Vermont Teddy Bear

Founded in 1981 by John Sortino. Offered 3 separately managed brands : Vermont Teddy Bear(VTB),PajamaGrams and Calyx flowers. Marketed these brands via online and print catalogs. Sales were highly seasonal with peak volumes at Christmas,Valentines day and Mothers day. Company suffered economic downturn and several costly strategic missteps in the past. CEO,John Gilbert is seeking for new sources of revenue and leverage their well known brand name. CIO,Bob Stetzel is aiming to set information technologies priorities: Option 1: Should they invest in full featured ERP(Enterprise resource planning) package? Option 2: Take other steps that would more quickly yield tangible results.

Mcfarlans Strategic Grid

High
Factory Improve companys performance and/or reduce costs. Strategic Improve core operations of business and generate strategic options to improve state and performance of company. CRM Marketing & Advertising to target the required segment. Best breed approach for IT strengthening platform Turn-around Exploit new technologies to provide strategic opportunities. Inventory turn-around system Emergency system for peak surges High

Operational impact

SCM(Supply chain management) Higher quality service and backup

Support Support day-to-day business operations.

Low

Feedback system. Employee Management. Access to current IT technologies.

Low

Strategic Impact

Position of Vermont Teddy Bear (VTB) on the Mcfarlans Strategic Grid

VTBs current system is placed in Support Quadrant. Core transaction processing infrastructure is quite strong for meeting its operational needs. Good practices in password and recovery mechanisms. purchased packages (few regularly updated) to offer optimal functionality. have custom built standalone applications all integrated via a complex web of middleware (business logic mostly undocumented) If the company implements efficient, well organized enterprise IT architecture, it will be placed in Strategic Quadrant. It serves as a robust platform for the companys changing business requirements and support their long-term strategic and operational needs. It is a long term strategy. It would take at least a year for the employees to get familiar and accustomed to the new system.

Three business challenges that could be helped by improving one or more IT capabilities

1. Improper accounting system.

2. Lower Operational Capabilities. 3. Issues in serving large customer volumes.

1. Improper accounting system

VTB faces challenges in accounting systems responsible for order-entry, sales and inventory management. Lots of issues are related to data management and data accuracy on day-today basis. IT capability that would help: Finance and Accounting Solution : replace their current application and huge portions of middleware by introducing a comprehensive solution. Benefits: 1. Accuracy in accounting. 2. Improved cash flows. 3. Better decision making.

2. Lower operational capabilities

The raw materials and finished goods are procured from vendors around the world. To maintain efficient flow of goods and enhance its operational capabilities , IT capability that would help: Supply Chain Management Solution : It helps in : 1. Customer requirement processing. 2. Purchase order processing.

3. Inventory management.
4. Goods receipt and Warehouse management. 5. Supplier Management/Sourcing.

3. Issues in serving large customer volumes

VTB has different product lines and customers all around the world that look for customized gifts and products.

To enhance relationship with customers by faster order processing and improving online customer experience, IT capability that would help:
Customer Relationship Management Solution:

Benefits:
1. Higher sales through cross selling and up selling products. 2. Improved productivity by elimination of unproductive activities.

CEO John Gilberts highest priority over the summer

To find new sources of revenue and ways to leverage the VTB brand.
Methods to achieve the priority:
By venturing into new market segments. Ensuring stability and reliability of e commerce platform especially at peak times. Coordinating marketing, forecasting and production across the product lines. Improving customer relationships that could aid the marketing strategies of the company Improving the Supply chain management to enhance operational capabilities.

CIO Bob Stetzels highest priority over the summer

To modernize and standardize the IT systems to support evolving business model
Methods to achieve the priority :
By understanding functionalities of existing IT system through proper documentation. Eliminating of unwanted complicated middleware. Removing Incompatible applications. Adopting Best Breed Approach: Instead of buying a single ERP package buy separate packages that offered close to optimal functionality. (As the companies cash reserves are limited and cannot afford single ERP package. )