Information Systems Strategic Plan For BVDC v3

De La Salle University
Ramon V. Del Rosario College of Business

Master of Business Administration
Baclaran Vendors Development Cooperative:

Information Systems Strategic Plan
Submitted in Partial Fulfilment
of the requirements in MIS535M
1st Term, A.Y. 2015-2016
Aure, Patrick.Adriel
Nito, Orenz
Parana, Mark
Santos, Norman Kenneth
Quillope, Vicente Paulo
Dr. Nelson Celis

Contents
1.0
About the Company..............................................................................................................4
1.1
Company Profile...............................................................................................................4
1.2
Objectives and Goals of the Company..............................................................................4
1.3
Organizational Structure...................................................................................................5
BVDC
2.0
Balanced Scorecard..............................................................................................................6
3.0
Business Model Canvas......................................................................................................10
Key Segments............................................................................................................................10
Value Proposition.......................................................................................................................11
Key Partners...............................................................................................................................12
Customer Relationships.............................................................................................................13
Key Activities............................................................................................................................14
Key Resources...........................................................................................................................14
Channels....................................................................................................................................16
Cost Structure............................................................................................................................17
Revenue Streams.......................................................................................................................18
Summary of analysis How can BVDC go from Good to Great?............................................19
4.0
Value Chain Analysis..........................................................................................................20
5.0
Five Forces Model..............................................................................................................29
Competition and Rivalry............................................................................................................29

Bargaining Power of Customers................................................................................................30
Bargaining Power of Suppliers..................................................................................................30
Threat of Substitutes..................................................................................................................30
Threat of New Entrants..............................................................................................................30
6.0
Strategic Alignment Maturity Model..................................................................................33
Communications........................................................................................................................33
Competency/Value Measurement..............................................................................................33
Governance................................................................................................................................34
Partnership.................................................................................................................................34
Scope & Architecture.................................................................................................................34
Skills..........................................................................................................................................34
7.0
IT Project Recommendation...............................................................................................36
7.1
Simplicity Collect (www.simplicitycollect.com)............................................................36
7.2
Cost Analysis...................................................................................................................38
7.3
Reconciling Recommendations with Strategic Analysis................................................40
8.0
Implementation Plan...........................................................................................................41
Phase 1: Adopting and Optimizing Operations using Simplicity..............................................42

Phase 2: Rolling out Simplicity to existing users for refinements.............................................42
Phase 3: Campaigning BVDC Online for new customers.........................................................42
2
BVDC
Phase 4: Review of Simplicity...................................................................................................42
BVDC
1.0
About the Company

1.1
Company Profile
Baclaran Vendors Development Cooperative is committed to utilize the cooperative

resources, strengthen advocacy and good governance thru capability building to attain total
human development.
October 1976 when the vendors of Mariano Nocom Market were given a notice to leave
the premises because they were told that there will be a renovation and construction
With the help of the Cuatro Cantos, they were able to conduct a Pre-Membership
Education Seminar (PMES) in a weeks time for 250 members to form a cooperative.
A total of Php 34,000.00 was contributed by its members and was the initial capital of
BVDC. After its registration, the operations immediately started.
March 1977, Mariano Nocom Market was closed for renovation. It was the primary
reason why the vendors have no stalls or spaces to sell and operate business and it was a burden
for the cooperatives operation for 2 years.
In 1979, the cooperatives operation was in full bloom and was able to get a total of Php
200,000.00 from member contributions alone. The amount increased as the years pass, from Php
200,000.00 to Php 700,000.00 in 1980 to Php 2M in 1982 to Php 3.5M in 1982 with 700
members.
In July 16, 1987, the first building of BVDC was inaugurated by Senator Neptali
Gonzales. In the year 2005, BVDC has a total of Php 75M Assets.
VISION:A leading cooperative that continuously responds to the socio-economic welfare
and development of its members
MISION:BVDC. is committed to maximize the utilization of the cooperative resources
and strengthen advocacy and good governance to attain human development.
1.2
Objectives and Goals of the Company
To institutionalize the capability building of the cooperative.

