Business Process Analysis

Consider this fictitious scenario, previously stated on this site. The Applications Department is having difficulty tracking and reporting client management data in a timely manner. Specifically, it has become increasingly difficult to communicate to the client how much of the budget has been spent. To amend this issue, a business model was drafted to show the current state of how data is being pulled and maintained. Then, a new business model has been proposed to address the accuracy, timeliness and effective reporting of the data. Currently, the participating systems do not integrate well and it is difficult to determine which system is the source of truth. To continue the initiative of designing a report process that addresses the aforementioned issues and adds value to the overall client management structure, the simulation model below was created. This model is a discrete event simulation model and captures the reporting process shared among the finance, IS and Project Management departments and its recipient also referred to as the client. The exercise starts with the client as a request is made through the Project Management database. It is accounted for as costs and actuals by the Finance department and details are maintained by the Project Managers. Lastly, to ensure that the data is accurate and of good quality, the Analysts owns the reporting structure, report creation and distribution of metrics. The Analyst also ensures that the PM Database has the most updated plans of record, is the source of truth, as well as the subject matter expert (SME) for client and project reporting. The Analyst has chosen Tableau as their Business Intelligence (BI) tool of choice and is responsible for ensuring that the data is refreshed and that the appropriate stakeholders know how to interpret the data, metrics, and insights.

Sales Analysis

A 2018 Forecast vs Actuals Chart shows a look back of how well the managers are able to forecast sales which ultimately projects how much or little resources are needed to support business operations. The numbers are fictitious, but the line graph show that December is generally the month with highest sales. Whereas, March sales are the lowest overall. December’s high sales could be reflective of the holiday season and higher consumer spending habits during that time.

If the above sales account for revenue generated per app, and 25 apps were created on an annual basis, then 27 apps would need to be produced to reach an annual goal of $1.2M annually. The following table shows how much revenue is generated by creating 25 apps vs 27 apps.

Pricing Analysis

Apple’s Business Executive Customer Profile:

• Current Apple Product user

• Current Apple Users who travel for business 

• Users spend up to 30% more per night on rooms compared to other mobile users

• The probability that owners have arranged travel in last month is up to 50%

• 1/3 of customers have a minimum household income of $100K 

• Apple customers are mostly college-educated and interested in technology news

• Average Apple customers use Apple products for productivity / professional reasons

• 2:1 customers are men

• Age 35-44 on average

• Apple customers tend to have a higher discretionary income than other mobile users

• $1.5 billion in app downloads from the Apple Store

The Information Systems Department (IS) is focused on building apps for internal clients and enhancing the app store which houses numerous non-Apple apps for productivity on an iPhone. Specifically, this is the responsibility of the the App Development sub-department.

internal Market Strategy

Since the App Development’s clients are internal, their Account Managers are focused on cultivating relationships with prospective and existing internal Senior Managers such as Director roles and above. 

Customer Profile:

• Decision-makers or Senior Management

• Budget Owners

• Sales, Marketing, and IT Departments who service external executives 

• Managers who are able to spend $500K and above on their app developments / initiatives

SWOT Analysis

Strengths

• Internal App Developers and App Store Managers who have both organizational and external customer knowledge

• Service is generally cheaper as expense is a reallocation of funding as opposed to an external cost to an outside vendor

• Timeline is reasonable and can be flexible since customer is internal and have fewer restrictions or more lenient terms

• Higher profit margin since internal services are generally cheaper

Weaknesses

• Unable to properly track expenses after budget and costs are sent to Accounting / Finance

• Unable to provide prompt and accurate account of forecasted costs or actuals charged to internal client

• Unable to provide routine reports as current model is too time consuming

• Unable to perform sound historical analyses on past client costs to accurately determine future costs

Opportunities

• Opportunity to gain better control on Client spend by employing an analyst and a BI tool short-term to track client costs

• Opportunity to create an Enterprise Data Warehouse (EDW) to integrate participating systems which house client and project management data 

• Opportunity to improve client reporting and communicating costs on a timely basis

Threats

• Internal clients decide not to pay for services since costs are not accurately accounted for in a timely manner prior to future budget approvals

• Internal clients enlist external vendors to perform work which could cause a decrease in business, revenue and influence / value

• Internal clients budgets are not approved for the following year when they are responsible for paying for operational expenses for services

Action Plan

• Ensure that customers are receiving high-quality service

• Ensure that costs are outlined as more affordable than external vendor costs

• Improve cost reporting process so that client feels comfortable knowing that they can track and afford services 

• Host quarterly informational workshops or seminars to inform prospective and existing internal clients of IS offerings and upcoming services

• Ensure that customer data is tracked in real-time and PM updates the database within 72 hours of receiving approved changes

Revenue Goals

• Grow revenue in upcoming year by $1.2Million to secure 80% of internal contracts

• Set competitive pricing to achieve this goal and ensure that revenue is at least $100K a month.

• Develop at least 27 apps this year compared to only 25 last year.

• Enlist current app developers to come up with in-app purchases to partner with the top 3 grossing apps in the Apple app store such as Netflix, Pandora, and HBO Now to gain a percentage of revenue