DEVELOPMENT AND MANAGEMENT

DEVELOPMENT AND MANAGEMENT
OF AN
INFORMATION SYSTEM ORGANIZATION FOR THE MARKETING, SALES, AND
CUSTOMER SERVICE DIVISION
FOR A
INDUSTRIAL CONSULTANT INTELLECTUAL PROPERTY LAW ORGANIZATION
A DIRECTED STUDY PROJECT SUBMITTED TO THE
FACULTY OF THE GRADUATE SCHOOL OF BUSINESS
IN
CANDIDACY
FOR A
MASTERS DEGREE IN BUSINESS ADMINISTARTION
By
Anthony W. Sublett
STRAYER UNIVERSITY NEWPORT NEWS CAMPUS
June, 2005

DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM ii
ABSTRACT
This paper will define the steps required in developing and managing an Information
Systems Organization that will perform the functional aspects of marketing, sales, and customer
service for an Industrial Consultant and Intellectual Property Law Organization. Design,
implementation, and departmental integration of system software will be addressed in this
document as well. This paper will define in detail the steps required in developing and managing
the marketing and sales department for this new Information Systems Organization that provides
web oriented marketing and sales for a new Industrial Consultant and Intellectual Property Law
Company. This paper will focus on developing a sales staff that is able to utilize the web in
obtaining information that contributes to their developing a marketing niche for these specialized
consulting services. Selection of target markets, influencing buying power, the buying decision
process, evaluating and segmenting the market are key aspects of the marketing strategy and will
be addressed in this paper as well. A risk analysis was performed and produced positive results,
showing that the information system would net a large profit the first two years and be an asset to
the organization.

DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM iii
ACKNOWLEDGEMENTS
Professor Martinez Del Rio and DR. Hayes deserve special thanks for their guidance and
insight in terms of helping me organize the specific subject areas of this paper as well as
formatting it properly in order to ensure that it would be acceptable in accordance with the
current DRP guidelines and specifications. I would also like to thank all of my other course
instructors of the Department of Business at Strayer University Newport News campus as well as
my online instructors that provided me with the theoretical knowledge which enabled me to
perform the analysis necessary to complete this quantitative and quantitative analysis.

DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM iv
TABLE OF CONTENTS
CHAPTER
Abstract ii
Acknowledgements iii
List of Appendixes vi
List of Figures vii
List of Tables viii
Chapter
1 Introduction 1
1.1 Strategic Planning 1
1.2 Strategic Management 2
1.3 Benefits of Strategic Management 6
2 Cash Flow Estimation and Risk Analysis 9
2.1 Cash Flow Estimation 10
2.2 Evaluation 12
3 Human Resource Management 17
3.1 Primary Function and Scope 18
3.2 Implications of Human Resource Management 19
3.3 Organizational Planning, Forecasting, Diagnosis, and Job Analysis 21
4 Management Implications 26
4.1 Management System 26
4.2 Management Implications on Human resources 27

DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM v
TABLE OF CONTENTS
CHAPTER
5 Business Strategy 29
5.1 Environmental Scanning 31
5.2 Evaluation of Strengths, Weakness, Opportunities 34
5.3 Total Quality Management 36
6 Design and Development of the Strategic Information System 41
6.1 Definition Phase 43
6.2 Construction Phase 45
6.3 Implementation Phase 49
7 Network, Internet, and Intranet Design 51
8 Sales and Marketing 54
8.1 Influencing Buying Power 58
8.2 The Buying Decision Process 59
8.3 Problem Recognition 61
8.4 Geographical Segmentation and Positioning Strategy 61
9 Summary and Conclusion 63
Appendixes 66
References 68

DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM vi
APPENDIXES
Appendix 1-A 66
Appendix 1-B 67

DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM vii
LIST OF FIGURES
Figure 5-1 Basic Elements of the Strategic Model 30
Figure 5-2 Environmental variables 32
Figure 5-3 SWOT Analysis Flowchart 33
Figure 5-4 Work Flow Path 38
Figure 6-1 Business Flow Path 47
Figure 6-2 PC Network Workstation Layout 49
Figure 7-1 Microwave Satellite LAN Server Layout 53

DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM viii
LIST OF TABLES
Table 1-1 Strategic Management Model 5
Table 2-4 Cash Flow Evaluation and Risk Analysis 13
Table 8-1 Three Companies-Perdue, Volvo, and Dominos-defined their vale 60

DEVELOPMENT AND MANAGEMENT OF AN INFORMATION SYSTEM 1
CHAPTER 1
INTRODUCTION
The purpose of this paper is to provide a baseline of information from which an
Information Systems Organization can be designed and managed to perform web based
marketing, sales and customer service for an Industrial Consultant and Intellectual Property Law
Organization. The product for this consultant and patent law organization is the consultation that
the organization provides to the people or companies it represents therefore the marketing and
pricing was performed differently then the normal methodology. Due to the limited number of
patent lawyers (there is only one patent law firm on the entire peninsula) they can set the bar on
the fees they charge their clients, they do not have to account for competition.
1.1 Strategic Planning
Strategic planning involves three main factors: scanning, short and long term planning,
implementation and evaluation. In general terms the Strategic Planning process is designed to
help an organization clarify what business it wants to be in, decide how it's going to compete
with similar organizations, identify the operational activities needed to support the competitive
strategies. This process generates real commitment by making individuals and teams accountable
for achieving specific goals.
Long-range planning is undertaken to increase the probability that the risks the organization are
taking are the right kinds of risks. It's important that risk be reduced to an acceptable level
(O'Neil, 2001). “Peter Drucker defines long range strategic planning as the process of making
current risk taking decisions with the best possible knowledge of their future consequences”
(O'Neil, 2001, para. 2).

The planning exercises presented below will enable this new information systems
organization to identify and develop their marketing and sales niche, i.e. their competitive
advantage in reference to marketing these consulting and consultation services to targeted
manufacturing organizations. There's a tendency today to put more and more products into the
category of "commodity"(O'Neil, 2001, para.3). That is not the signal that this organization
wants to convey to industry. Because these services are so specialized and involve evaluation of
every facet of the customer’s organization, the difference in services that this organization offers
compared to the services that other consulting firms and intellectual patent law firms’ offer must
be clearly illustrated to targeted industries. This organizations service (product) niche is based on
how their one organization can offer services that will enhance production and profit while
providing legal protection at the same time. This company does not want their completive
advantage to be based on low prices; this will be elaborated on more extensively in Chapter 8
Marketing and Sales. The time frame for strategic planning will vary in this type of industry.
This organization will be subjected to dynamic, turbulent, and unstable shifts in their business
environment; therefore planning will not be extended beyond two to three years.
1.2 Strategic Management
Strategic Management is a functional tool used to design and manage this Information
Systems organization as well as the parent Industrial Consultant Intellectual Property Law Firm,
but this paper will only focus on the design, development and management of the Information
Systems Organization. Wheelen and Hunger (2000) define strategic management as,” the set of
managerial decisions and actions that determines the long run performance of the corporation. It
includes environmental scanning (both external and internal), strategy formulation (strategic or

long- range planning), strategy implementation and evaluation and control. Strategic
management will be used to monitor and evaluate external opportunities and threats in light of
this company’s strengths and weaknesses” (2000, pg 4).
In general, as the industrial and economic world changes, managers attempt to deal with
these changes and help their organization to evolve through the fouling four phases of strategic
management (Wheelen and Hunger, 2000):
Phase1: “Basic financial planning: Managers initiate serious planning when they are requested
to propose next year’s budget. Projects are proposed on the basis of very little
analysis, with most information coming from the firm. The sales force usually
provides the small amount of environmental information. Such simplistic planning
only pretends to be strategic management, yet it is quite time consuming. Normal
company activities are often suspended for weeks while managers try to cram ideas
into the proposal budget. The time horizon is usually 1 year” (Wheelen and Hunger,
2000, pg 3).
Phase 2: “Forecast-based planning: As annual budgets become less useful at stimulating long
Term planning, managers attempt to propose 5- year plans. They now consider
projects that may take more then one year. In addition to internal information,
managers gather any environmental data –usually on ad hoc basis-and extrapolate
current trends 5 years into the future. This phase often involves a full month of
managerial activity to make sure all proposed budgets fit together. The process gets
very political as managers compete for larger shares of funds. Endless meetings take
place to evaluate proposals and justify assumptions. The time horizon is usually 3 to 5
years” (Wheelen and Hunger, 2000, pg 3).

