Ferry 3 that TVA planned to bring into commercial service in 1996.
Source: GAO summary of 1994 annual reports and 2006, 2010 Annual Reports. In-cludes
purchased capacity of 3.1 Kwh in 2010.
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Over the past few years, TVA has been repeatedly criticized for failing to reduce its debt. It has also
been severely criticized for counting its mothballed nuclear facilities as as-sets, and overvaluing
them by several billion dollars. In 2001, the company wrote down some of its assets by $2.1 billion,
generating a loss for the year. But that still leaves $4.1 billion in questionable assets on the books
[McTague 2003]. TVA has tried to raise rates to generate more income. In 2003, it proposed a rate
increase of 8.1 percent, which would have raised an extra $365 million. Even that increase raised so
many protests by customers (municipal power distributors), that TVA dropped the proposal to 7.4
percent, and was con-sidering reverting to no increase at all [The Economist 2003].
With the hikes in the national interest rates beginning in mid-2004, TVA could ultimately face a
more severe crunchtrying to pay the interest costs on its debt. Many investors believe that the
federal government will not let TVA fail or default on its bonds.
But, with increasing calls for privatization of the organization, and the ability to remove $25
billion in debt from the federal books, there are no guarantees.
In 2004, 13 power companies had higher revenues than TVA, led by Duke Energy and Halliburton
[Garvey 2004].
MIS Activity
Prior to 1992, the IS department was highly fragmented; each business unit essentially had its own
IS department. Computer hardware consisted primarily of large IBM and compatible machines
centrally located in the Knoxville offices. Data management and software development were largely
left to the individual business units. Most development of software was in COBOL. The business units
were happy controlling their own group of IS employees. However, there was considerable
duplication of effort. Additionally, the individual departments and their software tended to be
maintained separately from other departments. There were virtually no corporate standards, so
hardware and software purchased and de-signed for each business unit often required major
modifications whenever someone wanted to share data across departments. Overall, the IS staff
was spread too thin, and they were developing redundant, incompatible systems.
Overall responsibility for the MIS department technically belonged to a centralized core MIS team.
However, the operating divisions tended to mistrust the central MIS department. They had earned
a reputation of being late and over budget with most projects. The central MIS team was also
accused of being heavily biased in favor of solutions involving centralized programs written in
COBOL. It was generally accepted that the MIS team would always advocate a solution that they
knew bestregardless of the technical merits of the alternatives. As a result, the business units
often turned to outside consultants and programmers to create new information systems, bypassing
the internal IS department completely. For instance, in 1992, the finance department called on
Coopers & Lybrand and Oracle Corporation to develop a major new client-server based financial
system.
In 1991, TVA signed a five-year contract to purchase up to $60 million worth of personal computers
and local area network equipment from Concept Automation Inc of Sterling, Virginia. Part of the goal
is to shift the company toward an open systems environment. Managers who need PCs within the
company will order them from TVA offices in Chattanooga. The bulk of the purchases are expected
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to come from the headquarters in Knoxville, but offices in Huntsville, Alabama, and Chattanooga are
expected to buy several PCs through the contract as well.
In early 1992, TVA took the first steps to implement an agencywide geographic in-formation system.
The authority awarded a $750,000 contract to ESRI for Arc/Info running on Sun workstations. The
goal is to create a $13-million Automated Land Information Sys-tem over eight years. The goal is to
provide better management data to foresters, biologists, and engineers throughout the
organization.
Centralization
In 1990, the head of IS decided to centralize the IS department to reduce duplication and help
control costs. This centralization offended the heads of the various business units, largely because
they saw it as a loss of control. In the process of consolidating the IS departments, the head of IS
also offended the IS workers because he was stressing a shift to a client-server approach. In
particular, he tried to emphasize development using the Oracle database management system,
signing a $16-million contract. The IS programmers and an-alysts felt that management was shoving
Oracle down their throats. The IS department is represented by three different unions, which
provide alternative channels for complaints and grievances. As a result, the initial agreements with
Oracle were investigated by the TVA inspector general for alleged collusion and kickbacks. After
three years of investiga-tion, the inspector cleared the contract.
Scott Woodlee began working at TVA in construction and in 1995 moved into pur-chasing. He
examined the utilitys purchases over a 12-month period and found that TVA was buying similar
products from multiple vendors and paying different prices each time.
By coordinating purchases, he was able to obtain volume discounts. The ideas grew into the
Distributor Procurement Partnership Program. A key feature in the system is that most of the
same supplies are also needed by the local and regional power distributors (e.g., city utility
companies). TVA extended the application into the Supply Chain Committee in 2004 so that all of
the partners can negotiate together for better prices. Woodlee noted that its getting harder by
the day for distributors to make ends meet. With rising costs, theyre working hard to find ways
to save on expenditures [Brooks 2006]. The system initially struggled to get vendors to join, but
as the number of distributors grew, vendors realized the system provided a wider market. The
system collects bids from the vendors and utility companies purchase based on the winning
contract. The system makes it easy to order new supplieswithout going through a new bidding
process each time.
A New IS Director and a New Plan
In August 1992, the IS director was replaced by Robert Yates, previously the corporate treasurer to
clean up the mess in the IS department. Yates noted that there were a lot of turf battles, no
clear-cut domains, and built-in conflicts of interest.
Yates consulted with N. Dean Meyer and Associates, Inc., and with the IS workers to help create a
new IS structure that would satisfy the business units, please the IS workers, and improve the
competitive position of TVA. The new plan basically keeps the current (centralized) structure. It
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organizes the IS workers into four categories: (1) service bureaus consisting of IS operations staff,
maintenance, administration, and PC support; (2) technologists consisting of programmers,
application specialists, database administrators, and various technical experts; (3) a consultancy of
about 30 members who will help the business units determine their needs as well as market the IS
capabilities; and (4) A small number of architects to define corporate standards. Yates also plans to
institute a charge-back sys-tem to bill the business units for IS services. He is concerned that they
look at IS as a free good; hence there would be incentive to overuse the IS department, instead of
searching out other solutions.
In 1993, the MIS department began searching for a management software tool to help them
centralize the administration of all the workstations throughout the company. For example, in 1993
there were more than 100 Sun high-end workstations and 400 smaller SPARCstation 2 machines in
use. Robert Khym, TVAs manager of distributed systems soft-ware support, noted that The next
step will be finding something that will integrate all of our open systems.
In 1993, TVA began replacing its mainframe computers with Unix-based midrange computers. Each
of the 24 dams, 12 fossil fuel plants and 4 nuclear reactor plants operate as separate entities. The
agency wants to install lower-cost open-system minicomputers at each site. There is limited
information flow between the various sites, but TVA is in the process of installing a wide area
network to allow easier transfer of financial data. The ex-isting IBM mainframes will be kept as
centralized file servers.
As part of its consolidation plan, TVA signed a contract with PeopleSoft Inc. to use that companys
client-server payroll software package. After some alleged problems about making the package
work with the IBM DB2 database applications, the TVA inspector gen-erals office called a halt to
the installation and began an investigation into the purchasing process.
MIS In the Early 2000s
Utility companies in general have turned to IT to reduce coststhe industry-wide deregulation has
forced them to look for new areas to save money. Utilities need information systems to help
generate power efficiently, transmit it across aging power grids, and respond to outages and
customer problems. They also need to reduce costs. Since TVA is primarily a wholesale distributor,
it needs to track relationships with municipal providers and forecast demands. Diane Bunch, VP of
IS in 2000 noted that Our generating and transmission facilities use 60 different models for load
forecasting, production costing, maintenance planning, and market forecasting. Were
reengineering the process and want to reduce the number of models by 50 percent [Garvey 2000].
TVA also wants to reduce the amount of power reserves it holds. Bunch observes that Having the
right reserves at the right time could mean $150 million to $300 million to our bottom line [Garvey
2000].
In the late 1990s, TVA estimated that it was spending nearly $50 million a year on planning and
performing maintenance work orders for its nuclear plants. The single Browns Ferry plant alone
generates 14,000 work orders a year. The process is complicated by every-changing documents on
the power systems. Working with an outside software vendor, TVA was able to define and purchase
a new system to maintain all of the documents electronically. Developing the system and converting
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documents took the vendor 28 months. After such careful planning, Robert Rupe, process
improvement manager at TVA Nuclear notes that we butchered change management [Hildebrand
2000]. Many of the people who would use the system had never used a keyboard, and thought the
CD-ROM made a nice coffee cup holder. The new application was also based on a distributed
system, so some of the response times were actually slower, and people saw that. But we didnt
ex-plain that the overall process would result in huge time savings. We needed to manage expectations better [Hildebrand 2000]. In the end, the $5.1 million system reduced the time to
process work orders from 39.8 to 23.3 person hours; saving $8.4 million annually just in labor costs.
TVA also worked at improving its supply chain management. One key step was to join business-tobusiness marketplaces. Diane Bunch noted that We have to find every efficiency in our business in
order to stay alive. We cant (just) try e-commerce. We have to make it work [Meehan August
2001]. TVA is asking is local power distributors to enter re-quests for basic items like poles and
transformers onto its private Web site. From there, the system consolidates purchase items and
routes them onto a national e-commerce site run by Pantellos Group. Bunch described the basic
process: When we get a work order at one of our plants, (the software) will check our inventory
companywide to see if we have the right materials. And if we dont, it will then punch out (a purchase
order) to the marketplace [Meehan August 2001].
Re-engineering the supply chain management system began in 1996. In July 2001, the system went
live in a weeklong big-bang implementation. Bunch noted that from the sheer magnitude, it was
the largest undertaking in the agencys history [Songini 2003]. To reduce risks, the IS departments
involved end users at every step, and specifically identified business experts at each location who
had responsibility for the projects success. The system eliminated 20 homegrown and third-party
applications, integrates 32 others, and creates an enterprise system that provides real-time data
instead of waiting for nightly batch updates. By 2003, TVA had already saved $23.5 million [Songini
2003]. TVA also in-stalled logistics software from Manugistics, that centralized routing of is freight
operations.
To reduce development costs, TVA built its own front-end portal system using an Apache Web
server linked to its UNIX business systems. The portal provides Web access to handle customer
service, online billing, and access to the private marketplace by power distributors
[Comptuerworld August 2001]. Diane Bunch described the portal goals in more detail:
Through this portal, our business partners have secure, immediate
access to billing, real-time pricing, usage summaries, energy and
environment news, weather forecasts, and a digital marketplace that
leverages TVA volume contracts. We provide information in a fashion
that lets customers person-alize their portal displays. The goal: to
increase the avenues of communica-tion between TVA, its customers,
and suppliers. Planned future enhance-ments are scheduled to include
contract information, economic data, a cus-tomer information
management system, as well as online billing and pay-ment, Webhosted bond offerings, and additional functionality for online power
trading [Bunch 2001].
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The one drawback to the new system is that it generates a huge amount of data. TVAs wide-area
network was carrying 21 terabytes of data month in 2001, as more traffic moved to the Internetbased systems. To give users better access to the data, TVA began building a data warehouse. The
first phase was to consolidate TVAs financial and performance management systems. In the
process, Bunch wants to improve IS development standards. In particular, to ensure clean data,
she is insisting that all interfaces and data be fully documented. She observes that failure to