To intensify the cooperative good governance and advocacy within the area of operation.
To enhance cooperative business operation.
BVDC
2.0
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1.3
Organizational Structure
BVDC
4.0
Balanced Scorecard
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One way of checking if the existing operation of a company is performing well is by

using a Balanced Scorecard. In this manner, we can see a clearer picture if the company
needs boosting to better perform and improve old ways.
Financial
BVDC
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On its financial aspect, it got an average of 3.67 out of 5. Although they are doing well
with their finances, we believed that they need to expand their source of income, plan and
create revenue growth strategy to better sustain the needs on this area.
Customer
BVDC
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On Customer relations, we believe that they are doing well but they can still do better to
increase the average of 3.7.
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90.0 Internal Perspective
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8
BVDC
105.0
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110.0 With regard internal perspective, we believe that BVDC is performing very well. They
conduct trainings and seminars to improve their staff and also do assemblies that lets
other people involve meet to sit and discuss matters which needs attending to.
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114.0 Learning and Growth
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135.0 On the aspect of information technology, they have to improve their IT system to better
sustain and avoid future problems with regards members data.
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138.0 SUMMARY:
139.0
140.0 As a general comment, BVDC is still in the process of improving their system. There are
still lots of things to be done and they still have rooms to fill before they can generally
perform to their maximum level. They still need to improve their financial system, they
have to make policies to expand their revenue center. They have to have their office be
reconstructed or renovated as the space is quite small. They have to upgrade not only IT
system but also people involved in order to better serve their customer.
141.0
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BVDC
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BVDC
3.0
Business Model Canvas
172.0 The Business Model Canvas (BMC) is a useful strategic tool in analyzing BVDC
through the so-called nine building blocks. The following sub-sections dig deep on these
building blocks and offer recommendations.
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175.0 Key Segments
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189.0 The key segments of BVDC are primarily borrowers and depositors. At surface
level, they seem to service these segments well however, they can better tap the segment of
alternatives-to-bank users. The diagram below shows the recommendations for improving this
building block.
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11
BVDC
192.0 Value Proposition
193.0
194.0
195.0 In terms of the value proposition, as mentioned before, BVDC is servicing its
existing target segments in an acceptable manner. However, to drive new segments which can
increase revenues, it is important to create an online interface. The diagram below shows the
recommendations for improving this building block.
196.0
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12
BVDC
199.0 Key Partners
200.0
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202.0 In analyzing the annual report of BVDC, we can see that it works quite well with
its primary key partners, specifically the regulatory agencies (CDA, Department of Finance, etc.)
and its investment partners. However, it lacks value-generating partnerships with technology
vendors that can allow BVDC to innovatively serve new target segments. Thus, the diagram
below shows the recommendations for improving this building block.
203.0
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13
BVDC
207.0 Customer Relationships
208.0
209.0
210.0 BVDC establishes its customer relationships quite well with its existing customers
(personal assistance, seminars/events). However, what pulls down their scores in this building
block is their lack of relationship-building activities that can pull new members in. The diagram
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BVDC
214.0 Key Activities
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228.0 As can be seen in this
diagram, managing BVDC entails many
activities. Although the overall score of this
building block averages to around 3.5/5, the
lack of efficiency due to manual processes
and lack of IT integration affects loan
management and and effective collection. As
such, the diagram below shows the
recommendations for improving this building
block.
229.0
15
BVDC
230.0
231.0
Key Resources
232.0
233.0 The organization is able to generally manage its limited resources well, having a
score of 3.4/5. However, they can better improve efficiencies if they are able to address the issue
of manual database management and encoding of BVDCs debt and loans archives. The diagram
234.0
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BVDC
235.0
17
BVDC
236.0 Channels
237.0
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239.0
240.0 The primary channel of BVDC is only limited to its Baclaran office and satellite
branches. Although these channels can serve its existing customers well, the lack of convenience
in terms of having online channels limit efficiencies. As such, the diagram below shows the
recommendations for improving this building block.
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18
BVDC
246.0 Cost Structure
