Service Request SR-kf-013.doc _236K_ - Student Of Fortune

					SERVICE REQUEST SR-KF-013                                                                1

                               Service Request SR-kf-013

  Anthony Nguyen, Christopher Chambers-Graves, Hagar Rafalovitch, Jonathan Peirce, and

                                     Angela Lloyd

                                     June 21, 2010

                                 University of Phoenix

                               Business Systems/BSA 375

                                  Michele Gamberutti
SERVICE REQUEST SR-KF-013                                                                        2


In this paper, we will plan a project for a Frequent Shopper Program for Kudler Fine Foods. We

will discuss the goals of the program and the measures of the project’s success. We will make

recommendations for a successful implementation of the program.
SERVICE REQUEST SR-KF-013                                                                             3

                                        Service Request SR-kf-013

As a higher end specialty store, the customers of Kudler Fine Foods do not shop at Kudler for the

most basic products that can be found at any supermarket chain. Although the uniqueness of their

offerings allows them to target a very specific clientele with very specific tastes, the individual

uniqueness of those tastes make it difficult for Kudler to offer special promotions that will appeal

to a broad range of its existing customer base.

       To increase customer loyalty and give individual customers special offers that will suit

his or her individual shopping habits and the reasons he or she shops at Kudler, the store has

decided to track electronically an individual customer’s shopping habits. This plan promises

many rewards but also poses ethical and security related challenges.

       Despite these challenges, this paper intends to promote the notion that with a few simple

technological steps, this promotion can turn into a great source of revenue for Kudler, and that

these necessary steps can easily be implemented into the Kudler system.

                                         Existing situation

               Currently at Kudler, each store has three department managers and no general

manager and each department manager is responsible for the items they purchase, their quality

assurance and for finding these items at the best price. This creates a situation in which each

store has different items in stock potentially confusing customers who because of the chain

nature of Kudler fine foods expect to find the items they normally shop for at one store in

SERVICE REQUEST SR-KF-013                                                                           4

       Currently, Kudler stores track only what items and quantities are bought at its different

stores and the changes in consumption related to seasonal influences. Kudler uses this

information to predict optimal stock levels to best serve its customers and save costs. Kudler also

conducts promotions and gives its customers special offers, but those offers are uniform and are

given on products from across the store on the basis of general consumption.

       When a loyal Kudler customer conducts his or her shopping at one of Kudler stores in the

current system, no information is gathered about them, his or her shopping habits, favorite items,

repeat purchases, frequency of shopping at Kudler, and reaction to specials offered by the chain.

The customers simply check out at the register, pay for their purchases and disappear. This way

of operating misses out on the opportunity presented to Kudler to learn more about their

customers to serve them better, and by doing so, gain their loyalty or deepen it.

               Department managers in all stores are currently encouraged to communicate and

cooperate with each other but there is no system in place to facilitate, regulate and ensure that

cooperation. In the absence of such a system, cooperation is done manually and depends greatly

on a specific department manager’s will and ability.

       Stock level management with projection to future sales is one of the most critical areas in

managing store operations, currently, stock levels decision-making is done in managerial

meeting with past sales being the indicator. This decision-making process is based on the past

two to three years of sales levels and managers instincts and projections, the whole process could

greatly benefit from computer generated accurate sales data categorized by store, department,

season (holidays included), recent changes in shopping behaviors and other parameters.
SERVICE REQUEST SR-KF-013                                                                      5

       “Managers should be aware that the traditional inventory valuation process is seriously

       flawed. Aside from being costly and time-consuming, this approach does not generate

       any information that can be used to make intelligent decisions. Managers looking for

       an alternative to this process should select a method that does not use GAAP thinking

       in making operational decisions, views inventory as an investment in material, focuses

       on improving the performance of inventory as an investment, and constantly strives to

       reduce inventory” (Srikanth, 1996, para 1).
          SERVICE REQUEST SR-KF-013                                                           6

                                            Data Flow Diagram of Current Processes

        Purchasing                                    Accounting
                               Orders                                                Advertising

