Dollar General Uses Integrated Software - Case Study Example

Dollar General Uses Integrated Software I.D. of the In this paper, the case study of Dollar General is discussed. The main emphasis of the analysis focuses on the company’s urge to use a new systems integration software suite. The company used Financials Suite software to integrate its transaction businesses and accounting operations. Dollar General is a company that operates mainly in the retail industry, and therefore its financial operations are most crucial. However, in this case analysis tasks, other aspects of systems integration have also been explored. For example, synchronization of the working of different legacy software suites and preexisting technology platform is a major challenge in the way of optimal systems integration. The paper helps in developing a suggestive roadmap for utilization more systems integration tools. Dollar General Uses Integrated Software Introduction In this paper, the different key issues around Dollar General’s IT integration will be discussed on a question answer basis. The discussion will help in developing a deeper understanding of the Dollar General case study. Furthermore, theoretical emphasis will focus on systems integration for developing a better understanding of the topic in general. The overall quest of enterprise integration will also be explained in certain specific contexts, as raised in the case study related questions. Discussion 1. Explain why the old, nonintegrated functional system created problems for the company. Be specific. While analyzing Dollar General’s requirements and the business issues it faced, a case analyst should first examine its sector or industry of operation. Although Dollar General primarily operates in retail industry, it embarks on a variety of processes and tasks. These business processes and tasks involve warehousing and selling of food products, fast moving consumer goods (FMCG), apparels and fashion products, etc. However, processes that involve buying and selling of homes (and related financial tasks) are much more complicated and transaction dependent. Therefore, the company’s operations were drastically diversifying and they were rapidly growing as well. Examining more specifically, it can be stated that the company was operating various department-wise information systems. Examples included separate payroll system, separate asset management system and related electronic ledgers, area-wise auditing and sales processing systems, and so on. Now, specific emphasis on specific information systems called for a huge synchronization interface. Otherwise, the company was supposed to hire highly skilled IT staff members for managing every store and every branch of the company’s every department. What is more, increasing size of the company called for more reports to be generated and submitted everyday. Increased number of purchase orders across different product lines and geographical locations added gravity to the problem. According to Shervani et al (2007), it is very difficult for any firm to handle an increasing number of nonintegrated systems. A high level and wholesome “forward channel integration” is necessary so that the transaction costs can be decreased or at least managed effectively (Shervani et al 2007, p. 646). This has been the case with Dollar General too, where the management decided to apply the principle of systems integration for controlling the increasing transaction costs and IT expenditures. Otherwise, the old nonintegrated framework would lead to increased risks of system failure and drastic rise in maintenance overhead. 2. The new system costs several million dollars. Why, in your opinion, was it necessary to install it? With regard to cost considerations, one time but long term investment is always comparatively hassle free. The reason is that one time investment does not give rise to necessity of repeated investments. Moreover, processing overheads and procedural downtime are considerably decreased, which helps in saving both time and money. In the case of Dollar General, preexisting nonintegrated systems were causing chronic, continuous, and unorganized IT spending. Also, different legacy applications called for a diversified IT team with experts in different technologies. With increased number of transactions taking place everyday, the nonintegrated systems gave rise to a cumbersome and large IT framework. The potentiality of system failure was looming since workload was high and reporting requirements were approaching saturation. For example, data from sales department could not be automatically synchronized with the data of payroll management so that proper incentives could be given to the high performing sales persons/departments. A separate sales report form the IT department had to be issued which would then be forwarded to the human resources manager, who would then hand it over to the payroll or accounts manager. Large but one time investment in systems integration would integrate the different information systems across the different departments. This would result into lesser number of transactions calling for fewer interdepartmental updates. So, while choosing systems integration, the management considered the benefits of applying the principle of simplicity. The new system from Lawson Software was going to create simpler but faster channels for information flow across the company. According to Wolff and Sydor (1999, p. 36): “The more functions incorporated under an integrated system, the fewer nonintegrated systems would be necessary, thereby reducing the need for an interface engine.” So while simplifying a cumbersome business