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Lego: Embracing Change by Combining BI with a Flexible Information System

INTRODUCTION

The LEGO Group is a privately held company based in Billund, Denmark. The company is still owned by the Kirk Kristiansen family who founded it in 1932.The LEGO Group is engaged in the development of children's creativity through playing and learning. Based on the world-famous LEGO® brick, the company today provides toys, experiences and teaching materials for children in

more than 130 countries. Our head office is in Billund, Denmark, but we have subsidiaries and branches throughout the world, and LEGO products are sold in more than 130 countries.

PROBLEM STATEMENT

 In 2003, The LEGO was facing tough competition from imitators and manufacturers toys. In an effort to reduce costs, The Group decided to initiate a gradual restructuring process that continues today.

In 2006, the company announced that a large part of its production would be outsourced to the electronics manufacturing service company Flextronics. The decision to outsource production came as direct consequences of an analysis of Lego’s total supply chain. So, in order to reduce labor costs, manually intensive processes were outsourced, keeping only the highly skilled workersin Billund.

Lego’s workforce was gradually reduced from 8300 employees in 2003 to approximately 4200 in 2010.

Additionally, production had to be relocated to places closer to its natural markets. As a consequence of all these changes, Lego transformed itself from a manufacturing firm to a market-oriented company that its capable of reacting fast to changing global demand.

Lego’s structuring process, coupled with double digit sales growth in the past few years, has led to the company’s expansion abroad and made its workforce more international. These changes presently supply chain and human resources challenges to the company. The supply chain had to to be reengineered to simplify production without reducing quality. Improved logistics planning allowed Lego to work more closely with retailers, suppliers, and the new outsourcing companies. Therefore, HR department also need play more role inside the company. So, in order to solve this solution, LOGO choose move to SAP business suite software.

SWOT Analysis
Strength	1.Incorporates educational features to develop key skills in young children 2. Strong brand name across the world in over 55 countries 3. Many places use cars from the Automoblox range to demonstrate modern car assembly techniques to children 4. Encourages goal oriented play and problem solving 5. Strong product portfolio 6. Lego based theme parks are extremely popular tourist destinations 7. The brand has also diversified into video games, TV and movies, merchandise etc 8. Top of the mind brand recall owing to TVCs and extensive advertising
Weakness	1. Imitation of products and brand name is a concern 2. Intense competition means high brand switching and also loss of market share to online games
Opportunity	1. Organize competitions in schools 2. Diversify more into other segments 3. More branding exercises to reach out to newer segments
Threats	1.Video games 2.Cartoon channels 3.Internet 4. Outdoor games 5. Other similar companies
Competition
Competitors	1.Automoblox 2.Meccano 3.VTech 4.Leapfrog

QUESTION

1.  1.    Explain the role of the database in SAP’s three-tier system

 SAP’s business suite is based on a flexible three-tier client-server architecture that can easily be adapted to the new Service-Oriented Architecture (SOA) available in the latest versions of the software. In the first tier, a client interface-a browser-type graphical user interface (GUI) running on either a laptop, desktop, or mobile device-submits users’ requests to the application serves. The applications servers send the processed requests to the database system-receive and process clients’ requests to the database system-the third tier-which consists of one or more relational databases. SAP’s business suite supports database from different vendors, including those offered by Oracle, Microsoft, MySQL, and others. The relational database contain the tables that store data on LEGO’s products, daily operations, the supply chain, and thousands of employees. Managers can easily use the SAP query tool to obtain reports from the databases, because it does not require any technical skill. Additionally, the distributed architecture enables authorized personnel to have direct access to the database system from the company’s various locations, including those in Europe, North America, and Asia.

 2.  Explain why distributed architectures are flexible.

Distribute architectures are flexible because they adapting company operations to these  changes required a flexible and robust IT infrastructure with business intelligence capabilities that could help management perform better forecasting and planning. As part of the solution, LEGO chose to move to SAP business suite software. SAP AG, a German company that specializes in enterprise software solutions, is one of the leading software companies in the world. SAP’s software products include a variety of applications designed to efficiently support all of a company’s essential functions and operations. LEGO chose to implement SAP’s Supply Chain Management (SCM), Product Lifecycle Management (PLM), and Enterprise Resources Planning (ERP) modules.

3: Identify some of the business intelligence features included in SAP’s business software suite.

