1-888-JUNK-VAN Case Preparation



Marcus Kingo, founder of 1-888-JUNK-VAN, started operating its waste collection business in 2008 which rapidly grew in just a year’s time thereby required organizing its business process with a cost-effective IT system that would minimize information handling errors and retain its customer base. He realized the need to implement a fast, simple, reliable & affordable IT system to fit his virtual business model and organize his growing business.

Problem/Issue Statement

The key problem in this case is that as the business grew, the operational complexity, inefficiency & errors became a routine which led to decrease in customer satisfaction. Some of the symptoms negatively impacting the operations were due to the time consuming process of fixing the database errors by data clerk, contacting helpers and money collection, mistakes in customer contact information, forgotten e-mails, manual calculations of staff payroll and billing errors which lead to low customer service quality and loss of customers.

 

The scope of the problem includes every aspect of its business operations considering his virtual business model that does not allow for any physical office space, a flawed IT support system negatively impacts all processes and employees. Due to the company’s poor design of the IT infrastructure system and its inadequacies, personnel cannot efficiently devote their time to their daily tasks.

 

Situations Assessment

The context of the problem is looking at the inefficiencies that are apparent within JUNK VAN’s current virtual business model. Currently, the business runs in a structured manner with two call center operators, one data clerk, three drivers, and three helpers. The customer’s job requests come in via phone and later the information would be entered into a custom-built MS-Works database. From there, information would be communicated via e-mail to the morning and evening operators and ultimately to the drivers. Mr. Kingo wanted to maintain this virtual business and eventually move into franchising and growing. However he would like to have a central database and eliminate the manual process of e-mailing internal information.

 

The decision criteria to consider include the cost of the various alternatives to their current business model with MS-Work & the flexibility and ease of using the new IT infrastructure to be implemented as Kingo & his staff do not possess high level of IT knowledge and are not adaptable to changes within the industry. Other criterions discussed in the case are having vendor support and ability to implement this change at the earliest.

List of Plausible Alternative Courses of Action & Evaluation of Alternatives:

The possible alternatives mentioned in the case along with its evaluation are as follows:

1.  Microsoft Access Database: Upgrading from MS-Works to MS-Access would be affordable with each license costing $179 per computer.  A Microsoft Access platform would create one unified database that would replace the need for a data clerk to send out accurate details to morning operators as well as the task of drivers using templates to send information to the data clerk.  This solution would most likely be cost effective, depending on which option was selected, and could probably be implemented in a short time period. 

If Access was installed locally in several computers, Kingo could complete the installation himself within a few weeks however without allowing any remote access.  It could be installed on a shared server so the database could be accessed remotely, but Kingo would need to study the technical information in detail which would be time consuming or take professional assistance separately which would add a cost element in its operation.  The number of licenses in this situation would depend on the number of users working on the program concurrently. Hence this was not really an ideal solution in the future if the business kept expanding rapidly.

2. Custom application:  This web-based system is built as a completely customized application for the business. It would meet requirements of a central database and provide remote access as well as provide some basic functionality. It could be built within 4 weeks at an upfront cost of $2,000 and maintenance cost of $60 per hour, however with no exact knowledge of how much maintenance would be required.

A customized application would have the benefit of ideally solving all of the company’s IT requirements, such as automating e-mails and provide a central database that could be remotely accessed. However implementation of this option would be time consuming & the total cost would be difficult to estimate due to inability to predict how much maintenance would be required. Also quotes provided to JUNKVAN do not include data migration. Although this web based option would allow for remote access and meet functionality requirements, Kingo would not be able to assess whether the developer understood the business needs and whether the application is user friendly. Since there is a high potential for misalignment of requirements, future rework and support can become costly making this option a questionable choice. 

3. Google Docs:  The online application allows quick creation and sharing of documents. It allows up to 10 free user accounts to create text documents, spreadsheets, and slide-based presentations.  Many individuals can simultaneously work in one file in a collaborative environment. This option is low in cost, easy to use, supports different user profiles, and could be implemented quickly.

