Information Technology Reference
In-Depth Information
INFORMATION
SYSTEMS @ WORK
Key Performance Indicators
The landscape of today's global business environment is one of
mergers, acquisitions, and relationships. Companies combine and
form partnerships to share benefits and extend their reach into
new regions and markets. OfficeMax, a dominant global force in
retail and commercial office supplies, with close to 1,000 super-
stores worldwide, extended its reach into Canada by acquiring
Grand & Toy, Canada's largest commercial office products
company. Rather than rebranding and reorganizing Grand & Toy
(named after James Grand and Samuel Toy), OfficeMax allowed
the company to operate independently, a wise move since
Grand & Toy has proved itself to be a smart company, implement-
ing cutting-edge information systems with impressive results.
Recently, Grand & Toy has been experimenting with new
information management tools in hopes of better understanding
the ebb and flow of market demand and weaknesses within its
organization. Grand & Toy uses two tools from Clarity Systems—a
Key Performance Indicator (KPI) reporting application that tracks
important data in the system over time, and a tool called the
Defector Detector, which indicates when a customer reduces
order quantity. Using these tools, Grand & Toy can closely monitor
its customers and business to determine when and where it has
successes and problems.
Grand & Toy's new information system from Clarity is an
example of a trend in business management called corporate
performance management (CPM). CPM is an extension of ERP
that allows a business to use the information it collects to
analyze and improve business practices and processes. Analyzing
business processes often depends on analyzing key indicators—
specific information within the system that indicates broader
trends. For example, many senior managers look at growth,
profitability, productivity, and satisfaction as methods of determin-
ing the health of a business. Key indicator information can be
combined to compile scores for each of these areas. Tracking
these areas over time helps managers and employees evaluate
the health of the company. Information systems are used to
analyze these areas at a variety of levels.
Using corporate performance management tools, decision
makers at Grand & Toy can evaluate the company's performance
at many levels with little effort. Using the Clarity system, a
manager can study sales for a specific geographic area, on a given
day, or for the entire corporation for the previous year. Tracking
key indicators and adjusting corporate performance accordingly is
one way businesses are working to win a competitive advantage.
Discussion Questions
1.
What types of data do you think go in to scoring the growth,
profitability, productivity, and satisfaction of a company like
Grand & Toy?
2.
How can Grand & Toy maintain a competitive advantage over
other office supply companies that use the same information
system from Clarity?
Critical Thinking Questions
1.
What key indicators would you watch if you managed an office
supply business? Which are internal and which are external?
2.
Three hundred employees of Grand & Toy use the Clarity sys-
tem on a daily basis. Why do you think it is important to provide
system access to so many people in the company?
SOURCES:
Ruffolo, Rafael, “Grand & Toy Gets Business Performance Clarity,”
itWorldCanada, July 6, 2007,
www.itworldcanada.com/Pages/Docbase/
ParaStart=0&ParaEnd=10&direction=next&Next=Next.
Staff, “Retail Case
Study: Grand & Toy,” Clarity Systems Case Studies,
www.claritysystems.com/
Resources/CaseStudies.aspx,
accessed December 26, 2007. Grand & Toy Web
site,
www.grandandtoy.com,
accessed December 26, 2007.
62
