- Post the group members name and the chosen case through comment option at the bottom of this post.
- No duplication of case.(e.i. One case per group policy)
Case 1: Database Technology Used to Improve Airport Security
The Transportation Security Administration is evaluating various approaches to harnessing database technology to help improve airport security. Unfortunately, the deployment of any such system may require the airlines to invest in additional information systems technology at a time when they are suffering from a lack of revenue and one major airline has declared bankruptcy.
One idea is to develop a database system that links every airline reservation system in the country with a number of private and government databases. Data mining and predictive analysis would be used to analyze personal travel histories, the background of passengers aboard particular flights, and a wealth of other data to assign numerical “threat ratings” to individuals. Warnings would be sent electronically to workers at airport screening locations to inspect those individuals with high threat ratings more closely.
Another approach involves allowing prescreened “trusted travelers” to pass through airport security checkpoints quickly, avoiding long lines and congestion. This would allow more time and resources to be devoted to screening other travelers whose level of risk is higher or unknown. Those who apply for the “trusted traveler” program would have to pass a background check conducted using data from a number of state and federal databases. Once at the airport, “trusted traveler” passengers would be identified, perhaps by scanning the individual’s fingerprints or retina or some form of identification card. (A federal effort is under way to develop a security ID card for airline passengers that would rely on biometic identification and be linked to government databases). At that time, the system would also cross-reference the passenger’s identification with the FBI watch list database and a federal passenger profiling system known as Computer-Assisted Passenger Screening. Provided everything checked out, the passenger could then proceed to his/her airplane using expedited security check-in procedures.
Discussion Questions:
1. Which approach is best in terms of improving airport security: assigning a threat rating to individuals or prescreening individuals to identify “trusted travelers?” Why do you feel this approach is best?
2. Identify specific data and describe how that data could be used to assign numeric threat ratings to individuals.
Critical Thinking Questions:
3. Briefly discuss the data integrity or data privacy issues associated with the two approaches outlined above.
4. Identify other technical and economic issues that may make it difficult to implement either approach. Should the federal government help pay the cost of implementing these safeguards?
Sources: adapted from Dan Verton, “Feds Mulling New Airline Surveillance,” Computerworld, February 1, 2002, accessed at *www.computerworld.com; Matt Berger, “’Trusted Traveler’” Aims to Streamline Flight Security,” Computerworld, March 18, 2002, accessed at *www.computerworld.com; Brian Sullivan, “EPIC Files Suit Against the Bush Administration,” Computerworld, April 2, 2002, accessed at *www.computerworld.com; Larry Greenemeier, “Security Technology Modeled on Israeli Example,” InformationWeek, March 11, 2002, accessed at *www.informationweek.com.
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Case 2: VNU, International Media and Information Company
VNU NV in 1994 was a Netherlands-based owner of Dutch newspapers and television stations and European magazines. Over the next seven years, it spent a total of $8 billion acquiring other companies to transform itself into a leading provider of information about media and consumers for use by media companies and advertisers. Today VNU owns 145 trade newspapers and magazines; Soundscan, which tracks retail sales of recorded music; Nielsen Media Research, which rates television shows; and ACNielsen, which compiles market data on the sales of packaged goods. With operations in over 100 countries and employing 35,000 people, VNU provides millions of people around the world with business intelligence.
Its marketing information activities are built on the data collected, edited, cleaned, and stored by its ACNielsen subsidiary. The basic data collection process begins with in-store scanning of product codes at the checkout and observations of professional auditors during store visits. This data is gathered from retail outlets wherever food, household, health and beauty, durables, confectionery, and beverage products are sold. The data can be used to track sales volume, selling price, and effectiveness of promotions and merchandising—not just of your own company’s products, but of competitors as well. The data can also be used to measure overall product performance, assess the extent of product distribution in area stores, quantify the effectiveness of special promotions such as sales or advertisements, and measure consumers’ reactions to changes in price.
Recognizing the need to support global decision making, ACNielsen introduced an Internet service to deliver its information products in 1996. This expansion on-line allows people within client organizations to obtain ACNielsen information, regardless of their location.