Phase 3: “Externally oriented planning (strategic planning): Frustrated with highly political, yet
ineffectual 5-year plans, top management takes control of the planning process by
initiating strategic planning. The company seeks to increase its responsiveness
to changing markets and competition by thinking strategically. Planning is taken out
of the hands of lower level managers and concentrated in a planning staff whose task
is to develop strategic plans for the corporation. Consultants often provide the
sophisticated and innovative techniques that the planning staff uses to gather
information and forecast future trends. Ex- military experts develop competitive
intelligence units. Upper level managers meet once a year at a resort “retreat” led by
key members of the planning staff to evaluate an update on the current strategic plan.
Such top-down strategy formulation leaves the implementation issues to lower
management levels. Top management typically develops 5-year plans with help from
consultants but minimal input from lower levels” (Wheelen and Hunger, 2000, pg 3).
Phase 4: “Strategic management: Realizing that even the best strategic plans are worthless
without input and commitment of lower level managers, top management forms
planning groups of managers and key employees at many levels from various
departments and work groups. They develop and integrate a series of strategic plans
aimed at achieving the company’s primary objectives. Strategic plans now detail the
implementation, evaluation, and control issues. Rather than attempting to perfectly
forecast the future, the plans emphasize probable scenarios and contingency
strategies. The sophisticated annual 5-year strategic plan is replaced with strategic
thinking at all levels of the organization through out the year. Strategic information,
previously available only centrally to top management, is available via local area

networks and intranets to people through the organization. Instead of a large
centralized planning staff, internal and external planning consultants is available to
help group strategy discussions. Although top management may still initiate the
strategic planning process, the resulting strategies may come from anywhere in the
organization Planning is typically interactive across levels and is nom longer top
down. People at all level are now involved” (Wheelen and Hunger, 2000, pg 3).
This organizations management initiatives and organizational design were structured with these
phases in mind.
The Strategic Management Model below in Table 1.1 was the methodology used to
formulate the mission statement, organizational goals, and objectives. Procedures and processes
will be written to provide on the function aspects of the organization for training and
management purposes.
Table 1.1 Strategic Management Model (Wheelen and Hunger, 2000)
Societal
Environment:
General Forces
Task
Environment
Industry Analysis
External
Interna
Structure:
Chain of Command
Culture:
Beliefs Expectations,
Values
Resources:
Assets, skills,
knowledge
Strategy
Formulation
Mission
Reason
For
Existence
Objectives
What results
To accomplish
Strategies
Plan to
Achieve the
Mission &
objectives
Policies
Broad
guidelines
For decision
making
Strategy
Implementation
Programs
Activities needed
To accomplish
A plan
Budgets
Cost of the
programs
Procedures
Sequence
of steps
needed to do the
job
Evaluation
And
Control
Performance
Actual
Results in
terms of
actual clients
obtained and
fees charged
versus
projected
clients that
should be
obtained and
fees that
should be
charged that
are listed
in chapter 2
(Analysis of
Projected
Cash
Flows)
Environmental
Scanning

1.3 Benefits of Strategic Management
Generally speaking, organizations that engage in strategic management out perform those
that do not. Strategic management aids organizations in matching its environment with its
business strategy, structure, and processes. This matching generally results in positive
performance by the organization. A survey was taken of 50 different corporations that used
strategic management. They found the following to be the 3 most highly rated benefits (Wheelen
and Hunger, 2000):
1 A Clear sense of strategic vision for the firm.
2 A sharper focus on what is strategically important
3 Improved understanding of a rapidly changing environment
However to be affective the strategic management initiative needs to be a formalized process.
An organization has to ask some of the following target questions in order to develop goals,
objectives, and formal strategic plan:
1. Where is the organization now?
2. If no changes are made, where will the organization be in 1 year? Two years? 5 years?
10 years? Are the answers unacceptable?
3. If the answers are not acceptable, what specific actions should management undertake?
What are the risks and the payoffs involved?
Mission Statement:
The mission or reason for existence for this information systems organization is to aid the
company’s industrial (project) consultants and intellectual property lawyers in marketing and

selling their services nationally and internationally to companies and entrepreneurs involved in
manufacturing.
Objectives:
The objectives of this department once it has been developed, and is up and running will
be to invoke the following:
1) Determine how to define what type of technology to use in terms of PCs and network
systems.
2) Understand, utilize, and integrate the full capabilities of the hardware and software
selected.
3) Develop and implement the Expert System Product Manager (PDM), to aid in
managing company software that has been integrated into the company marketing, sales,
client acquisitions and accounting processes of the company.
4) Research and seek software that is a close match and functions with in the framework
of the processes and hardware that are in place. This will lead to higher productivity in all
venues of the business and less cost in terms of training staff on new hardware.
5) Develop and implement a vision plan that is inline with the company goals and
objectives. This plan will serve as a base line for laying the groundwork for the
development and maintenance for the Strategic Information department.
6) Clearly understand and define the components of this department and their integration
and expectations in aiding the company in becoming a nationally and internationally
known Consultant and Patent Law firm.
7) Anticipate future impacts that software and system will have on the department as well

as the company, and the best way to incorporate these changes into the department and
culminate them into company expansion.
Management for this organization had to develop long run performance goals and
objectives that paralleled those of the company. The research design was based on both a
qualitative and quantitative analysis methodology used to gather and evaluate data. Before any of
the objectives listed above could be achieved the organization was tasked with appropriating the
right individuals for the right positions within the organization so that their diversified
professional attributes could be collimated into objective orientated team goals that coincide with
the organization’s goals. The bottom line is that any organization is only as good as the people it
has working for it.
Because strategic management plays a major role in developing and implementing an
organization’s business strategy as well as developing the processes and procedures that will
attribute to that organization meeting its objectives and goals, the basic strategic model is
illustrated and discussed in greater detail in Chapter 5 (Business Strategy).

CHAPTER 2
CASH FLOW ESTIMATION AND RISK ANALYSIS
A web based marketing and sales information organization for a New Patent Law and
Industrial Consulting Firm can be a risky business venture to say the least. In order to avoid
unnecessary costly risk this New Patent Law and Industrial Consulting Firm performed a cash
flow estimation and risk analysis for their New Information Systems organization for their
company. This organization performs the web based marketing and sales for the company. The
company took numbers in these areas from other companies already established in the same
industry and used them as a baseline for data for their cash flow estimation and risk analysis. The
results of this analysis were used to formulate start up cost, operating overhead and gross
income. There is however a risk with using forecasts to denote expected sales. In this type of
industry the number of industrial organizations or their activities may diminish due to high
production costs (Griffin 2005). The number of new inventions, and people suing or being sued
for patent or copyright infringements may diminish with the heightened cost of production which
minimizes an organization’s willingness to manufacture and market a new product (Brigham,
Ehrhardt, 2002). This paper illustrates how the cash flow estimation and risk analysis were
performed, the results of the analysis, the significance of the analysis, and the final
recommendations due to those results. Due to the fact that adding the information system
organization to the company as an additional asset may possibly be a greater risk than the
company itself, an increase in cost capital was used to evaluate the project to reflect its higher
risk.

2.1 Cash Flow Estimation
Because this new organization represents a major capital expenditure capital budgeting
techniques were used to determine if the expected cash flows would be enough to justify the
added cost of the new organization (Brigham, Ehrhardt, 2002). This analysis was performed for a
five year organization life cycle of the company. Cash flow gives the organization the financial
stability to diversify. With a new organization such as this the cash flow that comes solely from
the organization is more important then accounting income. Estimating the cash flow is the most
important step in capital budgeting and evaluating whether a new project is worth the risk of
capital invested in it opposed to investing that capital in another project. Accounting income is
not important, but incremental cash flows are very important (Brigham, Ehrhardt, 2002). The
marketing and sales department use their theoretical knowledge of elasticity, advertising affects,
the state of the economy, competitors relations, and trends in the consumer’s demographics to
forecast possible unit sales and sales prices; but that is for the consumer demanded product or
consumable product.
Analysis of Projected Cash Flows:
The value of a suggested project depends on the free cash flow it generates. Like many
projects a new project also requires some assets that will cost the company cash flow that it
could otherwise use to invest in other projects, which is known as opportunity cost.
The purchase of additional office space, computers, printers, and other office equipment
are the main assets that have to be bought. Any cost associated with the shipment of any of these
items was added to the actual cost of the equipment when the cost of the project was being
determined (Brigham, Ehrhardt, 2002). Depreciation is not cash flow therefore depreciation was

added to Net operating profit after taxes (NOPAT) when the project’s cash flow was estimated.
This organization is located in an 800 square foot office building adjacent to the main office that
contains the consulting and law personal of the organization, both of these facilities are located
in Virginia Beach Virginia. “For Class A, non-trophy space, landlords offered rates that ranged
from $28 to $35 per square foot” (Office Finder 2005). A median price of $31.50 per square foot
per year was used to calculate the lease price as follows: $31.50 (800) = $25, 200 / year
This office will review Patent Infringement claims and provide an honest legal analysis.
This analysis will be based on the merits, not on the number of billable hours. The organization’s
attorneys will take cases on contingency, meaning they do not get paid unless they win the claim.
Their incentive is to win and maximize the amount of the recovery. Keeping in mind that,
“typical patent infringement lawsuits will cost several hundred thousand dollars to file and
litigate” (Patent Infringement Law Suits Lawyers, 2005).
The profit obtained from patent infringement litigation had to be roughly estimated as follows:
3 major cases the first year X $150,000 per case = $450,000 the initial year of operation
4-6 major patents = $160,000
Legal consultations =$700,000
Total legal estimated profit = $1,310,000
Total estimated industrial consultant profits =$ 800,000
Total organization estimated profit = $2,110,000
Table 2-1 is a duplicate of the spread sheet presented on the CD ROM is divided into five parts
:( 1) Input Data, (2) Depreciation Schedule, (3) Net Salvage Values, (4) Projected Net Cash
Flows, and (5) Key Output, (6) and (7) contain the risk analysis (Brigham, Ehrhardt, 2002).