document that information would never happen in our nuclear facilities, and our goal is that it
wont happen anymore with our in-formation systems [Computerworld August 2001].
The huge amount of data being generated also causes problems on the network.
With TVAs emphasis on enterprise and distributed systems, the company saw dramatic increases in
network traffic. Ed Wood, network administrator in Knoxville noted that The programmers are far
less network-sympathetic than they used to be. They must think weve got unlimited resources
[Meehan November 2001].
Beginning in 2001, TVA also began cleaning up its use of personal computers. The company migrated
from Windows 95 to Windows XP starting in October 2001. In the process, the company whittled
the number of desktop applications down from 4,700 to 2,300. In many cases people had installed
multiple versions of the same application. Reducing the number of users of each application also
enabled to company to renegotiate software licenses, saving several thousand dollars a year
[Hoffman 2003].
TVA has reduced the total number of full-time employees by several thousand work-ers. However,
it still hires over 4,000 part-time seasonal workers to handle maintenance and other tasks.
Additionally, the company has reduced its full-time IT staff to around 650 employees, but still hires
85 contractors in IT. Just in internal positions in IT, engineering, and clerical, TVA hires 1,500
temporary employees. In 2004, TVA purchased a contingent-workforce management system from
Elance. Before using the software, TVA relied on a pa-per-based system, backed up with faxes and
hours in phone calls. The new system handles most HRM management aspects from initial job
posting, to tracking projects that employ-ees have worked on. It also supports competitive bidding
when workers are provided by outside agencies. TVA anticipates recovering the software costs
within a year [Hoffman 2004].
In 2002, TVA restarted Browns Ferry Unit number 1 which had been inactive since
1985. In a nuclear plant, a network failure can shut down more than just a few desktop
PCs. On August 19, 2006, operators at the TVA Browns Ferry plant in northern Alabama
noticed that one of the two operating reactors was not circulating enough water to cool it-self. They
manually scrammed the reactor to prevent damage to the reactor. Investigation revealed the cause
of the problem was excessive traffic on the closed Ethernet network used by the plants control
system. The network engineers were not able to identify the exact cause of the problem, but suspect
it arose from faulty network code from the pump controllers. Eric Byres, CEO of Byres Security, Inc.
stated that Im personally aware of at least a dozen incidents at this point that relate to this
particular fault [McMillan 2007].
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Because of the importance of location and distance to the power utility, TVA has been a leader in
implementing GIS-enabled systems. One system (TVAsites.com) provides information on property
and buildings for sale in the TVA region. John Bradley, TVA Senior Vice President of Economic
Development noted that using technology tools such as
TVAsites.com streamlines the process for corporate decision makers and site selection professionals to locate and expand their companies in the Tennessee Valley. TVA developed
TVAsites.com as a comprehensive business development resource to save clients time and money
while they select the optimal property or building for their business [Directions Magazine 2006].
In 2008, the GAO pointed out basic computer security issues within TVAfocused on control systems
security [GAO 2008]. The Enterprise IT Security organization at TVA is in charge of overall security
issues, but individual plants have their own security systems integrated into the facility operations.
The external evaluation of the security features pointed out several problems such as incomplete
security settings on workstations and limitations in firewalls and the intrusion detection system.
Overall, the review showed that TVA personnel were working on improving security, but many plans
were not fully implemented in 2008.
In a related issue, TVA faced questions about the use of company credit cards. To reduce costs, the
purchasing cards were issued to employees to enable them to purchase common items such as
office supplies. An investigation into the use of the cards showed several purchases of alcohol
(forbidden by policy), student tuition, and other questionable expenses. The cards are used
frequentlyamounting to $75.6 million in expenses in fiscal year 2007 [Flessner 2009]. One
cardholder had almost $6 million in charges on six cards over two years. The unidentified person
told auditors that TVA officials never checked the receipts. Robert Martin, the TVA assistant
inspector general, said he found lack of accountability and physical control. He also suggested
the need for data mining to analyze transactions for fraud and compliance with TVA policies
[Mansfield 2009].
The Future
Like other firms, TVA faces issues with its aging workforce. The company risks losing critical
knowledge as its workers retire. In 2003, the average employee age was 47 and almost one-third
(4,500) planned to retire within five years. In response, the HR department created a survey. At least
once a year, managers interview employees and write down the answers to three questions: (1)
What knowledge will be lost when an employee retires? (2) What are the consequences of losing
this knowledge? (3) How can the organization retain this knowledge? [Leonard 2003]. HR staff
members then grade each employees skill and knowledge on a five-point scale. Jill Wallace, human
resource service manager for TVAs nuclear division noted that This is not rocket science; it really
is a fairly simple process. But it has definitely made our workforce a stronger and more cohesive
team. It has people thinking about how their job affects the organization and raised the awareness
that what they do counts and is important to the successful operation of this TVA [Leonard 2003].
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In 2003, TVA ran a second trial implementation of a fiber-optic-based network to connect power
stations. The system enables managers to watch all equipment along a line, and to send control
signals to equipment to change configuration and other features. Real-time monitoring of lines,
transformers, and other devices had not been possible earlier [Smith, et. al 2004].
In 2001, two finance professors (Dennis Logue and Paul MacAvoy) analyzed the financial records
for TVA and observed that TVA has a high probability of going bankrupt [Logue and MacAvoy 2001].
Logue noted that By most measures of solvency, they are broke [McTague 2003]. Pressures from
deregulation will continue. As interest rates continue to increase, the inability of TVA to reduce its
debt according to its own schedule means that the costs of TVAs debt might become too large to
compete. As of 2007, the fi-nance professors were wrongbut largely because interest rates
remained low for several years, leading TVA to issue low-rate 50-year bonds in 2006 [Euroweek
2006]. TVA still has a huge debt load to finance.
TVAs 2006 Strategic Plan noted that retail competition had almost stalled through-out the country,
and wholesale competition was based on reliability and environmental effects as opposed to prices.
Much of this change was driven by the Energy Policy Act of 2005, passed in response to the 2003
energy blackout in the northeast states. Consequently, a large part of TVAs strategy is to return to
a focus on reliability and match the 2 percent energy growth rates.
By 2008, it was clear that TVA had not filed for bankruptcy. The 2010 Annual Re-port showed that
the corporation earned positive net income of $817, $726, and $972 million for 2008, 2009, and
2010 respectively. At the end of the 2010 fiscal year, TVA had $42,753 million in assets and $22,389
million in long-term debt.
From an operational perspective, two key changes in TVA were announced in 2010-2011: (1) The
EPA forced TVA to close 18 coal-fired plants [Helman 2011], and (2) TVA started the process to
finish two long-delayed nuclear plants. Watts-Barr 2 was scheduled to come online around 2013,
and the Bellefonte plant in Hollywood AL that was half-completed in 1988 was scheduled to start
up around 2020 [Barnes 2010].
References:
Read the case below [taken from: [Management Information Systems Cases, Gerald V.post,
Copyright2012] understand and answer the questions in context of Management information
system.
Case Study Questions
1. How would you classify the management information systems at TVA? How has the authority
changed between 1991 and 1994?
(20 Marks)
2. What are the advantages of each business unit having its own MIS department? What are the
disadvantages?
(20 Marks)
3. How would you classify the operations and management structure of TVA? In particular,
Does it lean toward centralization or decentralization?
(20Marks)
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Case Study 3
Read the case below [taken from: [Management Information Systems, 13/E Ken Laudon
Jane Laudon] understand and answer the questions in context of Management information system.
Greyhound/Laidlaw/FirstGroup
Greyhound Bus Lines started in Hibbing, Minnesota, in 1914, when Swedish immigrant Carl Eric
Wickman began shuttling passengers to nearby Alice, Minnesota, using his seven-seat Hupmobile.
By 1930, the company put together a national network by acquiring other small bus lines. The
company then moved to Chicago and adopted the Greyhound as its corporate logo and name
[www.greyhound.com].
Up to the early 1960s, Greyhound was very successful. However, increased automo-bile ownership
and decreased airline fares put considerable pressure on bus companies. From 1960 to 1994, the
industrys share of interstate travel dropped from 30 percent to ap-proximately 6 percent of the
traffic.
In 1987, Greyhound was purchased in a leveraged buyout by Dial Corp. Suffering from high debt
payments and two violent strikes (some bus drivers were shot at in 1989- 1990), Greyhound filed
for bankruptcy protection. In late 1991, the company emerged from bankruptcy protection with
Frank Schmieder at the helm.
Schmieder and his lieutenant, J. Michael Doyle, began an ambitious re-engineering plan. Neither
Schmieder nor Doyle had much experience in transportation: Schmieder came to Greyhound in
1989, Doyle in 1987. Their plan called for significant cost cutting, by drop-ping routes, cutting
workers, and cutting the fleet from 3700 down to 2400 buses. Their plan also called for a new,
comprehensive computer system that would handle everything from passenger reservations to
scheduling.
Wall Street was impressed with the new managers and their plan. Within a month after emergence
from bankruptcy, Greyhound stock was selling for $13.50 a sharetwice as high as expected by
Greyhounds own advisers. In 1992, the cost-cutting measures led to a year-end profit of $11
million on revenue of $682 million, the first profit shown by Grey-hound since 1989. By May 1993,
the stock price reached $22.75.
Discord at Headquarters
Life at Greyhound during the years from 1991 to 1994 was schizophrenic, depending on where you
looked. Until Schmieder, Greyhound headquarters were in a Dallas high-rise, near the bus
terminal. The offices were Spartan and filled with bus memorabilia. Schmieder moved the
company to an upscale building in the suburbs. He hired an interior-design firm, paying it as much
as $90,000 a month. Decorating costs included $50,000 of fixtures, custom cabinets, and $4500 for
two chairs in Doyles office. Company funds also paid for season tickets to the Dallas professional
sports teams. The executives also flew first-class and stayed at expensive resorts. There were also
monthly bills for consulting firms and executive-search firms. One bill from Bain & Co. ran to
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$175,000 a month. Schmieder also arranged two communication breakthrough seminars with
the Meridian Institute for $560,000. Few lower-level managers were invited to participate in these
sessions, and even headquarters workers scoffed at the calls for teamwork and customer service
that began appearing in the corporate newsletter. In two years, Schmieders salary rose 57 percent
to $526,000, and Doyles by 65 percent to $264,000.
In the meantime, workers throughout the company were squeezed by the cutbacks. At corporate
headquarters, employees scrounged vacant offices for supplies. Mr. Oller, a marketing manager who
worked for Greyhound for six months in 1992, observed that There were never-ending meetings
about who was going to get fired.
Several other corporate employees lasted a year or less. In the field, experienced managers were
routinely sacked to cut costs. Most of the terminals were staffed with part-time workers and
customer-service associates. These employees earned $6 an hour regardless of their jobs, with
little or no chance for a raise. Few of them had completed high school. Turnover at some terminals
ran 100 percent a year and 30 percent was common. Ralph Borland, a long-time Greyhound
manager working as vice-president for customer satisfaction, notes that the turnover rate did not
bother Greyhound management, since If people stayed around too long, they would get too sour
and cynical.
When touring facilities, customer-service executives were shocked to find terminal workers
making fun of customers and ignoring others. Ridership was falling. To cut costs further, the number
of buses and drivers was cut (down by half since the mid-1980s) and routes were rescheduled. Bus
drivers began complaining that they had to exceed speed limits to meet the new schedules.
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The problems at Greyhound are reflected in its financial performance. Obviously, the company had
problems when it declared bankruptcy. The company improved in the mid- to late-1990s, but
passenger revenue peaked in 2001 [annual reports]. Even more amazing, check out the
stockholder equity in 2002 and 2003. It is negative! How long can a company survive when its
liabilities exceed its assets?
In 1999, Greyhound was acquired by Laidlaw, a Canadian company that owns a di-verse collection
of transportation firms. In June 2001, Laidlaw filed bankruptcy in the United States and in Canada.
Two years later, in June 2003, Laidlaw emerged from bankruptcy protection [2003 annual report].
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In response to this parent-company bankruptcy, Greyhound effectively became more financially

