3. Case Summary
Founded by John Sortino in 1981.
Offers 3 brands: Teddy Bears, PajamaGrams and Calyx Flowers.
Highly seasonal sales, peak volumes at Christmas, Valentines
Day and Mother’s Day.
Bob Stetzel Joined as CIO in November 2009.
Information system -a mix of homegrown and packaged
applications from many vendors knit together with middleware.
4. Summary..
Currently 7 IT experts working under Stetzel. They are domain
experts and are assets for company.
Incomplete IT architecture document existing in VTB.
Shadow applications developed by experts during urgent need.
Very Strong Core transactional infrastructure.
Three brands and four different channels
(retail, mail, phone, web) each supported by different software.
Decoding the Business Logic of Middleware was the biggest
challenge since most of it was undocumented.
2 extra employees were hired to keep the process operational.
5. Summary..
John Gilbert went to Toy Fair and found that people take
comfort in simple pleasures and family focus.
Improper marketing strategy.
Ultra simple toy Bilibo and Zhu Zhu pets gaining extreme
popularity.
Stetzel noted that marketing, forecasting and bundling of
products can be coordinated easily with better data integration
and analytical tools.
CRM can’t be helpful because most customers are buying
products as gifts for different market segments (mother and
girlfriends).
6.
Question 2
What is the overarching question faced by CIO Stetzel? By CEO Gilbert?
And, what are the sub-questions?
7. Umbrella problem faced by CIO Stetzel
To make a choice towards best use of funds towards
approaching to an efficient IT architecture before next peak
sales period.
Stetzel also wanted to make this shift towards efficient IT
platform gradual by having a better control at this shift.
8. Sub problems faced by Stetzel
Gathering hidden information about various IT applications
from silo members so that next employee lay out do not
hamper the IT shift.
Till the time VTB shift to entire new ERP package or if not make
that shift, there was a issue of managing the very cumbersome
middleware that linked VTB’s different IT platforms.
Rectifying problems in applications developed by former
employees of VTB.
9. Umbrella problem faced by CEO Gilbert
Raising spikes to counter two fold problem:
a) protecting market share by launching competitive
toys, increasing market penetration of Calyx flowers unit.
b) to speed up the deploy of new IT architecture for
optimizing VTB’s hybrid business model of three brands, four
channels.
10. Sub problems faced by Gilbert
Smoothing the peaks for pajama brand line as it has high lead
time.
Whether to make a shift from VTB’s trademark teddy toys to
electronic toys.
Improving marketing campaign as Stetzel pointed out the flaw
of mismatch between advertising message and target customer
segment.
12. Immediate Solutions
Outsource server load handling for spring peak to another
company.
Hire season professionals to iron out the software bugs.
Forecasting for the peak periods and maintain sufficient safety
stock for it.
Installation of RAID for parallel processing to increase
throughput as well as maintain stability.
13. ShortTerm Solutions
Retain employees with high knowledge company’s functions
through employee engagement.
Middleware reduction through customized system which
integrates all the various discrete modules into one single
system which is constantly maintained instead of “best breed
approach”.
How will this help?
It will use one single framework/language which will make it
easier for the user hence reducing complexity.
Initiate KMS(Knowledge Management System)- to retain
domain specific employee knowledge.
14. LongTerm Solutions
Improve the supply chain management system through
supply chain optimization.
Improve marketing functions, by conducting appropriate
market research and identification of target segment and
positioning for the product mix taking their individual target
segments and demands into consideration.
CRM, different for the respective segments, and also try to
maximize customer touch-points.
15. LongTerm Solutions
Data collection, and data mining through the deployment of a
data warehouse and comprehensive analysis of the data
through which we can identify the buying trends for the
various customers and prioritize high value customers. Also
“peak period demand” can be handled better, as by analyzing
the data in tandem with statistics we can get an idea of the
times when demand increases, and we initiate adequate
capacity planning measures as a form of contingency
planning.
Employees engagement through training to retain employees.
17. Look for alternatives for handling peak traffic during the
festivities, for the short-term.
Also try to setup a comprehensive in-house IT infrastructure
such that it acts as a base for future, more ambitious goals such
as collecting, mining and leveraging data.
Look for new product development, a whole new segment,
rather than tweaking the same old product over and over again
18. This would reduce their seasonal revenue fluctuations, if they
could come up with a product that would appeal to the target
segment throughout the year rather than just during specific
periods.
Now that the bull has been tamed, its time now to ride it and
data analytics is the way forward. Examples galore.