 SAP’s Supply Chain Management(SCM) included features such as supply chain   monitoring and analysis as well as forecasting, planning and inventory optimization. In SAP’s Product Life-cycle Management(PLM) module enables managers to optimize development processes and systems. SAP’s Enterprise Resources Planning(ERP) modules includes among another applications, the Human Capital Management(HCM) application for personnel administration and development.

SAP’s business suite is based on a flexible three tier client-server architecture than can be easily adopted to the new Service-Oriented Architecture(SOA) available in the latest version of the software. The first tier, a client interface which a browser type running on either a laptop, desktop or mobile device. The second tier is application servers that receive and process client’s requests. In the third tier, it is consists of one or more relational database.

SAP’s business suite supports database from different vendors, including those offered by Oracle, Microsoft, MySQL and others.

 4. What are the main advantages and disadvantages of having multiple database in a distributed architecture? Explain.

Advantages	Disadvantages
Mutiple database contains the tables that store data on products, daily operation, supply chain and thousand of employees.	The additional overhead of these transactions can be a performance penalty when the total amount of data in the network is small. Users also see slower performance when accessing user data that is not local.
Managers can easily use the SAP query tool to obtain reports from the database because it does not require any technical skill.	Increased the use of database space. E very table must exist in every database. When the number of tables is very large, the amount of space used this way can be significant. Administrators must use database storage parameters to size tables and reduce database space consumption.
Distributed architecture enables authorized personnel to have direct access to database system fronm the company’s various locations including in Europe, North America and Asia	Administrators must keep the schemas of all databases synchronized and ensure that the network is configured to take optimal advantage of the distributed-database environment in terms of availability and performance. Although database backups are more flexible in a distributed-database environment, multiple databases add complexity to the backup process.

Cloud Computing

Introduction

Cloud computing is a type of computing that depends on sharing computing resources rather than having local servers to handle applications. In cloud computing, the word cloud is a metaphor for "the Internet”. So it’s mean cloud computing is a type of Internet-based computing where provide varies services  such as servers, storage and applications which are delivered to an organization's computers and devices through the Internet. . Cloud services include the delivery of software, infrastructure, and storage over the Internet based on user demand. Cloud computing has four essential characteristics which are  elasticity and the ability to scale up and down, self-service provisioning and automatic de-provisioning, application programming interfaces (APIs), billing and metering of service usage in a pay-as-you-go model. Cloud computing structure allows access to information as long as an electronic device has access to the web. This type of system allows employees to work remotely.

Problem Statement:

Should Businesses Move to the Cloud?

SWOT Analysis:

Questions:

1. How does Salesforce.com use cloud computing?

Salesforce.com provides customer relationship management and other software applications using the software-as-a-service business model over the Internet. Cloud computing, also known as on-demand computing, eliminates the need for a business to make large up-front hardware and software investments and reduces the time so can implements new programs. Salesforce.com costumers don’t have to purchase or maintain any hardware nor install any special operating systems, database servers, or application servers. Other than the monthly user subscription fee, businesses reduce their licensing and maintenance fees. Users access the Salesforce.com cloud through a standard Web browser or a mobile handheld device. A business using the Salesforce.com’s cloud easily scaling their system as they increase or decrease their workforce as they adjust the number of subscriptions to the cloud.At the same time, Salesforce.com offers some customization of its software so a business can adjust the software to unique business processes. It offers three types of clouds: Sales cloud, service cloud, and the custom cloud. The sales and service clouds help businesses improve sales and customer service. The custom cloud provides a venue for customers to develop their own applications for use within the broader Salesforce network

2. What are some of the challenges facing Salesforce as it continues its growth? How well will it be able to meet those challenges?

Challenges include: Increased competition both from traditional industry leaders and new challengers hoping to replicate Salesforce’s success. Expanding its business model into other areas to ensure the system is available 24/7 with no outages. Defending the system against security breaches Salesforce is answering the first two challenges by partnering with Google and combining its services with Gmail, Google Docs, Google Talk, and Google Calendar to allow Its customer to accomplish more tasks via the Web. Salesforce.com and Google both hope that their Salesforce.com for Google Apps initiative will make further growth in on-demand software. By partnering with Apple, Salesforce.com can expand its applications to iPhone users who will have access to their data anywhere any time. Through its partnership with Amazon.com, Force customers can tap into Amazon.com’s cloud computing services that can handle “cloud burst computing” tasks that require extra processing power or storage capacity. Salesforce opened up its Custom Cloud application development platform to other independent software developers and listed their programs on its AppExchange. The company introduced a development tool for integrating with Facebook’s social network that allows customers to build applications that call functions at the Facebook site. Small businesses can go online and download software applications, some add-ons to Salesforce.  In order to grow its revenues to levels that industry observer s and Wall Street eventually expects, Salesforce will need to change its focus from selling a suite of software applications to providing a broader cloud computing “platform” on which many software companies can deliver applications.To ensure system availability, Salesforce.com provides tools to assure customers about its system reliability and also offers PC applications that tie into their services so users can work offline.

