Business
tadei
group_case.pdf
Teaching Case
Fitness & Wellness Place Appoints a Chief Information
Officer
Joan Rodon
Department of Management Information Systems
ESADE Business School, Universitat Ramon Llull
Sant Cugat del Vallès, 59, 08172, Spain
ABSTRACT
Fitness and Wellness Place (F&W) is a network of fitness and wellness clubs in Spain and Portugal created in 2009 as a result
of a buy-out from a large British operator. In 2009, F&W was operating 15 clubs in Spain and Portugal and by the end of
2011, F&W ran 25 clubs. F&W’s rapid growth in the period 2009-11 had become a matter of concern to senior management.
The lack of control and the poor performance of core processes were negatively impacting the financial results and the firm’s
reputation. The F&W’s Chief Executive Officer (CEO), Nick Summers considered that it was time to make changes to the
operating processes and systems. Accordingly, Nick decided to create a new Chief Information Office (CIO) post in the
company and sought an industry outsider with excellent business performance who could put things in order. Students are
asked to put themselves into the shoes of the new CIO and deal with a broad range of IS management issues through seven
assignments. This teaching case was prepared to support a core course on information systems of a business administration
and management degree.
Keywords: Teaching Case, Data management, Business process management (BPM), Software as a service (SAAS), Social
networking, Security
1. INTRODUCTION
It was Monday, the 5th of March 2012 and Mike Vidal was
gazing out of the train window on his way to his new job at
Fitness & Wellness Place (F&W). He had been recruited for
the new post of Chief Information Officer (CIO). This was a
great opportunity for Mike. Since he graduated in Business
Administration, five years ago, Mike had always worked as a
consultant at a major management consultancy firm. As the
train drew into the station, Mike remembered the words of
F&W’s CEO when he accepted the job: “Mike, I want you to
help us hasten the implementation of the new strategic plan
of F&W. You will have to work hard to reorganize the
company’s information management processes and IT
systems.”
2. PREPARATION OF MANUSCRIPTS
F&W was a network of fitness and wellness clubs in Spain
and Portugal, created in 2009 as a result of a buy-out from a
large British operator with over 80 clubs throughout Europe.
At the time, F&W was operating 15 clubs in Spain and
Portugal. By the end of 2011, F&W was a well-established
brand in the Spanish and Portuguese markets with over
100,000 members and 1,100 staff. F&W ran 25 clubs and its
revenues peaked to €95 m in 2011 (see Table 1). Each F&W
center offered a full range of gym equipment, exercise
classes, personal trainers, indoor pools, spa and wellness
services including saunas, Jacuzzi, hydrotherapy pools, and
relaxation rooms, on-site day care, and a restaurant. F&W’s
strong brand position placed the company in an excellent
position for future growth.
Spain
2009 2010 2011
Gross Revenue
€36,960,00
0
€44,600,60
2
€56.776,50
0
Total Expenses
(including taxes,
interest,
depreciation)
€36,405,60
0
€43,976,19
3
€56,038,40
6
Net Income €554,400 €624,408 7€38,095
Clubs 10 12 15
Members 40,000 48,144 61,050
Employees 450 528 675
Journal of Information Systems Education, Vol. 24(4) Winter 2013
257
Portugal
2009 2010 2011
Gross Revenue
€18,720,00
0
€22,576,32
0
€38,386,50
0
Total Expenses
(including
taxes, interest,
depreciation)
€18,457,92
0
€22,282,82
8
€37,925,86
2
Net Income €262,080 €293,492 €460,638
Clubs 5 6 10
Members 20,000 24,120 40,750
Employees 225 264 440
Table 1: F&W performance (numbers rounded)
However, F&W’s rapid growth in the period 2009-11
had become a matter of concern to senior management.
There was a lack of a control over core processes such as
billing and customer analysis at the corporate level. There
were repeated billing errors and the quality of customer
information was poor. The firm’s profits and reputation
suffered as a result.
Nick Summers, the CEO of F&W, presented the strategic
plan for the next three years (2012-2015) in November 2011.
Nick’s view was that F&W should become a market leader.
He set two key objectives: (1) Growth at a rate of three new
clubs per country each year; (2) Boost operating profits by
1% each year over the next 3 years. Summers considered that
a change in the company’s operating processes and IT
systems was needed to achieve those goals. To these ends,
Nick decided to create a new CIO post and he personally
began searching for a CIO in the industry but was unable to
find any suitable candidates. In the end, Nick chose an
industry outsider with excellent business performance. This
was Mike Vidal.
At that point in time, F&W had three levels of
management (see Figure 1): Corporate, Country and Club.