independent. In 2000, already facing problems, Laidlaw cut off funding [Heinzl 2000]. Within a
couple of months, Greyhound secured its own line of credit from Wells Fargo, a revolving line up to
$125 million [The Wall Street Journal 2000].
A New Information System
When Greyhound was the market leader and millions of people rode the buses, there was little
need for a comprehensive information system. The company set basic schedules and sold tickets at
the station. If demand was high, the company simply added more buses and drivers. If buses ran
half-empty, it did not matter, because margins were high enough to cover the costs.
With tight margins and a push for efficiency, Greyhound managers needed better data. Existing
ridership data was often months old; the company needed a system to track ridership, plan
schedules, and identify where it was necessary to cut prices to compete. Management also wanted
to be able to sell tickets in advance, enabling customers to re-serve seats.
Elements of the proposed system were similar to the issues faced by the airline reservation
systems. In some ways, the Greyhound system would be simpler, because reservations and tickets
would be sold only through existing terminals, or through a toll-free phone number. The airline
reservation systems provide additional support to travel agents. On the other hand, a bus trip is
considerably different from an airline flight. An airline passenger traveling coast-to-coast might
make one stop. A coast-to-coast bus trip would probably make 10 or more stops. Each leg of the
trip would carry slightly different travelers, as some got on and off at intermediate destinations.
Greyhound systems analysts estimated they would have to handle as many as 1800 vehicle stops a
day, more than 10 times as many as an airline system.
Greyhound management assigned about 40 full-time people to develop the new Trips reservation
system. They were given a $6 million budget and slightly over a year to develop the system. System
wide rollout was planned for the summer of 1993. Thomas Thompson, senior vice-president for
network planning and operations, notes that Every bone in my body knew that we were starting a
very difficult undertaking.
A First Attempt
The base software for Trips was written by an outside firm. The system was a nightmare. It
required 40 hours of training for station clerks. Even then, the screens were cluttered and
disorganized, often requiring several screens and options to book a simple ticket. The system also
did not include all of the Greyhound destinations, so clerks often had to resort to the old log books
to write tickets.
Greyhound tested the system in Houston, Dallas, San Antonio, and Austin during the 1992
Christmas season. The system crashed repeatedly, and it took twice as long to is-sue a ticket with
Trips as it did manually.
In an executive meeting in February 1993, Thompson suggested that the system needed to be
redesigned from scratch. He also suggested that the planned summer 1993 implementation be
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delayed. But Doyle reportedly ruled out any discussion of delays, declaring that We made these
commitments, and, by God, were going to live up to them.
Thompson now believes that he should have pressed harder for a delay or that he should have quit
the company. Instead, he kept on, and all notes and references to his comments were destroyed.
Doyle denies that he destroyed documents or fought against the decision, claiming that the
designer team made the decision to continue.
In April 1993, Greyhound executives made public promises that the reservation sys-tem would be
operational by the summer. They also filed with the SEC for a public offering of an additional 4
million shares of stock. The prospectus promised that the Trips system would make it easier to
purchase tickets, reserve space and improve customer service. An unnamed executive commented
on the internal climate, noting that My clear impression was that as long as we could have some
form of reservation systemas long as we could just book one reservation somewherethen by
some means, we would be living up to our obligations.
Through June 1993, the team continued to revise the software. They also installed the system in
additional terminals. At the end of May, it was running at 50 locations. How-ever, computer
terminals routinely froze up. The company also changed its long-distance phone carrier and
established a toll-free phone number for reservations. In June, technicians were seriously
considering delaying system when Doyle walked into a meeting and said the idea was not to be
discussed.
In July, the board of directors was told that Trips was ready to go. Announcement of an increase in
second-quarter earnings and strong ridership numbers resulted in a 4.5 per-cent increase in the stock
price.
Rollout
On July 27, Greyhound activated the toll-free number service, which was to book reservations
through the now-200 terminals connected to Trips. The Omaha, Nebraska service had 400 agents
selling tickets, in addition to the agents at the terminals.
Systems designers were uncertain about what to expect, except they believed the system would
not work. It did not. The new phone lines handled 800,000 calls a day (up from a traditional
60,000). Many of them were repeated attempts by customers to get throughcallers often tried a
dozen times to reach the ticket agents.
The computers in Dallas were swamped. Ticket agents sometimes had to wait 45 se-conds for the
computer to respond to a single keystroke. It often took five minutes to print a ticket. The system
crashed so often that agents resorted to writing tickets by hand. At some terminals, passengers
were told to stand in line so that their tickets could be reissued by computer.
Passengers missed connections, were separated from their luggage, and often had to sleep in the
terminals. At the New York Port Authority building, competing regional bus lines called in extra
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buses and lured away passengers. By September, technicians pulled the plug on reservations west
of the Mississippi river. On at least one weekend, they told the Omaha center not to take any more
reservations.
Somewhat surprisingly, none of this news seemed to reach analysts on Wall Street (of course, most
of them travel by air). On August 4, Greyhound stock was trading at $21.75 a sharethats when
Doyle decided to sell 15,000 shares that he had purchased with options for $9.81 a share. In the
first two weeks of August, Schmieder also exercised options and sold 13,600 shares for a profit of
$155,000.
On September 23, almost two months after the introduction of the Trips system, Greyhound
announced that ridership fell 12 percent in August and that earnings would not meet the early
forecasts. Greyhound stock fell to $11.75 a share in a single day. Thompson was removed as head
of the Trips development team. His successor lasted only until January 1994.
In May 1994, the Trips system caused problems again. Hoping to gain riders, Grey-hound offered a
$68 fare for any trip in the United States with a three-day advance purchase. The price attracted
thousands of customers. The Trips system crashed again. With too few buses and drivers, terminals
were packed with angry customers. Agents simply stopped selling tickets.
In the first half of 1994, Greyhounds operating revenue plummeted 12.6 percent, with a net loss of
$61.4 million ($4.19 a share). Meanwhile, the nine largest regional carriers in the nation showed
increased operating revenue of 2.2 percent. In July 1994, Schmieder announced that Greyhound
would abandon the long-haul business on concentrate on shorter routes. Three weeks later, he was
forced to resign. Doyle also resigned. Shareholders filed suits alleging that Greyhounds public
statements miscommunicated the status of the company.
We Cant Quit Now
In January 1994, Greyhound hired Bradley Harslem, a former American Airlines reservations
executive, as chief information officer to oversee the Trips system and solve its problems. In late
1994, the revised system was running at 248 locations. Training time was reduced to 16 hours, but
even Harslem sometimes had trouble using the system. When he was hired, he observed that
Greyhound had to be able to compete with Southwest Airlines and should have a similar type of
reservation system. Additionally, he hoped to eventually sell the reservation service to other bus
lines. Harslem was hoping to add yield management features so that Greyhound could charge
differential prices to maximize its revenue [Bettw 1994]. By the end of 1994, the system was finally
beginning to produce ridership da-ta to assist managers in planning and scheduling. However, it still
could not guarantee a passenger a seat on the bus. The system cost at least $6 million and triggered
a loss of $61.4 million for the first half of 1994 [Computerworld 2002].
The Second Half of the 1990s
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One more element of the Trips system caused problems for Greyhound. Most of the tickets are sold
within three hours of a trip. Generally, passengers walk up to a station or an agent location and
purchase a ticket on the spot. The problem was that the original system was networked with an
expensive, relatively low-speed proprietary network. Loading several agents onto the system at one
time dragged it to a crawl. Additionally, users at headquarters and the reservation centers needed
three terminals on their desks because the Tan-dem, UNIX, and personal computers all ran on
separate, incompatible networks.
At the end of 1995, Greyhound switched to a TCP/IP frame-relay network. The new network run on
AT&T leased lines, provided speeds up to 1.5 mbps and reduced printing time from 2 seconds to a
half-second [Girard 1996]. Because the system uses standard Internet protocols, it supports
multiple applications, enabling users to rely on just one terminal.
Greyhound installed the high-speed system in 153 large bus terminals and maintenance locations.
The company pays $750 per month to lease the network equipment and the communication line.
To handle communication needs at smaller, out-of-the-way locations, Greyhound set up individual
Internet accounts through CompuServe at $20 a montha substantial savings over the $200 a
month they were paying for the private lines. Overall, network costs were expected to drop by 40
percent, providing a payback within 18 months [Girard 1996].
In 1997, Greyhound implemented an imaging solution from WinOcular to process more than 125,000
bus tickets per day. The Greyhound imaging department has 40 full-time workers and uses 4 highspeed Kodak scanners. Printed bus tickets are scanned and recorded to CDs. The imaging system
picks off the pricing data and electronically sends it to Greyhounds Oracle database. The $500,000
project reduced Greyhounds processing costs [www.winocular.com].
The New Century
In 2000, Ralph Borland, vice-president of marketing for Greyhound Lines observed that Were pretty
obsessed with growth. We believe the bus has a rightful place in the transportation mix for North
America in this new century [Ramage 2000]. He also commented on the problems the company