In addition to its information products, ACNielsen markets a broad range of advanced decision support software that helps more than 9,000 clients spread across 100 countries to obtain large volumes of information, evaluate it, make judgments about their growth opportunities, and plan future marketing and sales campaigns. The software includes tools that perform sophisticated multidimensional reporting, data mining, analytical modeling, graphical presentations, and expert systems. The goal is to enable decision makers to make sound recommendations to optimize their business: price levels, promotion methods, media spending, product portfolio mix, retail category optimization, and other choices. If made correctly, these key decisions can generate increased sales and profits.
Discussion Questions:
1. What issues might be involved in collecting, editing, cleaning, and storing the ACNielsen data? Identify some specific issues related to data privacy.
2. What concerns might be associated with providing customers around the world with access to the ACNielsen data via the Internet?
Critical Thinking Questions:
3. What ethical issues might arise for VNU in providing marketing data, tools, and services to two major multinational companies that are competitors (e.g., Procter & Gamble and Unilever)? How might these issues be minimized?
4. Which do you think is more important to VNU customers—good data or good tools for the analysis of data? Why?
Sources: adapted from Geraldine Fabrikant, “MEDIA; Big Makeover for Dutch Media Data Company,” The New York Times, August 13, 2001, Late Edition-Final, Section C, p. 9,; “About VNU,” VNU Web site at http://www.vnu.com, accessed on February 25, 2002; “Sybase Solution Analyzes Television Viewing Trends for Nielsen Research,” Sybase press release, October 22, 2001.
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Case 3: J.Crew Turns to Data Warehousing to Increase Online Sales
J.Crew is a global retailer and catalog merchant of prestige fashions with headquarters in New York City. It offers a wide range of men's, women's, and children's apparel, shoes, accessories, and personal care products through its fast-expanding retail network of 133 U.S. stores and 76 licensed stores in Japan.
When J.Crew set up its jcrew.com site in June 1997, it was one of the first apparel sites on the Web. Today the Web site is J.Crew's fastest growing distribution channel. Part of the reason for its huge success is that J.Crew uses a data warehouse and software tools to identify for on-line shoppers what J. Crew clothes, shoes, and accessories customers frequently purchase together. That information is fed to applications running the Web site so that when on-line shoppers click on an item, the Web site recommends complementary products that the customer might be interested in buying. Delivering dynamic, relevant product recommendations to shoppers has increased the average order size and raised customer satisfaction and loyalty.
J. Crew uses DigiMine's Enterprise Analytics data-mining software to analyze sales data from its Web site, retail stores, and catalog sales operation. All of this data is collected and stored in a 500-GB data warehouse running on a Microsoft SQL Server database, which took J. Crew and DigiMine six months to develop. J. Crew combines the data generated by visitors clicking on its Web pages with product sales data from corporate systems that process order data from catalog and retail operations. The consolidation of all this data gives J. Crew a complete view of its customers’ preferences and enables it to analyze sales trends, build customer profiles, and generate product recommendations for E-mail marketing campaigns. It also uses this pooled data to pair products and advise shoppers which shoes customers most often buy with which slacks. As a result, every shopper at jcrew.com can view compelling apparel, shoe, or accessory suggestions, based on their browsing and purchasing behavior.
Discussion Questions:
1. Visit the J.Crew Web site at http://www.jcrew.com and shop for some apparel. Be alert for the site’s attempts to increase your order size through recommendations of complementary apparel, shoe, or accessories. Write a paragraph summarizing your experience.
2. In serving their on-line shoppers, most retailers do not combine data from the brick-and-mortar stores and catalog purchases with browsing and shopping data from their Web sites. J. Crew does. How does this provide J. Crew a competitive advantage?
Critical Thinking Questions:
3. Identify some potential data privacy issues that might arise with the capture, storage, and analysis of customers’ on-line shopping data from the J. Crew Web site.
4. Imagine that J. Crew is considering offering a new service for on-line customers—help in shopping for gifts for friends and family members. Interested customers would register friends and family members, along with their birth dates, anniversaries, and other pertinent information such as sizes and color preferences. J. Crew would send an e-mail reminding the customer that a friend’s birth date or other special occasion was near and suggest that they visit the Web site for help in choosing a gift. What are the pros and cons of such a service? What additional information would need to be captured in the data warehouse to support this service? Would you be in favor of this service? Why or why not?