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250.0 Among BVDCs business model, its cost structure received the lowest average
scores primarily due to their provisions on loan collections. Upon analyzing BVDCs annual
report, from a mere PhP 350,000 allocation to allowance for bad debts, it had to re-budget it to
PhP 2,000,000 a red flag in terms of their ability to collect loans. This is very substantial,
given that PhP 2,000,000 in expenses serve as 10% of its total expenditures! This shows as well
in the organizations lack of cost-effective IT investments. As such, the diagram below shows
the recommendations for improving this building block.
251.0
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19
BVDC
254.0 Revenue Streams
255.0
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258.0 The good financial condition of BVDC shows that it derives just the right amount
of income from its target segments. It has acceptable interest income and service fees, which
serve as 60% of its total revenues. Other incomes complement BVDCs profits as well, such as
rental income, other fees, and other investments. However, should BVDC strive to gear for the
next level, it is important to expand the borrower and depositor base to increase its reveneues As
such, the diagram below shows the recommendations for improving this building block.
259.0
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20
BVDC
262.0 Summary of analysis How can BVDC go from Good to Great?
263.0
264.0
The analysis of BVDCs business model shows that it has been good in operating
and servicing its current target market segment. However, as we average BVDCs scores
across the nine building blocks, we reach the score of 3.1/5, which is good, but not great.
This means that the pitfalls of BVDC prevent the organization from being a truly great
one. Therefore, in the next strategic goals of BVDC, we should consider:
265.0
Addressing cost concerns of having a huge allowance for bad debts
Optimizing operational efficiencies (strive for automation and better database
management) given manual processes
Tapping new market segments to increase revenue via introducing online client
interfacing
21
BVDC
4.0
Value Chain Analysis
266.0 The VCA is a tool used to analyze internal firm activities. Its goal is to recognize,
which activities are the most valuable (i.e. are the source of cost or differentiation
advantage) to the firm and which ones could be improved to provide competitive
advantage. In other words, by looking into internal activities, the analysis reveals where a
firms competitive advantages or disadvantages are. The business that competes through
differentiation advantage will try to perform its activities better than competitors would
do. If it competes through cost advantage, it will try to perform internal activities at lower
costs than competitors would do.
267.0
268.0 M. Porter introduced the generic value chain model in 1985. Value chain
represents all the internal activities a firm engages in to produce goods and services. VC
is formed of primary activities that add value to the final product directly and support
activities that add value indirectly.
269.0
270.0 PRIMARY ACTIVITIES
271.0
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BVDC has an extensive database of potential and existing members, hence it has
no problems regarding the number of loans it receives annualy. This may be attributed to
its existence for a long time and the prominent cooperative in the area, this is a market
advantage for the cooperative over other cooperatives and potential threats its business.
Because of the number of members it has, BVDC has a good pool of deposits and such
amount is used as capital for its primary operations.
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BVDC
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In operations, BVDC has a long list of services that add value to its business.
Many of which are serving its customers with its primary business of loans and its many
classification. Additionally, the cooperative has various other services that are outside of
its primary business but are necessarily connected to what I does. These services generate
added value to its product.
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23
BVDC
324.0
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BVDC has a fairly good amount of distribution channels. Mainly, because most of
its clientele are in the Baclaran area, the main office is situated close enough to service
the area properly. An addition to its distribution channel, is their satellite office in the
Zapote area. This widens its serviceable area as this portion of the area is the far end from
its main office serviceable area.
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BVDC
344.0
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346.0
BVDC distributes flyers around its serviceable area and posts tarpaulins around
its office and selected areas. This gives the public information of the presence and
existence of the cooperative. This may also be attributed to a large amount of word of
mouth as BVDC has been servicing the public for a long time and has a good reputation
to its current members. Other ways of promoting the cooperative are seminars conducted
for its current and new members. These seminar tend to encourage the people to join the
cooperative because it gives then information on how well the service of BVDC is
compared to other financial options such as banks and loan sharks. Lastly, their social
activities promote good image to the public. BVDC has been conducting CSR activities
for quite some time and because of these actions the public views the cooperative as a
very caring company. Such view generally will give more value to its business.
347.0
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25
BVDC
360.0
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BVDC has good communications and information dissemination to its members