experienced in the early 1990s. In particular, Greyhound had been targeting the discount airlines as
its main competitors. Until the early 1990s, we tried to be more like an airline by offering
reservation systems and capacity-fixed travel. Our consumers thoroughly rejected those concepts
and brought us to the brink of bankrupt-cy [Ramage 2000]. By capacity-fixed travel, he means that
the bus company established fixed routes and schedules. By 2000, the company had moved to a
more flexible systemwhen passenger demand increases, more buses are added to the route. Craig
Lentzsch, Greyhounds president in 2001, echoed those sentiments about the early 1990s we didnt
treat our customers right, we didnt answer the phone, we didnt give out good fare and schedule
information [Heinzl, Pinkston, and Machalaba 2001].
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In 2001, Greyhound began a series of discounts to encourage more travel by some of its primary
customers. Most of the passengers make under $35,000 a yearand its two big-gest
demographics are youths 18-24 and the senior market [annual report]. With new advertising
campaigns stressing competitive prices, the company hoped to expand its passenger miles both in
the United States and Canada. A 7.9 percent increase in the number of passengers in Canada was
attributed to the companys $139 Go Anywhere campaign [Ramage 2001].
Along with the rest of the travel industry, Greyhound was severely hurt by the 9/11 attacks. Actually,
the company experienced a 50 percent surge in traffic immediately after the attackslargely
because many people needed to get home. But, the travel numbers fell later. Greyhounds passenger
numbers peaked in 2000 at 25.4 million travelers, and have declined every year sincedown to 21.9
million in 2003 [www.greyhound.com]. Their finan-cial performance has suffered even more.
In 2004, in its last Annual Report, Greyhound noted that the TRIPS system was in use at 464
locations. Elsewhere in the annual report, Greyhound stated that it had 120 company-operated
bus terminals and worked with an additional 1,300 agency-operated terminals [Annual Report
2005].
In its 2006 Annual Report, Laidlaw stated that Greyhound has initiatives under-way to expand and
enhance its Internet based ticket sales and package tracking interfaces in conjunction with its
efforts to increase passenger and package revenue and lower operating costs [Annual Report
2006].
In February 2007, FirstGroup, Britains largest bus operator, announced that it was purchasing
Laidlaw for 3.7 billion. The deal might be derailed by antitrust regulators be-cause it would combine
FirstGroups U.S. school bus operations of Yellow Bus with Laidlaws school operations, but it is likely
to succeed. [Business Week Online 2007] First-Group had 3.7 billion in revenue in FY 2007
[FirstGroup Annual Report 2007].
Routes and Competition
One of the more interesting issues revealed in Greyhounds 2003 annual report is that most of
Greyhounds passengers come from the largest cities. In fact, the 50 largest sales outlets generated
about 50 percent of the 2003 ticket sales. Already in 2003, the company began cutting routes
reducing bus miles by nine percent [2003 annual report]. The cutbacks continued into 2004 with a
major announcement that Greyhound was substantially altering its routes in the United States. The
press release was blunt In the past two decades, Grey-hound has not had sufficient profitability to
fund its operating and capital investment requirements to be a viable company [Press release
June 25, 2004]. Notably, the company began eliminating many rural stops, and focusing on longhaul customers. If you read the 2003 annual report carefully, you will also see that the company
phased out almost all of its promotions and price discounts. It is relatively clear that the company
hopes to survive by seriously reducing its size.
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In its 2005 Annual Report, Greyhound emphasized that the typical passenger travels to visit
friends and relatives and generally has an annual income below $35,000. Many of the passengers
claim they own cars but choose the bus because of the lower cost or be-cause they are traveling
alone. The majority of the Companys customers usually make the decision to take a trip only a
short time before actually traveling and, for the most part, pay cash for their tickets one to three
days before the day of departure [Annual Report 2005].
It seems likely that Greyhounds competitors will help it decline in size. The company has already
noted that some southern-state Hispanic-oriented bus lines have started encroaching on its routes.
By 2004, the company was also facing stiff competition from so-called Chinatown bus companies
on the major East Coast routes. The new companies offer rock bottom prices and no-frills service.
Although, it is hard to say how anyone can provide fewer frills than a bus trip, the lower prices are
clear. A trip from Bostons Chinatown to downtown Manhattan on Travel Pack/Lucky Star will cost
only $10. Greyhound charges $30 for the trip. Although, the competitors do have to be careful;
passing motor vehicle inspections is not really a frillNew York police pulled 16 buses off the road
in one week. Nonetheless, the new lines have the potential to hit Greyhound hard in its prime
markets. Dan Wong, a student who frequently rides the buses comments that I dont know why
any-one would take Greyhound. This is much cheaper [McLure 2004].
By 2007, many of the competitors have increased prices to cover costsparticularly the huge jump
in fuel costs. But LimoLiner, a new regional competitor offers direct service between Boston and
New Yorkwith a twist. The bus has only 28 seats and every one has a power outlet for laptops. It
has wireless Internet connections and satellite TV [DeJean 2005 and limoliner.com].
Trips Is Working?
In its 2003 annual report, Greyhound notes that its Trips system continues to work. The automated
fare and schedule quotation and ticketing system was in use at 434 locations. On the other hand,
Greyhound had 130 company-operated bus terminals and 1,520 agency-operated terminals, so Trips
is being used in about 22 percent of its locations. The company also maintains a staff of 400 people
just to handle phone inquiries and reservations. The telephone centers and Web site handled 40.1
million requests in 2003 [annual report]. The annual report also recorded a cost of software of $55.9
million, with an accumulated amor-tization of $33.0 million in 2003. The software cost number was
$5 million higher in 2003 than in 2002. The report does provide a breakout of the software costs,
and part of those costs likely includes other software purchases.
First Group 2010
In 2007, Laidlaw (including Greyhound) was purchased by the London-based transportation
company FirstGroup, plc. With the purchased, FirstGroup is the largest transportation provider in
Great Britain and North America with revenue of over 6 billion a year. The company continues to
run the First Student program and handles many of the yellow bus school routes in North America.
As shown in the financial tables with data retrieved from annual reports, Greyhound continues to
struggle in the marketactually, the bus market continues to struggle because of alternative
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transportation methods and the declining economy from 2008-2011. By the end of 2010,
Greyhound had about 8,000 employees and carried about 20 million passengers for the year. On
the other hand, the Greyhound division reported positive operating profits for 2010 on over $1
billion in revenue.
The annual report also notes that most people travel on Greyhound to visit relatives and family. In
the first half of 2010, the company released a new version of their Web site
(www.Greyhound.com) and customers are increasingly purchasing tickets online. In some
marketslargely the Northeast corridor, the company also introduced the Greyhound Ex-press
brand and partnered with BoltBus to better compete with its rivals and attract new types of
customers. The buses offer more direct routes, competitive fares, and free Wi-Fi on each bus. By
the end of 2010, 25 percent of the sales were made through the online site.
The summer Olympics are taking place in London in 2012. FirstGroup is trying to prepare its
transportation networks for the influx of passengers and increased traffic. As part of this system, the
company invested 27 million to deploy contactless payment methods (including near-field
communication NFC) on public transport. The system will accept payments via smart cards which are
common in Europe as well as mobile phones [Ibrahim 2011]. Passengers will tap their standard bank
debit or credit cards when boarding the bus. When they exit, they will tap again and the system will
compute the fare and deduct it from the specified account. Giles Fearnley, managing director of the
UK bus division for First-Group noted that The public transport industry will increasingly rely on new
technology, such as contactless bank cars and mobile phones to both retain and attract customers,
[Balaban 2011]. Unfortunately for Asian visitors to the Olympics, the contactless technology in Asian
phones which are commonly used to pay for travel in Japan does not support the NFC standard that
will be adopted in London (and eventually America) [The Green Sheet, March 14, 2011].
In terms of the IT operations at FirstGroup, most of the Greyhound developments appear to have
been discarded. However, in January 2010, Chris Boult, the senior vice president of IT for Greyhound
in Dallas, Texas was appointed as the Chief Information Officer of FirstGroup America. Interestingly,
his degree was in German and Italian from the University of Lancaster in England [news release
2010]. A more interesting aspect of IT management was announced in February 2011, when
FirstGroup signed a $30 million 5-year deal with Atos Origin to outsource its UK data centers. The
deal includes the consolidation of the data centers in North America. The Atos Origin contract
promises to convert the North American data center operations into a utility-based service with the
goal of reducing risk and cutting costs [Crouch 2011].
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Case Questions
1. Provide a detailed description and explanation of Greyhounds Information System.
List all of the things that Greyhoud did wrong.
(20 Marks)
2. What were the primary causes of the problems? If you were running Greyhound,
What could you have done differently to prevent or minimize the problems?
(20 Marks)
3. Because no one can change the past, what would you suggest Greyhound do now to solve its
problems? Justify your answer.
(20 Marks)
(20 marks X 3 Questions = 60 Marks)
Task 3:
1. Critically Analyze threats and opportunities of adopting the E-COMMERCE MODEL. And
how it helps the organization. Provide a detailed explanation.
(10 Marks)
2. Compare and Contrast at least three (3) most popular E-COMMERCE business in the
market.
(10 Marks)
(10 marks X 2 Questions = 20 Marks)
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Management Information Systems