These three levels and their corresponding posts were
inherited from the previous stage with the British operator.
There were three senior management posts at the corporate
level: CEO, a General Manager of Business Development,
and the new CIO position (Mike). At the country level, there
was a management team comprising: a Country Manager (in
charge of Sales and Operations), a Financial Manager, a
Marketing Manager, an IT Manager, and an HR Manager.
Posts at the Club level were: Club Manager, Sales Manager,
and Operations Manager. There was a difference between
Spain and Portugal regarding reporting. Whereas in Spain
the IT manager reported to the Financial Manager, in
Portugal the IT Manager reported to the Country Manager.
3. F&W’s OPERATING MODEL
On Mike’s first day at work, Nick suggested he talk to
certain managers and other staff to get a better grasp of
F&W’s operating model and a feel for who was who in the
firm. This would help Mike think about how IT and existing
processes might support these two strategic business goals.
Mike needed to familiarize himself with the company as
quickly as possible so he spent the first four days visiting
clubs and talking with staff. Extracts from some of his
conversations with them are given below.
CEO
Business
Development
Manager
Financial
Manager
Spain
Marketing
Manager
Spain
IT
Manager
Financial
Manager
Portugal
Marketing
Manager
Portugal
IT
Manager
Country
Manager
Spain
Club
Managers
Club Sales
Managers
Club
Operations
Managers
HR
Manager
Country
Manager
Portugal
Club
Managers
Club Sales
Managers
Club
Operations
Managers
HR
Manager
Country level
Club level
Corporate/group level
CIO
(Mike Vidal)
Figure 1: Organizational chart of F&W - management positions
Journal of Information Systems Education, Vol. 24(4) Winter 2013
258
3.1 Interview with Peter van Dalen, F&W’s Business
Development Manager
Peter had a close professional and personal relationship with
Nick. They had worked together for over 10 years. They had
the same view of the sector and were closely involved in
clubs’ daily activities. They visited clubs frequently to get an
idea of both what customers and staff liked and disliked.
Peter made some comments on the business challenges he
faced:
“Today we have 15 clubs in Spain and 10 in Portugal. I
am currently working on a couple of deals that we hope to
close in the next 4 months. We are talking about two
acquisitions of well-established fitness centers, one in
Valencia and another in Oporto. Once a deal is struck, we
want to make the transfer in no more than 30 days. This
involves training staff, changing markings, properly
equipping fitness and wellness rooms, and lastly putting in
our IT systems to run the club. Of course, this includes the
migration of their systems into ours.”
Peter also insisted on a new line of business that had
great potential: “Several five-star hotels have recently
approached and offered us the chance to run their fitness
centers. We think it is a wonderful opportunity to capitalize
on our know-how in the management of fitness centers. In
addition, this line of business enables us to grow without
much leverage. We run the business for them — that means
that they invest in upgrading their facilities and equipment,
and we deploy the working processes and systems. Please
help me on this matter. Think about standardizing operations
in this line of business and the kind of technological
infrastructure and applications needed.”
3.2 Interview with Jose Saa, Marketing Manager at
F&W Portugal
“In the Marketing Department, we carry out three main
tasks: promotion, product design and pricing. We are heavy
users of on-line channels in our campaigns and we consider
this approach has been very successful. Likewise, our
products have won several innovation awards. Although we
try to design the products in co-ordination with the
marketing department in Spain, each country has special
features and so products show some differences…”
When asked about product pricing, Jose noted: “In
Portugal we have had some problems with pricing and I
imagine the same goes for Spain too. We usually set prices
for products but quite often we find that a given product is
differently priced at each club or even within a club. This
happens because although we set the price for each product,
the price is adjusted by the salesman at the moment of sale. I
do not like this as it damages the brand’s reputation but the
sales teams take a strong line on this issue. They want to be
the ones who make the final decision on the price for a given
product and prospect. We have always worked like that.
Moreover, our sales prospecting systems allow variable
pricing. In fact, when salesmen register a new member and
add a product, instead of automatically referring to a price
list, the system forces salesmen to fill in data fields to
establish the base fee of the new member. What it boils
down to is that price is specific for each customer.”
“About 6 months ago, we launched a new service called
‘TOP member’. It has been very successful — we got 1000
new members in the first month alone. TOP members are
allowed to use any club in Portugal and Spain at no
additional cost. This service is particularly attractive for
people who travel a lot in their work. We promise them that
they can find us wherever they go. TOP members use a
different card from regular members. TOP members simply
show their card at reception but do not go through the usual
electronic gates. Reception manually notes the TOP
member’s card number in an EXCEL file at the entrance.