Part 1, Table 2-4 the input data section, provides the basic data used in the analysis that
was presented in the previous paragraph some of the input was obtained from literature research
and some were educated “assumptions”, therefore $800,00 and $1,310,000 were the projected
sales for consultant and attorney services respectively. The input of 40% is a factual value not an
assumption. Other units like the projected growth rates are more speculative. If the sales or costs
were to differ in either direction this would shift the Net Present Value (NPV) and Internal Rate
of Return (IRR) in that direction (Brigham, Ehrhardt, 2002).
2.2 Evaluation
Part 5 of Table 2-4 summarizes the evaluation criteria of whether the project should be
implemented. It was assumed that sales prices and variable costs would increase at a rate of 2
percent per year, fixed costs would increase by 1 percent per year, and the depreciation charges
would not be affected by inflation, cost of capital is 12 percent. The NPV was calculated using
the following formula (Brigham, Ehrhardt, 2002):
NPV= CFt / (1+k)t
The NPV was a positive $1,639, 344 and the IRR and MRR both exceed the cost of capital of 12
%, and the pay back indicates that the project return will return the invested funds in .003 years.
Based on this analysis the project should be accepted.
A scenario analysis, which is a form of risk analysis that evaluates the base case, worst
case and best case scenario, was performed to confirm or deny if the cash flow estimation was
correct in its analysis that this project was worth the risk of investment. Table 2-5 which denotes
the data illustrated on the probability graph shows the base case scenario of a 49% chance of
obtaining and NPV of $1,639,344, and worse case scenario of a 24.5% chance of achieving a

possible $37,257. This worse case scenario will not bankrupt the organization. The possible best
and worst case scenario were the only scenarios considered. These numbers further confirmed
that this project is worth the financial risk and opportunity cost to the parent industrial consultant
and intellectual property law organization.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
A B C D E F G H I
Table 2-4. Analysis of a New (Expansion) Project
Part 1. Input Data (in thousands of dollars)
Key Output: NPV = $1,639,344
Building cost (= Depreciable basis) $25,200
Equipment cost (= Depreciable basis) $10,000 Market value of building in 2008 $18,000
Net Operating WC / Sales 10% Market value of equip. in 2008 $6,000
First year sales (in units) $2,110,000 Tax rate 40%
Growth rate in units sold 10.0% WACC 12%
Sales median price for all services comb $58,333.00 Inflation: growth in sales price 2.0%
Variable price per client $47,500.00 Inflation: growth in VC per unit 2.0%
Fixed costs $10,000 Inflation: growth in fixed costs 1.0%
Part 2. Depreciation Schedule
a
Cumulative
1 2 3 4 Depr'n
Building Depr'n Rate 1.3% 2.6% 2.6% 2.6%
Building Depr'n $328 $655 $655 $655 $2,293
Ending Book Val: Cost - Cum. Depr'n 24,872 24,217 23,562 $22,907
Equipment Depr'n Rate 20.0% 32.0% 19.0% 12.0%
Equipment Depr'n $2,000 $3,200 $1,900 $1,200 $8,300
Ending Book Val: Cost - Cum. Depr'n 8,000 4,800 2,900 $1,700
Cash Flow Estimation and Risk Analysis
Years
a
The depreciation rates are multiplied by the depreciable basis ($25,200 for the building and $10,000 for the equipment) to determine the
yearly depreciation expense. The correct depreciation percentages for the building depend upon the month that the b
(Brigham, Ehrhardt, 2002).

49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
A B C D E F G H I
Part 4 of Table 2-4. Projected Net Cash
Flows (Time line of annual cash flows) 0 1 2 3 4
2005 2006 2007 2008 2009
Investment Outlays: Long-Term Assets
Building ($25,200)
Equipment (10,000)
Operating Cash Flows over the Project's Life
Units sold 36 40 44 48
Sales price $58,333.00 $59,499.66 $60,689.65 $61,903.45
Sales revenue $2,099,988 $2,356,187 $2,643,641 $2,966,166
Variable costs 26,488 1,918,620 2,152,692 2,415,320
Fixed operating costs 10,000 10,100 10,201 10,303
Depreciation (building) 328 655 655 655
Depreciation (equipment) 2,000 3,200 1,900 1,200
Oper. income before taxes (EBIT) 2,061,172 423,611 478,193 538,687
Taxes on operating income (40%) 824,469 169,445 191,277 215,475
Net Operating Profit After Taxes (NOPAT) 1,236,703 254,167 286,916 323,212
Add back depreciation 2,328 3,855 2,555 1,855
Operating cash flow $1,239,031 $258,022 $289,471 $325,068
Cash Flows Due to Net Operating Working Capital
Net Operating Working Capital (based on sales) $2,555 $235,619 $264,364 $296,617 $0
Cash flow due to investment in NOWC ($233,064) ($28,745) ($32,252) $296,617
Salvage Cash Flows: Long-Term Assets
Net salvage cash flow: Building $19,963
Net salvage cash flow: Equipment 4,280
Total salvage cash flows $24,243
Net Cash Flow (Time line of cash flows) ($35,200) $1,005,967 $229,277 $257,219 $645,927
Part 5 of Table 2-4. Key Output and Appraisal of the Proposed Project
Net Present Value (at 12%) $1,639,344
IRR 2781.42%
MIRR 194.14%
0 1 2 3 4
Cumulative cash flow for payback (35,200) 970,767 1,200,044 1,457,263 2,103,190
Cum. CF > 0, hence Payback Year: FALSE 0.03 5.23 6.67 5.26
Payback found with Excel function = 0.03 See note below for an explanation of the Excel calculation.
Check: Payback = 3 + 5,275/23,999 = 0.74 Manual calculation for the base case.
Years
Years
The Excel payback calculation is based on the logical IF function. Returns FALSE if the cumulative CF is negative or the actual
payback if the cumulative CF is positive. Then, we use the MIN (minimum) function to find first year when payback is positive
$18,000 - (-$1,963) = $19,963.

74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
A B C D E F G H I
Cash flow due to investment in NOWC ($233,064) ($28,745) ($32,252) $296,617
Salvage Cash Flows: Long-Term Assets
Net salvage cash flow: Building $19,963
Net salvage cash flow: Equipment 4,280
Total salvage cash flows $24,243
Net Cash Flow (Time line of cash flows) ($35,200) $1,005,967 $229,277 $257,219 $645,927
Part 5 of Table 2-4. Key Output and Appraisal of the Proposed Project
Net Present Value (at 12%) $1,639,344
IRR 2781.42%
MIRR 194.14%
0 1 2 3 4
Cumulative cash flow for payback (35,200) 970,767 1,200,044 1,457,263 2,103,190
Cum. CF > 0, hence Payback Year: FALSE 0.03 5.23 6.67 5.26
Payback found with Excel function = 0.03 See note below for an explanation of the Excel calculation.
Check: Payback = 3 + 5,275/23,999 = 0.74 Manual calculation for the base case.
Years
The Excel payback calculation is based on the logical IF function. Returns FALSE if the cumulative CF is negative or the
actual payback if the cumulative CF is positive. Then, we use the MIN (minimum) function to find first year when payback is
positive

CHAPTER 3
HUMAN RESOURCE MANAGEMENT
The industrial world is engulfed in the knowledge era where the capital asset is the
knowledge that the employee or recruit brings to an organization. The quality of this
organization is contingent on the quality of people, also known as the human resource asset, the
organization recruits and retains as employees. Human resource management (HRM) is the key
to the success and failure of any organization. The information obtained through the people that
are hired, coupled with the synergies that they can potentially develop with existing employees,
will play a vital role in enhancing the organization’s growth within its respective market.
Because of the many different cultures of people that live within the United States, our
country is one of the most diverse nations in the world. Recruiting individuals that are of
different ages, and have different cultural and academic backgrounds will be conducive in
promoting a diverse work environment within this organization. Adding the right employees to
induce a diversified work environment is also key in promoting competition and increasing
productivity; therefore matching a recruit’s characteristics in terms of their work ethics, self
motivation, and innovative aptitude, with the correct work environment is as important as
matching an employee’s skills with the right job, and shall be a prime directive of HRM for this
organization. A careful recruit interviewing process will be implemented to ensure that the
recruit is a good match for the job description. There will not be any language requirements,
however strong pc skills, communication, manufacturing and legal experience are a must. HRM
is one of the most important departments in an organization.

3.1 Primary Function and Scope of HRM
Fisher, Schoenfeldt, and Shaw (2003) suggest the primary function of our HRM
department should be to provide an organization with the most efficient and affective work force
possible. HRM’s organizational scope will be to conduct job analysis to determine what is
needed recruit efficient people that can add value to the product and organization and fire those
who don’t. The general functional areas of HRM will be as follows:
Rewarding Employees:
• Performance Appraisal- evaluating an employees performance and granting pay increases
that is proportional to work production, job innovation, and adding value to the
organization.
• Direct compensation- evaluating if the organization is being cost efficient in the
compensation it give for performance of a particular task and not over or under paying its
employees.
• Indirect Compensation- employees expect professional and academic growth, they expect
the organization they work for to value them as an asset and support them financially in
obtaining secondary education and training.
Maintaining Human Resource Management:
• Collective Bargaining with employee union reps in addressing union and employee rights
issues.
• Organizational Exit- terminating the employment of individuals that are not assets, and
ensuring that another individual within the organization has the related skills of the
individual that is about to be or has been terminated.

