First and foremost, the group of system analysts would like to express the deepest
gratitude to Mr. Harvey T. Ong, professor from the Decision Science and Innovation Department
of De La Salle University, Manila for his unwavering dedication to teach and to guide his
students all throughout the term in order to accomplish this project. Without him, this IS Plan
would not be achieved.
Second, the group wants acknowledge De La Salle University Manila for providing its
students great facilities and resources such as the library, the classrooms, the books and the
computers. These resources have greatly helped the group in their study and project making
proper.
The group would also like to show appreciation to Chevrolet North EDSA, specifically
Mr. William Tan, Mr. Vincent Licup, Mr. Eddie Uy and all the employees of the company for
their willingness to participate and to cooperate in the making of this project. The group owes
them for all the information, time and effort the company gave to assist the group in their needs.
Lastly, the group would like to offer this project to God, their families and their friends
for the never ending support and love especially during the toughest times in the duration of the
project making.
Executive Summary
1
The study was conducted to improve the system of Chevrolet North EDSA. The company
is a car dealership company and engages in the sale of cars, sale of parts and accessories, and
provides service and repairs. The system analysts visited the company to conduct interviews and
to observe the business processes of the company. The system analysts also studied the
companys financial statements and documents to identify existing problems or problems the
company may face in the future. After careful analysis of the collected data, the system analysts
were able to identify three critical problems of the company; high turnover rate, ineffective
promotional strategies, and lack of coordination between departments.
To solve these problems, the system analysts proposed a system that could replace the
current system of the company. This means that the system analysts are aiming to offer the
company a better system that could provide the company with more efficient and more effective
performance. This system would mainly focus on the companys sales and after sales department,
finance department, human resource department and purchasing department. The proposed
system would automate the process of creating a payroll by taking advantage of a biometrics
scanner which would automatically record the attendance of the employees, the attendance
would then be used in computing the employee payroll. Another function of the system is to
automate the tracking of the companys inventories by providing databases such as for office
supplies and car parts. The system would also monitor all the databases for the entities of the
company, particularly for employees, suppliers and customers. Accounts Receivables and
Accounts Payables are also automatically updated when transaction is made through the system.
The generation of essential documents is also one of the capabilities of the proposed system. It
could produce receipts, invoices, and order lists for the use of the company, suppliers and
2
benefits offered by outsourcing the development of the new system is much more worthy
compared to the other two. This is because in outsourcing, the company would be able to get is
customized system that follows the companys objectives, which is basically the opposite of
COTS. And in outsourcing, the company is given the chance to focus more on their routinely
activities because they are not the ones maintaining the system. Lastly, outsourcing offers a
faster, more accurate and surer development of the system.
Provided below are graphs that presents the costs, benefits and period of development of
the system.
Innovations in technology are continuously growing today, especially that many people
are starting to engage and appreciate the benefits brought by the technologies. One of the most
evident benefits of technology to businesses is the fact that technologies make the work of
people easier, faster and more efficient.
businesses are able to get access to tons of information in the internet, produce more products
and services through machines, record data using computers, communicate to other entities by
the means of telephone, cell phone and/ or e-mail, and a whole lot more. Indeed, technologies
asisst the companies on how to find ways to have more efficient and effective means of meeting
the strategic goals of the business and attaining competitive edge against the other businesses in
the industry. Aside from these, technologies also help businesses improve its day-to-day business
processes by reducing errors, lessening costs and increasing productivity amongst its employees
and employers.
This study is limited only to the issues encountered by one company which is Chevrolet
North EDSA. The system analysts are to get into the exact business processes done within the
aforementioned company, so as to gain a wide range of information and a more profound
understanding of the problems faced by Chevrolet North EDSA. Currently, the companys
system per department varies such that many departments are fully- automated, some are semiautomated and only a number of processes are still done on a manual basis. The system of the
company also presents some eye catching problems such that some processes done by the
company like the promos are not yet integrated with the main system used by Chevrolet North
EDSA, which eventually leads to inefficient and incomplete data recording and inaccurate
results.
After the assessing the problems raised by the company, the system analysts designs a
new system for the company which could assist it in performing all of its processes. The
proposed IS plan would result to the elimination of errors, reduction of costs, improved
databases, accurate recordings, increased efficiency in employee works and more secured
system.
1.1 Scope
The IS Strategic Plan would encompass the following:
1.2 Limitation
The following are not covered by the IS Strategic Plan:
Other brands under the management and ownership of Calebs View Automotive
Group, Inc.
The information that the company kept private
The most recent financial statements were not disclosed by the company.
Business processes of the company that would not be fully automated.
Human Resource: Recruitment, Selection and Training Processes
Marketing: Promotions and Advertising Processes
6
Sales & After Sales: Repair of Vehicles, Personal Transactions with Customers
IT: Update and Maintenance of Systems
Brief History
Calebs View Automotive Group Inc. was incorporated in the year 2011 in the
Mr. Vincent Licup business includes retail electronics, toy distribution and also
holds interest 2 Foton car dealership. Mr. William Tans main business is wholesale
distribution of oil and lubricants, and has interests in shipping retail gas, liquefied
petroleum gas and real estate.
Main operations of Calebs View Automotive Inc. include selling of cars from
Chevrolet and Volvo and providing service and maintenance for automobiles. The
organizational structure of Calebs View Automotive Inc. is composed of the
7
Chevrolet North Edsa which is operated by Calebs View Automotive Inc. also
gained the Rookie of the Year Awards 2012.
2.2
Industry Update
Automobiles are now considered to be one of the essential things people must
own in order to carry out day- to- day tasks easier. With automobiles on hand, people are
able to go to different places in a less hassle and less complicated way. Even in the
transportation industry, automobiles are very important together with trains, airplanes,
ships, etc.
automobiles for both personal and business purposes due to the increasing purchasing
power of the consumers as a result from the developing economy of the country.
resulted for automobile industry to gain a 23.5 percent growth for May, 2014 as
compared to the same month last year (Vince Pornelos, 2014).
As shown in the table above, the total sales for May, 2014 reached 22, 815 units
which are significantly higher compared to the 18,475 units that were sold in May, 2013.
Toyota is still the number one player in the game, followed by Mitsubishi then Hyundai.
Chevrolet also is one of the leading firms in the industry which placed 8 th in the tally.
Overall, the Philippine automobile industry has sold 104, 264 units from January to May
of 2014 which is 21.4% higher compared to the 85,886 units of cars sold for 2013 (Vince
Pornelos, 2014).
Despite the growing prices of the vehicles and the unstoppable traffics
experiences in the Philippines, Filipino consumers are still on their plans of having their
own units someday. This means that the automobile industry will continue to rise up for
2014 and for the years to come.
2.3
Products / Services
The company offers all the cars that Chevrolet and Volvo manufactures. Some of
the cars that they offer can be bought by ordering from them, such as the Camaro of
Chevrolet.
The company offers maintenance and other services for Chevrolet, Volvo and all the
other different brands of cars. The following photos show all the services that CVAI offers
for each model of car:
10
11
12
Figure 2.3 Prices of the Services for Sonic and Spark Cars
13
Figure 2.4 Prices of the Services for Malibu and Cruzes Cars
14
15
Figure 2.6 Prices of the Services for Orlando and Spin Cars
16
This photo shows all the cars that Chevrolet North Edsa sells with the
corresponding price:
Figure 2.7: List and prices of the vehicles sold by Chevrolet North EDSA
17
This photo shows all the cars that Volvo North Edsa sells with the corresponding price:
Figure 2.8: List and prices of the vehicles sold by Volvo North EDSA
2.4
Every company has its own vision and mission. Every company also has its core
values that the company uses as a guide to be able to provide the most efficient service to
its valued customers. Stated below are the vision and mission and core values of Calebs
View Automotive Group Inc.
Vision
To excel in our chosen field, car dealership and services, using Emphatic
Customer Satisfaction (ECS) as our number one creed.
Mission
To consistently win the Dealer of the Year Award by fully tapping our area of
responsibility (Northern QC) using Emphatic Customer Satisfaction (ECS) as our number
one creed.
Core Values
Flexibility- We believe in being flexible in dealing with different customers. We provide
different strokes to different folks.
Unity- We believe that the achievement of our organization is the result of the combined
quality effort of each individual.
Sincerity- We believe that in giving real service to customers, we must add something
which cannot be bought or measured with money, and that is sincerity.
2.5
still a rookie when it comes to the industry. Despite being a newbie in the automobile
industry, Chevrolet North EDSA has already proven its strength and capabilities after
being awarded as the Rookie of the Year 2012. Chevrolet North EDSA is under the
management of Mr. Vincent Licup and Mr. William Tan who are also the owners of
Calebs View Automotive Group, Inc. The owners are very hands on to their operations
especially when it is related to sales.
