Capstone Case
BA479/CS480/MCMT479: Managing Information Technology for Business Strategy
The following case is designed to help you apply some of the concepts you have
learned throughout the course. Read the case material individually. Then, as a group,
discuss the questions at the end of the case. Be prepared to share your recommendations
with the class along with your supporting reasoning.
Acme Rocket Sled Manufacturing Incorporated
Each week, a group of senior leaders at Acme Rocket Sled Manufacturing
Incorporated (ARSMI) meets to evaluate the company’s performance and to address any
issues that may arise. The group is made up of the President / CEO, the Vice President
for Operations, the Chief Financial Officer (CFO), the Director of Engineering, the
Director of Human Resources, and the Director of Sales and Marketing. Most of these
employees have been with ARSMI for many years. You have recently been hired as
Director of Production and are a member of this group.
At this week’s meeting, the group has finally admitted that declining profits,
discovered at several previous meetings, are not an exception but rather an increasingly
serious trend. The group is now keenly aware that ARSMI is falling further and further
behind its competitors. In addition, personnel turnover rates have become unacceptably
high as experienced engineers and other valued employees leave to join ARSMI’s
competitors. The Vice President for Operations has repeatedly expressed her frustrations
about the unavailability of essential information about ARSMI production operations,
including resource costs. During your new-employee orientation, you were told that a
Sled Production and Reporting System (SPRS) exists, but that it is a “standalone”
computer that requires extensive manual input of data. As such, the information in the
system is outdated and unreliable.
The rocket sled manufacturing industry is highly competitive. Twenty years ago,
Acme was the undisputed leader in the industry, accounting for over 70 percent of all
domestic rocket sled sales. Since that time, however, Acme has lost market share to key
competitors, despite growing demand for rocket sleds. In addition, Acme’s operating
margins and net profits have declined. Acme’s competitors are not only able to integrate
technology-based improvements into their sleds more quickly, but also seem to produce
completely new, substantially improved rocket sled designs at a pace ARSMI cannot
match.
The ARSMI rocket sled production center was a state-of-the-art facility when it
was constructed in 1968. While the facility contains no plant-wide computer network,
PC workstations have been purchased for those employees who critically need them, such
as those in the accounting and finance departments. In addition, a shared workstation is
available through which employees can gain Internet access. The Internet workstation is
located at a central point in the plant and is connected to the Internet via a dial-up
connection to an Internet Service Provider (ISP). Members of the mobile sales force
currently have no network remote access into any ARSMI systems.
In a meeting approximately six months ago, ARSMI’s leaders realized that the
company lacked a well-defined strategy for competition. The group believed this was a
serious impediment to effective operations and profitability. In an effort to correct this,
ARSMI went through an extensive strategy development process. Their new strategy is
as follows:
Mission Statement: Acme Rocket Sled Manufacturing Incorporated will become the
market leader in worldwide Rocket Sled sales.
Strategy: We will achieve our mission by producing the highest quality Rocket Sleds
available. We will differentiate ourselves from our competitors by ensuring that our
sleds consistently outperform all others on the market. In addition, we will provide
exceptional, on-site service, to include rapid parts replacement. ARSMI will strive to
maintain close ties with our customers and rapidly integrate their needs and desires
into new and existing rocket sled models. In addition, ARSMI is committed to our
employees. We will strive to create a safe and pleasant work environment and to see
that employees are treated fairly. Rewarding employee innovation will be a key ACME
goal. Finally, we will ensure that all our operations proceed on a firm ethical
foundation.
Case Questions:
1. What kind of competitive strategy or strategies has ARSMI developed?
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2. What tool might ARSMI use to determine if their information technology is
supporting their strategy? How might it be used? (Hint: Porter)
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3. What are some steps ARSMI will need to take in order to realistically expect to
achieve its goals using this new strategy?
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4. Would it be advisable for Acme to hire a Chief Information Officer? What
benefits might a CIO bring to ARSMI and what would the CIO be responsible for
doing?
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5. What specific types of cross-functional systems (CRM, SCM, ERP) might
ARSMI want to implement and why? What will they probably have to do first?
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6. Does a Computer Aided Manufacturing (CAM) system fit well with the new
ARSMI strategy? Why or why not?
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7. Why might ARSMI employees be leaving to go to work for its competitors? Can
information technology possibly help with the situation? How might the
leadership group find out?
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8. If you were to recommend that ARSMI install a computer network, what kind of
system would you propose (Mainframe, Midrange, PC-based Client/ Server) and
why?
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9. Could E-Commerce concepts be used to help support the new ARSMI strategy?
How? Specifically, how does the Internet fit in?
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10. The new ARSMI strategy contains the word “global”. What implications does
this have for the company’s organizational structure and its information
technology? Could Acme benefit by creating a virtual corporation? Why or why
not?
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11. If Acme Rocket Sled Manufacturing Inc. embarks on a major information systems
implementation, what are some of the personnel issues they will need to address?
Are there any obvious ethical issues?
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