• Outplacement- which may include employee counseling and career enhancement and
assessment, aid job searches, helping employees set career and academic goals.
• Employee self worth- employees expect to have some input on the job that they are
performing and be involved in some of the decisions that affect their direct and indirect
job tasks.
3.2 Implications of HRM at the Strategic Level
It is important that a HRM representative is placed at the strategic level so they can be
part of the decision process in regards to the issues below that will have major implications on
the organization:
• Adding new types of equipment, deciding what, who, how, and when and individual
should be trained. How much should be spent on their training? Will it be cost affective
to train these people, when will these people be needed and can training be completed in
enough time to fill the need to support the marketing and sales demands of the parent
consultant organization?
• Growth through acquisition, selection, and training, compensation, and outplacement
• Taking on additional indebtedness to prevent takeover, compensation could be reduced,
outplacement could force reduction in the onsite organization, operate with a large off
site budget.
• Pursue a low cost competitive strategy; implement strategies geared towards making the
organization a cost leader. The HRM will investigate competitors indirect and direct
compensation packages to ensure that the packages that are offered to recruits are
competitive but not excessive.

HRM will use a universalistic approach to Strategic Human Resource Management
(SHRM) in transforming the traditional HR six practices listed below into a limited set “correct”
HR procedures and policies that will contribute to the bottom line success of the organization:
1) Selective hiring practices
2) A focus on teams and decentralized decision making
3) High pay levels
4) Extensive employee training
5) Practices that reduce status distinctions among employees
6) High levels of information sharing
It has been stated that the strategic planning process should include and be linked to
SHRM; this can be achieved by developing bundles of internally consistent HR activities that
directly contribute to the firm’s strategic objectives and goals. This is why it is important to have
a HRM representative in place at the strategic level prior to planning and implementing the
organization’s business strategy. Development of an active partnership between line managers
and HR staff is critical in achieving this objective. The six essential elements needed to develop
SHRM are as follows:
1) Internally transforming existing HR staff and structure into operating in the most
efficient and cost effective way possible
2) Enhancing Administrative efficiency
3) Integrating HR into the strategic planning process
4) Linking HR practices to business strategy and one another
5) Developing a partnership with line management
6) Focusing on the bottom-line impact of HR and measurement of that impact

in terms of the performance of the information system in regards to its ability to
successfully market and sell the services offered by the industrial consultant and patent law
organization.
3.3 Organizational Planning, Forecasting, Diagnosis, and Job Analysis Forecasting
Forecasting the demand for labor is performed after HR planners have collected
information from both internal and external sources. Assumptions such as sales forecast as well
as the geographical location of the organization are attributes considered when forecasting
demand for labor. The number and type of employees who are required to perform the desired
tasks in this organization in the future will be obtained from the departmental managers. Demand
forecasting can be divided into two categories: Judgmental and mathematical. This organization
will use the judgmental method. The judgmental method takes into consideration quantitative
data, as well as, intuitive interpretation and are used by companies with new HR departments and
do not have complex data bases in place and is the preferred method for new organizations or
organizations that are in transitions like our organization. Performing a detailed diagnosis will
play an essential role in forecasting other aspects of HRM planning.
Diagnosis:
Diagnosis and bench marking will be used to asses the current state of the company and
provide a baseline for the Information Systems Organization to use as a point of reference and
target why, where, how, and within what time frame can the organization implement methods to
improve production and the quality of products and services the continue reaching organizational
goals and objectives. Research has shown benchmarking is internal and should start with
customer diagnosis input, which will give the organization the customer’s perspective of the

organizations strong and weak points in terms of products and services that we will provide. This
organization will use an additional tool of benchmarking and evaluate the functional aspects of
other leaders in industry and use them as points of reference in facilitating changes within the
organization that should be conducive in improving production and the quality of products. This
is important, because managers often try to improve production or quality by motivating the
employee when essence the problem may be systemic or vendor related. Managers and owners
can contribute to training and motivating the employee opposed to using them to addressing the
real problematic issues with materials, processes, procedures, machine operation, and vendor
issues.
Affects on Organizational Culture and Human Resources:
Managers often attribute poor production, poor management, or quality of work to a poor
attitude or effort on the employee’s part instead of evaluating whether there were problems with
raw materials, production, or inappropriate signal processes. Managers try to improve production
or quality by motivating their employees, when in essence the problem may be systemic or
vendor related.
Managers and owners can contribute unnecessary resources to training and motivating
their employees, as opposed to using those resources to address the real problematic issues with
materials, processes, procedures, machine operation, and vendor issues (Fisher, Schoenfeldt, and
Shaw, 2003).
Management’s evaluation should not be based on what managers personally like in an
employee. Instead, the appraisals should be objective and evaluate an employee’s ability to use
and learn various skills needed to perform their job related tasks, as well as be cross trained in

other areas that may have a direct or indirect affect on their job. Managers must also access the
hygiene theory, satisfaction, and dissatisfaction that contribute to the effectiveness of the
employee as an individual and as part of the team and contribute more resources to enhancing
and developing these positive elements.
A lack of production should not just be blamed on the individual, instead all of the issues
involved with and affect that individual’s job should be evaluated. A systematic documented
performance appraisal enables Human Resource management (HRM), as well as department and
line managers, to give feed back to the workers. When an individual is given positive feedback,
it adds value to the employee’s job thus giving them a since of worth and value, which leads to a
more productive worker as opposed to a disgruntled worker who spreads doubt and dissention
among his or her peers within the organization.
It is human nature to want to achieve and do a good job. If negative feedback is to be
given to an employee, it should be performed by management behind close doors, and expressed
as constructive criticism. If management wants to give an employee negative feedback, it is
important that management starts and ends the conversation with highlighting some of the tasks
that the employee is performing well before highlighting the tasks that the employee is not
performing well and adhere to HRM policy etc. A system’s thinking approach should be used in
designing and performing performance appraisals. A written performance agreement based on a
one to three point system is how the employee will be evaluated. One representing needs to
improve, two representing consistently achieves, and three representing excellent level of
achievement.

Managers must look at everything involved in the employee completing a task, from the
number of employees that the employee has to interface with, i.e., how many people the
individual has at their access to collaborate and coordinate with in exchanging knowledge in
terms of using job related machines and software, and the availability of materials.
Constant appraisal of teams and individuals should be used and followed by constant
feedback and appraisal. Pay raises and promotions based on performance agreements builds
competition, but it can also lead to jealousy and dissention amongst workers that can lead to a
lack of collaboration, information exchange, and team work. Therefore, management must be
careful in assigning tasks with high visibility amongst employees that work in the same group
that perform similar tasks.
Using an electronic formal appraisal system to evaluate the goals and objectives of the
organization and the goals of the employee is essential in analyzing whether or not the
organization’s goals are in line with the goals of its employees. It is important that the
employee’s goals align as closely as possible with my organization’s goals. TQM visible
alignment will make it more readily possible for the organization to fulfill its part of the implied
contract in attributing to the employees professional development through training and secondary
education. This will go a long way in adding value to my organization. Knowledge and training
gained by employees, will lead to a direct proportional increase in value added to the
organization. This new training and education obtained by employees will allow them to make
innovative changes, suggestions, and more readily highlight and adhere to lessons learned, which
will increase production as well as improve the quality of products and services the organization
provides.

Job Analysis
Fisher, Schoenfeldt, and Shaw (2003) states job analysis is a good tool for human
resource planning and recruitment, and can be used for sound employee selection. Job analysis
provides a baseline of information from which training and appraisal programs can be used to set
wage rates. An organization must decide how they are going to use the job analysis data, what
type of information is needed and from where that information will be obtained. The job analyst
can use a number of job analyst procedures to perform a functional job analysis. This
organization will be using the functional job analysis, because it provides the best methods of
obtaining and utilizing data that is useful in identifying worker traits that are needed to perform
the job as well as providing information to base performance evaluations. Functional job analysts
(FJA) observe workers review materials, and interview present employees and supervisors to
obtain information relative to the functional tasks of the job. Other incumbents that is familiar
with the job review then review the information to ensure the validity and plausibility of the
information. Obviously FJA will play a highly functional role in forecasting and diagnosis, the
other aspects of HRM planning.