The company follows a centralized form of organization which means that the
company has a hierarchical status which should be followed by the employees. The
decision making and planning are done by the top management. The company also
follows a strict vertical structure in which front line employees of Chevrolet North EDSA
should frequently report to the middle and top management the progress of the various
works in the company.
20
Chevrolet North EDSA also provides quotas for its employees each month as to
how many units should be sold per sales agent. Rewards system is evident in the
company since those high-performing employees are handsomely rewarded for the efforts
to meet or double the expected quotas. In the company, the employees do different
techniques to inspire themselves in meeting the quota. Some post papers in the wall to
remind them of the progress of the sales, while the others go for team buildings to
motivate one another.
Aside from the benefits garnered for meeting the desired quotas, other benefits are
also given to the employees like SSS, Philhealth and HDMF.
21
2.6
2.7
Resources
22
2.7.1 Physical
a. Computer and Server
These computers and servers are usually used by companies, not only Chevrolet
North EDSA, to record and store data. These function as a mean of documenting
transactions and creating forms such as sales order and sales invoice. The hardwares are
essential for the companys daily activities because every transaction is placed/ recorded
with the use of the computer. The server should always go with the computers because
computers can only function properly and well with the server present.
b. Printer
Printers are important hardwares in the company because these allow production
of hard copies of the document and records of the company.
c. Photocopying Machines
Photocopying machines are used to produce multiple copies of printed outputs.
These are commonly used for reproducing customer records, customer receipts, sales
invoce, sales order, etc.
d. Projector
Projector is used by the company during meeting and conferences. This is
functional for visual aids like PowerPoint presentations.
23
e. Telephone
Telephones are necessities in the company when communicating with customers,
suppliers and other important entities in the environment of the company. The company
has direct lines, trunk lines and local/ extension lines.
Estimated Projected
Hardware
Qty
Computer
25
Type of Equipment
Location
age
Desktop 2
Intel
life
8 years
Computer
Intel
Server
25
Core
offices
3470
Owners office
6 years
Server
Xeon
Departmental
Departmental
offices
E31220v2
Owners office
80W
Printer
Intel C202
Epson M100
4 years
Departmental
Photocopying
6 years
Owners office
Departmental offices
machines
Projector
Telephone
1
13
Infocus IN112
2
Panasonic
telephone 3
5 years
8 years
Owners office
Departmental offices;
User KX-T7716
Employees; Top Management
Employees; Top Management
Employees; Top Management
Employees; Top Management
Employees;
Top
Management; Customers
Owners
Status
In operation
In operation
In operation
In operation
In operation
offices;
office,
Financial Customer
arrangement
Lounge
Owned
Owned
24
Owned
Owned
Owned
The first department is the Human Resource (HR) Department. This department
has 2 employees. The HR department handles the attendance and payroll processes of the
company. For the attendance, the company uses a time checker to monitor the attendance
of the employees. And using those cards, the HR personnel will manually input the data
in the MS Excel. As for the payroll, MS Excel is used by the company to compute for the
salaries.
25
the needs of the system. This department is also vital in the planning of the developments
to be made in the system.
The Sales Department has 12 employees. It monitors and controls the inventory
and orders coming from the customers. As for the inventory, the department uses the
ERIC system to input the details from the sales order and automatically deducts the
number of units and supplies in the inventory. On the other hand, the orders from the
customers are manually done through personal transactions. Half of the employees of the
Sales Department are the agents who are personally talking and transacting with the
customers.
The After Sales Department has 11 employees. This department is assigned to the
functions of vehicle maintenance and repair, as well as the order from the suppliers. The
vehicle repair and maintenance part uses the ERIC system to gather information about the
customers. The services and products availed also in this part are entered to the system
for updates. Final reports on expenses incurred by the customers are also generated
through the system. However, the repairing of vehicles proper and the ordering from
suppliers of the parts and equipment needed by the vehicles are done manually.
also maximizes the benefits of texting to encourage the customers to avail their products
and services.
The Finance Department has 4 employees. The Finance department handles the
accounts receivable and accounts payable of the company. They monitor the companys
finances particularly the sales and expenses. The department uses the ERIC system in
order to update their account databases and to generate the companys financial
statements.
2.7.3 Financial
The financial resources of the company come from the income earned by
Chevrolet North EDSA. The income that they earn is used by the company to suffice the
monetary requirements of their daily operations.
2.7.4 Informational
Chevrolet North EDSA is engaged research and development about the latest
trends and news about their products, the company and the industry. It is important for
Chevrolet North EDSA to continue researching about the field they are into, so that they
would be able to anticipate future demands and problems. Promotional techniques are
also one of the things the company is continuously researching about. Aside from
research and development, the company also collects data through their suppliers and
customers. The opinions, suggestions and comments of the external environment are very
27
helpful for the company especially for their improvement and to increase customer
satisfaction. Internal environment is also important for Chevrolet North EDSA when
gathering information. The experiences and knowledge of the employees aid the
company into developing their systems and processes. E-mails, texts, surveys and
personal interviews are the common ways that the company uses when engaging with the
external and internal entities around them.
2.8
SWOT Analysis
a. Strengths
Chevrolet and Volvo are US-based car brand which assures the customers that the
cars that Calebs View Automotive Inc. is offering are in the best of the line. Chevrolet
also offers the Trailblazer, which is named as the SUV of the year in 2013.
Calebs View Automotives Inc. gets the materials it uses in its maintenance
services directly from the supplier of Chevrolet Philippines which means that their
materials are of high quality. The materials that they provide for the services they are
offering makes their service better than other service and maintenance shops around the
area, because customers can be assured of the quality of the service.
Calebs View Automotive Inc offers really good packages and promos from time
to time for their customers. They also require low down payments for the car purchased
by their customers. The company also offers 5-year warranty for parts and services for
their cars. This makes their customers more at ease in buying cars from their company.
28
b. Weaknesses
Being a well known US-based car brand, Chevrolet is quite more expensive than
other car brands, especially those from Japan, such as Toyota and Mitsubishi. This also
makes it hard for Calebs View Automotive Inc. to retain their customers because the
materials that they offer for their service and maintenance shop are more expensive than
the other service and repair shops.
According to the company the automobiles they sell are not the primary cars that
customers choose to own. Due to higher value of their products, first time car owners
usually prefer brands such as Toyota and Mitsubishi.
c. Opportunities
Chevrolet North EDSA is the nearest Chevrolet branch for customers residing in
Quezon City, Bulacan and Anitipolo.
Chevrolet is currently manufacturing new car models that will cater to the Asian
market.
d. Threats
A new branch of Chevrolet in Baliuag, Bulacan opened recently which could be
the new target shop of customers living in Bulacan.
Other leading brands (e.g. Toyota, Mitsubishi, and Honda) are more prominent
therefore capturing a bigger portion of the automotive industry market.
The chart below is the summary of the SWOT of Calebs View Automotive Inc.
29
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
30
Existing System
After conducting a series of interview with the company, the system analysts
found out that Chevrolet North EDSA has six departments which cater to the needs of
the internal and external entities surrounding the company. The six departments
namely Human Resource, Marketing, Sales, After Sales, Finance and IT functions
differently from one another and uses various systems as well. The system used by
each department varies in terms of the need and system capability of the company.
For the Human Resource department, they use Microsoft Office particularly
Microsoft Excel to input their attendance and payroll records. The department is not
using the companys system because they are more comfortable with Excel as a mean
of computing the employees salaries and benefits as well as in tallying the attendance.
However, the department is open for new developments in their system if possible.
For the Marketing department, they make use of the internet as a method to
perform their job requirements specifically for company promotions and
advertisements. The department utilizes the Facebook pages to send messages and
status about Chevrolet North EDSAs update, promos, and freebies to its followers and
customers. The department also uses MS Excel to keep track of the progress of their
promotional and advertising techniques.
31
The Sales Department uses the companys system called ERIC. The use of
ERIC system to the Sales department is in regard to inventory and order from
customers. Through the ERIC system, the department finds convenience in recording
and monitoring the sales and inventory of the company. The employees under the
department just input the necessary data in the system and then relevant information
will automatically be produced by the system.
For the After Sales Department, they use the ERIC System as well for their
business processes. The department utilizes the system by using it in their business
processes namely vehicle repair and maintenance and order from suppliers. Through
the ERIC system, the department is able to input and to access the information of their
current and new customers and the transactions that they have made with Chevrolet
North EDSA. Documents such as invoices are produced by ERIC to present the total
amount to expenses due from the customers. However, for the ordering from suppliers,
this is done manually through phone calls.
