IT Initiative Recommendation for PFM Devices

To:        Betty Brewer, CIO

From:   Jennifer Mackson

Date:    July 25, 2016

RE:       IT Initiative Recommendation for PFM Devices

As a result of a decrease in revenue, PFM Devices has developed a new strategy with four objectives to turnaround and increase revenue:

·  Increase market share,

·  Decrease operating expenses,

·  Increase access and visibility to financial, inventory and sales data on a worldwide basis and,

·  Reduce inventory levels globally.[1]

To achieve the above-listed objectives, PFM’s executive team has decided to implement either a customer relationship management system or a data warehousing project.  The issue is which of these two initiatives should be implemented first. 

A data warehouse would help with two of the four objectives listed above:  decrease operating expenses and increase access and visibility to financial, inventory and sales data on a worldwide basis.  With the availability of more current and real-time information that data warehousing provides, decisions can be made faster which in turn would assist with decreasing operating expenses.   However, the data warehousing project will take longer to implement.  PFM wants to meet its objectives within a year or sooner and there are a few obstacles and challenges that stand in the way of a speedy implementation of data warehousing.    The process of consolidating data and systems across three regions – United States, France and Japan is complex.  Each region has its own set of technology challenges that would make consolidation difficult.  The projected cost savings for this project is $339,717 for the next four years however the cost will be $2.8 million.

The other IT initiative, a customer relationship management system (“CRM”), would help PFM increase revenue and market share.   A CRM will allow PFM to build relationships with existing customers and to gain new customers which will help PFM increase its market share.  Once PFM increases market share, revenue will increase as well.  Estimated project costs and benefits illustrate that implementing CRM will increase revenue approximately $1.2 million dollars over the next 5 years after implementation and operating costs will steadily decrease.  But this option is the costlier of the two at $4,955,300.

My recommendation for PFM Devices is that the company implement a CRM system to increase its revenue and then focus on the data warehouse project.  An improvement in revenue in the short-term is what PFM needs and the CRM system will provide that as well as income to pay for the implementation of the data warehouse which will further assist with the continued success of the company by providing real-time information for faster decision making and cutting operating expenses. 

    

---

[1] Embry, Mark and Kayworth, Timothy. PFM Devices – Complex Project Initiatives. Case Study. Ivey Publishing, 2007. Print. 6 September 2007.