process framework, holistic systems integration appears to be a very practical solution. Next is the principle of knowledge sharing (Turban et al 2006, pp. 455-460). The main aim of implementing this principal is enterprise integration. Nonintegrated systems not only give rise to differences in legacy technologies but also they create communication gaps (Gold-Bernstein and Ruh 2005). For example, if the accounts department uses Windows operating system and the human resources department uses Macintosh operating system, then compatibility issues might arise while sending encrypted text files from variety of systems to another. If people across departments start to fail or delay in effective intercommunication due to reasons like the one mentioned insofar, then inconsistencies in organizational behavior and culture are inevitable. So in the case of Dollar General, adopting systems integration was necessary for overall enterprise integration too. And the new system had the potential to bring about integrative management and functionality throughout the company by facilitating knowledge sharing. 3. What other software should Dollar General consider to reduce its costs? According to the case study, Dollar General implemented Lawson Software’s Financials Suite. Indubitably, this was a clever step. Instead of going into process specific intricacies, the company sought to synchronize its finances. Majority of the business processes of Dollar General involved financial transactions or transference of related reports and business intelligence data. The Financials Suite could thus be directly used in almost each and every department of the company. Therefore, the Financials Suite would primarily reduce the costs of implementing and maintaining accounts data, distributing them, and managing even the different EDI interfaces. However, some other options can be explored along with the Financials Suite. For instance, systems integration software like the PowerTerm Host Publisher (from Ericom Software) can prove to be very helpful. This software helps in unified processing of transactions done across different technology platforms (Capterra 2014). This means that if Dollar General can implement this software, then the company might be enabled to run different legacy applications simultaneously. Besides, the WebEDI software suite can help in bringing together different EDI technologies and interfaces for better organized transactions all across the Internet (Capterra 2014). This software has thus got the potential of further decreasing the transaction costs. So Dollar General can explore the prospects around implementing WebEDI too. In sum, the company’s decision to implement Lawson Software’s Financials Suite is a commendable measure, and applications like PowerTerm Host Publisher and WebEDI can bolster the existing integration framework all the more. 4. Another product of Lawson is Services Automation. Would you recommend it to Dollar General? Why or why not? Lawson Software has a vast array of products that can be implemented for diverse corporate usage and purposes. Contextually, Lawson’s Services Automation software suite can prove to be highly assistive for Dollar General’s organizational purposes. This software application does have an integrative role since it helps in developing a common interface engine for managing both financial and IT projects (Business Wire 2003). Therefore, in combination with the Financials Suite, Lawson’s Services Automation will provide a very strong integrating mechanism that will adjust transaction management as per the company’s IT infrastructure. Moreover, automation may help the company to control its requirements of hiring highly skilled technical staff. The reason is that automation will help in minimizing manual labor and increasing communications between different systems and subsystems even without human agency. Conclusion Systems integration is an important area of research which is closely related with business intelligence, business administration, and corporate control. In the case of Dollar General, systems integration appears to have been correlated with key business principles like the principle of simplicity and the principle of enterprise integration. Although a versatile systems integration software (such as the Financials Suite) can fulfill several corporate requirements, certain tasks like managing diverse legacy applications can be accomplished with a few more specific software applications like WebEDI, Services Automation, etc. References Business Wire (2003). Lawson Services Automation Provides New Approach for Managing Business and IT Projects for BMW Financial Services. Retrieved on 14th August 2014 from http://www.businesswire.com/news/home/20030701005621/en/Lawson-Services-Automation-Approach-Managing-Business-Projects#.U-ochPmSxZE Capterra (2014). Top Integration Software Products, Arlington: Capterra, Inc. Retrieved on 14th August 2014 from http://www.capterra.com/integration-software Gold-Bernstein, B. and Ruh, W.A. (2005). Enterprise Integration: The Essential Guide to Integration Solutions. London: Addison Wesley Shervani, T. A., Frazier, G., & Challagalla, G. (2007). The moderating influence of firm market power on the transaction cost economics model: An empirical test in a forward channel integration context. Strategic Management Journal, 28, 635-652 Turban, E., Leidner, D., McLean, E. and Wetherbe, J. (2006), Information Technology for Management, Hoboken: Wiley Wolff, D. S., & Sydor, K. (1999). Information systems strategy development and implementation: a nursing home perspective. Journal of Healthcare Information Management, 13, 29-40 Read More