The Finance department handles the accounts receivable and accounts payable
records of the company. The department also uses the ERIC system in order to update
the companys financial accounts, and to generate the financial statements of the
company.
32
As for the IT Department, they also use ERIC System to plan and develop
improvements and changes for the system if ever some errors or slack have been found
in the systems work flow.
The business operations of Chevrolet North EDSA run like this. Customers
inquire about the companys products/ services. Quotations are also given when
customers inquire. If the customers is satisfied with the price and product/ service of
the company, the sales manager then assess if the customer would pay in cash or
installment. If in cash, the transaction will now proceed to vehicle allocation by the
Sales Administrator. If installment, the customer would have to pay advance deposit
first to the cashier before the vehicle allocation step. The advance deposit will go to
the Finance department from the cashier. Then the Sales Administrator would prepare
the sales order. After that, the Sales Administrator would also collate all necessary
documents such as the vehicle checklist approval which will be given by the Sales
Manager. When everything is ready, Sales Invoice is processed by the Sales
Administrator. After the Invoice is prepared, the vehicle accessories are installed to the
chosen automobile. Then, the sales invoice will be updated again. After this, the
Official Receipt will be printed. Then the delivery of the vehicle would proceed.
33
3.2
34
35
36
3.3
Business Process:
a. Attendance- semi automated- uses MS Excel.
The company uses a time checker to monitor the attendance of the employees.
Using the cards, the HR personnel will manually input in the MS Excel.
2. Sales
Business Process:
a. Inventory- Fully automated- uses ERIC system
The sales representative will input the details from the sales order in the ERIC
system. The inventory is also in the ERIC, so every time a customer buys a car, the
system deducts the product from the inventory.
38
3. After Sales
a. Vehicle Repair and Maintenance- fully automated- uses ERIC system
The company can use the information about the customer who has already
purchased a car from them but if the customer is new, the employees will have to ask
them to fill-out a form. The employees also have to input all the services they have to
make for the cars being repaired. The ERIC system will then create a final report on
the expenses that the customer needs to pay for the service.
b. Order from Suppliers- Manual- done through phone calls and personal transactions
The company has to contact their suppliers through phone calls in purchasing
new supplies. Usually, the company makes sure to have a stock for car parts that are
always in demand. As for the parts and equipment that are not that usually needed for
repair and maintenance services, the company orders it only when necessary. In
addition, for the newly purchased cars, a company representative commonly goes to
their main supplier; Chevrolet Philippines to order the cars availed by the customers.
4. Finance
Business Process:
a. Accounts Receivable- fully automated- uses ERIC system
b. Accounts Payable- fully automated- uses ERIC system
The company monitors their finances using the ERIC system. Both the
receivables and payables are stored in the system and its where they are constantly
updated. They also utilize the system to generate the companys financial statements.
39
5. Marketing
Business Process:
a. Promotion and advertising- semi-automated- uses internet particularly facebook;
uses text messaging
The company keeps it facebook page updated. Every now and then the
company posts their promos, freebies, services and products in their facebook page.
The company also makes use of text blasting to easily connect to their customers.
Usually, the content of their text messages focus on encouraging its customers to avail
their products and services. They also send updates through texts.
6. IT
Business Process:
a. Maintenance and overall operations of the system- fully automated- Uses ERIC
System
The IT department makes use of ERIC system in order to maintain and to
update the needs of the system. It manages the functions of the system. And also, the
IT department is also the division which is vital in the planning of the developments to
be made in the ERIC system.
3.4
3.5
3.6
Hardware
41
Chevrolet North Edsa uses a total of 25 computers. For each office, around
2-4 computers are allocated for the daily functions of the department. Six Epson
printers are also available, and are installed in each department. Moreover, the
companies invested on photocopying machines for their documentation purposes,
and for effective communication, thirteen telephone units are also being used by
the company. Conducting meetings in the company is also more convenient since
they installed a projector in the boardroom.
3.6.2
Software
The companys computers are installed with Microsoft Office 2007. Particular
MS Office applications that the company uses include, MS Word, MS PowerPoint, MS
Excel, and MS Access. This software supports the employees in their daily tasks and
operations. Currently, the Human Resource Department uses MS Excel to gather and
store data regarding the employees, as well as in generating payroll sheets. MS
PowerPoint on the other hand, is normally used for reports such as sales reports, financial
reports, and management reports.
The other software used by the company is their current system called ERIC.
This system handles the companys business processes that are done under the Sales,
After Sales, Finance and IT Departments of Chevrolet North EDSA. This system
functions as the one monitoring, controlling and updating all the records/ databases of the
company. ERIC System also generates the necessary documents needed by the company
for its transactions with its customers and suppliers. Although this has been found useful
by the company, it still has some flaws such that it lacks some major functions related to
payroll and attendance.
42
3.6.3
Database
Normally, the company uses databases to handle financial accounts, and to keep
track of their sales and inventory. These databases are managed by the top management
and the department heads. Employees will not have a hard time viewing these databases
since they are stored in the ERIC System. However, not all departments make use of the
supposed to be centralized system yet.
Currently, the system of the Chevrolet North EDSA has different databases. One
of these is the Car Sales Database which records the all the vehicles sold by the company
only. This does not include the inventory of cars since the cars sold by the company are
directly acquired from its supplier, Chevrolet Philippines. Another database used by the
company is the Parts and Accessories Sales Database. This database functions similarly
with the Car Sales Database. The difference only is that this database focuses on the parts
and accessories sold by the company. Inventory of parts and accessories are excluded in
this database. The third database used by the company is the Accounts Receivable and
Payable Database. This database is used to monitor and to update all the debts and
receivables of Chevrolet North EDSA. In here, the company is able to manage the
information regarding the amount to due from customers and to suppliers, as well as the
maturity date for the debts and receivables. The company also has a database for its other
expenses related to the general and administrative expenses of the company such as
utilities, rents, etc. Lastly, the company uses a database for its inventory of office supplies
and car parts and accessories. This database functions mainly for the purpose of keeping
track of the quantity of the supplies of the company.
43
3.6.4
Telecommunications
For effective communication, the company has a total of two direct lines, 3 trunk
lines, and 8 local lines/extensions. These installations support the company in maintaining
its business processes and operations. Having a reliable Internet connection also helps the
employees in dealing with other entities from different locations.
vehicles. But nowadays, it would take the LTO 4-6 months to release the plates to car
owners.
Payroll
Scope
Customer
Product
Salaries of Employees
Business processes
Information
Technology
Personal computer
Payroll
Architecture
1.Customer
2. Product
3. Business processes
4. Participants
5. Information
6. Technology
Payroll
Performance
1.Customer
Moderate satisfaction
2. Product
3. Business processes
4. Participants
5. Information
6. Technology
Payroll
Infrastructure
1.Customer
N/A
2. Product
3. Business processes
4. Participants
N/A
5. Information
6. Technology
Payroll
Context
1.Customer
Undeclared referrals
2. Product
3. Business processes
4. Participants
5. Information
6. Technology
Biometrics
47
Payroll
Risk
1.Customer
2. Product
Power play and biases leading to altered time in and time out
records
3. Business processes
4. Participants
The Excel file is the sole basis of the attendance, thus access
to the file can easily affect ones salary.
5. Information
6. Technology
Payroll
Opportunities
1. Customers
2. Product
3. Business Processes
4. Participants
checkers output
5. Information
6. Technology
N/A
Accounts Receivable
Scope
1. Customers
2. Product
3. Business Processes
4. Participants
5. Information
6. Technology
Accounts Receivable
Architecture
49
1. Customers
2. Product
3. Business Processes
4. Participants
5. Information
6. Technology
Accounts Receivable
Performance
1. Customers
2. Product
3. Business Processes
4. Participants
5. Information
6. Technology
Accounts Receivable
Infrastructure
1. Customers
2. Product
3. Business Processes
4. Participants
Financial consultants
5. Information
6. Technology
Accounts Receivable
Context
1. Customers
2. Product
3. Business Processes
4. Participants
5. Information
Financial information gathered are not to be shared with nonmembers of the organization
6. Technology
Accounts Receivable
Risk
1. Customers
2. Product
3. Business Processes
4. Participants
5. Information
6. Technology
Accounts Receivable
Opportunities
1. Customers
2. Product
3. Business Processes
4. Participants
5. Information
6. Technology
Accounts Payable
Scope
Customers
Products
Records of payables
Business Process
Participants
Information
Technology
Accounts Payable
Architecture
Customers
Products
Business Process
Information
Finance department and the top management has the access to the
financial statements and reports of the company
53
Technology
Accounts Payable
Performance
1. Customers
2. Product
3. Business Processes
4. Participants
5. Information
6. Technology
Accounts Payable
Infrastructure
1. Customers
2. Product
3. Business Processes
ERIC has an annual debugging schedule, and training for the use
of ERIC is provided to new members of the companies whose jobs
require the use of ERIC
4. Participants
Financial consultants
5. Information
6. Technology
Accounts Payable
Context
1. Customers
2. Product
3. Business Processes
4. Participants
5. Information
Financial information gathered are not to be shared with nonmembers of the organization
6. Technology
Accounts Payables
Risk
1. Customers
2. Product
3. Business Processes
4. Participants
5. Information
6. Technology
Accounts Payable
Opportunities
1. Customers
2. Product
3. Business Processes
4. Participants
5. Information
6. Technology
Sales Inventory
Customer
Products
Business Process
Sales Department
Car Information (Model, color, freebies), Car Services,
Information
Customer Information
Technology
ERIC System
Sales Inventory
Architecture
Sales Department uses the products to create sales invoice that
Customer
Products
Business Process
Participants
Information
cash register
Software: ERIC System
Sales Inventory
Performance
Customers are moderately satisfied with the products
Customer
Products
Business Process
Participants
Information
Technology
Sales Inventory
Infrastructure
Customer
Products
Computers, Intranet
Business Process
Participants
Information
Technology
ERIC system
Sales Inventory
Context
Customer
Products
buyer.