             Purchase Orders



                                             Excesses and Write-Downs

        Inventory                                   Forecasting                      Merchandising and
       Management                                                                    Pricing
       SERVICE REQUEST SR-KF-013                                                                          7

                                             Diagram of Current Processes

                                                 Kudler Fine Foods


Purchasing           Advertising               Accounting                  Forecasting            Merchandising
                                                                                                  and Pricing

                                        Statement of Scope and Goals

              A new project is being developed to increase customer’s loyalty and give individual

       customers specials offers that will fit his or her shopping habits. The company will begin a new

       project that will implement a customer purchase tracking system for sales and marketing

       departments. The system will track customer purchases to understand spending habits. The

       company can understand their regular customers a little more, and know why they come to

       Kudler Fine Foods. Knowing what the customers’ likes and what they buy often can allow the

       company to be prepared for when that customer comes. When the customer walks into the store
SERVICE REQUEST SR-KF-013                                                                          8

the employee would see that it is a regular and know what they want to buy and can get the items

ready for him or her when they come up to the counter and not have to wait as long to get his or

her items he or she came to purchase. The program will offer rewards to customers for shopping

with their rewards card. The program will help Kudler refine its processes and offerings to better

satisfy its customers.

       The goals for this project are to have the customer purchase tracking system project

within the budget and completed by the due date to ensure everything else is ready to promote

the project. Having Kudler Fine Foods communicate effectively within the team and with the

stakeholders will make sure that everyone understands the new project that the company is

planning to promote to its customers. Effective communication will aid in a smoother transition

of the project to where it needs to go.

Making sure the customers’ satisfaction with the new customer purchase tracking system is high,

is one of the biggest goals that will never go away.

                                Supporting Measures for Success

  To determine the success or failure of the Kudler Fine Foods Frequent Shopper Program

project, tangible measures must be outlined. Several factors will help to make the determination

including the IT time and budget constraints and the desired increase in revenue and customer

loyalty. An increase in customer loyalty will prove that the program is creating a better

experience for the customer, which is also an important indicator of the program’s success. The

project’s success or failure also can be analyzed to determine the best way to plan future


   The budget will greatly determine what type of technology can be implemented to fulfill the

project’s requirements. In many projects, the budget is more flexible and can grow to
SERVICE REQUEST SR-KF-013                                                                          9

accommodate further requirements. Staying within the constraints of the budget is extremely

important for this project as Kudler Fine Foods is not a large business and will not be able to

absorb the expense of going over budget as well as a larger corporation would. This makes

staying within the budget one of the most important factors that will determine project success.

   The ultimate goal of the program is to increase revenue and customer loyalty. Attracting new

customers is also a goal of the project. Between the increase in repeat customers and the

attraction of new customers, a large increase in revenue is expected. Kudler Fine Foods expects

the increase in revenue to pay for the implementation of the program over a short time. After the

expense of implementing the program is made back, any increase in revenue is profit. This

indicator will be the most important for this project.

                                  Suggestions for improvement

            “The fact is that today’s marketing requires a mixture of Old Economy and New

            Economy thinking and action. Companies need to retain most of the skills and

            practices that have worked in the past. But they will also need to add major new

            competencies and practices if they hope to grow and prosper in the new

            environment. Marketing should play the lead role in shaping new company strategy”

            (Armstrong & Kotler, 2005, pp. 14-5).

       To gain its customers’ loyalty and receive more of their business, Kudler must introduce

a system in which information is gathered about each individual customer every time he or she

conducts his or her shopping at a Kudler store. This information must be gathered on a per

customer basis and be shared between the stores in the chain.
SERVICE REQUEST SR-KF-013                                                                        10

       A system must be put in place that will analyze each customer’s shopping trends. Trends

such as favorite items, favorite times of the day and week to shop for each group of items,

reactions to Kudler special offers, favorite store to shop at and whether or not the customer shops

at more than one store regularly, the proximity of a customer’s favorite store from his or her

residence, etc.

