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INFORMATION SYSTEMS PLAN Retail Expansion Analysis System

Submitted to Erlan Burk, Assistant Professor IS315 Computer Systems Analysis & Design I Park University

Submitted by Will Cheeseman Park University

April 15, 2012

IS315 Cheeseman TABLE OF CONTENTS Executive Summary I. II. III. IV. V. VI. System Description Needs Analysis Feasibility Analysis Data Analysis Process Analysis Financial Analysis

Retail Expansion Analysis System

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Appendix

Charts & Diagrams Context-level Data Flow Staff Processes Management & Maintenance Processes Initial Investment Break-Even Analysis 6 8 9 10 11

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IS315 Cheeseman

Retail Expansion Analysis System

EXECUTIVE SUMMARY
Mamba Juice smoothie chain has continued to expand its business by opening several additional sandwich shops across multiple states. Like many other corporations that wish to expand, Mamba Juice faces the difficult process of deciding when and where to add storefronts. Although a considerable amount of resources and time are put into the location selection process, the success rate of is mixed at best. The most difficult challenge for executives is to be able to assimilate and analyze data from a wide array of different sources and to convert that into a single comprehensible risk analysis report. The Retail Expansion Analysis System (REAS) is designed to create a single point of decision support for management considering adding storefronts. A tremendous number of different sources of data have to be considered when retail expansion is under consideration. REAS accesses data from both internal and external reports to present company management with GIS-based site selection solution. The REAS will provide a detailed analysis of the likelihood of success in a proposed location. The data is presented with both spreadsheets and graphics to managers for simplified decision support.

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IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

SYSTEM DESCRIPTION
System name: Retail Expansion Analysis System (REAS) Project Description: The Retail Expansion Analysis System (REAS) will support corporate management decisions regarding whether to add a new storefront in a proposed location. REAS will congregate data from multiple internal and external sources to analyze and assess expansion risk. Geographical outputs will help management identify areas of high success potential. Type of System: GIS-based site selection solution (DSS) and object-relational DBMS Key Benefits: Mitigate the risk associated with opening a new location and maximize the return on the invested capital it takes to build a store. Provide a high level of local customer intimacy. Maximize profits of new storefronts by locating areas with high projected success rates. User interface does not require training to use and is multiplatform compatible. Interrelation/Interdependencies: The system will be accessible through cloud software on a central server. System will be able to pull data from internal Sales, Marketing, and Accounting databases in order to analyze past expansions and compare that data to current proposed locations to produce a site scoring model. Key variables from the census will be analyzed. These variables include population, age, ethnicity, total households, home ownership, income levels, and industry data. These variables were purchased from Applied Geographic Solutions (AGS) and are forecasted through 2010. System will locate and extract key data fields applicable to expansion analysis.

Replacement/Upgrade: The Retail Expansion Analysis System (REAS) will reduce the cost for consultants and additional labor typically required when collecting data for proposed retail expansion. The cost reduction is done by automation of data collection and analysis accompanied by limited IT data entry. Upgrades of existing databases are limited depending on existing technology.

IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

NEEDS ANALYSIS
Organizational Environment The Retail Expansion Analysis System (REAS) will integrate into the existing organizational environment of any retail company. REAS can be configured to retrieve data from automatic or manual inputs to create custom reports and projection analysis. The REAS can be configured to operate within an intranet environment behind corporate level firewalls. The REAS retrieve relevant data from applicable data providers and load that into the selected GIS program. Stakeholders The system will be self-developed and funded by business assets allocated by accounting. The in-house analyst will oversee the entire development process and will stay on for maintenance and training for new management. Mamba Juices business needs include aggressive expansion of retail locations to facilitate new product lines. The eventual launch of cross over products will increase market penetration in all juice bar locations. Successful analysis of new storefronts will ensure maximum sales from each new location opened. In turn projected sales will increase shareholder value as market dominance becomes prevalent. Users The Retail Expansion Analysis System (REAS) will be accessed exclusively by management seeking support for decisions relating to opening new storefronts. The REAS is designed to generate geographical reports and analysis summaries for specific occasions of need including annual board meetings or business plan development. If management requires new storefront planning in order to develop either a 1 or 5 year financial and business plan the REAS can be access on demand to produce analysis. If a particular franchise request is to be considered the REAS can produce custom analysis applicable to that request. The system analyst will facilitate data input for any analysis request provided by management. Authorized users will have access to a secure network drive where GIS interface software and relevant output data are stored. Level of Management Served The Retail Expansion Analysis System (REAS) is being developed for executive management support. Those making business decisions up to and including retail storefront expansion will have access to centralized data and reliable analysis. In franchise approval requests management can select particular geographical locations and view analysis scoring of the potential site. Organizational Culture The Retail Expansion Analysis System (REAS) will be a key resource for short and long term business plan development. Mamba Juice is still a young company seeking an aggressive model of expansion. Mamba juice has a high sales integrity and performance requirements for its retail locations. With that thought of integrity in mind Mamba juice currently only franchises

IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

20% of its locations. The Retail Expansion Analysis System will allow Mamba juice to expand franchises to 50% of total storefront.

Analysts Organizational Interface The Analyst will have full control of all functions of the system. Must maintain and provide for system interface updates and changes. Maintain system at full operational capacity with all users and stakeholders. Analysts Role in System Development The Analyst will oversee the build and implementation, working closely with both the end users and development team. The Analyst will perform detailed information gathering through both interviewing and unobtrusive methods to identify relevant data for DIS input. The Analyst will also test and evaluate the system and develop a training plan to ensure all users are properly trained in its use. Training however will be limited to accessing the GIS interface because the GIS is easy to use and understand. Activities, Methodologies, Techniques to be used in System Analysis and Design The Retail Expansion Analysis System will be developed using the SDLC method to ensure accurate and dependable analysis can be achieved before decision support is implemented. The analyst will use project management and CASE tools to develop an overview of the time frame of each development phase. Planned Use of CASE Tools Using MS Visio to visualize and plan systems development throughout the life cycle. Justification for CASE tool use Visio will produce graphical representations in order to make development process accessible and focused.

IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

FEASIBILITY ANALYSIS
System Objectives The Retail Expansion Analysis System will provide accurate and valuable retail location analysis for any proposed storefront site in the continental US. Analysis will provide optimal site placement of retail storefronts by providing valuable knowledge in the three key areas of Customer analytics, Market analysis and Site selection and evaluation. The REAS will facilitate quick and intuitive access to knowledge through a robust and easy to use GIS interface. Customer analysis, charts, and reports will be available to management on demand through a dynamic relational database. Organizational Objectives Obtain competitive edge by achieving optimal retail storefront location selection. Maximize sales in new and existing retail storefront sites. Minimize expenses and overhead in new storefront locations. Lower percentage of failures in newly opened retail locations. Augment and support retail expansion objectives outlined in long term business plans. Alignment of Objectives Objectives of the Retail Expansion Analysis System align with both short and long term corporate business objectives outlined in section 32, paragraph 6 of the Mamba Juice 5 year fiscal and business plan which states Mamba Juice shall continue to pursue an aggressive expansion strategy to increase market penetration and franchise availability. Operational Feasibility Existing server processing capacity supports integration of a data warehouse to store appropriate metadata for GIS analysis. Storage capacity will need to be expanded 26% to support additional data storage. Intranet integration will be implemented easily into the existing network. Technical Feasibility Implementation of the Retail Expansion Analysis System will require a customized objectrelational DBMS capable of interfacing with commercially available GIS desktop software. Existing mainframe network infrastructure will support data retrieval and storage requirements of any currently used DBMS. Our GIS of choice: ESRI Business Analyst solution products are bundled with extensive business, consumer spending, demographic, and segmentation data that we can combine with our own sales and customer data. ArcGIS Server Enterprise, also provided by ESRI, will allow seamless integration into existing DBMS. ArcGIS Server Enterprise supports many DBMS and software such as IBM DB2, IBM Informix Dynamic Server, Microsoft SQL Server, Oracle, and PostgreSQL.

IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

Economic Feasibility Development costs for the DBMS will be minimized due to the excellent compatibility of the proposed GIS solution. Aside from the increase in storage capacity hardware costs will be limited to server expansion. ESRI Business Analyst solution and ArcGIS Server Enterprise products will constitute primary bulk of the costs. Software licensing and leasing rates have been submitted to appropriate departments for review. Recommendation The Retail Expansion Analysis System will allow Mamba Juice to analyze a market quickly and accurately, to decide on which products to offer and choose the best site to attract new customers to avoid cannibalizing existing store sales. The potential risk of opening a new retail location demands sound decision making. Losses attributed to failed site selection can offset sales needed to meet short and long term business objectives. Implementation of the REAS is recommended to insure objectives outlined in both the short and long term business plans are achieved.

IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

DATA ANALYSIS
Data Flow The REAS utilizes data inputs from internal and external networks sources. The database will retrieve GIS data from currently established online access points. Internal business data will be retrieved via SQL commands compatible with current database architecture. Access will be available to staff to view and print reports pertinent to location proposals. Staff will also be able to input new locations for analysis via the GIS interface. Maintenance personnel will have access to perform system updates. Management will have access to analysis, reports, and the GIS interface. Management will have the capability of viewing all activity and reports in the system. Outputs include analysis reports and GIS data reports available to managers and staff requiring knowledge of proposed site selection.

CVLA Context-level Data Flow Diagram


0

Account creation Account sign-in Account Access Print Reports

Users

Application Submittal GIS Interface

Users

Application Review

REAS

Analysis Results Present Reports

Staff

Data Entry

Staff

GIS selection Access View all tasks in system

Management
System Maintenance Inquiry System Performance Reports

Maintenance

System Maintenance

Maintenance

CONTEXT-LEVEL DATA FLOW

Elements Structure 6

IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

The data structure will be accomplished by using standard algebraic notation. Example for adding location information for analysis Data entered online will allow users to create a specified user name and password, which will correspond to the system generated key. Location ID = System Generated ID + User Selected Name

Location Address =

Street Number + Street Name + Suite/Space Number + City + State + Zip Code

Data Stores D1 CIS Data Master Contains geographic related Metadata used for analytics. Geographic data includes population and census data. Data retrieved from online servers provided for use with ESRI Business Analyst solution and ArcGIS Server Enterprise D2 Market Data Master The Market data master contains market sales data provided by ESRI used for analytics. Market data includes competitors, existing local product lines, and other relevant market indicators. D3 Internal Data Master Internal Data Master includes relevant internal metadata used for analytics. Internal data includes, regional and market sales applicable to the proposed site and also budget data provided by accounting.

IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

PROCESS ANALYSIS The context level data flow diagram has been decomposed into two areas of processes. These two areas are similar in scope and function. Staff Processes Authorized staff have access to the REAS through the ESRI Business Analyst solution and ArcGIS Server Enterprise. Staff can access the ArcGIS GIS GUI to view and input GIS location data. Performance, Market, and Site Analysis reports can be viewed orprinted.

STAFF PROCESSES

D2

GIS Data Master

Upload location Data

View GIS Data

Access GIS GUI

Staff
D1 3

Proposed Market Analysis

Market Data Master

Proposal Creation

Add Proposed Site

Proposed site Analysis

D3

Existing Site Analysis

Internal Data Master

View Reports

Performance Reports

Market Analysis Reports

Report Generator

Site Analysis Reports

Staff Processes

IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

Management and Maintenance Processes Management access includes advanced access to ESRI Business Analyst solution and ArcGIS Server Enterprise frontend GUIs. Managers, can run address inquiries for possible sites and print corresponding reports. Maintenance access includes front end and back end access to ESRI Business Analyst solution and ArcGIS Server Enterprise as well as related databases. Maintenance staff can generate system performance reports and perform system backup as well as manual data type updates.