Sales
Business Process
Representative/Service
Representative
takes
full
Representatives
must
be
good
communicators.
Information
Technology
Sales Inventory
Risk
Late delivery of the purchased car to the buyer. Late
Customer
information
input
by
the
personnel.
Wrong
Products
Business Processes
Participants
buyer
Information
Alteration of data
Redundant and inconsistent information. ERIC system's
Technology
failure.
Purchasing Inventory
Customers
Products
Purchase Invoice
1. Purchasing Inventory Department will get data from the
Business Process
Participants
Purchasing Department
Car information, car parts information, number of stocks
Information
Technology
ERIC System
Purchasing Inventory
Architecture
Customers
Business Process
Participants
Information
delivery
Technology
Purchasing Inventory
Performance
Customers
Moderately satisfied
Products
Business Process
Participants
telephone
Information
Technology
Purchasing Inventory
Infrastructure
61
Customer
Products
Business Process
Participants
Information
Technology
Purchasing Inventory
Context
Availability of the car/car parts from the supplier, date of
Customer
delivery
Products
N/A
Business Processes
Participants
good condition
Information
N/A
Technology
N/A
Purchasing Inventory
Risk
Customer
Products
Business Process
Participants
Information
Technology
N/A
around the company positively. With the information system, it becomes easier for the
company to plan for the improvements to be made to achieve customer satisfaction. It has
also helped the company in monitoring the sales and expenses coming in and out of the
business. Information system has also provided the company the ease of computing and
generating financial statements, receipts, invoices and other related documents. So far,
the company believes that the information system is continuously proving its worth in the
business by providing an efficient and effective means to complete every automated
business process and by outweighing the benefits of the traditional or manual business
processing.
Chapter 5 - IS Architecture
5.1
types of vehicles from Chevrolet Philippines. The company has a wide target market that
ranges from the various cities in Metro Manila and the other nearby provinces in the
Northern part of Luzon. With these things on hand, Chevrolet North EDSA must make
sure to take control of all its business processes from all its departments to ensure the
smooth flow of operations and to guarantee higher customer satisfaction.
List of Business Activities:
1. Customers inquire about the companys products/ services. Quotations are also given
when customers inquire.
2.
If the customers is satisfied with the price and product/ service of the company, the sales
manager then assess if the customer would pay in cash or installment. If in cash, the
64
5.2
67
69
70
F
igure 5.12 Child Diagram for Perform Maintenance and Services
5.3
EmployeeName =
EmployeeContact =
EmployeeID +
Autonum
EmployeeName +
Varchar (20)
EmployeePosition +
Varchar (15)
EmployeeContact +
Varchar (12)
EmployeeAddress +
Varchar (30)
EmployeeBank
LastName +
Varchar (10)
Varchar (9)
FirstName +
Varchar (9)
MI
AreaCode +
Varchar (2)
Varchar (2)
71
EmployeeAddress =
Contact#
StreetNumber +
Varchar (10)
Varchar (3)
StreetName +
Varchar (10)
City +
Varchar (13)
ZipCode
Table 5.1 Data Dictionary for Employees
Varchar (4)
Payroll
Payroll =
SalaryRate =
Attendance =
EmployeePremiums =
EmployeeID +
Autonum
SalaryRate +
Currency
Attendance +
Date/Time
EmployeePremiums +
Currency
OvertimeRate +
Currency
Commissions
Rate_Hour
TimeIN +
Currency
Currency
Time
TimeOUT +
Time
Date
SSS +
Date
Currency
PhilHealth +
Currency
HDMF
OvertimeRate =
Rate_Hour
Table 5.2 Data Dictionary for Payroll
Currency
Currency
Attendance
Attendance =
EmployeeID +
Autonum
TimeIN +
Time
TimeOUT +
Time
Date
Date
72
{AccountsReceivables} =
{AccountsPayable} =
{Payroll} =
PurchaseInvoiceID +
Autonum
SalesInvoiceID +
Autonum
POID +
Autonum
{AccountsReceivable} +
Varchar (28)
{AccountsPayable} +
Varchar (28)
{Payroll} +
Varchar (25)
SalesOrderID +
Autonum
OtherExpensesID
CustomerName +
Autonum
Varchar (20)
AmountDue +
Currency
DateDue
SupplierName +
Varchar (8)
Varchar (20)
AmountDue +
Currency
DateDue
EmployeeName +
Varchar (8)
Varchar (20)
TotalSalary
Currency
EmployeePremiums +
Currency
Commissions +
Currency
Overtime
Currency
SupplierID +
Autonum
73
OEItemID +
AmountOthers
Table 5.5 Data Dictionary for Other Expenses
Autonum
Currency
Customer
Customer =
CustomerName =
CustomerAddress =
CustomerCN =
CustomerID +
Autonum
CustomerName +
Varchar (20)
CustomerAddres +
Varchar (30)
CustomerCN
LastName +
Varchar (12)
Varchar (9)
FirstName +
Varchar (9)
MI
StreetNumber +
Varchar (2)
Varchar (3)
StreetName +
Varchar (10)
City +
Varchar (13)
ZipCode
AreaCode +
Varchar (4)
Varchar (2)
ContactNumber
Table 5.6 Data Dictionary for Customers
Varchar (10)
Sales Order
SalesOrder =
CustomerID +
Autonum
CarID +
Autonum
Quantity +
Char (4)
ServiceOrderID +
Autonum
SalesOrderID
Table 5.7 Data Dictionary for Sales Order
Autonum
Sales Invoice
74
Sales Invoice =
Quantity +
Char (4)
CustomerID +
Autonum
ServiceOrderID +
Autonum
CarID +
Autonum
AmountSales +
Currency
EmployeeID +
Table 5.8 Data Dictionary for Sales Invoice
Autonum
Car
Car =
CarID +
Autonum
Model +
Varchar (19)
Color +
Varchar (7)
{Specs} +
Varchar (75)
NumberOfUnits +
Char (4)
Model =
Price
Type +
Currency
Varchar (15)
Specs =
YearReleased
Engine +
Varchar (4)
Varchar (10)
Wheels +
Varchar (4)
Lights +
Varchar (10)
AirCon +
Varchar (10)
Battery +
Varchar (10)
Gauges +
Varchar (10)
OtherAccess
Varchar (20)
75
ServiceID +
Autonum
ServiceType +
Char (2)
ServiceFee +
Currency
ItemID +
Autonum
CustomerID
ServiceType =
[Repair: Maintenance]
Table 5.10 Data Dictionary for Service
Autonum
Char (2)
Purchase Order
PurchaseOrder =
POID +
Autonum
CarID +
Autonum
Quantity +
Char (4)
Price +
Currency
SupplierID +
Autonum
ItemID +
Autonum
OfficeID +
Autonum
DateOfDelivery
Table 5.11 Data Dictionary for Purchase Order
Autonum
Purchase Invoice
Purchase Invoice =
PurchaseInvoiceID +
Autonum
POID +
Autonum
TotalPrice +
Currency
DateOfPayment
Table 5.12 Data Dictionary for Purchase Invoice
Date
76
Supplier
Supplier =
SupplierName =
SupplierAddress =
SupplierContactNumber =
SupplierID +
Autonum
SupplierName +
Varchar (20)
SupplierAddress +
Varchar (30)
SupplierContactNumber
LastName +
Varchar (12)
Varchar (9)
FirstName +
Varchar (9)
MI
StreetNumber +
Varchar (2)
Varchar (3)
StreetName +
Varcher (10)
City +
Varchar (13)
ZipCode
AreaCode +
Varchar (4)
Varchar (2)
ContactNumber
Table 5.13 Data Dictionary for Supplier
Varchar (10)
Office Supplies
OfficeSupplies =
OfficeID +
Autonum
SuppliesName +
Varchar (20)
Quantity +
Char (4)
Price
Table 5.14 Data Dictionary for Office Supplies
Currency
Car Parts
CarParts =
ItemID +
Autonum
ItemName +
Varchar (20)
ItemPrice +
Currency
Quantity
Char (4)
77
IS and Ownership
Information Systems
Ownership
Employees
Payroll
Attendance
Finance
Other Expenses
Customer
Sales Order
Sales Invoice
Car
Service
Purchase Invoice
Supplier
Office Supplies
Car Parts
Chapter 66.1
The IT Strategy
79
The company currently operates with ERIC, a system whose functions are limited to
automatically computing the amount of sales and services that the company has provided. Other
functions such as payroll, purchasing, and keeping track of the companys inventory are done
manually.