Sources: adapted from Ann Bednarz, “Cents and Retail Sensibility,” ComputerWorld, January 7, 2002, http://www.computerworld.com; Mark Hall, “Finding Answers in Data Haystacks,” ComputerWorld, April 23, 2001, http://www.computerworld.com; Rick Whiting, “Retailer Seeks Success in How Customers Dress,” InformationWeek, November 26, 2001, http://www.informationweek.com; “J. Crew Deploys digiMine’s Data Mining Solutions,” DigiMine company press release, November 13, 2001, , http://www.digimine.com/; J. Crew Web site at http://www.JCrew.com.
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Case 4: Penske Uses Satellite Communications to Meet Customer Needs
Principle: The effective use of telecommunications and networks can turn a company into an agile, powerful, and creative organization, giving it a long-term competitive advantage.
Penske Logistics provides service across three continents using the company’s technology, engineering, and operational expertise for global transportation management, distribution management, and integrated logistics. In fall 2001, Penske installed wireless computers in its 4,000-vehicle fleet. Each truck’s cab computer features a wireless network and satellite connection, effectively turning the cab into a communications hub. The wireless networks are based on a pioneering technology called Code Division Multiple Access (CDMA). That technology powers wireless networks and handsets all over the world. QUALCOMM, based in San Diego, developed CDMA, which makes very efficient use of the radio frequency spectrum and allows more people to share the airwaves at the same time—without cross-talk, static, or interference.
The satellite connections for Penske truck drivers are made possible by a consortium of international telecommunications companies formed to deliver satellite communications through a network of service providers called Globalstar. Members include Aerospazio, Alcatel, Alenia, China Telecom, DACOM, Daimler Chrylser Aerospace, Elsacom, France Telecom, Hyundai, Loral Space & Communications, QUALCOMM, and Vodafone. The Globalstar system provides high-quality satellite-based voice, fax, and data transmission services to a broad range of customers using Globalstar's set of 48 low-earth-orbit (LEO) satellites. Globalstar sells access to its satellite communications system to regional and local telecommunications service providers around the world.
At the company’s distribution centers, the Penske driver captures information about cargo deliveries and pickups using a bar-code scanner. The scanner comes equipped with a card allowing the driver to relay data to the cab computer, a Qualcomm MVPc CE unit running the Windows CE operating system. The cab computer is programmed to immediately relay critical information—such as a change in the number of items delivered to a customer—to Penske corporate distribution systems and to the affected customer. This information is sent over the Globalstar satellite system. So, the customer knows exactly what items and what quantities are being shipped as soon as they are loaded on the truck. Penske’s central operators are also able to send route alerts to its drivers about traffic jams or changes in schedules over the satellite communications system.
Routine shipment information—such as records of all items dropped at a particular location—is stored in the onboard computer until the truck gets within close range of a Penske distribution terminal. At that point, the computer in the truck's cab senses the approach of the distribution terminal and starts downloading its data at 11M bit/sec. The cab computers also run software from XATA, a supplier of onboard computing systems for transportation companies. The software enables Penske to automate driver logs, monitor state line crossings, and calculate fuel tax. The wireless and satellite-based telecommunications system enables Penske to deliver superior customer service while reducing is costs and enabling it to comply with all distribution regulations.
Discussion Questions:
1. Why does Penske use the satellite link only for transmission of critical information, while transmitting routine information over the short-range link?
2. Why is the information concerning exactly what was loaded on the truck deemed to be critical enough to relay to the customer immediately?
Critical Thinking Questions:
3. With this basic infrastructure in place, what additional applications can you identify that would further reduce costs and add customer value?
4. What components of this system could fail? Which ones need some sort of backup system? What would you recommend to provide backup capability at a reasonable cost?
