I. Intro & Background
The Automated Service Kiosk, or ASK for short, was conceived by a group of
people trying to improve the modern retail stores’ customer retention. To do this, the
group first had to determine the main causes for loss of customers. “Customer Service is
on the top five list of reasons why businesses fail.”1 Frustrated by waiting for a sales
associate who might not be the most competent or capable to answer questions, dealing
with rude associates, and requiring more detailed information are common problems we
face when shopping. Therefore, an in-store customer service terminal which could serve
as an alternative source of knowledge and help for customers was proposed.
II. Problem
Poor customer service in retail stores is a cause for low customer retention.
Standing around waiting for impolite or incompetent associates has conditioned us to
loathe visiting stores for information. Some people bypass them altogether by researching
and ordering online. For many, however, this is not an acceptable solution. Either lacking
the knowledge required navigating a website, or simply wanting to go to the actual store,
many people are forced to rely on assistance from a human being. However, since sales
associates can be difficult to find or incompetent, human assistance is inferior.
III. Product Objectives
Consisting of a number of touch-screen terminals and an integration server, the
ASK provides customers and stores alike benefits not currently available. Customers can
1
Belmont University: Center for Entrepeneurship 09/22/2005
[http://forum.belmont.edu/cornwall/archives/003452.html ]
search for, compare, view sales of, locate, and comment on products. The ASK can
explain certain terms used, for example, defining what memory does for a camera, and
why more is better. Stores can track customer queries and compare them to sales records,
letting them modify inventory and store placement as needed. Integration with the store
inventory database is required, as all information will be queried from it.
IV. Methods of Achievement
The ASK will require much testing and preparation. The hardware, including the
integration server and the kiosks will be tested to ensure everything remains in working
order under a heavy load. The network infrastructure will be tested to determine
bandwidth sufficiency. Software components will be tested as they are added to ensure
functionality, and integration testing will be performed at every level of development.
Beta testers will be enlisted to ensure functionality and ease of use.
A prototype will be developed during Phase 1. The prototype will consist of a
working graphical user interface simulating the in-store experience. Integration with a
mock inventory database server will be complete, as well as the ASK server and
predictive analysis database.
V. Management
The organization structure the ASK project will vary with Phase. For Phase 0,
which has passed, the basic management structure consisted of a General Manager, a
Project manager, an expert in the field of marketing, and an expert in Computer Software
design. In addition, the following specialists were used: research, marketing, hardware,
software, finance, and a web master. For Phase I, the experts (computer software and
marketing) have been eliminated but the rest of the team is still intact. Phase II, the initial
team will remain the same, however, the following assistance will be required: two
software engineers, one senior software engineer, two technical writers, one quality
assurance manager, one GUI developer, and one marketing manager. Phase III, the final
stage, will require the initial team as in the previous Phases, but the additional hires will
be replaced. In their place the following will be hired: ten customer service
representatives, ten technical support staff, five production staff, and one legal specialist.
VI. Schedule
Phase 0 of the ASK project will range from 8-25-2005 to 11-16-2005. It will
consist of the initial team selection, project definitions and planning, as well as initial
research and feasibility determination. At the end, SBIR Phase I will be complete. This
phase has already passed.
Phase I of the ASK project will range from 12-13-2005 to 5-4-2006. It will
consist of additional team changes, prototype design, marketing research, production of
the initial lab prototype, and the SBIR phase II. This phase is currently in production.
Phase 2 of the ASK project will range from 5-10-2006 to 5-8-2008. The
deliverables for Phase II will consist of product design specifications, an updated
management plan, testing & evaluation plan(s), a working product model including
software and hardware integration, and a marketing plan contract.
Phase III of the ASK product will range from the end of phase II (5-8-2008) to 15-2010. It will consist of typical post-production actions such as product maintenance,
customer service, technical support, and patches & updates.