Three methods of improving the current situation are being considered and are being
carefully examined. The first is creating a new system which would automate the different
functions of the company and having it created by the companys own IT department. The
second is creating the same system but employing an external team to create the system. Finally,
the last method is purchasing a COTS which would generally suit the companys operations.
The proposed system would automate the process of creating a payroll by taking
advantage of a biometrics scanner which would automatically record the attendance of the
employees, the attendance would then be used in computing the employee payroll. Another
function of the system is to automate the tracking of the companys inventories by providing
databases. Finally, the process of prompting a purchase would be automatically done as a
database of purchased inventory would be kept to easily identify a need for purchase.
The functions of the proposed system are aimed to attain efficiency and avoid
unnecessary activities which consume time. The proposed system saves time in a number of
activities; manually checking the attendance, manually checking which cars and parts are
available for sale, and manually checking which supplies are running low.
Payroll
In the current system, the attendance is checked through an attendance checker, the
results are manually recorded, and the payroll is computed through Microsoft Excel. In the same
80
way, the computed payroll is manually deducted to the financial data of the company to get a
holistic report on the companys overall financial position.
The proposed system uses a biometrics scanner to automatically record the attendance of
the employees. The attendance data would be used to compute for the payroll, these then would
be stored in a database which would be used by the finance department in creating financial
reports.
Sales, Service, and After Sales
In the current system, the availability of cars, parts and services are manually checked,
thus putting the customers in queue while waiting for the response on the availability of the car,
parts, and service.
The proposed system will use a car and service database to easily identify which cars,
parts, and services are available. The time it takes to check the availability of the required
product is lessened exponentially and thus provides efficiency.
Purchasing
In the current system, the employees just inform the company of a lack in supply when
the shortage already exists, the purchasing is also done manually and purchases only what is
needed at the time being. This causes a repetitive process of buying different items, in different
times every time there is a shortage in the supply of such particular item.
81
The proposed system takes advantage of a purchase inventory database to easily monitor
which supplies will run out. With this, purchasing of supplies may be done in bulk. This will
save time and expenses due to the repetitive buying process.
Finance
The current system could only compute for all the receivables and revenues generated
from the sales and after sales. These computed data would then be combined with payroll, other
expenses, purchasing expenses, and other financial data to manually compute for the overall net
income of the company.
The proposed system stores all these financial data in databases. These data would then
be combined to compute for the net income of the company and generate financial reports.
6.2-
work nature of one with the others. The group would also take note of the similarities of one
department with the others so as to be able to devise a system that would fit the organization as a
whole. The initial interface of the system will be based on the observed environment and work
nature in Chevrolet North EDSA and would then be consulted with the company, particularly
with the users and adjust it according to their demands.
Once the proposed software has been established, it would be checked for misalignments
and errors. The company would then have the choice to either accept it or reject it. If the
company chooses to accept it, another decision would be made of whether to outsource it and let
82
an external group of programmers create the system, fund the companys IT department to make
the system, or buy a pre-made system that would somehow serve the same purpose as the
proposed system. The decision making team would consider a number of factors in accepting or
rejecting the system; economic feasibility, technical feasibility, and operational feasibility. In
determining its economic feasibility, the decision makers would check if the tangible benefits
could outweigh the tangible costs. In technical feasibility, the decision makers would then again
check if the proposed system would be compatible with their existing system and with their
current equipments. Finally, in operational feasibility the decision makers would look at the
capacity of the organization and its employees to operate the system.
6.3-
these data for the completion of their jobs. These are data rendered confidential and critical as it
contains the companys contacts from which potential buyers come from, and also these will
reveal the companys financial status. Such data will be stored in databases for ease of access and
security.
6.4-
Hardware Strategy
83
The new system requires various new hardwares; a biometrics scanner, a new computer,
router and LAN cables. The biometrics scanner and new computer, to which the scanner would
be connected, would be strategically placed in the front desk of the office to easily scan and
record an employees attendance. A new computer is needed because the biometrics scanner
could not just be connected to any computer in use as it may cause disruption to the user.
Currently, the company has 25 computers and the proposed system requires 1 more
computer, adding up to a total of 26 computers, all these 26 computers would be connected
through Local Area Network. For this to come about, the company needs a router to connect
computers from different departments, the LAN cables would be used to connect them. This
would allow data receiving and transfer from one department to another.
Within the company itself, LAN would be used to connect the departments and make the
flow of information easier. With regards to its suppliers, either the internet or the telephone lines
would be used as a mean of communication.
6.4.2
Software Strategy
A new system would be created; the same means that the current software used by the
company- the ERIC would no longer be used. The decision on what software is needed would be
dependent on the result of the feasibility test. The proposed software would either be done by
external programmers or by the companys own IT department. This software would perfectly fit
the needs of the company as it is designed to address their problems. The COTS software would
just be bought and may not be a perfect fit for the company. Both softwares would serve the
same functions; facilitate automated functions, provide ease of information flow, and avoid
redundancies.
84
6.4.3
Database
Few additional databases will be established to make the system effective. The first set
are the employee database and attendance database. Cars database and parts or service database
would also be used. This is to avoid the consumption of unnecessary time to manually check the
available cars and parts while putting the customer in queue. A purchased inventory database
would also be used to automatically check which supplies are about to run out. Finally, a
financial database would also be needed to keep records of previous financial reports which
would serve as a basis for comparison in the future.
6.4.4
Telecommunications
The proposed system would provide ease in sharing of information, better access to
information, and better communication. The system, being centralized, could link one
department to the other. A Local Area Network(LAN) will be imposed in the company, this will
serve as the link between the departments. The LAN would then facilitate ease of information
sharing. With regards to the companys suppliers, the telephone and the internet, particularly
electronic mails would facilitate information sharing and communication. Both telephone lines
and internet are currently present in the company.
6.5
Organizational Strategy
During the groups immersion the group has noticed that although the company has a
written and pre-identified hierarchy of authority, the environment of the work place is very
85
organic, people are relating with their co- workers as if the hierarchy is inexistent. With such
kind of environment, coercion or forcing employees to learn and adapt with the new system
would be ineffective. Group training may be effective in such particular situation.
Should the company proceed with creating the proposed system and having the IT
department create the system, the company would need additional IT personnel. About 2-3
additional employees in the IT department should be hired by the company. The company,
preferably, should hire these employees on a contractual basis. Having them as permanent
employees may create unnecessary costs after the creation of the system. Although the group
suggests that economically, a contractual manner of hiring these employees are more feasible,
the group does not necessarily persuade the company to do so considering their ethical beliefs.
As stated in the previous section, new hardware, software, and databases would be
acquired.
system will be connected to the companys ERIC system. The new system will link the
inputs, outputs and functions of the HR and Marketing departments to ERIC System. For
the implementation step of the propose system, the group has come up with three
alternatives that Chevrolet North EDSA could take into consideration. The first option
would be the employment of an outside application server provider team to create and
develop the customized system. The second is the creation of the customized/ proposed
86
system by the in-house IT department of Chevrolet North EDSA. And lastly, the purchasing
of similar, if not the same, commercial off-the-shelf software package to the proposed
system. The group of system analysts has planned three different strategies that the group
thinks is the best fit for each alternative stated. These strategies will be used to aid the
company in converting their current business processes into the new proposed system.