Evaluation Grid - Case Study
Student ID:
Task 1:
Work
Proposal
Aspect
Report on
general
aspects of the
case study
TASK 2
Analysis and
Knowledge
of the Case
Study
Q1.
Q2.
COMP 0380
Student Name:
0
Doesnt
understand
all task.
Process
(6 Marks)
1-3
Partial analysis
and
understanding
of the case
tasks.
Aspect
Analysis and
Knowledge of
the questions
A Detailed
Description
and analysis of
the IS/MIS
used by the
Organization.
Demonstrate
an
understanding
why business
integration is
important for
the
organization.
4-6
Excellent
analysis and
understanding
of the case
tasks.
Session:
0
Incomplete
proposal
Product
(4 Marks)
1-2
Partially correct
proposal with
task & time
allocation
Marks
(10)
3-4
Accurate
proposal with
task & time
allocation, and
references
Total
Marks
(60)
CASE 1: REEBOK AND ADIDAS

Process
(12)
0
No individual
description
and analysis,
entirely taken
from case.
1-6
Partially
described and
analyzed the
case.
Product
(8)
7-12
Excellent and
detailed
description
and analysis
done.
Plagiarized
report.
Process
(12)
1-4
5-8
Partially
complete
and accurate
report. But
there was a
grammar
and spelling
error.
Complete and
Accurate report.
Grammar and
spelling were
excellent.
Marks
(20)
Product
(8)
1-6
7-12
No individual
understanding
, entirely
taken from
case study.
Partially
understands
the questions
and answers
show that case
was analyzed
Excellent and
detailed
understanding
and analysis
done on the
questions.
0
Plagiarized
report.
1-4
5-8
Partially
complete
and accurate
report. But
there was a
grammar
and spelling
error.
Complete and
Accurate report.
Grammar and
spelling were
excellent.
Page 38 of 42
Marks
(20)