The following figure (Figure 1) illustrates a summary of dates for the Phases for
the ASK project as previously illustrated:
2005
ID
Task Name
Start
Finish
Duration
Q4
1
ASK.0 Phase 0
8/29/2005
12/8/2005
74d
2
ASK.1 Phase1
12/13/2005
5/4/2006
103d
3
ASK.2 Phase 2
5/10/2006
5/8/2008
522d
4
ASK.3 Phase 3
5/2/2008
1/5/2010
438d
2006
Q1
Q2
Q3
2007
Q4
Q1
Q2
Q3
2008
Q4
Q1
Q2
Q3
2009
Q4
Q1
Figure 1
VII. Justification
The target customer for the ASK project, Best Buy, currently holds the market
share in its genre of stores. With a 2004 yearly revenue of approximately $469 million,
and a net profit of nearly $8 million,2 Best Buy can certainly invest in the ASK product.
The average current rating on resellerrating.com is 2.04 out of 10.3 Best Buy desperately
needs an increase in customer retention and satisfaction, and the proposed solution of the
ASK can provide it. Kiosk sales are growing worldwide, as indicated by Figure 2.
Figure 2
2
3
http://www.msnbc.msn.com/id/4637841/from/RL.3/
Reseller Rating [http://www.resellerratings.com/seller1823.html
Q2
Q3
2010
Q4
Q1
VIII. Budget
The budget for the ASK project is broken down in to Phases in accordance with
the schedules as defined above. The main source of funding will be generated from an
NSF SBIR award, $100k for Phase I and $750k for Phase II. Other income will be
available in the form of small business loans, and preliminary contracts from Best Buy or
other customers.
Phase 0 will have no budget.
Phase I, which utilizes the staffing requirements as outlined in section V. Phase I
will also require software and hardware necessary to develop a working prototype. The
staffing requirements will use $45,100, and the resources required will use $20,300.
Phase II, which involves management, testing, and a working product model, will
use $128,400 for resources, and $1,150,500 for the required staff.
Phase III, which involves post-production staff for customer service, maintenance,
and upgrades, will use $28,500 for resources, and $2,000,000 for staffing. Phase III, as
indicated in section V. will require a much larger staff than the previous Phases.
The total budget and funding for all four Phases are outlined in figure 3:
Cost
Phase 1 Resources & Staffing
$65,458
Phase 1 Funding
-$100,000
Phase 2 Resources & Staffing
$2,395,884
Phase 2 Funding
-$750,000
Phase 3 Resources & Staffing
$2,021,239
Phase 3 Funding
Total Development Cost
To be determined.
$3,632,581
Figure 3
A break even-analysis has been done to assess return—over investment for the
ASK customer, as indicated in Figure 4:
Break-Even Analysis
Cost per Unit
$20,119
Price per Unit
$50,000
Profit per Unit
$29,881
Units needed for Break-Even
Units sold (weekly)
Break-Even Time
122
$4
$31
Figure 4
As can be inferred from the graphic, an initial investment of $3.63 million will be
required. After 122 units are sold at a cost of $50,000, this initial investment will be
returned. After 244 units are sold, the customer will begin making a profit over
investment.
___________________________________________
Hill Price, Company President
Subject:
ASK Budget Proposal
Date:
March 29, 2006
From:
ASK Production Team
To:
Hill Price, Company President
This budget proposal provides an informative look into the budget of and
resources required by the Automated Service Kiosk project. The total development cost,
as indicated in the figure blow, is $3,632,000, with assistance from federal research
grants. Other small business loans will be requested, as well as an initial investment from
the proposed customer.
Cost
Phase 1 Resources & Staffing
$65,458
Phase 1 Funding
-$100,000
Phase 2 Resources & Staffing
$2,395,884
Phase 2 Funding
-$750,000
Phase 3 Resources & Staffing
$2,021,239
Phase 3 Funding
Total Development Cost
To be determined.
$3,632,581
The investment required will ensure a reliable, efficient product to be produced
within the timeframe as outlined in this paper.