CHAPTER 4
MANAGEMENT IMPLICATIONS
The speed in which electronic data interchange can obtain, store, and distribute electronic
information will yield added advantages and disadvantages in the organization producing quality
products and services (Fisher, Schoenfeldt, and Shaw, 2003). In order to efficiently and
effectively use electronic data interchange as a strategic tool, management must use electronic
data interchange within a productive management system. A system in general is composed of
interlinking parts that affect each other to produce a total product.
4.1 Management System
Total Quality Management (TQM) is such a system; TQM will be implemented to
address all the issues the organization is faced with as well as ensure that its goals and objectives
are met (Fisher, Schoenfeldt, and Shaw, 2003). TQM is based on the principal that doing high
quality work the first time improves productivity, and reduces inspection and rework cost for the
organization. In this system, employees are encouraged both individually, and in a team setting,
to make suggestions on how to improve the process or quality of the product (Fisher,
Schoenfeldt, and Shaw, 2003).
Training employees to recognize customers that need the product or service is a major
part of this process. Statistical analysis, which is used to detect variances from the required
results and the results that are actually produced, is a major part of this system. The key to TQM
is employee acceptance, involvement, and internalization of quality goals in developing and
using the systems. Without the acceptance of employees and commitment, using this system

would likely result in failure. TQM is activity-based, not result-based, which can lead to
management focusing on the activities instead of the
results achieved by the department or the organization it self. Another problem with TQM is that
it sometimes overemphasizes the, “do it right the first time approach”, which has led to lack of
change or product innovation.
Electronic data interchange can have a great impact on TQM, because it provides a
vehicle to gather and distribute electronic information that will be used in training and e-mail
correspondence between employees and management (interfacing between middle management,
line supervisors, and employees). This will facilitate the acceptance, involvement, and
maintenance of an open line of communication between management and employees. A
systematic approach in providing quality services and products the first time will lead to gaining
a larger client base and retaining those clients as long term customers (Fisher, Schoenfeldt, and
Shaw, 2003).
4.2 Management Implications on Human Resources
The effects on human resource management is that all employee activity from the work
being performed, to web site access, to training pursued and achieved can be retrieved
electronically and used in a more factual evaluation that is more conducive for the company.
This will make the employees aware that their work can be monitored and systematically
reviewed at any given time in lieu of their performance agreement. This will make the employees
aware that their work can be monitored and systematically reviewed at any given time in lieu of
their performance agreement. Managers must be careful evaluating an individual’s performance,
and awarding promotions and salary increases. In tasks that require a shared pool of knowledge

and collaboration, a lack of collaboration due to competition induces selfishness among
employees, which can be detrimental in a high tech organization such as ours where a lot of
computer software and e-commerce information and other formalized training used for
marketing, sales, and accounting databases will be collaborated amongst a group of employees
(Fisher, Schoenfeldt, Shaw, 2003).

CHAPTER 5
BUISNESS STARTEGY
Implementing electronic data interchange as this organization’s business strategy’s prime
objective, is essential if this company wants to have a competitive advantage over its
competitors. A brief synopsis of today’s present day economic environment was given in
previous chapters as a prelude to introducing this organization’s new business strategy.
Management must utilize electronic data interchange to support the marketing venue of the
organization Innovative Industries Consulting and Patent Law Inc. Management must facilitate
the company directives and address the issues of competition, market and increase sales, reduce
overhead, and monitor the affects on organizational culture and human resource management.
As discussed in Chapter 1 strategic management which is the driving force in any
successful business strategy, consists of 4 basic elements:
1) Environmental scanning
2) Strategy formulation
3) Strategy implementation
4) Evaluation and control
Figure 5-1 below illustrates how these elements interact with each other.

Figure 5-1 Basic Elements of the Strategic Model (Wheelen and Hunger, 2000)
Environmental
Scanning
Strategy
Formulation
Strategy
Implementation
Evaluation
And Control

5.1 Environmental Scanning
Environmental scanning can be described as evaluating the cultural and industrial
environment of an organization and its competitors, in order to find out both of their strengths
and weaknesses (Fisher, Schoenfeldt, Shaw, 2003). Socially, the vast markets in the world today
are becoming more integrated and the means of production has become more globally distributed
(Kurtzman, 1993). This organization must stay in tuned with the customs, values, and beliefs of
the different cultures of today’s society. This will enable the organization to cater to its
customers and produce and market the products and services that the customers want, need, and
are willing to pay for. Environmental scanning is the monitoring, evaluating, and disseminating
of information from the external and internal environments to key people within the corporation.
The first step in developing any successful business strategy is to perform a SWOT analysis. A
SWOT analysis is an evaluation of an organization’s strengths, weaknesses, opportunities, and
threats (Griffin, 2005).

External Environment:
The external environment is composed of both threats and opportunities that are outside
the organization and are not usually within the short- run control of top management (Wheelen
and Hunger, 2000). Figure 5-2 below
Figure 5-2 Environmental Variables (Wheelen and Hunger, 2000)
Task
Environment
(Industry)
Special interests
Groups
Competitors
Employees
Suppliers
Communities
Customers
Creditors Trade Ass.
Governments
Share Holders
Internal
Environment
Structure
Culture
Resources
Social Environment
Sociocultural
Forces
Political-legal
Forces
Economic
Forces
Technological
Forces

The flow chart below in Figure 5-3 denotes the steps and process involved in performing
a SWOT analysis and accessing the organization’s strengths weaknesses, opportunities, and
threats. This analysis will provide the organization with a baseline of information from which it
can develop goals and objectives. After the goals and objectives have been developed,
management can use electronic data interchange to address the issues of competition, reducing
overhead, increasing sales, establishing and maintaining diversity, and human resources the our
organization (Griffin, 2004).
Figure 5-3 SWOT Analysis Flowchart
Mission Statement
The organization fundamental purpose
Environmental
Scanning
SWOT Analysis
Strategies that support the mission statement
Good Strategies
• exploit opportunities and threats
• Neutralize threats
• Avoid weaknesses
Internal Analysis
Strengths
External Analysis
Opportunities
Weaknesses Threats

5.2 Evaluation of Strengths, Weakness, Opportunities and Threats Competition
An organization must be aware of the following five competitive forces if it is to enjoy a
competitive advantage:
1) The threat of new entrants into its specific market arena
2) Rivalries between other competitors
3) The threat of substitute products or services as well as the growing trends in using
complimentary goods or services
4) The buying power of the customer
5) The power of suppliers of similar goods or services (Griffin, 2005).
In order to ensure the organization’s success against its competitors, it must first ask itself
the following questions:
1) Where did the companies in its industry fail in adding customer value to their
products and services?
2) What products or services could they have provided that would have constituted a
perception of quality and satisfaction amongst their customers?
2) Has the organization evaluated its competitors in terms of them using their physical
resources effectively and efficiently within the confines of the manufacturing
industry?
4) Did competitors attempt to implement some form of scientific management to
improve the efficiency of their individual workers?
5) Did competitors make the mistake of using qualitative goals?
However, qualitative goals do not serve as good indicators of success or failure. Using a
combination of quantitative and qualitative goals to evaluate the direction or misdirection that an

organization is heading towards provides more viable indicators for the organization to evaluate.
By performing analysis on these five major areas and making subsequent changes in problem
areas of the organization that parallel the same or similar subject areas of an unsuccessful
organization, we can prevent our own organization’s demise as well as make it more competitive
in industry (Gale, 1994).
It is important that organizations are kept cognizant of new and existing government
regulations and the business relationships between its customers and the government, as well as
the relationship between its competitors and the government, i.e. the political legal dimension
(Griffin, 2004).
A major organizational strength that this organization possesses, which its competitors
(other industrial consultant firms and patent law firms) do not have is that this organization
performs both services. The consultant department of the organization can use the electronic data
interchange as a knowledge sharing tool to provide manufacturing organizations with detailed
analysis on their current position in terms of production and the quality of products and services
they provide. This also enables the organization to provide it customers with vendors for
outsourcing purposes. Many organizations are using electronic data interchange to provide
information for work that they use to perform themselves, but are now contracted out for vendors
to do instead (Zilliox, 2001).
The organization can use the electronic information transmitted by various vendors,
manufactures, and government agencies for diagnosis and benchmarking to access the current
state of its customer’s organization and to provide the organization with a baseline or reference
point in targeting why, where, how, and within what time frame can the organization implement
methods to improve its customers rate of production and the quality of products and services it

provides. Diagnosis and benchmarking should start with customer input, which gives the
organization the customer’s perspective of the organization’s strong and weak points in terms of
products and services that they provide (Fisher, Schoenfeldt, and Shaw, 2003).
An organization can use benchmarking to evaluate the functional aspects of other leaders
in the industry. These points of reference can facilitate changes within their own organization
that will constitute improvement in production and the quality of products and services they
provide. This information can then be entered into a database of information that will be
constantly updated with a rapid influx of vendor, material, production, manufacturing, and cost
analysis information. This will give the organization a major advantage over its competitors in
terms of gathering and furnishing pertinent information to its customers (Bruner, Harden,
Heyman, 2000).
5.3 Total Quality Management
Total Quality Management (TQM) is the management system that the organization will
use to implement electronic data interchange to support the marketing aspects of the business
strategy and that will address the issues previously listed. This paper will show the possible
managerial implications in using TQM and the affects it will have on employee development and
behavior.
Managers should take an intuitive approach in performing an integrating production and
marketing activities of the organization with the subconscious of achieving the overall goal of
the organization. Management is responsible for planning, leading, and organizing the
organization’s resources in an effort to affectively achieve company goals and objectives.
Collectively, the two key components of productivity that management needs to focus on is