and other clients. Such service is a good way to keep the people in the know on whats
new with the cooperative, what kind of services it offers, and how they can avail of the
services. The cooperative also employs personal assistance through its agents in the
office, wherein the members and other customers may inquire anything about the services
of BVDC. CSR Activities that service its members also add value to the business. These
service gives the members free services which if they availed separately is very
expensive, yet BVDC provides them to its members as an added feature for being one.
The livelihood program is more on how the members of the cooperative will effectively
use their borrowed money.
391.0
26
BVDC
392.0
393.0
394.0
BVDC has plenty of seminar and other group oriented activities, all of which are
done in its own HR training facilities and seminar rooms. The cooperative has allotted
funds for the creation and maintenance of these facilities as it uses seminars and staff
development as a value adding proposition, hence it sees the value of these assets. Formal
accounting, is necessary for the generation of financial books in the proper format. Since
BVDC is a cooperative imbued with public interest, the government has a regulatory law
for cooperatives, hence requiring a formal accounting is a must. Not only is it a
regulatory requirement, it also is a good tool for the support of its activity in terms of
transparency with its operations. In collections, BVDC has a good number of collectors
in the field. These collectors conduct a door-to-door collection of loans and other
receivables for the convenience of its members. An added feature to its services is the
membership ID. This ID is in the database of members of BVDC, its a good tool for
processing the services of each individual member. Generally with this tool, everything
would be easily handled by the attending agent of the cooperative. Another point of
having it is to segregate the existing members from new applicants, as the cooperative
will only transact certain business services with current members.The careful planning of
27
BVDC
its business operations yearly provides a good foundation on how BVDC conducts and
facilitates its daily business operation.
395.0
396.0
397.0
Human resource is one of the most valuable support activities of BVDC, because
most of its activities require man power. The hiring, selection and development of its
human resource is vital to the success of the business. Since most of the services of the
operative is done manually, then human intervention is necessarily a key factor on how
the business operated. BVDC employs a great number of seminars which adds value to
its business, these are typically lead by the employees of the cooperative. Since seminars
are a vital portion of the operation of BVDC, the people who conducts them must
generally be knowledgeable and properly trained to conduct and facilitate these activities.
Other employees necessary, like the collectors, accountants, front-line agents, etc. are
also given priority. Hence, BVDC invests money in the development of these key
personnel.
28
BVDC
398.0
399.0
400.0
Technology for BVDC has been kept at a very minimal level. This is the
weakness of the cooperative. As it does not employ any other software aside from the
COPAS, BVDC is lacking in technological advancements which are readily available and
has been getting cheaper by the day. Also, BVDC has not been allocating resources to the
development or acquisition of more advanced equipment and software necessary to
support its primary activities to its full potential. The group would recommend to
improve this internal activity. The future vision is to achieve a level of technological
proficiency leveled with currently leading banks such as BDO. The implementation of
technology that would support its primary activities would definitely boost the value
adding potential of its primary activity. In fact, if such recommendation is followed,
technological advancements would necessarily be one of the primary activity that would
greatly influence the value of the products of BVDC. Having hassle free transactions
catered to its members would positively generate more revenue that will outweigh the
cost of purchasing these technologies.
29
BVDC
401.0
402.0
403.0
BVDC has a good procurement as a support activity. It necessarily supports all of