This means headquarters does not have up-to-date
information on where TOP members go and when. At the
moment, information on TOP members’ use of clubs is sent
to us only once a month from each club. We then merge all
that data to get a full picture of each TOP member - a fiddly
task that takes 3 more days of work. It is too time-
consuming. We are losing opportunities for improving the
service.”
3.3 Interview with Marta González, Country Manager at
F&W Spain
Marta was appointed Country Manager just three months
ago: “I am quite new in this job…but I have some experience
as Club Manager in three other clubs in F&W Spain. As a
Country Manager, my main concern is to tune the reporting.
I receive a daily report through e-mail from each club in an
EXCEL file. This report contains information for each club
in Spain and gives the actual and the budgeted number of
live members, leavers, hours of personal training sessions,
sales of articles at the point-of-sale, etc. Then my assistant
pre-processes all this information for me and consolidates
the EXCEL files from all the clubs into one. This
consolidated file is really my main working tool. I use it to
see how things are going and to quickly identify deviations.
We use an EXCEL sheet for each month… and it is really
good because it is very easy to use. However, when I want to
analyze and compare data from various months, things get
tricky. I have to use several sheets at the same time and that
is very limiting. I would like to have a tool that gives me an
easy way to analyze information at different levels of
aggregation: daily, weekly, monthly, etc. Apart from this
report, we have around ten other reports, for instance, debt
recovery, gym activity, sales commissions, deferred revenue,
service KPI, etc. At headquarters we have one and a half
full-time staff collecting the data from multiple internal
sources and drawing up these reports. Considering that all
the data comes from the systems we have at F&W, I would
have expected more automation. By the way, from what I
have seen so far, Portugal works the same way as we do in
terms of reporting.”
3.4 Interview with Larissa Pinto, Club Manager at F&W
Portugal
Larissa has over 15 years of experience in the sector and had
worked for F&W’s two main competitors. She stressed the
billing process and the management of debtors: “At clubs we
are in charge of billing at the end of the month. It is usually
chaotic. The last two days of each month are wholly taken up
with billing. Moreover, we have made several mistakes with
invoices over the last six months. It seems that some member
data is wrong — basic things like bank account numbers,
family names and fees. These glitches arise from typing
Journal of Information Systems Education, Vol. 24(4) Winter 2013
259
errors or members changing their bank accounts and failing
to tell us. We are cleaning up the data but it takes time and
new mistakes appear with each billing cycle. Luckily, we
have picked up such mistakes before sending the payment
orders to the bank so customers have not noticed them.
However, mistakes force us to run the whole billing process
again and that slows things down to a crawl. If payment
orders arrive later than the last day of the month, it pushes up
the default ratio, which in our case around it is around 10%!
Then there is debt management. Debtors are chased up by
the finance people at the headquarters in Portugal. However,
we have no information on this at the club. Among other
things, it means we sometimes provide services to members
who are two months in arrears. We see and talk with them
every day but we do not know that they owe us money. It
would be much better for business if we were made aware of
sums owing when members swipe their card in the entry
gate. The salesman has a vested interest in making sure
everyone pays his dues because they get no sales
commissions on members who run up debts within three
months of joining the club. .”
While listening to Larissa, Mike remembered what Marta
González told him about reporting. Mike asked Larissa what
she thought about it. Larissa said: “We have an EXCEL
template that I fill every day with the data that I extract from
sales prospecting, membership, control access, and point-of-
sale systems… It takes me about an hour a day but there is
more. I have to send headquarters in Portugal a weekly
summary. That takes another 4 hours. They constantly phone
us and ask for data which I do not always have on the system
so I have to ask others in the club… for instance the Club
Operation Managers, the Sales Manager, or reception staff.
Then there is the manual control of TOP members. You can
imagine that at peak times, reception is just too busy to note
them down. I hope we can simplify and automate all this
work… We also have reporting at the club level for instance,
to monitor prospects.”
3.5 Interview with Sandra Komrowski, Club Sales
Manager at F&W Spain
When asked about the daily problems with the sales area at
the club, Sandra spoke about the management of prospects
and members: “We have one system for the management of
prospects called ACT! and another for management of
members called Member Track. We spend too much time
transferring data from ACT! to Member Track. This transfer
task is supposed to require little staff effort because it is
automated. We have an import option at Member Track that
reads the prospects’ data from ACT! and automatically
creates the new members at Member Track. However,
because some prospects were missed in the past, salesmen
prefer to do things manually rather than rely on the import
feature. So some salesmen re-type all their new members in
Member Track every day. This is very time-consuming. We
are under a lot of pressure to recruit new members. The more
time that we spend on these tasks, the less time we have for
selling. This manual re-typing has also led to input errors
that come to light during the billing process. This happens
much more often than we would like.”
