Situation Analysis: The Company Planeta, launched an ambitious online venture “ casadellibro.com”. The venture seems to be in very difficult situation. The market is not favourable. The internet companies faced the era of dotcom crash. There were terrorist attacks and fall in stock market. On the top of everything, the new designed platform to support its future expansion plans could not be integrated.
The management of the Company is in a cost control mode. It is in the dilemma whether it should rescale the newly designed platform based on UNIX or go for an entirely new platform of Microsoft.
There is no doubt that the Company has to launch an internet based platform. Thereby, evaluating both the options has its pros and cons. On one side the UNIX module has already seen the phase 1 of the project, i.e. design stage on the other hand is Microsoft which is latest technology and highly efficient . UNIX is not cost efficient where Microsoft which needed to be rescaled and redesigned in future in case the growth was higher than expected.
To decide for the option, we should make the following assumptions:
1) What is the kind of services the Company want to offer in the market? When it comes to e-commerce the management has to consider the Confidentiality, Integrity and availability of the database
2) What is the expected growth of the online business? Traditionally, the Company has been selling books through its book shops. It appears from the case that the Company is in the expansion mode. Therefore, it can be convincingly assumed that Internet business will grow in the future even though the market is facing temporary slowdown
Based on the assumptions and case analysis I strongly recommend that the Company should re-develop the acquired UNIX model due to following reasons:
1) The amount invested in designing the UNIX platform is a sunk cost and need not be considered for our decision. Even though the Company is in the cost saving mode the future maintenance, redesigning and rescaling cost of the platform has to be considered. Considering the future growth the new system appears to cost effective but it has high rescaling and redesigning costs attached to it.
2) Even though it is always an advantage to have latest technology but UNIX is also time tested technology. To what extent the Companies should upgrade its systems is a difficult question to answer.
3) The Company has passed through the initial churning (design) stage with UNIX so it is quiet matured to deal with the situation. On the other hand, to establish Microsoft platform will be a new experience for the Company which essentially means the Company will have to start from scratch which essentially means “ fear of non- performance”.
4) In economic terms, the Company will have the advantage of learning curve. Since the Company is used to work on UNIX, it will not face the problem of training its employees. In other words, firstly. It will not face resistance from its employees and secondly, it will enjoy the benefits of learning curve impact.
5) Since the solution to the problem of UNIX database was best in breed the concern of security and continuous availability of database doesn’t seems to exist.
6) Lastly, in an organisation, which is in continuous mode of expansion, the IT solutions projects are implemented with a very long term prospects and not the short term viability. Since, the Company has long term objectives, a strong, scaled and secured system is recommended even though a little complex.