its primary activities with not much more room for improvement. The cooperative has a
healthy financial position as it generate a lot of revenue from its operation which in turn
supports its other non-revenue generating business processes. The cooperative has
partnerships with doctors and clinics necessary for its medical missions and services.
With regard printing of necessary print materials, the cooperative has readily available
contacts for printing.
404.0
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BVDC
5.0
Five Forces Model
412.0
413.0 The Five Forces Model, which was popularized by Michael Porter, is used to
analyse the prevailing industry structure and its impacts and implications to the operations of an
organization in the industry. The model looks into and takes into account five key forces within
an industry: (1) competition and rivalry; (2) bargaining power of buyers; (3) bargaining power of
suppliers; (4) threat of substitutes; and (5) threat of new entrants. These forces combine to shape
the structure of the industry, which then influences the decisions and actions of the organization.
The diagram below illustrates the interaction among the forces.
414.0
415.0
416.0
417.0
418.0 Using the Five Forces Model to analyse the cooperative sector, in general, and the
Baclaran Vendors Development Cooperative (BVDC), in particular, can provide some relevant
and interesting insights into how the organization can cope with the different forces in its
immediate environment. More importantly, the model can be used to draw up some basic
recommendations on how the organization can improve its internal processes vis--vis the
industry norms.
419.0
420.0
421.0 Competition and Rivalry
422.0
423.0 The prevailing competition or rivalry within the cooperative sector is assessed to
be medium. There are many cooperatives in the Philippines. In the Baclaran, Paranaque area
alone, there are several prominent cooperatives. These cooperatives include the San Dionisio
Credit Cooperative, which is considered to be one of the largest in the country. Some of these
cooperatives are multi-purpose cooperative, similar to the BVDC. Other types of cooperatives in
the area are market vendor cooperative and public transport association cooperatives. Members
31
BVDC
of the BVDC are also members of these cooperatives and are thus availing also of the services of
these cooperatives.
424.0
425.0 Bargaining Power of Customers
426.0
427.0 The bargaining power of customers (members) of the cooperative is assessed to
be low. BVDC has over a thousand members that are availing of its services, including loans and
rentals of retail space within its building. The members generally belong to the low-income
group and have very little financial options. These members are mostly market vendors, whose
main source of income is small-scale retail. Borrowing money from traditional and formal
money lending institutions, like banks, is possible for these people. However, this option is very
unattractive for many members of the cooperative since the interest rates and other requirements
are prohibitive.
428.0
429.0 Bargaining Power of Suppliers
430.0
431.0 The bargaining power of suppliers of the cooperative is assessed to be medium.
The main service that the BVDC provides is in the form of loans to its members. To do this
service, the cooperative sometimes needs to borrow from other public and private institutions to
raise the needed capital to finance this service. The cooperative also borrows money from banks.
However, borrowing from banks is generally done to retain or maintain the business relationship
that the cooperative has with these banks. Generally, these institutions offer a high interest rate,
which essentially could be expensive for the cooperative. Besides, banks are traditionally
considered competitors of cooperatives, although the two have different target markets.
432.0
433.0 Threat of Substitutes
434.0
435.0 The threat of substitutes to cooperatives is assessed to be high. BVDC basically
offers a moneylending service to its members. Although it has other services like savings and
retail space rentals, loans are its primary product. For this particular product or service, the
cooperative competes with many other moneylending channels, including traditional banks,
Indian and Chinese moneylenders, and other micro-financing institutions in the area. Moreover,
as a general practice, many resort to borrowing money from friends and relatives, which
essentially is another channel for the members of BVDC. The members of the cooperative are
thus likely to be borrowing money from these other moneylending channels, apart from the
cooperative.
436.0
437.0 Threat of New Entrants
438.0
439.0 The threat of new entrants to the cooperative sector, particularly in the Baclaran,
Paranaque area, is assessed to be low. Establishing a cooperative is very difficult. It requires a lot
of government or regulatory approvals, including complying with the requirements of the
