Good Business Plan About ‘café-Dicted’ – Company Overview

Business Technology

Business Technology

Café-dicted is a retail chain of cafes headquartered in San Francisco, California. The company set up its first outlet in the year 2000 at the South Beach Area and has now grown into a chain of over 12 cafes spread across San Francisco and San Jose. The menu consists mainly of espresso based beverages such as classic coffees, cappuccinos, lattes, macchiato, espressos, iced coffee etc. Café-dicted also serves non coffee drinks such as hot chocolate, fruit punch, choc mocha, white hot chocolate etc. In addition to the beverages, the café also serves a wide choice of wraps, breads, salads, bakery, cakes, pizzas, burgers and breakfast and lunch combos.
The company operates in the highly competitive coffee shop industry in the US, the overall revenue of which is estimated at approximately $ 31 Billion. Starbucks is the largest in the industry and the market leader with over 11,000 stores located in the US and more than 7,000 stores worldwide, generating revenue of almost $ 15 Billion in 2013. The total number of coffee and snack shops in the US is estimated at around 53,000 as of today.
The major competitors of Café-dicted include major international chains such as Starbucks, McCafe, Barista, Gloria Jean’s Coffee as well as regional players such as Philz Coffee, Bernie’s Café Algiers, to name a few. The vision statement of Café-dicted is- “To offer the finest café experience and a relaxed meeting place for friends, families and professionals”. The mission of the company is- “To provide high quality food and beverages to its customers in an inviting and safe environment perfected by the best customer service”.

Current Technology Landscape

The management of Café-dicted has realized that their current system is a stumbling block in their plans for expansion to newer geographies. They have realized the importance of implementing a modern, yet cost effective, reliable and scalable application to manage their business expansion plans.
The café shop currently runs on the legacy POS system, integrated to a restaurant management ERP solution. The data from their 12 outlets are stored in a central server maintained by a third party. The ERP application runs on the legacy client-server architecture and includes the following modules- inventory management, purchase order and vendor management, time scheduling, supply chain, POS terminal, Credit/Debit card authorization and billing and account management. The current system, when implemented in 2007 was considered modern and up to date, but currently, 7 years down the line has become severely outdated and calls for immediate upgrade/replacement. The legacy system is facing the following challenges:
Integration with other systems – In 2010, the management wanted to offer a new experience to their customers by offering a mobile ordering platform, through which the customers will be able to place their orders through the PDA kept at the table. This idea could not get translated into action due to the non-compatibility of the ERP towards newer applications.
Business Intelligence- The existing ERP system is dumb; it does not have the capability to perform any kind of data analysis. Business Intelligence has to be acquired manually.
Scalability – Or lack of thereof is yet another pressing challenge facing the management. If they have to expand, they have to replace this system. The competition has done it already and is on the fast lane to supremacy.
Social Media- The current ERP was implemented at time when Facebook and Twitter were not born. While the competition is gauging the customer sentiments by doing social media analysis, Café-dicted is still not clear on what to do with the customer comments and feedback on their Facebook and Twitter pages.
Security – Café-dicted’s data server is managed by a non SSAE16 certified facility, which is a compromise on their data security.

Information Technology Roadmap

Based on the initial analysis of the technology landscape of Café-dicted, it is recommended that the management should consider implementing a cloud based Point of Sale (POS) system, with business intelligence module built in and which is accessible on mobile platforms. Many of the cloud based system comes with the social media analysis module as well, however it is recommended that the social media analysis tool should be procured separately, as it holds the advantage of being more comprehensive and comes with enhanced functionality. Of course, the application should be possible to integrate with the cloud based POS.
This section will focus on the key IT roles identified in facilitating a successful migration from the legacy system to the cloud based POS platform. The 5 major roles identified include Business Analyst, Solution Architect, Migration Lead, Social Media Analyst and Delivery Lead.
Business Analyst: The role of a Business Analyst (BA) is multi-fold. The BA should have the capability to approach the situation from both the business as well as technology point of views. The primary functions of this role includes, assessing the current application, understanding the pain points, documenting the findings, doing a gap analysis of the current landscape with the identified potential solution, documenting the gaps and reporting it to the technology team, recommending the best possible solutions to problems etc.
Solution Architect: The solution architect is the creator; the new environment will take shape according to the Architect’s vision. The role of the architect in this scenario will be to analyze the reports, framing the solution, identifying the tools and methodologies, identifying the best possible solution after careful evaluation of the pros and cons etc.
Migration Lead: The Migration Lead will be responsible for an uneventful migration from the legacy application to the cloud based application. It is the duty of the migration lead to ensure a smooth migration without any disruption to the business and loss of historical data.
Social Media Analyst: The role of a social media analyst is to closely monitor the social media pages like Facebook and Twitter. The analyst will also gauge the data on the popular café review portals and newspapers. Using the application, the analyst can understand the customer sentiments, their brand loyalty, feedback on the beverages and food served at the outlets, feedback on the level of service as well as the recommendations for improvement, which are posted by the customers of Café-dicted.
Delivery Lead: Delivery Lead has to construct the new environment, brick by brick, based on the architect’s vision and business analysts’ reports and recommendations. The delivery lead’s primary responsibility is to manage his/her team comprising of developers and testers to successfully implement the application and do customizations as required. The delivery lead will also be responsible for the timely completion of the project.
In addition to the above mentioned roles, it is also important to have a strong guidance from the senior management as well as an expert workforce. The resource pool should comprise of Project Managers, Coders, Testers, Architects, and Data Analysts.
S.W.O.T Analysis

This section will look into the Strengths, Weaknesses, Opportunities and Threats for this new initiative.