Sandra also expressed her concerns about the lack of
automated tools for controlling sales staff, “They have a lot
of room for maneuver regarding the final price of products.
For instance, when we get a message from the Marketing
Department about new products and new prices, we must
enter them on our IT systems. I do it myself. It is a task I
would not have to perform if Marketing had access to our
prospecting and membership systems. I could save myself
the bother. As things stand, I cannot ensure that salesmen do
not change the price of products at the moment of sale.
When they register a new member they assign a price which
may be different from the price recommended by Marketing
because they can apply discounts. So I spend a lot of time
checking the discounts that salesmen give to a new member.
The problem is, once a discount has been applied it is hard to
change, even when it is a mistake. How can we tell a
customer that his or her discount no longer applies? If we do
so, we are likely to lose the customer. The end result is that
there are as many prices of products as customers have that
product. I need a system that automatically limits salesmen
capacity to change prices or that at least forces them to get
my approval before they set a different price for a prospect.
That is, the IT systems should help Sales Managers more in
tracking and controlling both prospects and existing
members.”
3.6 Interview with Diego Martinez, Financial Manager at
F&W Spain
“We are in charge of consolidating the financial data from
the business in Spain and Portugal. This currently takes us
about 4 weeks. We have to slash that time and we need to
standardize processes to do so. However, that is impossible
unless we all use the same system. Spain uses SAGE and
Portugal uses Agresso. We are happy with SAGE. We need
to talk with Portugal and convince them to move to SAGE. It
is absurd that we use different systems for the same
purposes. We should lead this standardization process. This
would also help slash IT maintenance costs — something
that might interest you. We need to centralize the IT function
to achieve synergies and develop new projects while
building a strong support team that works closely with each
club. The Finance Department also deals with debt recovery
because it is the only way to ensure that a single procedure is
used by all the clubs. If we don’t control this process, we
cannot guarantee its effectiveness. I also have my doubts
about clubs’ incentives to chase up debtors. They only worry
about sales — if you catch my drift”.
3.7 Interview with Luis Roberto Barroso, IT Manager at
F&W Portugal
Luis Roberto described the business applications and
databases running in Portugal thus: “All the clubs have the
same types of applications. Each club has a server that runs
all the business applications: sales prospecting, membership,
access control, billing, booking and point-of-sale. Likewise,
each club has its own database. So data covering prospects,
members, invoices, agendas and trainers are specific to each
club and are not shared. The only data that are shared cover
products given that Marketing creates new ones and sets
prices. However, each club has its own table of products,
which is maintained by the Club Manager. Moreover, the
same product is assigned different codes at each club and
some clubs that have obsolete products in their databases.”
Journal of Information Systems Education, Vol. 24(4) Winter 2013
260
Mike then asked Luis Roberto whether the situation in Spain
was the same. The answer was: “Yes we all work with the
same decentralized client-server model. However, the
versions of these business applications are different because
it depends on the provider implementing it. You should also
be aware that Portugal and Spain do not always follow
procedures to the letter. This is reflected in the way they use
the systems. For instance, I know that we use different fields
in ACT! than Spain, and that our prospecting and
membership systems are fully integrated insofar as they
share the same table for prospects and members. This means
that salesmen in Portugal do not spend time importing from
ACT! to Member Track. This was a project that we
considered critical and implemented 15 months ago. We had
a major incident due to the existing redundancy and
corruption of data. Probably in Spain they have not
integrated the prospecting and membership systems because
they are more disciplined and update data on prospects and
members more often.”
Luis Roberto complained about the constant changes
Marketing made to the business, which he saw as hindering
him in planning and managing F&W’s IT systems. For
instance, the ‘TOP member service’ was decided on and
launched in just two days — “I had no time to make the
required changes to the membership, control access systems
and billing systems. I had to prioritize billing. So we finally
had to design a manual process for such members at
reception. This kind of high-handedness by Marketing
overwhelms my team and I don’t know how to put a stop to
it. I realize Marketing boosts business revenue but they must
also understand that their ideas are not simply ‘plug and
play’ for us.”
At the end of the conversation Luis Roberto drew Mike’s
attention to the website: “By the way, I forgot. We have also
a big issue with the website. We don’t have any control over
it. The marketing people do. We initially had some input but
then they decided to outsource the portal because they said
that we were not agile enough in developing new services
and that we were very expensive. So they hired a developer
and contracted a service provider to host the website. That
approach has caused problems for the business. First, the
website suffered several denial-of-service attacks and
hacking. When that happened, the Marketing Department
called us because the provider did not act swiftly enough.