Although the company already has its own IT department, it could still be possible
for them to employ an application server provider company, or in other words, outsource a
development team to create, develop and maintain the proposed system. The costs that
would be incurred in outsourcing a system provider is much less compared to the costs that
would be incurred if the in-house IT department would create the proposed system. The
strategy that the analysts think would be great is the Phasing Conversion Strategy. Since the
proposed system will just be connected to the current system of the company, it would be
better if the strategy will focus only on one department at a time. This is the most beneficial
strategy particularly for the Human Resource and Marketing departments since they will be
changing their systems from manual to automated process. Phasing strategy would help
also them adjust easily and learn the uses of the system more effectively. Anticipated errors
from the system could easily be identified as well if the company would use Phasing
strategy. Another good thing about this strategy is that the company could ensure that the
system functions is aligned per department and is working properly. It would also be more
convenient for the outsourced company to use this strategy because any changes and/ or
further improvements to be made in the proposed system would not be difficult to execute.
87
For the second alternative which is to create the system development with the inhouse IT department, the system analysts believe that it is best to use the Phasing
Conversion Strategy. This alternative is similar to the first one; however, the difference is in
terms of the period of time in making the system. Developing the system in-house would
surely take a longer time compared to outsourcing it because the IT department has also
other things to do such as the maintenance of the ERIC system. Usually the cost of
developing the system in-house is cheaper, but in this case the second alternative is more
expensive since it will take a longer time to finish the system in-house.
88
still a few issues as to why some enterprises are not considering the use these information
systems. Take into consideration the situation of Chevrolet North EDSA. The proposed
system is made to help the company improve their business processes in order to meet the
expectations of the top management, clients, suppliers and other external and internal
entities. However, series of difficulties are expected to come in during the process of
implementation. The first and number one anticipated difficulty is the resistance of the
employees to use the proposed system. This would most likely be seen from the HR and
Marketing department employees since they are the ones who would experience the biggest
adjustments in their work process which the manual to automated business processing. The
second anticipated issue would be the need for training of the employees is using the new
89
system. The training needs would also be more prominent in the workers of the Human
Resource and Marketing Departments. Definitely, the other employees from the other
departments as well as the top and middle managements would also need training on the
functions of the proposed system. The next expected difficulty is the period of the creation
of the system. If ever the proposed system would be used, the waiting time before the
system is ready to operate could take quite a long time since many considerations are still
on the way. Lastly, the cost would also be one of the important issues in the
implementation. Information systems whether the users like it or not, entails big costs.
Company owners might be hesitant to continue to system if it would incur costs that are too
big. Although there is surety in the benefits of the systems, costs are still costs, so it is
expected from the owners to think twice or thrice on whether to pursue with the proposed
system of not. Opportunity costs during the creation period of the system are also taken
into account, since the company is hoping for lower amount of regrets/ opportunity costs.
IS Development Plan
After the Information System Plan has been proposed to the company, it is the
management who will make the final decision regarding the pursuance of the proposed
system. However, the system analysts believe that among the three alternatives presented,
the outsourcing of the system developer (ASP) for the creation of the proposed system is
the best one to accept.
90
improvements if necessary. Lastly, if the new system has been operating within the
company, additional improvements could also be asked from the software company.
Currently, the system analysts are looking for potential software developer
companies. The analysts have a few in minds already, but further screening is still on the
process before proposing the prospect software developer companies to Chevrolet North
EDSA.
Another alternative that the system analysts suggested is to have the in-house IT
department of the company create the proposed system. In here, the IT professionals
would have to be in a meeting with the top management in order to plan for the new
system to be made. In the meeting, they will discuss the costs, period of development,
functions, users, trainings and implementation plans for the proposed system. It was
mentioned in the earlier chapter that this alternative will use the Phasing conversion
strategy, so it means that the implementation will be done per department as well, like the
first alternative. 90 days will be allotted for the development of the system, excluding all
training, meeting and implementing period. This alternative is beneficial for the company
since there will be no much difficulties in the communication between the developer and
the user.
The analysts propose that the company should avail of SAGE ERP X3 if they
already need a system and cannot wait any longer. SAGE will train the users to fully
understand the features of the system. The features of SAGE ERP X3 can also be changed
92
any time but the full responsibility is still within the company. The analysts recommend the
company should use parallel conversion to be able to monitor the problems and errors that
the users will encounter during the implementation.
8.2
LETTER
ACTIVITY
DAYS
REQUIRED
A
B
C
D
E
F
G
H
I
J
3
2
1
2
30
8
5
5
5
5
A
A, B
C
D
E
F
G
H
I
Training of Users
12
G, H, I, J
PREDECESSOR
93
F
igure 8.1 Gantt chart: Outsource System Developer
ACTIVITY
DAYS
REQUIRED
90
30
Implementation: HR
Implementation: Finance
Implementation: Purchasing
Implementation: Sales
Finalization
PREDECESSOR
94
F
igure 8.2 Gantt Chart: IT Department
Purchase COTS
LETTER
ACTIVITY
DAYS
REQUIRED
Choose Users
Purchase COTS
User Training
C, D
Implement System
20
System Tests
Maintenance
PREDECESSOR
95
Requirements
There are three possible solutions for the company. But with these three different
solutions come with various costs relating to development and operational functions. The
costs of each option are dependent on the needs/ requirements of the customized system.
For the first alternative, the company could hire or outsource software developer to
create the proposed system. In this solution, the company would not have any difficulties
in terms of maintaining the system because it is already the software company which will
do that function. In figure 9.1, the cost to be incurred for the first option is broken down
to present the division of the total costs in relation to the needs and requirements of the
system implementation.
96
The second alternative is to order the companys own IT department to create the
proposed system. Creating a proposed system ensures that the system is fit for the needs
of the organization as it is specifically designed for the company, based on their structure,
work environment, and necessities. Ordering the companys own IT department to
develop the system may also cost more, than hiring an external programmer as an
additional three IT personnel is needed to be employed in order to create the program.
97
The second alternative would result to a total initial cost of P799, 336.70. For
further explanations on how such values are derived, refer to Figure 9.2.1.
The training cost comprises of the salary of the employees who will use the new
system at 1 hour each day, which is the most allowable by the company to ensure
continuity of the companys operation.
98
The third alternative is COTS that will be purchased from SAGE. It will also
provide all the things that the company needed for implementation except for the
computers and biometrics system. The computers that are going to be used for the
implementation of SAGE ERP X3 will be the computers that Chevrolet-Balintawak is
currently using.
9.2
Potential Savings
With the proposed system, the company would be able to avoid turnover costs and
99
displayed by the attendance checker. Preventing turnovers saves the company the
overtime cost it has to pay its employees to fill up for the retirees vacant job and the
training cost it will incur to train the new employee hired.
9.3
101
Tangible benefits
Intangible benefits
IT Department will have more time to focus on their jobs because they are not required to
Tangible Costs
Intangible costs
103
Tangible benefits
Intangible benefits
Tangible Costs
Intangible costs
Tangible Benefits
105
Intangible Benefits
Tangible Costs
Intangible Costs
9.4
outsourcing of software developer, having the IT Department create the proposed system
and/or purchasing the commercial off-the-shelf software package. Given below is a table
of the summary of costs to be incurred per each alternative.
106
2014
2015
2016
2017
2018
TOTAL
Outsource
287,333.30
11,800.00
12,349.00
12,835.00
13,595.50
337,912.80
IT Dept.
774,711.90
24,624.80
25,074.80
25,658.80
26,420.30
876,491.60
COTS
136,253.00
10,495.25
10,495.25
10,495.25
10,495.25
178,234.00
9.5
new system. It was mentioned in the earlier chapters that the company could get the funds
for this proposal from the profits they earn in their business transactions.
For the outsourcing, the company will need a total of Php 337, 912.80 to fund the
five-year operations of the proposed system. The initial cost for the development of the
system is Php 287, 333.30, which will be spent on the first year of implementation. For
the following years, a sum of Php 11, 800.00 will be spent for operating costs particularly
for maintenance with an increasing 0.03% cost per annum.
The calculated total benefits would amount to P3916493.6 which is derived from
the savings that the company may incur in turnover and increase in 2% sales due to
customer satisfaction. The total development cost of the system is P774711.9 which was
derived from the costs of the biometrics scanner, cost of new computer, cost of router and
LAN cables, and the salary of three additional IT personnel in a 6 month contract. The
107
operational cost is P24624.8 annually. The total cost is 879491.6. The return on
investment is 3.46 and the BEP is 9 months and 22 days.
For the COTS, the company will spend Php 178,234.00 for the five-year
operation of the system. The development cost of the proposed COTS will be Php
136,253.00 and the operating cost for four years is Php 41981.00. The operating costs
consist of annual maintenance costs of SAGE (Php 8829.00) and PrimeTime Biometrics
(Php 1666.25).