   This system should acquire the information automatically and instantly at the moment of

checkout at any Kudler register.

       The system should store all customer information and sort it out into a few report formats

that will be decided on in advance and be automatically sent to all store managers, all department

managers, and the general manager of Kudler periodically. In addition to these periodical reports,

there should be report formats that can be accessed by a manager on-demand as well as access to

any individual statistic a manager may want to pull up and review. The system should also flag

items most recently purchased in general and automatically sort customers by which of these

products relate to their shopping habits.

       “Brands are increasingly realizing they need to engage in a discourse with customers and

in particular listen to their views” (Poynter. 2008. p. 1)

                           Ethical and security related considerations

       Implementing this type of a system poses a few ethical and security related

considerations that must be addressed. The first is customer privacy. When a customer shops at

Kudler, he or she does not expect to have his or her privacy invaded and may even react

negatively to it. Because of this reason protecting the privacy of its customers has to be Kudler’s
SERVICE REQUEST SR-KF-013                                                                        11

first and utmost concern when implementing a system basically aimed at gathering all the

information possible about individual customers.

       Another major issue is maintaining the security of the private information gathered. This

system will contain customer names, addresses, and other personal information and protecting

this information from being compromised is essential. If this information were to become

compromised the result would be not only the loss of customer trust, but also may result in

expensive litigation and damage to the Kudler brand.

       Another concern is the effect of implementing such a system may have on customer

loyalty. The company must decide whether to make the system an “opt-in” system or an “opt-

out” system; in other words, whether the system will automatically include all customers unless

they specifically opt-out of the program, or gather information only on those customers who

have knowingly chosen to opt-in to the program. This is a tough decision for Kudler as they must

weigh the risk of alienating customer versus the benefits of gathering a larger amount of

information and the ability to appeal to a larger customer base.

                 Suggestions for system characteristics and implementation

            “In order to produce superior value and satisfaction for customers, companies need

            information at almost every turn. Good products and marketing programs begin with

            a thorough understanding of consumer needs and wants” (Armstrong &

            Kotler, 2005, pp. 4-1).

       This should be an opt-out system; Kudler should gather all the information it can about

its customers while giving them an easy way to opt-out. The risk that this type of system will
SERVICE REQUEST SR-KF-013                                                                          12

pose to customer loyalty is outweighed by the benefit of offering those customers special

promotions and offers individually tailored to his or her habits and needs.

       The system should gather the information through first offering all customers a store

customer loyalty card that will award him or her with coupons and points he or she can use for

gifts or discounts on future purchases, all the while attaching the customer’s information to his or

her customer loyalty card and tracking the card’s use. The system should also gather customer

information by tracking customer orders and credit card transactions in the store.

          The services of a security consulting company should be attained to set up and manage

the frequent shopper appreciation system’s security needs and to ensure that customer

information does not become compromised. Kudler should hire a consulting company that also

offers customer privacy protection consulting services to ensure the privacy of its customers is


       The system should automatically build a customer profile for each individual customer

based on his or her shopping history then divide the customer pool into groups based on those

profiles. The system should then compile a periodic report according to a predetermined period,

which consists of each group’s favorite products in recent history and on historical trends for that

season. These reports should then be reviewed by management and be analyzed to compile the

next periods’ promotions and special offers for that group.

       Each group of customers should receive a complete set of promotions and special offers

decided upon for that specific group by Kudler’s management staff. When a customer enrolls

into the store loyalty card program, he or she can select his or her preferred means of

communication for these promotions (standard mail, e-mail, etc.), and their promotional package
SERVICE REQUEST SR-KF-013                                                                         13

will be delivered to them via their indicated preferred means. Other customers who have not

enrolled into the store loyalty card program will receive their package via standard mail.

       The new system requires a database be established allowing remote access to this

database from the stores point of sale systems. This database will be set up with a Microsoft

Access front end, and a MySQL back end. The system needs to achieve a 98% uptime in the

first six months of operation and 99% uptime in the months following that. Uptime will only be

measured during business hours. This new server needs to have sufficient hard drive capacity.