However, we can’t do much about it. We did not negotiate
the deal with providers nor did we design and develop the
website. I am sure that the code would not pass a security
audit. Worse still, the website server holds a database with
information on products and members, so we have a legal
issue too. On the other hand, the Marketing people often
announce the new services first on the website and then send
a message to clubs. Clubs must register those new products
in the ACT! and Member Track systems. As you can
imagine, it is not uncommon for salesmen to be unaware of
new products that have just been put on the web site. It is
embarrassing for them when customers ask about a product
that the club has not been told about. In some clubs, I have
seen salesmen browsing the website every day to see if there
are any new products. When there are, they call the
Marketing department for more information and register
those products in ACT! and Member Track. So salesmen
have effectively created their own parallel procedure for
registering products! I would like you to help me with these
two issues. Please convince Marketing that the
vulnerabilities and inconsistencies of the current web site
management model are hurting our business.”
After the interview with Luis Roberto, Mike wrote down the
list of business software applications at F&W (see Table 2):
Business application
for club management
Name of application
Sales prospecting Sage ACT! and SDA sales manager (for
the analysis of sales actions carried out
in ACT!)
Membership
management
Member Track
Billing Member Track
Control Access Member Track
Point-of-sale FirmPOS
Booking Managed by trainers through Outlook
and EXCEL and later noted in Member
Track when the session ends.
Reporting (at clubs
and headquarters)
EXCEL
Finance (at
headquarters)
ERP Financial Management from Sage
(Spain) and Agresso (Portugal)
Table 2: Business applications at F&W
4. NEXT STEPS
It was Friday the ninth of March 2012 and Mike Vidal had
spent his first four days at F&W going around and talking
with staff — something that had given him a full picture of
the company. Mike knew that F&W‘s decentralized
operating model had worked well for the firm in the past but
had become an obstacle to the new strategic plan. He was
also keenly aware of the key role information systems should
play in implementing the plan. The challenge that lay ahead
for the coming months was an exciting one.
5. ASSIGNMENTS
This section presents the seven assignments covering the
case. To work on these assignments, students are asked to
put themselves in the shoes of Mike Vidal, F&W’s CIO.
1 st Assignment: CEO brief on opportunities for
improvement
After Mike Vidal’s first four days at F&W, the CEO asks
Mike (you) to prepare a report analyzing two of F&W’s most
mission-critical areas: (1) prospecting and membership; (2)
billing and debtor management. In particular, you have to
analyze the current state of these two applications, their
problems and the scope for improvement and your
recommendations.
Journal of Information Systems Education, Vol. 24(4) Winter 2013
261
2 nd
Assignment: Members Really Matters at F&W
The CEO and F&W’s Marketing Managers want to launch
the project “Members Really Matter”, whose aim is to
provide a 360° view of F&W’s members which will
ultimately help boost customer satisfaction and the firm’s
operating margins. Taking into account the current level of
data fragmentation and redundancy at F&W, it is clear that
this project means making changes to the current software
applications in general and to the way data are organized in
particular. There are debates among F&W managers as to
whether they should: (a) continue with the current
organization of data (that is, with each club having its own
database of products, members, prospects, salesmen, fees,
etc.) or (b) build a sole database for each country, or (c)
build a sole corporate database, or (d) come up with a mix of
these scenarios. Discussion of the subject has made it clear to
everyone that choices regarding data redundancy,
fragmentation and integration will deeply affect the way
F&W performs sales, billing and marketing functions.
Taking into account the current organization of data for each
software application at F&W (see columns 1, 2 and 3 of the
table 3), make a choice for a new organization of the data
(either by club, country or corporation). Provide arguments
for your choice and describe the organizational changes that
would be required. Your arguments must take into account:
(1) the project’s two main goals (to boost members’
satisfaction and the firm’s operating margins); (2) the
potential changes in the organizational structure that your
proposal entails (the fewer changes needed, the better).
Software
application
Data used by the
software application
Current data
organization
Prospecting
Prospects, Salesman,
Products, Product
fees/prices
Club
Membership
Members, Products,
Product fees/prices,
Salesman
Club & Corporate
(for Top Members)
Marketing
Products, Product
fees/prices, Campaign,
Promotion
Club & Country
(for campaigns and
product
fees/prices)
Billing & Debt
Management
Members, Products,
Product Fees/Prices,
Invoice, Debtors
Club & Country
(for debtors)
Point-of-sale Articles, Prices, Stock,
Members Club
Table 3: Organization of data
3 rd
Assignment: Modeling F&W’s business processes
One of your immediate goals at F&W is to standardize the
way the gyms are run (i.e. business processes) and then
invest in software that automates these processes. This has
led the CIO to collect information on two prospect and
member management procedures (first contact with prospect,
and billing). The objective of this assignment is to model
these two processes using BPMN (Business Process
Modeling Notation).