Strengths
Lower Cost of Acquisition – Monthly licensing fee mode and no big initial investment
Application Upgrade – Not required to invest on yearly upgrades, will be taken care by the service provider.
Integration with other tools and applications – Easily possible in the cloud based system.
Scalability – One of the biggest strengths, very much required for a growing company like café-dicted.
Access to Business Data- The sales data and customer analytics data can be accessed from anywhere, all that is required is an internet connection.

Social Media Analysis – Will help the company to gauge customer sentiments

Data loss risk is minimal – Company’s data will be safer in a cloud based environment
Weaknesses
Internet reliance – Care should be taken to ensure uninterrupted internet connectivity
Long term investment – Cloud demands continuous investment in the form of monthly/yearly licensing fee
Customization- A simple POS may work as plug and play, but hosting applications like ERP onto the cloud requires expert hands.

Opportunities

Expansion- Adoption of cloud based system will make the future expansions much easier
Focus on Business- The management can focus on the core business and stop worrying about IT
Reward Programs- The company can implement reward programs for its loyal customers, assessed based on the intelligent POS application
Access to customer feedback- Helps the company to quickly address customer concerns
Threats
Security- Hackers and cybercriminals are increasingly targeting Cloud based POS systems. The company should evaluate the threat mitigating capabilities of the cloud service provider before finalizing on one.
Migration– In the future, if the company wants to install their own client-server architecture; the process of migrating the data from cloud will be tedious and runs the risk of data loss.

Major Goals of the IT Strategy Plan

The plan is to migrate from the legacy system to the cloud based one, let us look into the five major goals that this strategy aims to achieve.
Enable Expansion – This is the primary goal of the new IT strategy. Adopting the cloud based model will enable the company to expand its operations into more geographical areas, without having to worry about their IT support systems.
Smart and Intelligent Platform- The strategy envisions a sea change from the days of legacy system for the company. The new platform recommended will include a business intelligence module, which will do the data analysis and releases reports to the senior management for them to gauge the efficiency of operations and make strategic decisions.
Customer Satisfaction- This is the age of ICT and its applications like social media. No company in the growth path can afford to ignore the social media, and it makes more sense for companies like Café-dicted to actively monitor the social media activity and thereby understand their customer expectations. By doing so, the company will be able to customize their offerings to suit the local needs and implement measures to address the customer concerns. Social media analysis will hold much importance at the time of geographical expansion, as localization will hold great importance during this stage.
Mobile Devices- Implementing the new plan will enable the company to integrate mobile devices to the POS platform. The management can confidently go about implementing the once shelved plan of providing PDAs to the customers to place their orders. The management is also benefitted from the fact that the new application can be accessed from virtually anywhere with an internet connection. Integration with various mobile platforms will also help the company to reach out to their customers more proactively.
Cost Effective Switch- The recommended roadmap scores high on value for money parameter as it does not require heavy investments on hardware or software applications. A comparative table on the investments and savings is given below -

Organizational Impacts

The potential organizational impacts of rolling out the IT strategy plan is as explained below-
Focus on Business: By adopting this plan, it is highly possible that the management will be able to focus on their core business of running the café business and stop worrying about IT. A majority of the IT functions are outsourced and what it is required from the management is only an efficient supervision.
Business Expansion: As mentioned in the above sections, the new strategy will enable the management to expand their business to newer geographies without having to worry about the lack of an efficient and intelligent IT system
Quicker Decision Making: The business intelligence module and the social media platform will enable the management to make quick decisions as comprehensive analysis reports will be available at the click of a button.
Ensure Customer Satisfaction: Once implemented, the new platform will enable the management to address the customer concerns quickly, made possible by the social media analytics software. The management will also be able to roll out reward programs more accurately, thereby ensuring customer loyalty.
Return on Investment: Cloud based systems do not demand a huge investment and the cost of licensing will be quickly outweighed by the benefits of business expansion.
These benefits will help the company to focus on their business and expand to newer location, thus aiding them to become a $ 20 million organization.

Works Cited

iBar POS. (2013). iBarPOS – Legacy POS Annual Cost Comparison. Retrieved from ibarpos.com: http://ibarpos.com/ibarpos-cloud-vs-legacy/
Niehaus, M. (2014, March 31). Five Reasons to Consider a Cloud Point of Sale System. Retrieved from instoredoes.com: https://instoredoes.com/blog/five-reasons-to-consider-a-cloud-point-of-sale-system
Statista. (2015). Number of establishments in the U.S. coffee and snack shops industry from 2002 to 2016. Retrieved from statista.com: http://www.statista.com/statistics/196590/total-number-of-snack-and-coffee-shops-in-the-us-since-2002/