Department of Finance, the Cooperative Development Authority, and the local government unit,
including the city hall and barangay office, where it will be established. Particularly in the
Baclaran, Paranaque area, it will be difficult to put up a new cooperative due to the prevailing
32
BVDC
environment and competition in the area. Similarly, since majority of the members of the BVDC
are its clients in the building space rental service, there is a small chance that other cooperatives
will be established in the area.
440.0
441.0 To summarize the assessment for each of the forces, the diagram below illustrates a colorcoded metric.
442.0
443.0
Threat of
New
Entrant
Bargaining
Power of
Customers
Competition
or Rivalry
Bargaining
Power of
Suppliers
Threat of
Substitute
444.0
445.0 This color-coded metric is defined using the following parameters:
446.0
High (RED) The force is assessed to be high when it is significantly impacting, whether
positively or negatively, the operations of the company.
447.0
Medium (YELLOW) The force is as assessed to be medium when it is moderately
impacting, whether positively or negatively, the operations of the company.
448.0
Low (BLUE) The force is assessed to be low when it is marginally impacting, whether
positively or negatively, the operations of the company.
33
BVDC
449.0
Not Applicable (GREEN) The force is assessed to be not applicable when it does not
have any implications to the operations of the company.
450.0
451.0 Based on the analysis using the Five Forces Model, the operations of BVDC can
be streamlined in order to make it more efficient and effective. Due to the high competition (with
other money-lending channels available to its members) that BVDC is facing, it needs to be more
proactive in liaising and communicating with its customers. This should primarily focus on
creating awareness, particularly on the products and services that the cooperative can provide.
More specifically, the cooperative can looked into the following basic recommendations:
452.0
1 Implementing a more streamlined operations to focus on the strengths of the cooperative
considering the prevailing market competition and environment.
453.0
2 Differentiating the products and services offered by the cooperative in order to make it
stand out vis--vis its competitors.
454.0
455.0
Implementing a client management system that keeps track of the cooperatives
members, particularly the services or products they avail or likely to avail.
34
BVDC
6.0
Strategic Alignment Maturity Model
456.0
457.0 Communications
458.0
459.0 BVDC doesnt have a designated IT department which supposed to manage
and/or control their IT infrastructure. Hence, constructive partnership between IT and business
itself cannot be established.Moreover, employees understanding with their IT solutions is below
average. People are isolated and limited only to their own job role
460.0
461.0 Competency/Value Measurement
462.0
463.0 IT metrics is not available in line with answers above. BVDC measures success
by their growth in terms of number of members as well as their reported income. Business plans
are created to be achieved within 5 years and being reinforced or modified annually.
464.0
465.0
35
BVDC
466.0 Governance
467.0
468.0 IT solutions can be implemented in the business as they have the capacity to do
so. Management of IT process need not to be accounted internally but rather outsourced. BVDC
has the ability to finance such project. Planning can be included in the current annual schedule of
BVDC. Planning committee will consist of all top management officers as well as representative
from the chosen IT solutions provider.
469.0
470.0 Partnership
471.0
472.0 IT solutions provider will back all expenses to the business and will serve as
external IT department. IT function will not have a seat at the business table and will be included
as basis for decision making. IT can be considered as critical process enabler to adapt
ecommerce banking which will contribute to further success of the business.
473.0
474.0 Scope & Architecture
475.0
476.0 ERP systems, as supported by IT service provider, will be installed and all
processes will be monitored at an enterprise level. IT will be able to assume a role supporting a
flexible infrastructure that is transparent to all business partners and customers All standards
within BVDC will be integrated to create process standards.
477.0
478.0 Skills
479.0
480.0 No necessity for all employees to be have the technical know how of the IT
function. Whole process will takencared of by IT solutions provider. Only selected employees
are needed to be trained as internal support for the IT function.
481.0
36
BVDC
482.0
483.0
484.0
485.0 Strategic Alignment Maturity Summary
486.0 Initial
488.0 Committed
487.0 Process
489.0 Process
496.0 Business
lack IT
understa
nding
497.0 Employees
limited
business and
IT
understandin
g
490.0 Establi
492.0 Managed
shed
Formal
493.0 Process
491.0 Process
498.0 IT
494.0 Optimi
zed
495.0 Proces
s
is 499.0 IT will create 500.0 Accept