Q3.
TASK 2
Analysis and
Knowledge
of the Case
Study
Q1.
Q2.
COMP 0380
Identified the
problems in
the system.
And provided
the analysis
on how these
problems
were solved.
Process
(12)
0
1-6
7-12
Problems
were not
identified. And
no individual
analysis,
entirely take
from the case
study.
Partially
identified the
problems and
provided the
analysis on
how the
problems were
resolved.
Complete and
accurate
identification
of the
problems.
Excellent and
detailed
analysis done
solutions.
Aspect
Analysis and
Knowledge of
the questions
A detailed
classification
analysis of
MIS in the
Organization
and how their
authority
changed
between 1991
and 1994
A detailed
description of
the
Advantages
and
Disadvantages
of having MIS
in each
unit/departm
ent.
Product
(8)
0
Plagiarized
report.
1-4
5-8
Partially
complete
and accurate
answer in
the report.
But there
was a
grammar
and spelling
error.
Complete and
Accurate answer
in the report.
Grammar and
spelling were
excellent.
Total
Marks
(60)
CASE 2: Tennessee Valley Authority (TVA)

Process
(12)
0
No individual
classification
and analysis
of the MIS,
entirely taken
from case.
1-6
Partially
classified and
analyzed the
case.
Total Marks
(60)
7-12
Excellent and
detailed
classification
and analysis
done.
0
Plagiarized
report.
Process
(12)
1-4
Partially
complete and
accurate
answer in the
report. But
there was a
grammar and
spelling error.
Marks
(20)
5-8
Marks
(20)
Complete and
Accurate
answer in the
report.
Grammar and
spelling were
excellent.
Product
(8)
1-6
7-12
No clear and
inaccurate
description of
the
advantages
and
disadvantage
s. And
entirely taken
from case.
Partially
described and
provided the
advantages
and
disadvantages.
Excellent
description of
advantages and
disadvantages
were provided.
0
Plagiarized
report.
1-4
Partially
complete and
accurate
answer in the
report. But
there was a
grammar and
spelling error.
5-8
Complete and
Accurate
answer in the
report.
Grammar and
spelling were
excellent.
Page 39 of 42
Marks
(20)