The information needed to carry out this exercise has
been provided by the IT Manager for Spain and the director
of one of the Spanish clubs. In particular, the IT Manager
gives you the following data model (using idef1x notation)
on which both processes operate (see Figure 2).
A brief description of the entities of the data model follows:
The Prospect entity stores potential F&W members. When
someone initially approaches F&W for information, the
system automatically catalogues the person as a new
prospect. Salesmen assign a likelihood of a prospect
becoming a member (status attribute). The Status entity
stores these statuses. F&W staff data are stored in the
Salesperson entity. Every time a prospect contacts F&W, a
salesperson records this in the Contact entity. The Member
entity records those prospects who have decided to become
F&W members. Each member is assigned to only one club
(the one where the member signs up). Clubs are stored in the
Club entity. Note that each club can have a different rate,
although it is the same for all members of that club.
Member
MemberID (PK)
Phone
Address
ProspectID (FK)
ClubID (FK)
Salesperson
SalespersonID (PK)
Name
Surname
Status
StatusID (PK)
Description
Prospect
ProspectID (PK)
Name
Surname
PhoneNum
Salesperson (FK)
Status (FK)
Contact
ProspectID(PK, FK)
SalespersonID (PK, FK)
Day (PK)
Time (PK)
Annotation
Activity
ActivityID (PK)
Descripción
ActivityRate
SessionCalendar
ActivityID (PK, FK)
ClubID (PK,FK)
Day (PK)
Time (PK)
Register
ActivityID (PK, FK)
ClubID (PK,FK)
Day (PK,FK)
Time (PK,FK)
MemberID (PK,FK)
InvoiceID (FK)
Invoice
InvoiceID (PK)
MemberID (FK)
Date
Total
Club
ClubID(PK)
Name (AK)
Address
ClubRate
PK: Primary Key
FK: Foreign Key Figure 2: Data model
Each member, in addition to enjoying club facilities
(gym, pool, sauna, etc.) may sign up for various extra
activities (yoga, spinning, Pilates, etc.). These activities,
which are recorded in the Activity entity, incur additional
fees over and above the basic membership rate. These fees
are charged depending on the activity and the number of
sessions attended. Any activity can be taken at different
clubs and different activities can be taken at one club. A
Session Calendar entity has been created to reflect this rule,
which will record the sessions of an activity taken in a club.
A member may sign up for any of these sessions, which are
stored in the Register entity. Finally, the Invoice entity
records monthly invoices for each member.
In your interview with the Club Manager, you have
discovered how the following two processes operate: (1) first
contact with prospect (by telephone); (2) billing. Note: You
can assume that the primary keys of all non-associative
entities are automatically created by the system (in other
words, you do not have to assign a value) when you create a
new record.
1. First contact with prospect (by telephone) A person calling F&W is attended by a salesman, who
answers any questions the prospect may have about the
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services offered by F&W. Just before ending the call, the
caller should be stored in the system as a prospect and the
contact should also be recorded. The salesman asks for the
caller's name, surname and phone number, and enters the
data into the system. With this data, the system first of all
verifies that no one is already registered as a prospect either
with this name plus the surname or with the same phone
number. The system will notify the salesman if the person
has already been registered as a prospect. If there is already
an entry, the system ends the process. If the entry is a new
one, the person is signed up as a prospect. The salesman then
types in his code (SalespersonID) and the status of the
prospect and the system stores this in the database. The
telephone call (not the process) will end at this point. Then
the system creates the contact. To do this, the salesman types
in the date and time and makes the appropriate entries (field
description) covering the call. The system stores this data in
the database and the process ends.
2. Billing At the end of the month, each club uses a software
application to automatically start the billing process for each
of its members. Each member is billed for two items (1) the
base rate membership for the home club; (2) any extra
activities taken during that month (at any of the F&W clubs).
Since this billing process is carried out at each club, there are
currently 25 billing processes. One should note that although
all clubs operate on the same data model, each has its own
database that is physically located on each club’s server.
This means that there are as many ‘invoice’ tables as there
are clubs, and hence the information has the same format but
is not shared. For example, each club has its ‘register’ table,
which stores information on usage club facilities. This usage
may correspond both to members who signed up at that club
and to members of other clubs who have taken an activity at
the club in question. This affects the billing process, given
that different databases have to be cross referenced for data.