seen as
process
ance
process
standards
for
enabler
which
will
externa
drive
other
l
business
partner
strategy
s
37
BVDC
503.0 Consist
501.0 No
formal
IT
function
505.0 IT
ent
govern
ance
process
502.0
solutio
ns
adaptiv
e
506.0 IT
is
seen as
507.0
additiona
l cost
508.0
509.0
38
510.0
BVDC
7.0
IT Project Recommendation
511.0 Based on the analysis of BVDC using the different strategic tools and
frameworks, we have uncovered that the most crucial IT recommendation should address the
following issues:
512.0
Better loans collection
More efficient and effective processes (from manual to automated) to increase
productivity of staff without the need to hire extra manpower
Tap the online space to appeal with new customers
Not capital investment heavy, given the limited resources and capabilities of BVDC staff.
513.0
514.0 As such, we recommend the use of an integrated and online (for BVDC staff and
customer access) loans collection and management software which can be outsourced via a
Software-as-a-Service applications.
515.0
516.0
517.0 7.1
Simplicity Collect (www.simplicitycollect.com)
518.0
519.0
SimplicityCollect.com is a cloud-based app hosted in the United States but caters
to different clients across the world. As their site describes:
520.0
521.0 Simplicity collections software provides the most affordable and sophisticated
solution for managing and tracking your debt collection cases.
522.0
523.0 Unlike other case management or debt collection software packages, Simplicity
specializes in ensuring your collection cases never fall through the cracks.
524.0
525.0 Their key features are as follows:
526.0
527.0
39
BVDC
528.0
529.0
The mindmap below shows the key benefits as well of Simplicity that are highly congruent with the strategic directions
of BVDC.
530.0
531.0
40
BVDC
532.0
533.0
534.0
41
BVDC
535.0 7.2
Cost Analysis
536.0
537.0 The next section shows the cost analysis of outsourcing to Simplicity as a software (option 1) versus building ones
own software and hosting it in a dedicated online server (option 2).
538.0
539.0 Option 1: Outsource Service-as-a-Software for Debt Management and Online Client Interface
540.0
542.0
PV
541.0 Costs
Year 0 543.0 Year 1 544.0 Year 2 545.0 Year 3 546.0 Year 4 547.0 Year 5
549.0
(26,
955.00
548.0 Initial Setup
)
550.0
551.0
552.0
553.0
554.0
556.0
(53, 557.0
(53, 558.0
(53, 559.0
(53, 560.0
(53, 561.0
(53,
555.0 Yearly fees (paid
460.00
460.00
460.00
460.00
460.00
460.00
monthly)
)
)
)
)
)
)
563.0
(80, 564.0
(53, 565.0
(53, 566.0
(53, 567.0
(53, 568.0
(53,
415.00
460.00
460.00
460.00
460.00
460.00
562.0 Total Yearly Costs
)
)
)
)
)
)
569.0
570.0
571.0
572.0
573.0
574.0
575.0
577.0
PV
576.0 Savings
Year 0 578.0 Year 1 579.0 Year 2 580.0 Year 3 581.0 Year 4 582.0 Year 5
583.0 Reduction in bad 584.0
400, 585.0
200, 586.0
200, 587.0
200, 588.0
200, 589.0
200,
debts*
000.00
000.00
000.00
000.00
000.00
000.00
590.0 Increase
in 591.0
298, 592.0
100, 593.0
100, 594.0
100, 595.0
100, 596.0
100,
revenue**
000.00
000.00
000.00
000.00
000.00
000.00
598.0
698, 599.0
300, 600.0
300, 601.0
300, 602.0
300, 603.0
300,
597.0 Total Yearly Savings
000.00
000.00
000.00
000.00
000.00
000.00
604.0
605.0
606.0
607.0
608.0
609.0
610.0
612.0
617, 613.0
246, 614.0
246, 615.0
246, 616.0
246, 617.0
246,
611.0 Net Present Value
585.00
540.00
540.00
540.00
540.00
540.00
618.0
619.0
42
BVDC
620.0 Notes:
621.0 *
Company expects to reduce bad debts by at least 20% in the first year (from previous PhP 2,000,000)
622.0 **
Company expects to increase revenue by at least 1% of its 2014 income by tapping on new market segments and
optimizing efficiencies in operations
43
BVDC
623.0 Option 2: Option 2: Build and Manage own Software
624.0
625.0 Costs
626.0
PV 627.0 Year
Year
1
0
632.0 Yearly software maintenance 633.0
(3 634.0
(3
fees
(reference
price:
1,860
1,860
Simplicity)
.00)
.00)
639.0 Yearly dedicated server for 640.0
(26 641.0 (264
debt collection and client portal
4,000
,000.
(Web.com.ph)
.00)
00)
646.0 Software setup fees on Year 0
647.0 (359, 648.0
955.0
0)
653.0 Total Yearly Costs
654.0
(65 655.0 (295
5,815
,860.
.00)
00)
660.0
661.0
662.0
667.0 Savings
668.0
PV 669.0 Year
Year
1
0
674.0 Reduction in bad debts*
675.0
40 676.0
20
0,000
0,000
.00
.00
681.0 Increase in revenue**
682.0
29 683.0
10
8,000
0,000
.00
.00
688.0 Total Yearly Savings
689.0
69 690.0
30
8,000
0,000
.00
.00
695.0
696.0
697.0
702.0 Net Present Value of option 2 703.0 42,18 704.0
5.00
4,140
44
628.0
Year 629.0 Year 630.0 Year 631.0 Year