9.6
requirements of the proposed system. Both development and operating costs may vary
per alternative. For the three alternatives, the budget requirements mainly depends on the
total cost computed by the system analysts for the five-year IS plan. For the outsourcing,
the company must have at least Php 337,912.80 to maintain the needs of the system. For
the second option to have the IT department create the system, a minimum of Php 876,
491.60 is required to suffice the budget needs of the new system. And for the COTS, Php
178, 234.00 is needed to be able to meet the maintenance of the software.
9.7
Training Cost
In a company, to have a new system means to have training for the users. Each
alternative proposed has corresponding training requirements in order to fully adopt the
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functions of the new system. However, training for every alternative varies in terms of
costs.
For the first alternative which is to outsource, the training cost would reach Php
153, 120.00. This would mean Php 440.00 per head is the cost for training. 29 employees
will be trained by the software developer particularly the employees under Finance, Sales
and After Sales, Purchasing and Human Resource Departments. 12 days will be spent for
the training of the employees.
For the second alternative, the training cost will reach Php 105, 498.60. This is
quite big compared to the first alternative because the training days will reach 30 days
with 1 hour training allotted per day. The training for the employees in the company will
be executed by the 2 IT professionals of the company since they are the ones who will
create the system.
There will be no training costs for COTS. The SAGE ERP X3 package already
includes training for the users.
department could also be accessed by the finance department for cross-checking of the
reliability data. The system could keep track and control all the sales and expenses
made by the company in each of their transactions. This promotes a smooth flow of
information and thus better productivity for the employees of the company.
10.2
The Proposed System (Automation System)
The proposed system is designed to perform the following functions:
-
Generate a report that encompasses data from all the departments of the company.
Compute HR payroll in connection to the attendance and employee records of the
company.
Use a biometric system to automatically record the log in and log out of the employees
Send the total expenses incurred automatically to finance.
Create a prompt message to notify the finance department of due receivables and
payables
Keep track of inventory of supplies for cars and suppliers for office.
Monitor invoices from suppliers and to customers.
Finance
The finance department has complete access to all the data that the new system
will provide. Compared to the current system, the finance department would have access
to more data as it would have access to the cost and returns of marketings promotional
strategies and to the payroll. The finance department would be able to generate a
comprehensive report that encompasses data from all the departments of the company.
Data of debts due would also be provided to the finance department.
Human Resource
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The proposed system will include biometrics as a new means to check the
attendance of the employees. The data gathered by the new system will be used to
compute the employee payroll. Furthermore, the computed salary will be added to the
employees commission, overtime pay, and bonuses. Computation for payroll will be
done using the information from the attendance and employee databases.
Sales
The proposed system will record all transactions made with customers. It will also
generate the necessary documents such as the sales order and sales invoices. The system
will also be the one to update and monitor all the databases of the sales department such
as the customer databases. This system will also confirm availability of car parts for
services acquired and for the vehicles to be purchased by the customers.
Purchasing
The proposed system will handle all the companys transactions with its suppliers.
It will also monitor and manage the inventory of supplies for car parts and office
supplies. Any transactions made with suppliers that incur costs will automatically
increase the accounts payable of the company. Necessary documents such as the purchase
invoices and purchase orders are generated by the system as well.
10.3
111
112
113
114
115
10.4
ER Diagram
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10.5
10.6
117
118
119
10.7
Employee ID or EmpID, being the primary key, is connected to the payroll and to the
attendance and employee records database. This will allow the system to compute and
generate the payroll sheets.
Finance Database
The Finance Database displays the payables, receivables, payroll, and the
transactions that the company incurred. The service code key in the service order
database is connected to the service code of the finance database, which is a summary
of service orders. The payroll also represents the salary expenses that the company has
to compensate.
Supplier Database
This supplier database includes the details about the suppliers or contractors the
company deals with. This provides a list of the suppliers and the corresponding
amounts the company has incurred from the products purchased. The supplier key is
connected to the purchase order, and also with the finance department since they are
responsible for the companys payables.
Customer Database
The customer database contains general information about the customer. This is
connected to the sales invoice, which contains the transactions that transpired between
them and the company. It allows the management to keep track of their sales and
orders coming from the customers.
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10.8
Query Operations
The queries that will be incorporated in the system will permit the user to obtain
certain information according to their requirements and purpose. The system would
generate organized and summarized information based on the query function. Queries
that will be executed and presented in the system are as follows:
a.
b.
c.
d.
e.
Employee Record
The query will enable the Human Resource staff to keep track of the daily
attendance of the employees. The time the employee starts working and the time they end
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will be displayed in a list form for a better viewing. This will also show the profile of the
employees, which contains personal information regarding each individual. This would
be essential in determining the absenteeism rates of the employees; likewise will be
utilized in order to generate Human Resource reports.
Employee Payroll
This presents a summarized form and details of the payroll sheets of the
employees. It determines the corresponding rates for the computation of salaries.
Furthermore, respective commissions will also be displayed to provide for the necessary
adjustments.
Accounts Payable
This query will allow the management especially the Finance Department staff to
monitor the list of the accounts of their suppliers or contractors. This will show the dates
when the accounts are due. With this they can effectively accomplish all their liabilities
before the due dates.
Accounts Receivable
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The accounts receivable query permits the Finance staffs to keep track of their
receivables. A list of their clients will be displayed, together with their corresponding
accounts. This is necessary to enable the system to generate alert messages, and let the
user decide which client to email for a follow up.
Financial Reports
This query will provide comprehensive reports for departments such as Finance,
Sales, and Human Resource, which may be viewed by the users. They are given the
option to select the date or time period for the reports that they requested. Users may also
ask for a recently updated report, which the system is also able to generate.
10.9
Figure 10.11
Login Interface
The system incorporates a login page, which requires the username and password for users to
gain access. It is restricted for Chevrolet North Edsas management and employees. Each of them will be
given by the IT Department a unique username and password to be able to access the system. This serves
as an approach to regulate and monitor the people who enter and acquires confidential information stored
and generated by the system.
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Figure 10.12
The systems Home Page allows the users to select which departments database to enter. It is
divided into 4 categories namely Human Resource, Sales, Purchasing, and Finance, each representing the
4 departments the system caters to. Users may choose among different records or accounts they would
want to enter to, and the buttons will lead them to each respectively. Consequently, once the user decides
to return back to the Home Page, a Home button is located in the upper left portion of all interfaces. Here,
the user may also choose to Logout and exit the system.
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127
128
Figure 10.15
Upon gathering information from the Biometrics System, employees attendance will be
automatically recorded in the system. After which, the payroll sheet of the particular employee will be
generated. HR Staff may also input certain numbers or details on the payroll forms since employees have
distinctive rates and commissions that have to be accounted for in their total salary. The Save Record
button enables the staff to save and update the payroll form once he/she has already finished adjusting the
accounts. The search button for Employee ID on the upper right will lead the user to other employees
payroll sheets according to the ID entered. Lastly, payroll sheets may be printed at any time especially
during distribution of salaries.
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Figure 10.16
Customer Record interface displays the list of customers with their corresponding contacts and
information. The customers are also assigned a unique ID, which will be used in creating sales order,
sales invoice, and whenever they avail of the companys service and maintenance.
may simply input new customer entity and save his/her record. They may also choose to print the list for
reference.
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Figure 10.17
The Sales Order form of the system enables the companys Sales Department to generate Sales
Order forms automatically. Each form created will be assigned a number in order to effectively keep track
of the several order forms. On the lower left portion of the interface, users will also be able to search or
select other forms they would wish to view. The staff may add new record, save edited records, and print
the forms.
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132
133
134
135
136
137
138
139
A system should not only perform the functions that the company needed for their
process but also create a feasible output that the company can use, hence, the second test that has
to be made is performance testing. In this test, the integrated module will be compared with the
non-functional requirements that include security, accuracy, speed and reliability. All the input
data in the system must be well-secured and must not be easily accessed by unauthorized
personnel. The output from the system should be accurate and reliable because the company will
use the output to know which decision should be made in order to get the highest profitability. T
140
The third test the company should make is the acceptance testing. In this test, the
systems characteristics will be checked to guarantee that they are in acquiescence with the
requirements given by the company. This will assure the company that the system is compatible
with the processes and constraints they defined.
The last test is implementation testing. In this test, the users will be the ones to try the
system and evaluate it if they can work with it or not. One of the important factors upon the
implementation is the accessibility of the system. The users must know and understand the
features of the system and the processes they have to do in order to get the output that the
company needs. The users will also be able to document and check the errors they encountered
during the testing and can use in the future.