Q3.
TASK 2
Analysis and
Knowledge
of the Case
Study
A detailed
classification
and analysis
of operation
and
Management
structure of
the
Organization.
And provided
the
explanation if
the
organization
structure lean
towards
centralization
or
decentralizati
on?
Process
(12)
0
1-6
7-12
Unclear
classificatio
n and no
individual
analysis,
entirely
take from
the case
study.
Partially
classified
and
analyzed the
operation
and
managemen
t. But
provided an
incomplete
explanation
about
centralizatio
n and
decentraliza
tion.
Excellent
classification
and analysis.
And provided
the complete
explanation
about
centralization
and
decentralizatio
n.
Aspect
Q2.
Provided,
analyzed and
explained the
causes of
problems. And
how the
problems
could be
minimized.
COMP 0380
Plagiarized
report.
Process
(12)
0
A Detailed
Description
and analysis of
the IS/MIS
used by the
Organization.
1-4
Partially
complete and
accurate
answer in the
report. But
there was a
grammar and
spelling error.
5-8
No individual
description
and analysis,
entirely taken
from case.
1-6
Total
Marks
(60)
Partially
described and
analyzed the
case.
Product
(8)
7-12
Excellent and
detailed
description
and analysis
done.
0
Plagiarized
report.
Process
(12)
0
Unclear and
inaccurate
problems
were provided
and explained.
No individual
analysis of the
case study
/questions,
entirely taken
from the case.
1-6
Partially
provided and
explained the
problems. And
shows little
analyses of the
case study
/question.
1-4
Partially
complete
and accurate
report. But
there was a
grammar
and spelling
error.
Marks
(20)
Complete and
Accurate
answer in the
report.
Grammar and
spelling were
excellent.
CASE 3: Geyhound/Laidlaw/FirstGroup
Analysis and
Knowledge of
the questions.
Q1.
Product
(8)
5-8
Marks
(20)
Complete and
Accurate report.
Grammar and
spelling were
excellent.
Product
(8)
7-12
Complete and
accurate
problems were
provided and
explained.
Excellent
analysis of the
case/question.
0
Plagiarized
report.
1-4
5-8
Partially
complete
and accurate
answer in
the report.
But there
was a
grammar
and spelling
error.
Complete and
Accurate answer
in the report.
Grammar and
spelling were
excellent.
Page 40 of 42
Marks
(20)