This capacity will be monitored and should remain at less than 85% full. The data mirrors itself

to a backup server, which will weekly backup the data to tape.

       The processor and memory that the Information Services Division selected should be

adequate. A monitoring system will be developed to observe memory and CPU usage. The ISD

will use an audit log to track changes to any information that is related to financial information.

This audit feature provides a detective control and is important. The team will review this log on

a monthly basis for anomalies.

                                       Benefits of new system

          “Most people, sports teams, and organizations are trying to improve their

          performance. Improving performance can be a challenge: a requirement for survival,

          or the key to improved life, profitability, or reputation” (Turban, Volonino, &

          Pollard, 2010, para. 1,3).

       By providing customers with promotions and special offers, they have been deemed

likely to take advantage of based on their past shopping behavior, Kudler raises the odds of

repeat and increased business from its loyal customers and can foster increased organic growth.
SERVICE REQUEST SR-KF-013                                                                         14

By large, customers prefer one-stop-shopping; by luring them into the store to purchase one of

their favorite products on a special promotion sent by the system, Kudler also increases the

likelihood of these customers purchasing other items around the store or even fulfilling their

entire shopping needs for the week at a Kudler store.

       The profits from other items bought by customers while shopping for a special promotion

item sent to them by the system will pay for the cost of the promotion and the cost of the system.

Furthermore, by catering to a customer’s individual taste and preference Kudler ensures

customer loyalty by making him or her feel pampered and catered to, and giving them reasons to

come back (their favorite items on promotion).

       This system will also save Kudler on advertising. Currently, Kudler spends money on

advertising its promotions and special offers to the public. Sending special promotions to a

specific group of people, many of them via e-mail, is a cheap advertising option. Targeting

customers according to items they have shown a historical preference for raises the odds of the

advertising campaign bearing fruit and generating both business and revenue for Kudler.

       Nurturing a loyal customer base will not only benefit Kudler in the short term but also

create a long-term revenue stream. This will also allow Kudler to receive valuable constructive

criticism from a loyal following as well as afford Kudler the freedom to experiment with new

methods and products on people who have shown to be Kudler’s core consumer base.

                                      Determination of Requirements

    In order to determine the system requirements, the users and other stakeholders must weigh

in on the functionality that will make their job easier and make them more efficient. Listening to

the users and responding to their needs is necessary to create the correct type of program. The
SERVICE REQUEST SR-KF-013                                                                          15

program may be perfectly written but will not be successful if it does not perform the appropriate

tasks. All stakeholders must participate in the requirements gathering to ensure that the

functionality of the new system is based on the needs of the company.

   Several different methods will be used to determine the requirements for this project. The first

method will be a Joint Application Development (JAD) workshop. All of the stakeholders and

several key users will be gathered together to share their ideas and desires for the new system.

Each idea will be noted and taken into consideration by the analyst when determining the final


   The next step will be a survey that will be conducted on a voluntary basis with the current

Kudler customers. Each customer will be asked two to three questions upon checkout. This

feedback will be noted and evaluated by the analyst. This will help to gauge customer interest

and the likelihood of participation in the program. Customers can also share their input for how

they would like the program to work and what types of rewards they would expect for being a

loyal customer.

                                 List of Confirmed Requirements

       The opt-out system is mandatory because Kudler will gather all the information it can

about its customers while giving them an easy way to opt-out. The system will gather the

information by offering all customers a store customer loyalty card that will award him or her

with coupons and points and it will also gather customer information by tracking customer orders

and credit card transactions in the store.

          The security for this service is mandatory because no customer will want their

information taken if there is no security to ensure that their information does not get out. Kudler
SERVICE REQUEST SR-KF-013                                                                          16

should hire a consulting company that also offers customer privacy protection consulting

services to ensure the privacy of its customers is maintained.