being effective and being efficient. Effectively planning, controlling, and making decisions that
will contribute to the efficiency of the organization in a timely manner and accomplish
organizational goals should be the primary directive of management. Management can be
effective in contributing to the organization’s efficiency by capturing lessons learned and
maintaining an open line of communication so employees can make suggestions, and assist
management in correcting and preventing errors. Management should take a systemic approach
in improving the ability of the organization’s functional operations in accomplishing company
goals. This can be done by limiting the expenditure of resources in one area, so that they can be
used in an area where they are needed more (Griffin, 2005).
Business managers must operate within the confines of a national economic system. This
national economic system is the managerial playing field that is defined by the nature of
competition, rules, and regulations prescribed by the government, the level of technology, social
and cultural norms, and the physical environment.
External managers must accommodate and interface with the three different market areas:
other businesses, other organizations (which may be a government agency), and consumer
markets. Internally, the organization will perform the following two main activities: product
creation (production), and gearing marketing efforts toward the customer. This involves
monitoring and generating product ideals. Management must coordinate within the organization
and set priorities for each functional area in addressing these two main activities (Tilton, 2004).
The success or failure of a company in today’s economy is based on information and
technology. Basically it is contingent on how much and how fast pertinent information can be
obtained and delivered to individuals within the organization that effectively use it. Due to the
fact that this is the technological information era, technology is the prime directive in this new

business strategy. The main focus of management is to use electronic data interchange to support
new client and customer acquisition, as well as, improve e-commerce, sales and marketing
schemes. The definitive flow path below in Figure 5-4 highlights the origin and destinations of
the electronic information, as well as, the utilization, management, and possible limitations of the
information through out this organization.
Figure 5-4 Work Flow Path
Management of Marketing and Sales:
Due to the fact that the patent law department either represents clients that are attempting
to procure patents for new designs or defend individuals or organizations that are being sued for
patent right infringements, it would greatly benefit perspective clients to retain a patent attorney
that is very knowledgeable in reference to potential threats from other designers that have similar
designs (http://trentbaker.com/SERVICES.htm).
Data Base
Stores &
transfers MI
& PI info
PCs obtain and
Store info in data
base
Production
Information (PI)
Industrial Consultant
Clients
Manufacturing
Information (MI)
Patent Law
Clients

The organization will obtain and distribute electronic information on different company’s
backgrounds in terms of products, areas of focus in production, and cost analysis. Employees
will forward this electronic information to the inventor of the proposed design so that they can
evaluate if their design will infringe on a similar product. Customers that retain the
organization’s services as consultants can benefit from its legal expertise, and use that legal
information to cover themselves from being sued for implementing designs that infringe upon
other patents. The wealth of shared electronic data obtained from the functional operations of
both aspects of the services the organization provides, can be used in terms of marketing and
sales. Providing the customer quality service is important in developing the reputation of the
organization in its specific industrial arena. Web responses and other correspondence will be
essential to developing and gaining a competitive edge in the industrial market. Statistical
analysis will be used in evaluating the effectiveness of web based marketing, as well as, the other
marketing venues used to obtain new customers (Bruner, Harden, Heyman, 2000).
Reducing Overhead:
Electronic data interchange will aid the organization in training, obtaining and storing
valuable client information from off the web, as well as other electronic correspondence
activities that will be performed to attribute to the organization’s specialized services. By
implementing the electronic data interchange into some of the functional training aspects
of the employees, overhead will be reduced dramatically. Using electronic data interchange to
retrieve data from the web and other databases, transmitting data, and storing it electronically
will cost less then the traditional techniques of retrieving information over the phone, filing and

storing data on paper, which would require more storage space. This will result in a reduction in
overhead in terms of man-hours, supplies and storage space.

CHAPTER 6
DESIGN AND DEVELOPMENT OF THE STARETIGIC INFORMATION SYSTEM
This department will be managed by one information systems (IS) expert trained in
computer software, and web technology. It will have one technician and one secretary both of
which will perform research and various other functions the position may require.
A primary task for management will be to develop and implement an IS Plan that will
generate the marketing, sales, and screening for potential clients, which should result in national
corporate visibility, constantly increasing profit margin, and corporate growth respectively.
In addition management must task the staff with setting up an Intranet system of company data
bases and the e relevant software to perform the tasks listed below and delivers the information
needed to the staff that needs it in a timely fashion; note due to the limited staff this system
should have the capability to be accessed remotely via telephone line connection. They must also
provide internet browsers that are listed on the network to access the information of competitors
and vendors utilized by the company as well as potential clients. In order to efficiently utilize the
information system upper and middle management must have and convey a concise
understanding of the information and tasks that the system is to produce and perform on a
departmental level as well as corporate level. The informal system by which the company
operates must be used as a base line for developing the parameters of all technical aspects in
terms of hardware and training of individuals that will use these systems. The system should
address the following key elements:
1) Boundary: The parameters of the elements within the system being analyzed
And which are outside; it is automatically assumed that the elements inside
the system can be more readily change then those outside.

2) Environment: Is defined as everything outside the system, the environment
provides economic assumptions constraints, and inputs, to the system.
3) Inputs: Resources from the environment that are consumed and manipulated
within the system, i.e. data, materials, supplies, energy.
4) Outputs: Resources or products provided to the environment by activities within the
system, i.e. information, reports, documents, screen displays, materials.
5) Components: The activities or processes within the system that transform inputs into
intermediate forms that generate system outputs, components may also are considered
as a system or subsystem.
6) Interfaces: Is the place where two components or the system meet or interact; systems
may need special sub components that serve as filters for translating, storing and
correcting whatever flows through the interface.
7) Storage: Holding areas for permanent and temporary information, energy, materials,
and etc..; storage which provides a buffer between system components to allow work
to be performed at different times and to allow different components to share the
same data resources. Storage is especially important in IS because data are not
consumed with usage; the filing,
8) Separation, and storage of data is crucial to the functionality of handling large
volumes of data.
Management will implement a three phase systematic approach in developing this
information system; these three phases and the impact they will have in developing the Strategic
Information System and integrating its functional aspects are defined in the following chapters.

6.1 Definition Phase
Definition phase, the CEO and managers of the respective three departments (i.e.
managers of the strategic information systems, industrial consulting, and patent law departments)
will conduct a multi step analysis on future business operations and the information system’s
main areas of concern. Detailed description of system requirements pertaining to information
processing and data orientated notations will be researched and developed to ensure all aspects of
company procedures and processes are incorporated into and addressed within the system design.
In order to design and develop an IS department for the company A comprehensive definition of
the departments and their functional aspects within the company were defined as follows:
1) Administration, marketing sales and client procurement will be under the IS umbrella.
This department will be responsible for all administrative tasks necessitated by the
consultant and patent departments. The IS department is also responsible for marketing
the industrial consultant and patent services offered by the company as well as screening
potential clients through web oriented software and questioners (see Appendix A) to
determine the feasibility of the respondents becoming potential clients on either the
industrial consultant or patent law side of the house, as well as the accounting and finance
aspects of the firm.
2) The industrial consultant’s phase of the operation main function is to evaluate the
applicants, which have been deemed as potential clients by the IS department. If client
potential is justifiable to them they will contact the company by phone and perform a
phone interview at that point. The consultant will ask the client,” what is your company’s
target gross in dollars and production for this year, the next three years and the next five
years”. Their second question will be, have they met those goals, if their response is no,

the consultants next question is, “what departments failed to meet their objectives and
how did this contribute to your company not reaching their goals”. The answers to these
questions will aid the consultant in developing projected target areas that need to be
addressed.
3) Patent law phase of the operation phase of the operation main function is to evaluate the
applicants, which have been deemed as potential clients or companies by the IS
department. If client potential is justifiable to them they will contact the potential client
or company by phone and perform a phone interview at that point. The lawyer will asked
the client what is the product they are trying to procure a patent for, “why do they think a
patent is justified for this product, and what background do they have that stipulates the
design, and functional as phase of the operation main function is to evaluate the
applicants, which have been deemed as potential clients by the IS department. If client
potential is justifiable to them they will contact the client or company by phone and
perform a phone interview at that point.
The definition phase defined above will assist management and IS personal in understanding and
providing a detailed description of the flow defining the types of information and the paths that
must be accessed to obtain that information, how the information should be processed, what is
the end result being sought after processing has been performed, as well as the paths the
information will flow in after each particular phase of processing has been performed. The flow
of information aids the designing the system, primarily the networking aspects of the system.