Sources: adapted from Bob Brewin, “Penske Outfits Fleet with Wireless Terminals,” ComputerWorld, June 11, 2001, http://www.computerworld.com; “Penske Logistics Signs License Agreement with Xata for Xatanet Software,” Penske press release, February 26, 2001, http://www.penske.com; “QUALCOMM’s FleetAdvisor Offers Private Fleets Affordable Solutions for Improved Productivity and Customer Service,” QUALCOMM press release, February 5, 2001, http://www.qualcomm.com.
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Case 5: Starbucks Deploys Wireless LANs
Starbucks is the number one U.S. specialty coffee retailer, and it operates more than 5,000 coffee shops in office buildings, shopping centers, airport terminals, and supermarkets in some 20 countries worldwide. Starbucks sells coffee drinks and beans, pastries, and other food items and beverages, as well as mugs, coffeemakers, coffee grinders, and storage containers. The company also sells its beans to restaurants, businesses, airlines, and hotels, and it offers mail-order and online catalogs. Starbucks has expanded into coffee ice cream (with Dreyer's) and makes Frappuccino, a bottled coffee drink (with PepsiCo).
In January 2001, Starbucks and Microsoft announced an agreement to jointly offer high-speed Internet connections in all 3,000 Starbucks stores throughout North America. Starbucks chose Compaq Computer as the main hardware supplier for this project. Compaq is providing iPaq handheld computers, which Starbucks customers can use to access broadband content and services.
The project is part of an overall Starbucks strategy to upgrade its operations including the introduction of Starbucks customer cards, which are intended to speed up orders and eventually allow customers to order drinks over mobile phones. Starbucks also believes that giving customers the ability to access a 10 Mbps wireless LAN while enjoying a cup of coffee on a comfortable couch will lure more customers into its coffee shops during off-peak post-breakfast hours—the company currently does 80 percent of its business in the morning. Starbucks has 15 million customers a week, and 90 percent of them use the Internet. So, providing Internet access may be a benefit to many of its customers. Starbucks offers the service at fees ranging from $2.50 for 15 minutes to $59.95 per month for unlimited access.
MobileStar Network Corporation was picked to install an industry-standard 802.11b LAN complete with wireless radios and antennae in Starbucks stores. One LAN is capable of supporting 20 to 40 concurrent users. Customers access the MobileStar network through a portal that Microsoft developed for Starbucks on its MSN online service. Access to that portal carries no charge, but once customers surf beyond it or check their e-mail, they will either have to enter a MobileStar user number or sign up online. The first installations were completed in the spring 2001 in the Pacific Northwest. Starbucks planned to expand its Internet access for customers to all 3,000 North American outlets and 70 percent of its stores worldwide by the end of 2003.
Starbucks is weighing several options to encourage use of the wireless LAN technology, including the sale of wireless modem cards in its stores—provided it does not detract from the coffee experience. Starbucks has also started discussions with major laptop computer manufacturers to provide incentives for customers to purchase the wireless LAN devices.
Some industry analysts believe that Starbucks has positioned itself too far ahead of the technology curve by launching this service so early. After all, not that many people have a wireless modem today. A writer for Fortune magazine tested access to the Internet from Starbucks outlets and complained that he had to visit five stores before he could get it to work. He also pointed out the total lack of publicity for the wireless networks—there were no signs, no brochure, no one available to offer customer service, nobody in the stores who knew anything about the wireless LAN.
Rollout plans were delayed when MobileStar Network Corporation shut down its offices in October 2001. By February 2002, Starbucks confirmed that VoiceStream, the North American affiliate of T-Mobile International, had acquired MobileStar and will be the service provider for the high-speed Internet access that Starbucks is continuing to roll out to company-owned stores.
Discussion Questions:
1. Visit a local Starbucks store (in an off-peak time period) and ask the workers about the wireless LAN service. Has the service been installed there yet? If so, do you notice any customers taking advantage of it? Ask for a demo. If it has not been installed yet, find out why not.
2. What evidence might support critics’ comments that Starbucks has positioned itself too far ahead of the technology curve?
Critical Thinking Questions:
3. Make a list of actions that are required to complete the rollout of this new technology in a manner that will provide an effective and useful service to customers.