While the implementation of this option is inexpensive and timely (considering if the company opts to use the small business option for $5 a month), and the collaboration and functionality would accommodate most of business requirements, it would not eliminate the problems accompanying management of a large database in a single excel spreadsheet. The database function could not be cross-referenced and all employees would still need to use one large spreadsheet with all data visible to all users.  Additionally, Google Docs does not have a formal customer support structure & has a potential security and sustainability concerns which need to be considered carefully. Hence this option is not that feasible for JUNK-VAN's business needs.

4. Platform as a Service:  This option, very similar to Google Docs, is delivered on a cloud-computing infrastructure and would provide network capacity as well as some basic functionality on demand through the Internet. Users could utilize common applications, build their own unique applications using a shared computing platform that is provided and hosted by a third party. The application is relatively easy to use and requires only three days to implement. Service package ranges from $300 to $600 per month depending on how much storage space and how many user licenses and applications are needed. Long term contracts are not required and service can be canceled or expanded at any time with a one month’s notice.
 

Platform as a Service could most likely meet all of the company’s IT needs and be available to do so within a timeframe as short as under a week. However this solution would require more hands-on IT knowledge to build forms and connect tables, which Kingo himself may not be knowledgeable enough to handle however he could use external IT services to overcome this obstacle. Before making a decision, Kingo needs to understand how much of a platform he wants and how much he is willing to pay. Any further customization to be done in the future to meet the company’s needs could cost $180/hour fee, therefore it is in his benefit to have a very good plan and design the requirements based on the easiness in the trial he observed with the sales representative.

5. Enterprise Resource Planning System: The ERP system is built around a central database that could be accessed remotely and integrate every aspect of the business processes like purchasing, sales, customer service, etc. The implementation cost is extremely high as licenses cost about $2500 per user per year with start-up fees being approximately the same as the complete annual license charge. License fees might even be higher considering that the estimates were for larger firms.

 

This option would potentially address the IT problems suffered by the company through a central database, though it is not completely clear that an ERP system could be applicable to the company itself.  Furthermore, the ERP system had finance & manufacturing modules which may not be useful to JUNK-VAN’s specific business needs as well as any future needs as the company and industry grew. The excessive costs and rigidity of the system indicates that an ERP system would not likely address the company’s key problem.

Recommendation

Based on the above alternatives, a logical and quality recommendation is that JUNK-VAN upgrade from MS-Works to a Platform as a Service as it will help in the best resolution of its current problems in IT system.  Using a Platform as a Service model would allow the company to meet all of Kingo’s desires for a new IT system such as automated e-mailing and a remotely accessible central database.  Although the new system would require more IT knowledge than an already established system like MS Access, Kingo was fairly certain based on the demonstration from one of the vendors that he would be able to perform the requisite setup tasks himself.  The option is slightly more expensive than some of the other alternatives, but its viability in the long run by being fully customizable will save the company any fund needed to update from an outdated system.  Vendor support for PaaS is much better than other options like Google Docs and as the firm expands to other areas through franchising this customer support will be very helpful in accommodating new employees.  The PaaS architecture should minimize errors, mitigate time delays, and allow for the custom needs that the company’s situation demands. 

Presentation

For the purpose of presentation, I would highlight the current problem faced by JUNK-VAN & further provide a balanced perspective of all the alternatives and give equal weight to each of the choices. In this case I would use a tabular format to explain the pros & cons for each of the alternatives along with the weights for the different criterion useful to the company as per Kingo’s ideal IT solution. The consulting group should determine which factor, whether it be cost, ease of implementation, or product flexibility, which is the most important aspect in the decision making process.  Only by choosing one or two variables as the most significant factor can the consulting team evaluate which solution would best meet 1-888-JUNK-VAN’s needs. This type of presentation will ease the decision making process. I would also highlight, when making the IT system choice, that while it is great to have control of one’s business, Mr. Kingo will benefit from relying more on a robust business solution so that he can focus his efforts on applying his entrepreneurial skills and grow the waste collection business.