The process is as follows. The system generates a new
entry for each club member in the ‘invoice’ table with the
member and the date (the internal system date). The system
will then consult its database for the sessions attended by the
member during that month (whether at this or another club)
in order to generate the final bill. The system will record the
activity as billed (using the ‘invoice’ field in the ‘register’
table).
At this point, the billing process will read its members’
usage data at other clubs. This information is in an EXCEL
file, generated manually from the information that a given
club receives from other clubs. This EXCEL file can be
treated as another table called ‘External Activity Log’
(which is not reflected in the data model). The information
contained in this ‘External Activity Log’ is: MemberID,
ActivityID, ClubID where the session has been taken, Date,
and Time. The billing process will search through this table
for the member’s usage for the bill being generated and will
calculate the amount corresponding to usage at other clubs.
Then the system will calculate the total amount to be
invoiced (amount of usage in the club itself plus usage in
other clubs plus the club’s base rate), store it in the database,
print out the bill and send it to members by post and e-mail.
The data contained in the printed bill includes: member’s
personal details (name, surname(s) and address), the base
price associated with the member’s regular club, the list of
sessions consumed (activity, date and time), the price of each
session and the total amount.
4 th
Assignment: Preliminary recommendations for a new
CRM system
After reading Mike’s report “Problems and opportunities for
improvement of two of the applications: prospecting and
membership, and billing and debtor management”, the CEO
thinks that it is time to upgrade the existing front-office
systems (i.e. access control, prospecting, membership, post-
of-sale, booking, billing, marketing) in Spain and Portugal.
With this transformation project, the CEO expects to achieve
the following two business objectives: (1) to standardize the
business operations to permit business growth; (2) to
improve the operating margins by integrating the information
processes covering prospects and members. In a week, Mike
(you) will attend the monthly Executive Committee meeting
and the CEO has asked him to make recommendations for
this project. Prepare a report for the Executive Committee to
answer the following question: Should F&W go for a
traditional off-the-shelf (on premises) or a SaaS (Software-
as-a-Service) enterprise system?
5 th
Assignment: Customization of a CRM system for the
management of prospects and members at F&W
After reading your report “Preliminary recommendations for
a new CRM system” and having discussed it with other
executives at F&W, the CEO thinks it is time to implement a
CRM system. The idea would be to replace the ACT! and
Member Track applications currently running at the F&W’s
clubs by a single application. The CEO considers that the
best choice is a cloud-based customer relationship
management solution (also called software-as-a-service). A
cloud-based solution would slash the time to launch the
project by speeding up the going live, minimizing the initial
investment and ensuring standardization of clubs’ working
practices.
After a quick search of cloud-based solutions in the
market, Mike identified five candidates: Salesforce
(salesforce.com), Microsoft Dynamics CRM
(crm.dynamics.com), ZohoCRM (zohocrm.com), Sage CRM
(sagecrm.com) and Open CRM (opencrm.co.uk). After a first
analysis Mike’s choice is ZohoCRM because he thinks it is
the one that best fits F&W’s needs. For the Executive
Committee meeting next week, the CEO asks Mike to
prepare a more detailed gap analysis in order to see whether
zohoCRM fits F&W’s business needs and to identify what
must be done to address shortcomings. In the gap analysis,
you must take into account of the following functional
requirements:
1) For each new prospect and/or member you must store the following information: forename, surname(s), salutation
(Mr., Mrs., Miss., Dr., Prof.), marital status, address,
postal code, city, country, work phone number, home
phone number, mobile phone number, e-mail, first
contact channel (phone, e-mail, facebook, twitter,…),
status of the prospect (e.g. first contact, lost, stand-by ,
‘hot’), registration date, conversion date (that is to say,
Journal of Information Systems Education, Vol. 24(4) Winter 2013
263
the member’s joining date) and other custom fields (e.g.
Do you wish to receive the free monthly newsletter?).
2) Each prospect and member will be assigned to a salesman (the owner). A prospect and/or member will
always have only one owner at any given time. The new
application must be able to track changes in the salesman
serving a prospect or a member. This feature would help
ensure F&W’s salesmen follow company guidelines.
3) The new application must store the history of correspondence with prospects and members (e-mails,
letters, etc.).
4) A warning message should be generated for prospects with the same surname and date of birth to stop
accidental entry of duplicate contacts.
5) It should be possible to define groups of prospects and/or members by different criteria. This can be used to link
prospects or members of the same family or company. A
prospect and/or member may belong to any number of
groups.
6) It should be possible to reassign the salesman for a group of prospects.