6.2 Construction Phase
Construction phase, involves the design and testing of the system software and hardware.
If system hardware and software that will perform the functions necessitated by the company
does not already exist, then software and hardware capable of performing these functions will be
developed.
Software:
SAP highly regarded industrial function software already exist, therefore software
does not have to be designed from the ground level. SAP is an enterprise resource planning
system (ERP) developed by a company in Walldoff Germany. SAP is composed of several
modules. SAP will also serve as the customer relationship management
system. It will integrate the warehouse data base variables (such as purchase orders,
material scraped, material used and in what application, and many others) with the
sales and marketing venues of the companies seeking consultant assistance as well as
the marketing venues of the consulting company it self. A key aspect of efficiently
using SAP within the company was the high level of integration of the software with
the business processes of all departmental venues of the company. SAP can be
divided into seven applications:
1) Supply chain management
2) Product life cycle management
3) Human capital management
4) Financials
5) Business Intelligence

6) Customer relationship management
7) Electronic commerce.
SAP can be used as transaction processing system to carry out accounting functions, i.e.
accounts payable and accounts receivable. The other two modules that SAP logistic capabilities
allow the software to perform the sales and product data management functions of the company.
The modules in the administration category is capable of placing client info in the respective
databases, perform scheduling functions, pay company employees, as well as process accounts
receivable transactions. It allows employees to access, review, and change their own address data
as well as submit travel expenses reports, view and edit vacation and attendance reports. The
financial category modules will allow the CEO and upper management to work with and
interpret company financial reports in terms of sales and payroll the flow paths will be in line
with those presented below in Figure 6-1below.
Data warehousing, a contact management system will be implemented where contacts
of possible clients off site will be maintained, the system will store distinct profiles on the
personal as well as relative information about the company it self.
Tracing database that capable of tracking company activity in terms of product
procurement, company acquisitions, and vendor interaction and activity will be
implemented. This database will have the capability of being linked with clients where
house databases if that client uses some form of SAP for purchase order, material
inventory and other material inventory functions.

Figure 6-1 Business Flow Path
Support Software:
All PCs used in the company will use windows XP as the operating system and Microsoft
Office 2003 as the applications software. Norton antivirus, popup blocker, firewall protection,
and hacker protection will be used on all systems to provide encryption protection and ensure the
security of business transactions, detour electronic tampering, and secure all information within
the system (note the Microsoft router also comes with its own firewall protection as well.
Vendor
Accounts
Payable
Vendor
Invoices
Checks
Rejected Invoices
Accounting
Purchasing
Payable documents
Purchase Orders
Vendor Information,
Stock Receipts

Hardware:
Dell PCs with Pentium IV 500 MHz processors with 20 gig hard drives will be the PC
used within the company; all systems networked together with a Microsoft hard wire router (see
chapter VI for details). Hewlett Packard (HP) 600 all in one printer fax combo units will be
placed in each office and linked together computer through the hard wire network previously
mentioned, this will give all the computers (Pc terminals) within the network the capability to
access any of the computers at any time. The HP all in one units are self feeding fax and printing
units capable of receiving up faxes to 20 pages per minute (ppm) black an white and 12 ppm
color, and print and Xerox 26 ppm black and white, and 15 color. The number of printers
purchased will be contingent on the number of personal utilizing the PCs at any given time as
well as the office positions (seating assignments) of those individuals. See Figure 6-2 below for
Schematic of the Microsoft LAN network. A star topology was used where a the Microsoft
server is located in the center ant the PCs workstations as well as printer stations are hard wired
to the network which is wired to and controlled by the multiplexer(see Network, Internet, and
Intranet Design chapter for component details)

Figure 6-2 PC Network Workstation Layout
Note: All PCs have access to all printer/fax/scanner locations
6.3 Implementation Phase
Implementation phase, a vendor would be contracted to install and maintain the
system software, this individual would work with the company IS professional to collectively
ensure that all desired system company requirements are met and the system performs at
maximum efficiency in addressing daily function able tasks. Discir, a SAP consulting firm will
be used as the consulting agent to serve in the above mentioned capacity.
The following sub phases list the steps involved in the implementation phase:
1) Installation of the system should be contingent upon recommendations made
and questions asked by the end users, a testing phase should be at the end of
this sequence and should proceed the actual implementation of the actual
system it self.
Server
And
Multiplexer
PC Work Stations
Printer/Fax/s
canner
Printer/Fax/s
canner
Printer/Fax/s
canner
Printer/Fax/s
canner

2) Operations, the systems ability or lack there of in terms of data bases query
applications, system processing capabilities, and most importantly efficiency of
the system in terms of completing departmental functions as well as company
tasks.
3) Maintenance on system hardware and soft ware should be performed on a
quarterly by a team composed of an offsite IS consultant, a company
administrative employees and a departmental manager. This will facilitate a
more detailed analysis on problem areas relative to departmental functionality
and integration of the system.

CHAPTER 7
NETWORK, INTERNET, AND INTRANET DESIGN
SAP will be networked with satellite internet applications so that the consultant company
can pull material data, i.e. purchase orders, requisition, and discrepancy reports that detail how
material was either misused or inappropriate for the subject application, resulting in scraped
material and inflated overhead cost. Overhead cost is a key factor in developing a baseline for
evaluating the success of the company being analyzed by the consulting company.
Networking or telecommunications is an essential element of the IS system, because it
gives the individuals using the system the ability to exchange information between PCs within
the company as well as with individuals outside the organization at different geographical
locations. The fundamental functions carried out by the telecommunications system are as
follows:
1) Voice transmission of the data used in the network.
2) Processing,” making sure that an error-free message or data packet gets to the right
destination”.
3) Editorial, data being transmitted is checked for errors and is put into a standardized
format.
4) Conversion, involves changing in the coding system or transmission speed that be
necessitated when moving the data from one device to another.
5) Routing, is choosing the most efficient path, which is extremely important aspect in
this IS system design due to the complexity of the information being exchanged and
taking into account that information will be exchanged between PCs from both on site
and off site locations.

6) Network Control, tracks various elements of the system status on servers and if access
lines are busy it directs the system to another access line that is not busy; it also
periodically checks each user to see if they have a communication to send.
The interface part of the system is a critical part of the system which makes the network user
friendly in terms of allowing the user and management to send communications.
Due to the fact that computer data is composed of strings of binary digits or bits (strings
of zeros and ones) and noise in a telephone line could easily be interpreted as a one or vice versa
therefore a digital signal is preferred opposed to analog signal. A DSL Microsoft server (LAN)
will be connect by a hard wire to the network cards installed, which will be installed on all the
PCs on site. This land connection will be in a star configuration with a multiplexer serving in the
capacity as a controller. A twisted pair (LAN) with a transmission speed of 4mbps-100 mbps will
be used as the transition medium. On site (of the Consulting and Patent law office)the LAN will
be hard wired to a microwave, sub station (sub station l) allowing the network to be interlinked
via satellite connection with other microwave substations which are in close proximity, due to
the line of sight principal, with other microwave stations located at customer locations (see
Figure 7-1 below).

Figure 7-1 Microwave Satellite LAN Server Layout
Note: Microwave Station #1 is located at the Industrial Consultant and Patent Law home
office site; microwave station #2 is located at the client company site.
Earth
Microwavestation#1
Microwavestation#2 Satellite B
Satellite A

CHAPTER 8
SALES AND MARKETING
Selling is only a small part of marketing, marketing is the process by which individuals
and groups obtain what they need and want through creating and offering to consumers products
and services of value. The success of this company will be contingent on knowing the target
market intimately and developing a market offering that meets their needs and demands
(developing a marketing niche) (Tilton, 2004). The next step is to develop a market offering that
will satisfy those targeted consumers. This part of marketing is especially important when it
comes to offering specialized services like industrial and patent law consultation. This step will
involve tailoring the consulting and legal services to the targeted consumer’s needs and wants,
and setting an appropriate price. It also includes selecting the write distribution channel that will
make these services available when and where the customer wants them, and communicating
with the target market in a way that will grab their attention and spark their interest ultimately
creating product value in the customers mind. The ultimate goal of the marketing team is to
create satisfied customers and create repeat customers that will refer other customers (Kotler
2000).
The new economy is based on the Digital Revolution and the management of
information. Information has a number of different attributes it can be customized, personalized,
and dispatched to numerous individuals connected to a network (Brown, 1999). Negating wasted
time lost in face to face presentations and expediting the process through selective targeted
internet marketing is the wave of the future (Mc Kinsey, 2005). It saves both the selling agent
and the potential customer time and money. The information system organization will track the
number of potential customers that frequent the web site. The company will then put this

information into a database and enhance it with information, thus putting them in a better
position to customize offerings and services to specified customers (Kotler, 2000).
Management will be tasked with the following:
 Establishing a sales staff that is equipped with both a legal and technical base line of
knowledge that will enable them to develop a customer interactive web service that
provides a detailed summary of the industrial consultant and intellectual property (patent
or copyright) law services that the company provides to entrepreneurs, small businesses,
and fortune 500 hundred companies.
 Determining whether the customer is in need of Industrial Consultant Consultation or
Patent Rights Assistance from the information obtained from the customer via web-site,
e-mail, mail correspondence or telephone by asking the following:
A. If a customer is in need of industrial consultant consultation the staff should ask the
client the listed questions in Appendix A-1. This form denotes the basic info about
the company where the company has been in terms of production and assets and what
are there objectives and projections in terms of growth.
B. If a customer is in need of patent right assistance the staff should ask the client the
list of questions listed in Appendix B-1. This form obtains the information which
allows the customer service staff to ascertain the validity of the product in terms of
procuring a patent as well investigating if the product or design in question already
existed, which would conflict with the clients claim to patent their product.
Organization of the data obtained and used in the marketing and sales venues will be
facilitated by the SAP customer relationship management system (Brown, 1999)