Debugging
The alteration and checking of processes during the testing is called debugging. This is
the process wherein the programmers and consultants correct errors by editing and creating new
codes that could make the system better. It is usually hard to debug a system because the ones
that will debug it are also the ones who created the system, which makes it harder for them to
determine the errors that they have correct. The programmers also need to determine where the
error is coming from before being to create new codes for the system. After fixing all the errors
found, the programmers have to create a user manual that would discuss the steps and processes
that the user have to do in case an error will occur again. The user manual will also help the users
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to be able to understand the processes in the system and they could also use it to guide them
throughout the implementation.
Upon evaluation, the analysts found out that most of the problems are from the
departments that are still doing processes manually. The marketing department is having a hard
time in organizing events and creating new ways in promoting the cars which is causing them to
lose some sales and prospect customers. Another problem is that the slow processing of payroll,
it is handled by the HR department and because of some factors that affect the computation of
the salary of employees one of which is attendance they are having problems computing it
because of the inconsistency of the data they have. After all the evaluation has been done, the
analysts decided to create three alternatives that the company can use to solve these problems:
(1) a customized system that the IT department will create that will make the processes in
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marketing and HR automated linked with ERIC; (2) outsourcing the system proposed; and (3)
buying COTS that matches most of the needs of the company.
The analysts then evaluated the feasibility of the systems considering the effects of each
alternative in the current operation of the company. The feasibility matrix below discusses the
feasibility of the system in four areas: operational, technical, economic, and schedule.
FEASIBILITY
CRITERIA
Operational
Feasibility
40%
CUSTOMIZED
SYSTEM:
OUTSOURCE
SOFTWARE
DEVELOPER
CUSTOMIZED
SYSTEM: INHOUSE IT
DEPARTMENT
The IT professionals
from the outsourced
software
company
could help in the
improvement of the
COTS
The maintenance of
the system would also
be done by the
software
company,
which means that the
in-house
IT
department
would
have more time to do
their jobs inside the
company.
be performed by the
companys in-house
IT department. Which
makes
the
dissemination
of
information easier
The disadvantage of
this is that there will
be no fresh ideas
from external teams
and there will be no
external team to
check if the system
has anomalies.
Score: 95
Another
disadvantage
is
that the system has
features that are
not needed by the
company.
The
adaptation
process of the
employees to the
system continues
even after the
implementation
stage because the
system
is
not
business oriented.
The
employees
might
encounter
problem
during
operations
that
could affect their
output.
The disadvantage of
this alternative is the
difficulty
of
communication
between the company
and
the
software
provider.
SCORE:
The disadvantage
of this is system is
the
company
should adapt in the
format
of
the
system.
Score: 94
Score: 90
144
Technical
Feasibility
30%
The
hardware
required in order to
use the new system
are already in the
company.
The
system does not
need a lot of new
hardware.
The
biometrics
system that the
company should
buy is that is very
compatible with it
which
is
PrimeTime
Biometrics system.
Other
materials
needed for the
operation of the
new system will be
provided by SAGE
(i.e., cables).
145
customized system.
SCORE:
Score: 98
Economic
Feasibility
20%
Score: 98
Score: 92
Other
important
factors to consider are: Other
important
factors to consider
ROI: 10.59
are:
Other important
factors to be
considered are:
Breakeven:
months
ROI: 9.89
9.74
Breakeven: 4.13
months
SCORE:
Score: 96
Score: 92
Score: 90
Schedule
Score: 94
Score: 91
Score: 96
Score: 96
Score: 93.75
Score: 91.2
Feasibility
10%
SCORE:
RANKING:
100%
Alternative 1
Costs
Time of Completion
P287, 333.30
81 days
Customized System:
146
P774, 711.90
160 days
Customized System:
In-House IT Department
Alternative 3
Purchased COTS
(SAGE ERP X3)
Table 12.2 Summary of the Feasibility Matrix
After the analysis of the feasibility matrix, the analysts concluded that the best among the
alternatives is to outsource the system.
In the operational feasibility, the analysts gave outsource and in-house system both 98
and gave COTS 92 as a rating. This shows that in terms of how the operations of the company
after the implementation of the system change will be mostly positive if the company uses the
outsourced or in-house system. Considering that the proposed system will be that of the
company, the users of the system will have easier time to understand and process the things
needed for the output they have to do. The analysts also considered the productivity of the
employees during the implementation of the system showing that if the company chooses inhouse, the IT department will be not be productive because they have to focus on the creation of
the system. On the other hand, if the company chooses outsource, the operations of the company
will not be affected during the implementation. The COTS is given the least rating due to the
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reason that the system will not be maximized by the company because of the features that cannot
be used or not needed by the company.
All the proposed alternatives do not require a lot of materials or equipments needed by to
the company to implement the program. The similarity of the three alternatives is the need of the
biometrics. The low rating for the COTS is the cost of the biometrics needed for implementation
of SAGE. The PrimeTime Biometric system which is the prescribed biometric for sage cause
more than 5 times than the biometric system that the company has to purchase for the in-house
and outsource system.
The analysts computed the costs of the three alternatives. The most expensive alternative
is the in-house system which will cost the company more than P770, 000, the second is the
outsourcing which is for more than P280000, and the least expensive is the COTS which costs
more than P140, 000.
In terms of scheduling, the best alternative is the COTS with a completion time of 41
days. If the company already needs a system and they could not wait for the completion of inhouse or outsource system, they should choose the COTS. The second best in terms of
scheduling is the outsource system and the least alternative is the in-house system.
The analysts and the company want a system that could accommodate all the functions
that the company needs and making it as business-oriented and considering all the results in the
148
feasibility analysis test, the suggested and the best alternative for Chevrolet-Balintawak is to
outsource the system.
List of Appendices
Appendix A: Inventory of Existing Hardware and Software
1. Hardware
Estimated Projected
Hardware
Computer
Qty
25
Type of Equipment
Intel
Computer
age
Desktop 2
Location
life
8 years
Departmental
offices
Intel
Server
25
Core
i5
3470
Owners office
6 years
Server
Xeon
Departmental
offices
E31220v2
Owners office
80W
Printer
Intel C202
Epson M100
4 years
Departmental
offices;
Photocopying
6 years
Owners office
Departmental offices
machines
Projector
Telephone
1
13
Infocus IN112
2
Panasonic
telephone 3
5 years
8 years
Owners office
Departmental offices;
Hardware
Computer
Printer
Photocopy
Projector
Telephone
Owners
KX-T7716
Customer Lounge
User
Employees; Top Management
Employees; Top Management
Employees; Top Management
Employees; Top Management
Employees;
Top
Status
In operation
In operation
In operation
In operation
In operation
office,
Financial arrangement
Owned
Owned
Owned
Owned
Owned
Management; Customers
2. Software
ERIC SYSTEM
150
151
153
Architecture
Automation
Biometrics
Breakeven Analysis
Commercial Off-the-Shelf
Data Dictionary
Refers to metadata
Database
Debugging
ERIC System
Feasibility
Gantt Chart
Information System
Outsourcing
an outside supplier
A schematic illustration or visual presentation of the
steps or processes in a system
Queries
System Analyst
System
155
156
157
2. System analysts: Sir, how about the functions of other departments such as HR?
Chevrolet North EDSA: Wala pa kaming system that handles the functions of marketing
and promotion, HR, and the like.
158
3. System analyst: So, in the HR how is the attendance being checked and how is the
payroll computed?
Chevrolet North EDSA: Manual checking of attendance and the computation is made
through Excel.
4. System analyst: Sir, sorry, what do you mean by manual checking? A tally sheet of
attendance?
Chevrolet North EDSA: In the HR department, there is an assigned attendance checker,
the checker then checks the department one by one to see who is not yet around by 8pm
and who already left before 5pm.
5. System analyst: Thank you sir, well keep you posted regarding the development of this
project
Chevrolet North EDSA: Sure, if you need anything contact me through e mail.
159
160
161
Magkilat, B. (2013). Auto industry targetd 10% increase in sales in 2014. Retrieved August 8,
2014 from, http://www.mb.com.ph/auto-industry-targets-10-increase-in-sales-in-2014/.
Pornelos, V. (2014). Combined PH Auto Sales May 2014: Strong growth continues. Retrieved
August 8, 2014 from, http://www.autoindustriya.com/auto-industry-news/combined-phauto-industry-sales-may-2014-strong-growth-continues.html.
168
169
172
Bibliography
175
Magkilat, B. (2013). Auto industry targetd 10% increase in sales in 2014. Retrieved August 8,
2014 from, http://www.mb.com.ph/auto-industry-targets-10-increase-in-sales-in-2014/.
Pornelos, V. (2014). Combined PH Auto Sales May 2014: Strong growth continues. Retrieved
August 8, 2014 from, http://www.autoindustriya.com/auto-industry-news/combined-phauto-industry-sales-may-2014-strong-growth-continues.html.
176