4. Discuss the potential risk of “pushing the technology so hard” that it takes away from the coffee experience.
Sources: adapted from Elisa Batista, “Bluetooth Fakes Lack Proper Bite,” Wired, October 24, 2001, accessed at http://www.wired.com; Bob Brewin, “Starbucks Takes Wireless Leap,” Computerworld, January 8, 2001, accessed at http://www.computerworld.com; A. Lee Graham, “MobileStar Cites Starbucks Project as Its Grounds,” The Dallas Morning News, February 20, 2001, accessed at MobileStar Web site at http://www.mobilestar.com; David Lidsky, “Shortcut to Hell,” Fortune, March 1, 2002, accessed at http://www.fortune.com; Jaikumar Vijayan, “Starbucks Picks Compaq as Hardware Supplier for Wireless Access in Stores,” Computerworld, May 2, 2001, accessed at http://www.computerworld.com; “Starbucks Annual Shareholders Meeting to Highlight New Initiatives,” Starbucks press release, February 26, 2002, f http:/www.starbucks.com.
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Case 6: Bear, Stearns & Co. Builds Redundant Telecommunications Network
Bear, Stearns & Company is a leading investment banking and securities trading and brokerage firm that serves governments, corporations, institutions, and individuals worldwide. The company headquarters is in New York City, and it has 10,500 employees with additional offices in several U.S. cities and foreign countries. Through Bear, Stearns Securities Corporation, it processes approximately 10 percent of the New York Stock Exchange volume cleared daily through the National Securities Clearing Corp. Bear, Stearns is also one of the largest securities borrowers in the world.
After three years of planning and three and one-half years of construction, Bear, Stearns moved into a new seven-story building on Madison Avenue in New York in 2002. Bear, Stearns saw the relocation of its New York headquarters building as the perfect opportunity to provide innovations that would enable its employees to work more efficiently and more effectively.
High on its list of priorities was the need to upgrade the computers and the network its traders rely on for market data and trade execution. The new building houses 2,000 traders, each with multiple, state-of-the-art desktop computers. The typical trader uses two PCs, but some use as many as four. Flat panel displays were a requirement to reduce the amount of desk space required.
The company identified the network interface card (NIC) on the traders' PCs as critical to ensuring complete fault tolerance. The NIC is a computer circuit board or card that is installed in a computer so that it can be connected to a network. Personal computers and workstations on a local area network typically contain an NIC specifically designed for the LAN transmission technology. All Bear, Stearns PCs were outfitted with two network interface cards for redundancy. In addition, Bear, Stearns ran 12 Category 5 communications lines connecting each trader’s PC to Bear, Stearns's 100-Mbps Ethernet LAN. Two fiber-optic cables also provide additional redundancy. The goal is to eliminate any downtime—traders must be able to continue business even in the event of a network failure.
IP Metrics Software was contracted to provide the NICs. The firm also provided high-availability/high-reliability software and consulting services to increase the performance and reliability of the network infrastructure and eliminate all single points of failure on the network. The current network design employs Cisco Systems 6509 routers in a four-tier architecture. The headquarters LAN connects to a three-node optical metropolitan area network that carries data at 6 Gbps among the headquarters, a site in downtown Brooklyn, and Bear, Stearns's data center in Whippany, New Jersey. This network uses Nortel Networks' Optera equipment and runs alongside a synchronous optical network–asynchronous transfer mode network that's there as a backup.
Discussion Questions:
1. Draw a rough sketch showing the equipment and network connections available to the typical Bear, Stearns trader.
2. Is there any single point of failure in the Bear, Stearns network?
Critical Thinking Questions:
3. Why is it so critical to Bear, Stearns to avoid a business interruption?
4. How could you quantify the cost of a business interruption at Bear, Stearns?
Sources: adapted from “Investor Relations,” Bear, Stearns Web site at http://www.bearnstearns.com, accessed March 11, 2002; Marianne Kolbasuk McGee, “IT Leadership Put to the Test,” InformationWeek, July 2, 2001, http://www.informationweek.com; and John Randleman, “No Downtime, No Matter What,” InformationWeek, March 11, 2002, http://www.informationweek.com
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