7) It should be possible to look up prospects and members by any of the data fields and to perform more complex
queries such as enquiry ‘date greater than x’.
8) The system should have a calendar function so that a salesman can see appointments for the day/week
selected, including pop-up reminders and the ability to
print activities per day.
9) It should be possible for salesmen to schedule activities (for example scheduling a visit, making a phone call,
writing an e-mail or a letter to a prospect and/or member)
in the calendar.
10) It should be possible to generate reports for the scheduled activities for a given prospect and/or member.
11) It should be possible to generate reports on the salesmen’s activity.
12) The new application should treat prospects and members the same way. That is, the data about prospects and
members should be captured by the same user interface
and data re-typing should be minimized (this refers to the
conversion from prospect to member). The conversion
from a prospect to a member should be straightforward
and involve as little re-entry of data as possible.
13) It should be possible to generate a report on new prospects by salesman and period.
14) It should be possible to generate a report on changes in the status of prospects by salesman and period.
15) It should be possible to generate a report of new members by salesman and period.
16) It should be easy to import prospects and members from the existing systems at F&W: ACT! and Member Track.
Write a report for the Executive Committee that contains the
following:
1) Indicate the ZohoCRM tabs/modules that you will use for prospects and members.
2) Indicate the degree of compliance for each functional requirement (0% indicates that the requirement is not
supported by ZohoCRM, 50% indicates that ZohoCRM
does not support the requirement by default but that
changes can be made to ZohoCRM to support it, and
100% indicates that ZohoCRM fully supports it).
Likewise, provide a justification for the degree of
compliance that you indicate for each requirement (for
instance, if the requirement is supported, indicate which
menu options should be used, or if it is partially
supported, indicate what is supported and what could be
done to fully support it).
6 th
Assignment: F&W teams up with social media
Nick Summers, F&W’s CEO, has just arrived from the
annual congress of IHRSA (International Health, Racquet &
Sports Club Association). There, he has seen some
interesting experiences from competitors with social network
(or media) – facebook, twitter, etc. –. He tells Mike. “Look, I
need to understand the implications of teaming up with
social media”. He adds “Prepare a report about how F&W
could use the social media to be more customer-oriented, and
present it at the monthly Executive Committee meeting.
Keep in mind the two strategic goals for the next three
years.” In particular, your report is supposed to address the
following questions:
1) How could F&W use social network/media tools in interaction with customers?
2) What type of benefits could F&W expect from the use of social media?
3) Who should lead this initiative within F&W? Should F&W create additional structures to manage this
initiative?
4) How should these social media tools integrate with existing IT systems at F&W (consider the IT systems as
consisting of processes, data, technologies)?
7 th
Assignment: Using Dropbox at Fitness & Wellness
After three months in the company, Mike Vidal feels that he
has things under control. He has been able to put the firm’s
IT in order, grasp the company’s operations and foster the
use of innovative social media tools in interaction with
members. Now he faces a new challenge. On his last visit to
one of the clubs in Barcelona, he discovered that salesmen
were using Dropbox to share presentations, internal memos,
and EXCEL files containing members’ data. He could only
wonder what data protection laws were being broken in the
process. What would happen if confidential corporate data
such as F&W’s financial statements or members’ personal
addresses, phones and even bank account numbers were to
leak out? Given that he was new to the company, he asked IT
managers and other executives in the two countries what
mechanisms there were to safeguard data. He was stunned to
discover there were none.
On the one hand, he knew that cloud file-sharing (for
example, Dropbox, Onedrive, GoogleDrive) was becoming
commoner with each passing day. On the other hand, he is
seriously concerned about possible privacy and security
incidents such as theft of customers’ information or even the
legal consequences of unlawful disclosure of their data. He
needs to propose initiatives to ensure data security and
privacy and get the CEO’s approval for implementing such
arrangements. What measures would you propose and why?
Which F&W staff should be involved in a team
implementation of such measures?
Journal of Information Systems Education, Vol. 24(4) Winter 2013
264
AUTHOR BIOGRAPHY
Joan Rodon is an Associate Professor of Management
Information Systems at ESADE
Business School, Universitat
Ramon Llull, Spain. He has
published articles in journals
including European Journal of
Information Systems, Journal of
Information Technology,
Information Systems Journal,
Decision Support Systems,
Communications of the ACM,
and International Journal of
Production Economics, and presented his research as major
conferences including International Conference on
Information Systems, European Journal on Information
Systems, and Academy of Management Proceedings. Joan
has taught in the areas of system analysis and design,
management information systems, strategy & technology,
and digital platforms.
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265
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