3. What kinds of businesses could benefit from switching to Salesforce and why?

Small to medium-size businesses are probably the most likely ones to switch to Salesforce.com because of cost factors and the lack of having in-house resources to provide the same level of computing capacity. Businesses that are trying to increase the sophistication of their computing capabilities could also benefit from switching to Salesforce as long as the two are compatible. Businesses that rely on smart customer management would benefit from using the tools available at Salesforce.com. Also companies that have small sales and marketing teams can benefit from the software-as-a-service business model.

4. What factors would you take into account in deciding whether to use Saleforce.com for your business?

Businesses should assess the costs and benefits of the service, weighing all people, organization, and technology issues. Does the software-as-a-service applications integrate well with the existing systems? Does it deliver a level of service and performance that’s acceptable for the business? Does the SaaS fit with the business’ overall competitive strategy and allow the company to focus on core business issues instead of technology challenges?

5. Could a company run its entire business using Salesforce.com, Force.com, andApp Exchange? Explain your answer.

Depending on the type of business, a company probably could run its entire operations using Salesforce .com, Force com, and App Exchange. All four major functional areas of a business are supported: Sales and Marketing, Manufacturing and Production, Finance, and Human Resources. There are dozens of applications available to fully support all of these areas. It would be a matter of integrating the software from Salesforce.com and App Exchange with any existing legacy systems within the business.

Conclusion :

Over the past few years, emergence of cloud computing has notably made an evolution in the IT industry by putting forward an "everything as a service" idea .Cloud Computing is of growing interest to companies throughout the world, but there are many barriers associated with its adoption which should be eliminated.

Meeting 1 :UPS completes globally with information technology

Question 1

What are the inputs, processing and outputs of UPS’s package tracking system?

Answer

Inputs of UPS’s package tracking system is scan bar-coded label attached to a package which contains detailed information about the sender, the destination and when the package should arrive.

The processing of UPS’s package tracking system is before the package is picked up, information from the “smart” label is transmitted to one of UPS computer centers in Mahwah, New Jersey or Alpharetta, Georgia and sent to the distribution center nearest its final destination.

The output of UPS’s package tracking system is customers download and print their own labels using special software provided by UPS or by accessing the UPS Web site.

Question 2

What technologies are used by UPS? How are these technologies related to UPS’s business strategy?

Answer

UPS has used the dispatchers in computer center to download the label data and use special software to create the most efficient delivery route for each driver that consider traffic, weather condition and the location of each step. By using the software, UPS estimate it save 3 million fewer gallon of fuel of every year. This technology related to UPS’s business strategy which is best services and lowest rates.

Moreover, to accomplish business strategy which UPS want to increase cost savings and safety, UPS are train driver to use “340 Methods” to optimize the performance of every task from lifting and loading boxes to selecting a package from a shelf in the truck.

UPS has also used handheld computer called Delivery Information Acquisition Device (DIAD) which can access wireless cell phone network. Drivers can know their task by handheld, the DIAD has a function which is automatically captures customers signatures.

Question 3 

What strategic business objective do UPS information system address?

Answer

The strategic business objective that UPS information system address were provided best customer services to the customers. Every year UPS spend more than $1 billion to maintain high level of customer services.

UPS also focus on improve the efficiency of the performance. UPS invest and use a lot of systems or software to increase the company performance. For example, Package Tracking System, UPS using this system to monitor and re-route package throughout the delivery process. The UPS can always improve operational efficiency.

The others strategic business objective is lower cost. UPS was keeping costs low to compete with competitors like FedEx. By using information system in UPS, it can reduce cost of operation.

Question 4

What would happen if UPS’s information systems were not available?

Answer

If UPS’s information systems were not available, UPS will face some problems. The process of providing information to customer will become slow. The customer cannot receive the information rapidly.

The operation of UPS will also become slow. Because UPS is using technology and information to monitor and control the operation when information system does not available, it will effect to the operation of the organization.

Moreover, UPS need to spend more on cost. The cost to deliver the product and monitor the performance of driver will increase when information system does not occur.