Q3.
TASK 3
Analysis and
Knowledge
of
E-Commerce
Q1.
Q2.
COMP 0380
Provided the
possible
solutions with
enough
justification.
Process
(12)
0
1-6
7-12
No possible
solution and
justification
was
provided.
Partially
provided the
possible
solutions
with
justification.
Excellent
solution and
justification
were provided.
Aspect
Analysis and
Knowledge of
the questions.
Critical
Analysis and
explanation of
the threats
and
opportunities
of adopting
the ECOMMERCE
MODEL. And
How it helps
the
organization.
Comparison of
at least 3
most popular
E-Commerce
in the Market.
Product
(8)
0
Plagiarized
report.
Process
(12)
1-6
7-12
No individual
analysis of
the case
study
/questions,
entirely
taken from
the case.
Partially
provided the
analysis and
explanation.
Excellent
analysis and
explanation
were done in
the case
study/question
.
0
Unclear,
incomplete
and inaccurate
comparison
were provided
Partially
Compared 3
most popular
E-Commerce
in the market.
5-8
Partially
complete
and accurate
answer in
the report.
But there
was a
grammar
and spelling
error.
Complete and
Accurate answer
in the report.
Grammar and
spelling were
excellent.
Product
(8)
Process
(12)
1-6
1-4
7-12
Excellent
comparison
and
information
were provided
for 3 most
popular ecommerce in
the market.
Plagiarized
report.
0
Plagiarized
report.
1-4
5-8
Partially
complete
and accurate
answer in
the report.
But there
was a
grammar
and spelling
error.
Complete and
Accurate answer
in the report.
Grammar and
spelling were
excellent.
Product
(8)
1-6
Partially
complete
and accurate
answer in
the report.
But there
was a
grammar
and spelling
error.
7-12
Complete and
Accurate answer
in the report.
Grammar and
spelling were
excellent.
Page 41 of 42
Marks
(20)
Total
Marks
(20)
Marks
(10)
Marks
(10)

Task 4
Presentation
Aspect
Ability to
Comprehend,
explain, and
present.
Process
Product
1-5
6-10
Presentation
was poor and
was not able
to provide any
correct
answer.
Presentation
was
satisfactory
and was able
to few
questions
correctly..
Presentation
was excellent
and all
answers were
correct.
Not
Applicable
Not
Applicable
Marks
(10)
Not Applicable
Total Marks
Penalty
FINAL Marks
Signature of Teacher: ___________
Signature of Moderator: ____________
Comment/s:
Comment/s:
______________________________
_________________________________
______________________________
_________________________________
______________________________
_________________________________
______________________________
_________________________________
______________________________
_________________________________
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COMP 0380
Page 42 of 42

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Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

This is a group assessment and each student is expected to give equal

The report document should be well presented and neatly done.

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Written Feedback on Moodle

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Task 1: (Work Proposal)

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

tennis shoes increased by 92 percent with a 42 percent in-crease in orders.

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Reebok and the Internet

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

was experiencing an annual growth rate of about 8 percent

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Fixed financ- Net cash from

Deferred assets to gross

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

In response to this parent-company bankruptcy, Greyhound effectively became more financially

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems

CASE 1: REEBOK AND ADIDAS

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

CASE 2: Tennessee Valley Authority (TVA)

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Management Information Systems (COMP 0380) Fall 16 CW2 (Case Study)All-QP

Signature of Teacher: ___________

Signature of Moderator: ____________

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