MANAGEMENT AND MAINTENANCE PROCESSES


1

Address Inquiry

View GIS/Population Data

GIS GUI
D2

GIS Data Master

View Reports

Reports

D1

Report Generator

Internal Data Master

Performance Analysis Reports


D3

Management
Market Analysis Reports
D4

Market Data Master

System Reports

System Data BACKUP

System Reports

Maintenance

System Maintenance UPDATES

System Maintenance UPDATES

Update System

Management & Maintenance Processes

IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

FINANCIAL ANALYSIS Overview The cost associated with the installation of the REAS will be covered by the Mamba Juice assigned IT budget. Hardware and GIS software will be purchased from ESRI in a package to minimize cost. Training personnel will be including in the operating cost and is expected to consume a sizable portion of funds available due to the unique nature of GIS technology. Currently owned software including Microsoft Visual Studio, will be used in development so development software require no additional funding. The initial Server installation and software licensing will constitute the major portion of the costs for this project. The total initial investment for REAS Hardware Installation (Includes First Year of Software Maintenance) ArcGIS Server Hardware and Software Package ArcGIS Business Analyst SQL Database Migration 1st Month Ops Initial Training Package and Support Total $950.00 $42,500.00 $13,495.00 $4,000.00 $1,000.00 $8,000.00 $56,450.00

Server Location and Installation The REAS will be operated in the current headquarters building. The server location will be in the current communications and server room which is a secure area. The electricity currently in the room will adequately provide power for the new server. The server will be purchased from ESRI and Dell. ESRI will also be installing the server along with the operating system for a total cost of $42,500.00 Server Specifications: Dell PowerEdge R610 Rack-Dense Server with One (1) Quad Core Intel Xeon X5677 3.46 GHz Processor, 12 MB Cache, 12 GB RAM (3 x 4 GB Dual Ranked LV RDIMMs), 2 x 146 GB 15000 rpm Serial Attached SCSI (SAS) Disk Drives with RAID 1, PERC H700 Integrated RAID Controller 512 MB Cache, DVD+/-RW ROM Drive, Two dual-port Broadcom NetXtreme II 5709 Gigabit Ethernet NIC, 2 x 502W Power Supplies

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IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

Windows Server 2008 SP2, Standard x64 with 5 CALs, Three-Year FourHour On-Site Response 24 Hours a Day, Seven Days a Week and OnSite Installation of Operating System and Hardware

Technology ESRI will provide ArcGIS Server 10 Advanced Enterprise included with the ArcGIS Server Hardware Package. In addition ESRI will install and configure ArcGIS Business Analyst with a Data and Network Analyst Regional Concurrent Use License for $13,495.00. Operating Costs After the initial costs of setting up the system there will be minimal costs associated with maintaining it. There will be little to no yearly costs, because the server is going to be added to the existing network infrastructure. Updates will be charged $100 per hour and a forecast of 5 hours per month is realistic. Other operational expenses will be limited to additional training of new employees to the system. Break Even Analysis REAS is funded with company funds assigned from the approved IT budget. Returns on investment will become especially prevalent as the software is used to open new locations. Because the total cost of installation can be negated by avoiding just 2 or more closures a year. The Break even point can be reached within the fiscal year.
$140,000 $120,000 $100,000 $80,000 Profitability (per store) $60,000 $40,000 $20,000 $0 3-month 6-month 9-month 12-month Store losses

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IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

Cash Flow Analysis REAS will not be generating new cash directly for Mamba Juice however there are significant intangible benefits to consider. The REAS will allow confidence when following the companys expansion objectives. Failure rates of new retail locations will be drastically reduced saving the expenses associated with opening, the having to shut down, a new retail location.

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IS315 Cheeseman

Retail Expansion Analysis System (REAS)

April 15, 2012

Appendix: ESRI Pricing Reference: http://www.esri.com/partners/hardware/dell_advanced.pdf http://www.state.nj.us/treasury/purchase/pdf/Civil_Solutions_Price_List.pdf

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