2
3
4
5
635.0
(3 636.0
(3 637.0
(3 638.0
(31
1,860
1,860
1,860
,860.
.00)
.00)
.00)
00)
642.0 (264 643.0 (264 644.0 (264 645.0 (264,
,000.
,000.
,000.
000.0
00)
00)
00)
0)
649.0
650.0
651.0
652.0
656.0
(295 657.0 (295 658.0 (295 659.0 (295,

,860.
,860.
,860.
860.0
00)
00)
00)
0)
663.0
664.0
665.0
666.0
670.0 Year 671.0 Year 672.0 Year 673.0 Year
2
3
4
5
677.0
20 678.0
20 679.0
20 680.0
20
0,000
0,000
0,000
0,000
.00
.00
.00
.00
684.0
10 685.0
10 686.0
10 687.0
10
0,000
0,000
0,000
0,000
.00
.00
.00
.00
691.0
30 692.0
30 693.0
30 694.0
30
0,000
0,000
0,000
0,000
.00
.00
.00
.00
698.0
699.0
700.0
701.0
705.0
706.0
707.0
708.0
4,140
4,140
4,140
4,140
BVDC
.00
.00
.00
.00
.00
709.0
710.0 Notes:
711.0 *
Company expects to reduce bad debts by at least 20% in the first year (from previous PhP 2,000,000)
712.0 **
Company expects to increase revenue by at least 1% of its 2014 income by tapping on new market segments and
optimizing efficiencies in operations
713.0
714.0
715.0 Thus, given the results of the cost-benefit analysis via calculation of Net Present Value, we recommend that BVDC go for
Option 1. The tremendous savings and potential for increasing revenues far outweigh the cost of outsourcing the software
to SimplicityCollect.com
716.0
45
BVDC
717.0 7.3
Reconciling Recommendations with Strategic Analysis
718.0
719.0 It is important to tie back the analysis of alternatives with the strategic tools and
frameworks discussed in the previous sections. As such, the table below reconciles our
recommendation with the strategic recommendations derived from the frameworks.
720.0
721.0 Framework 722.0 Recommendations based on 723.0 How
IT
System
Framework
addresses
Recommendations
based on Framework
724.0 Balanced
Alignment
among
all 725.0 Option 1 balances all
Scorecard
the perspectives in the
perspectives
Balanced
Scorecard
with attractive costs.
726.0 Business
727.0
Option
1
directly
Address cost concerns of having
Model
addresses issues on
a huge allowance for bad debts
Canvas
bad debts, improving
Optimize operational efficiencies
and automating some
(strive for automation and better
operational activities
database management) given
(therefore increasing
manual processes
employee
Tap new market segments to
productivity),
and
increase revenue via introducing
having
the
potential
to
online client interfacing
target new market
segments for better
chances of increasing
revenues.
728.0 Value Chain
729.0
Option
1
greatly
Optimize operational efficiencies
Analysis
optimizes
activities
given manual processes
across the entire value
chain,
leading
to
higher profit margins.
730.0 Five Forces
Serve as a viable competitive 731.0 Option 1 competitively
Model
positions BVDC as a
alternative to banks and other
good alternative to
financial institutions to tap new
banks within BVDCs
market segments
mandated area scope,
attracting customers to
switch.
732.0 IT Strategic
1
allows
Consider
limited
resources 733.0 Option
Alignment
Simplicity staff to help
available from BVDC
Model
BVDC staff better be
Have an easy-to-use software
familiarized with the
both for the BVDC staff and
software.
Moreover,
customers
Simplicity provides a
user-friendly interface
46
BVDC
for customers to track
their loans.
47
BVDC
8.0
Implementation Plan
734.0 Below is a summary of the timetable in adopting the Simplicity software and
rolling it out to BVDC staff and customers:
735.0
736.0 Phase
737.0 Du 738.0 Activities
739.0 Target
rat
Date
ion
741.0 1
Contact SimplicityCollect.com for 742.0 January
mo
2016
free 1 month demo
nth
Hands-on training of employees of
how to use the software
Mock market testing with potential
740.0 Phase 1:
users
Adopting
Adopt SimplicityCollect.com by end
and
of month
Optimizin
744.0 3
Migrate all manual data (database of 745.0 February
g
mo
to April
members, loans, etc.) to Simplicity
Operations
nth
2016
Integrate
loans
management
using
s
processes with Simplicity
Simplicity
Parallel manual servicing
747.0 1
Ensure Simplicity is working 748.0 May
mo
2016
efficiently
across
all
loans
nth
management
processes
and
operations
749.0 Phase 2: 750.0 1
Begin rolling out and promoting 751.0 June
Rolling
mo
2016
online debt tracking and customer
out
nth
portals to existing customers
Simplicity 753.0 1
Assess usage of customers of the 754.0 July
to existing
mo
2016
portals
users for
nth
refinement
s
755.0 Phase 3: 756.0 4
Campaign for the new customer 757.0 August
Campaigni
mo
2016 to
portals for new customers
ng BVDC
nth
Novemb
Online for
s
er 2016
new
customers
758.0 Phase 4: 759.0 1
Review of actual performance in 760.0 Decemb
Review of
mo
er 2016
utilizing Simplicity as a loans
Simplicity
nth
management and collection software
with client interface capabilities
Work closely with Simplicity staff in
refining the software
48
BVDC
761.0
762.0
763.0
49
BVDC
764.0 Phase 1: Adopting and Optimizing Operations using Simplicity
765.0
766.0
This phase ensures that BVDC properly adopts and optimizes its operations as it
adopts Simplicity. Phase 1 serves as the initial pilot testing aspect to smoothen the
learning curve of having new software.
767.0
768.0 Phase 2: Rolling out Simplicity to existing users for refinements
769.0
770.0
After adopting and ensuring that Simplicity is now working efficiently in an
operations aspect, it is now time to gradually roll out the Simplicity customer portal to
some of the existing users in refining their user experience. Although not all customers,
specifically the vendors, will avail of the client interface, there are some existing
customers who most likely resemble bank users. These users can be the early testers of
the online customer interface portal, which BVDC and the Simplicity staff can take
recommendations from before aggressively campaigning for new customers.
771.0
772.0 Phase 3:Campaigning BVDC Online for new customers
773.0
774.0
Once refinements have been done, BVDC can now launch a BVDC Online
campaign with minimal marketing communications expenses to begin attracting new
customers.
775.0
776.0 Phase 4: Review of Simplicity
777.0
778.0
After a year of operation, it is vital to work with the Simplicity staff in
determining how the Simplicity software can be optimized for the following years and
months.
50

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De La Salle University

Ramon V. Del Rosario College of Business

Baclaran Vendors Development Cooperative:

Dr. Nelson Celis

Objectives and Goals of the Company..............................................................................4

Business Model Canvas......................................................................................................10

Value Chain Analysis..........................................................................................................20

Five Forces Model..............................................................................................................29

Competition and Rivalry............................................................................................................29

Strategic Alignment Maturity Model..................................................................................33

Simplicity Collect (www.simplicitycollect.com)............................................................36

Reconciling Recommendations with Strategic Analysis................................................40

Phase 1: Adopting and Optimizing Operations using Simplicity..............................................42

About the Company

Baclaran Vendors Development Cooperative is committed to utilize the cooperative

Objectives and Goals of the Company

To institutionalize the capability building of the cooperative.

One way of checking if the existing operation of a company is performing well is by

Business Model Canvas

Value Chain Analysis

BVDC has good communications and information dissemination to its members

BVDC has a good procurement as a support activity. It necessarily supports all of

Five Forces Model

Strategic Alignment Maturity Model

485.0 Strategic Alignment Maturity Summary

is 499.0 IT will create 500.0 Accept

Year 629.0 Year 630.0 Year 631.0 Year

(295 657.0 (295 658.0 (295 659.0 (295,

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