       The database that will be established to allow remote access to this database from the

stores point of sale systems is mandatory because that data that is collected need to be stores

somewhere. If there are a lot of loyal customers that uses the new program then a large database

will be needed. The processor and memory is mandatory, but as long as it is capable of running

the system getting the best processor and memory is optional.

       The monitoring system to keep track of what the customer buys is mandatory, because in

the purpose of this project is to keep track how what the customers buys the most so we know

what kind of food they like the next time they come. However the monitoring system to the

customer’s personal information is optional because if the data is inputted into the system then

that is where the data will be. The monitoring system over the customer’s personal information

will be used to find anyone who is trying to steal that information. This audit feature is

mandatory because it provides a detective control and will track changes to any information that

is related to financial information.
SERVICE REQUEST SR-KF-013                                  17

                            Proposed System Process View
SERVICE REQUEST SR-KF-013                                                                     18

                                  Functional Allocation Modeling


               Security                                                   Hardware

 Monitoring System

                Point of Sale

 System Upgrades

               Rewards Database

              Customer Information

Monitoring System
                   Sales Data

                                                                   Human Computer Interface

                Rewards Program

                Customer Information
 Sales Data
SERVICE REQUEST SR-KF-013                              19

                            Preliminary Design Model
SERVICE REQUEST SR-KF-013                                                                          20

                                   Design Trade-off Approach

Kudler main focus should be on the customers because they are the main priority in the business.

This focus will have some tradeoffs among cost, schedule and performance. To keep customers

around, Kudler’s performance to their customers must be a good one. This means the employees

should treat the customers with the up most respect. Since the performance will require people to

be there at different times of the day, the schedule will play a big role in it. Having people there

when it is the busiest will help make their performance better toward their customers, because

the customers are not waiting as long if there was less people working. If there is too many

people schedule when they are not needed it will cut into Kudler’s cost. Cost is the biggest out of

all three because without cost there will be no food or employee to work for Kulder’s Fine Food.

As profits increase new technology will be an added to help increase efficiencies, cut costs, and

labor. While cutting cost, but keeping the same performance it is important to not lose sight of

what is really important, the customers. When Kudler begins to expand its operations they will

also need to expand their employees as well as their performances.

                                Design Process and Specifications

The process has been defined, and will incorporate the following design specifications.

Design Specifications:

      The form of the software will take on a Human Centered Interface.

           o The screens will be done in colors that do not interfere with the colorblind to do

               data processing.

           o The interface will allow for single sign on credentials to be provided to the

               software from the Domain server to reduce the need for multiple passwords.
SERVICE REQUEST SR-KF-013                                                                       21

         o The interface will be designed to be shown at a resolution that is readable for

             most employees, but contains enough information to not require more screens

             than is necessary.

     The hardware requirements will be based on three aspects.

         o Availability will be a priority, the hardware must be strong enough to provide

             constant uptime, speed, and stability

         o Confidentiality will be a priority as the legal requirements are stringent on the

             personal information contained.

         o Integrity will be a priority and will be implemented using several methods

             including a certificate authority system and hashing. These will provide

             confidentiality when transmissions occur over the VPN and will also provide

             some level of nonrepudiation.

     The network changes will be minor and will mainly be involve the certificate authority,

      hashing, and transport of invormation over the VPN.
        SERVICE REQUEST SR-KF-013                                                                       22

                                           Physical Model of the System

                                              Kudler Fine Foods

                                             Customer Rewards

        Hardware            Software                HCI            Internal Systems              Customer

        Upgraded         Enhanced Screen          Speed and         Tighter Security            Single Sign-on
       Functionality        and Colors           Performance           Protocols                 Credentials

      99% Uptime            Increased            Faster Data        Data Integrity             Confidentiality
                           Readability           Processing          Assurance                   Protection

Quick Fulfillment of   Reduced Errors by      Fast Turnaround of    Efficient utilization of     Increased Customer
  User Request            End Users               Data Input         Network Resources               Confidence
SERVICE REQUEST SR-KF-013                                                                 23


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Turban, E., Volonino, L., & Pollard, C. (2010). Information Technology for Management.

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