(Note, the Sap software will not be implemented until two years after the initial start
of the business).
C. Customers will also have the capability to ask questions online with discussion
forum, direct e-support, or a natural language tool:
Dividing up the market is the starting point in any marketing campaign. The ability to
market specialized services, i.e. Industrial Consulting and Intellectual Property Law
Representation lies within the marketing manager’s ability to correctly identify the market
segments which are superfluous in developing a target market. The scope of the marketing
group’s job specification will be to know and understand the customer so well that these services
can be tailor made for each customer or organization (Kotler, 2000).
The most important aspect of marketing is to know and find out the customer’s
needs. The questioners in Appendixes A and B will serve as a tool in acquiring and developing a
market segment for these specified services.
Baring in mind that this is an information division for a relatively small company
composed of five to six employees and has a limited cash flow, the marketing, sales, consulting,
and attorney representation are all inner related. This adds a personalized touch and is a major
contributing factor in customizing the organization’s product or service niche in this case. The
best people to market any service are the individuals that provide these services on a daily basis.
They are more familiar with the functional aspects of the services and how they can remedy
target organizations of present, ongoing, and possible future problems. For example consultants
can tell their client how much, when, and why they should divert funds to other departments to
increase production. Intellectual property (or patent) attorneys can tell organizations how to
procure patents in order to protect them selves from having their designs stolen.

Marketing management must select target markets and continue getting
customers through creating, delivering, and communicating superior customer value. The
marketing task at hand is to find ways to connect the benefits of the services with the target
organizational needs and wants. The buyer or customer is already aware that they need the
service either to make their organization more profitable or to protect themselves legally. The
target organization will ultimately base its decision on the service that delivers the most value.
Value can be seen as a combination of quality service and price (QSP), other wise known as
customer value triad (Kotler, 2000).
Transaction or Relationship marketing can be defined as objectively
building long lasting relationships which perpetuate new long term customers that generate
referrals. If this is achieved transaction cost is drastically minimized and cash flow is increased.
Components of a marketing information system (MIS) are: people, equipment, and procedures to
gather sort, analyze, evaluate, and distribute needed, timely, and accurate information to
marketing decision makers. The company’s marketing information system should represent a
cross between what manager’s think they need, what managers really need, and what is
economically feasible.

8.1 Influencing Buying Power
The starting point for understanding buyer behavior is the stimulus response model
shown in Figure 8.1 on the next page. Marketing and environmental stimuli enter the buyer’s
consciousness. The buyer’s characteristics and decision processes lead to certain purchase
decisions. The marketer’s task is to understand what happens in the buyer’s consciousness
between the arrival of outside stimuli and the purchase decisions. A consumer’s buying behavior
will be influenced by cultural, social, personal, psychological, and in this case industrial factors
or trends. An individual’s cultural factors exert the broadest and deepest influences.
Cultural Factors:
The fundamental determinant that dictates a person’s wants and behavior is culture. The
growing child acquires a set of values perceptions, behaviors, preferences and behaviors through
their family Children growing up in the United States are exposed and expected to have the
following values: achievement and success, activity, efficiency and practicality, progress,
material comfort, individualisms, freedom, external comfort, humanitarianism, and youthfulness
(Kotler, 2000). Each culture is composed of smaller subcultures, in this case Industrial and
Manufacturing Cultures.
A diversity marketing program which is a specialty marketing program that will be
geared to target industry and manufacturing corporations will be strategically developed by the
marketing team, due to the fact that generic marketing campaigns will not produce the sought
after results in terms of procuring new customers and establishing long lasting business
relationships.

Social Factors:
“In general consumer’s behavior is influenced by social factors as reference groups,
family, and social role issues’. In terms of gearing marketing campaigns that provide specific
services for manufacturing, the industrial roles that these organizations play in industry as well
as the functional aspects of the parts they produce must be evaluated. Reference Groups consist
of all the groups or organizations that have a direct or indirect influence on a person’s or in this
case organization’s attitude, behavior or corporate objectives. Membership Groups or
organizations are those groups of people or organizations that have a direct influence on a group
or organization.
Secondary Groups such as professional, trade groups, vendors that supply raw materials
for the organization tend to be less formal and require less continuous interaction. Organizations
are also influenced by groups to which they do not belong and whish to become a part of such as
Aspirational Groups or organizations. Roles, status and personal factors will not come into play
in regards to marketing industrial consulting and patent law services to manufacturing
organizations. However industry trends, prices and industrial culture in the manufacturing world
will be a contributing factor in developing marketing schemes, tailoring the services and
communicating those services to organizations (Kotler, 2000).
8.2 The Buying Decision Process
Marketers have to identify who makes the buying decisions for their respective
manufacturing organizations, the types of buying decisions they make, the services the
need and use, and the steps in the buying process.

Since the target market are manufacturing organizations opposed to individual clients the buying
roles are defined differently.
Table 8.1 Three Companies-Perdue, Volvo, and Dominos-defined their vale proposition (Kotler,
2000)
Buying Roles:
There are five distinct roles that people portray in a buying decision:
Initiator: The person in the organization who first suggest the ideal of buying the product or
service.
Influencer: The person in the organization whose review or advice influences the decision.
Decider: The person in the organization who decides on any component of buying decision:
whether to buy, what to buy, how to buy, or where to buy.
Buyer: The person in the organization who delegates if the actual purchase is made.
User: The organization or department that consumes or uses the products or services.
Marketing
Stimuli
Product
Price
Place
Promotion
Other
Stimuli
Economic
Technological
Political
Cultural
Buyer’s Buyer’s
Characteristics Decision Process
Cultural Problem Recognition
Social Information Search
Personal Evaluation of
Psychological alternatives
Purchase Decision
Post purchase behavior
Buyer’s
Decisions
Product Choice
Brand Choice
Dealer Choice
Purchase timing
Purchase amount

8.3 Problem Recognition
The buying process starts when the buyer recognizes a problem or need, in this case when
the organization recognizes that they have a need for either the intellectual property law or
industrial consultation services being offered. The key will be for the marketers to identify the
circumstances that trigger a particular need by gathering information from other organizations
and vendors in the same industry. For example, if three to four new contracts were obtained by
UPS which increased the weekly quantity of overnight letters that come through their Memphis
Hub weekly from 30, 000 to 45, 0000, how could UPS be consulted on how to decrease their
process time, decrease cost, and increase their volume of overnight letters handled? A targeted
recognition action would be aware of new and upcoming new contacts in the shipping area, i.e.
overnight letters.
8.4 Geographical Segmentation and Positioning Strategy
Geographical segmentation will play a key role in defining and contributing to a focused
marketing effort that will include all manufacturing organizations in the United States. The
country will be segmented geographically into four zones east, west, north, and south, so that
industry within each zone can be carefully evaluated in terms of size, growth, and production
potential. Also organization’s specializations or product niches can be evaluated in terms of
tailoring service specifically geared for their needs.
Kotler (2000) “defines positioning as the act of designing a company’s offering and
image to occupy a distinctive place in the mind of the target market. The end result of
positioning is the successful creation of a customer-focused value proposition, a cogent reason
why the target market should buy the product or service.

Table 8.1 shows how three companies-Perdue, Volvo, and Dominos-defined their vale
proposition given their target customers, benefits, and prices.
Service specialization is the marketing niche that this organization provides, because all
manufacturing industries can use industrial (project) consulting information to increase
production and profit. These same organizations can use legal representation to procure patent or
copy rights for designs, processes or procedures that their employee design or develop litigation
representation for either suing or being sued for patent or copyright infringements, as well
initiating and developing contracts. One close nit organization composed of industrial project
consultants and lawyers that discuss details of new contracts, patents, and copyrights procured
for a manufacturing organization, and are augmented by the ability to exchange details on how
new contracts and patents will call for more raw materials, different vendors, and possible new
plant locations will give customer organizations a vast competitive edge. The factor that is most
detrimental to any organization is the loss or lack of information, but this can and will be
negated, because this valuable information will be obtained stored and used by one structured
organization opposed to being shared and lost by three or four. This is the positioning strategy of
this new organization and will contribute immensely to its success.

CHAPTER 9
SUMMARY AND CONCLUSION
In summary the information provided in this paper can be used as a base line for
developing a Strategic Information Department for an Industrial Consultant Company and Patent
Law Firm that can be readily integrated into the marketing, sales, and client procurement
processes of the company. However variations in software, type and speed of PC used, variations
in servers, type of networks used for intranet and internet, as well as variations in output devices
may be implemented depending on the detailed information that is used, processed, and stored by
both the Consultant and Patent Law company for who the system was designed, as well as the
information the information that is processed by and sent from client companies.
A clear precise definition that encompasses the types of information that is to be
obtained, processed and stored by the information system both in the present and foreseeable
future must be developed by a team composed of the following:
1) The Departmental Information Systems Manager
2) An outside Information Systems Consultant
3) Upper Management
4) Middle Management
5) End Users (which is the most important member of the group due to the familiarity
with departmental and company processes and procedures that they present in terms of
what is necessitated by the system as to the functional capabilities the system needs to
possess).

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