CIS Project Deliverable 2

Running head: PROJECT PLAN INCEPTION

Project Deliverable 1: Project Plan Inception

Strayer University

CIS498

April 16, 2017

Background

Knight Inc is an online retail company that specializes in the sale of sports goods of all kinds. Started about two years ago, the company has managed to grow in size from its humble beginnings. It started as a seller of second hand sports footwear for use by amateur sport enthusiasts. However, as that gained more traction, the company was able to add more products into its lineup. This continued up to the now big operation pulling $35 million in a year.

Genuine sports equipment can be expensive to acquire especially when it is new. This can set back amateur sports players who wish to experience a given sport authentically. Whether it is football, or cycling or basketball and alpine sports, equipment is required and it can be out of reach for the person who taking the sport as a hobby. Knight Inc was able to partner with professional sports teams from whom it would buy used sportswear and equipment. These would then be sold on the company’s own website at a cheaper price to the consumer compared to new wear and equipment. Knight Inc ensured that all the sportswear and equipment it sourced and placed on its site were in good working condition.

To serve more customers across more product lines and markets, Knight Inc will be entering into a merger with Krypton Corporation, another retailer of sports goods. Krypton Corporation has largely been maintaining a physical presence for its sales but has recently ventured into e-commerce. Its budding e-commerce operation while established in complementarity to its physical locations has grown to be a viable competitor to Knight Inc. their merger will bring together their operations to create a formidable sports goods company. (Ries, 2011). 

Type of Business Activities

Knight Inc is wholly online retail operation. The company began by selling its goods on social media. However, as its operations grew, the owners saw the importance of having their site which they then developed. From then henceforth, the company has entirely conducted its business on the site.

The website is as simple as it can be. Sports goods are listed according to their various categories and customers can browse through. The details of the goods are elaborated clearly for the customer to see. While the company began by selling used goods, it has been recently adding new items to its stock in a bid to increase its reach. Still, a large chunk of the products sold are second hand. An unexpected advantage of the business model is that customers are finding interest in particular products once they discover that they were used by their favorite sports stars. Customers can select as many products as they want and place them on their cart.

Once they have completed their selection, the customers head over to the payment section where they pay for the products. Knight Inc has two options of payment on order or on delivery. This is to ensure that customers do not feel conned. In making their payment, customers will also specify their address where the delivery will be made. The company has been using third party operators to makes its deliveries but it hopes to make this an in-house activity in future.

Outsourcing and Offshoring Activities

Knight Inc has been taking advantage of exciting opportunities in outsourcing and offshoring. As a small company, it is necessary to keep its costs as low as possible to ensure that they keep the company afloat. With outsourcing and offshoring, the company has been able to do this effectively. The company has been able to have access to world class services without having to outright acquire or own them and this has reflected favorably on its operations. Once costs are kept as low as possible, the company can operate more efficiently. Some of the outsourced have also enabled the company to focus on their core competency areas.

Business support services are the biggest outsourced services for the company. All legal, human resource management, auditing and shipping are handled by external organizations. Instead of an internal legal department, the company has retained the services of a local reputable law firm. This is the same for audit and human resource management services. As for the shipping operations, the company has contracted a countrywide operator that is able to deliver its products to its various purchasers. Given that Knight Inc has not established operations outside the country; it is able to keep the services of just a national operator. These services have enabled Knight Inc to considerably reduce costs that it would have incurred had it done the services itself. They have enabled it to carefully focus on their e-commerce operations which they are good at. These outsourced services are expected to increase in scope as Knight Inc enters into this merger. There will be need for expanded legal services, both during and after the merge has gone through. The company will also require the other currently outsourced services to remain so in a bid to keep costs down. While there is the desire to take charge of its own shipping services. Knight Inc will continue using tis current outsourced model until that time it can capably take over. (Sako, 2014). 

As for offshoring, as mentioned, Knight Inc has been selling new goods in addition to the current second hand. The new goods have mostly been the sportswear that Knight Inc has been selling under its own brand known as Chill. The Chill apparel is being made by a foreign company in Cambodia. Cambodia has a receptive economy that ensures the costs of production are low. This low cost production is what makes company able to offer competitive prices on its products as sold on its site. With offshoring, the company has been able to take advantage of favorable market conditions in another country. Especially important has been the low cost of labor which would have made the products exorbitant and out of reach for its core customers. (Sako, 2014). 

Knight Inc and the merged company with Krypton will continue to explore more opportunities in outsourcing in a bid to reign on costs. Whenever an option emerges to save money, the company will take it and ensure that more attention is paid to the core operations of the company.

Current Information Systems

Operational systems are currently being used for data processing within the company. While Knight already generates large amounts of data as it is, this is expected to exponentially increase with the merger. Every aspect of the system will need to be scaled to meet the needs of the increased customer base and number of transactions. The current database should continue serving until the merged organization adopts the data warehousing concept. Data warehousing should provide a much bigger platform to operate in with more capabilities compared to the current system. The most salient advantage is the capability of smoother scalability as the data processing needs increase.

Cloud computing will be adopted to provide cheap technology services. This will include data hosting where the company will store its data. This data will be very large to include the current data and future processed and raw data of the merged company. The company will also access the cloud for applications and compute services. Virtualization will be used to take full advantage of the company’s physical infrastructure. This will be by expanding their capability beyond what they currently are.

Network infrastructure is made of a small data center and the computers the employees use to access data and applications from the data center. The current offices are cramped and that is one of the reasons is moving to bigger premises to provide more spacious offices. Security consists of among others WPA2 security for Wi-Fi, antivirus software and firewall systems. The company conducts regular penetration tests to gauge the resilience of the system and find vulnerabilities before they can be maliciously exploited. (Merkow, & Breithaupt, 2014). 

References

Ries, E. (2011). The lean startup: How today's entrepreneurs use continuous innovation to create radically successful businesses. New York: Crown Business.

Merkow, M. S., & Breithaupt, J. (2014). Information security: Principles and practices. Pearson Education.

Sako, M. (2014). Outsourcing and offshoring of professional services. Oxford Handbook of Professional Service Firms.