2.1 Organization
The Information Systems department within Overton’s is fairly centralized. All of the computers and servers are located in the corporate office except for the computers in the distribution center which are on their own T-1 server. Overton’s customer service activities, sales and support activities, and marketing applications are all completed in their corporate office. The distribution center however, is connected to the main processing center through a wide area network (WAN).
The Information Systems department consists of eight full time employees and four part time employees. These numbers vary slightly depending on the season and the projects at hand. Two of the full-time employees and one of the part-time employees are programmers that design and create new programs and systems to continually improve Overton’s efficiency and usability. Their programmers write code in COBOL, PHP, Pearl, and a lesser known program called Python that is similar to Pearl in that it allows a program to compile at runtime. Several different databases are used by Overton’s including: MS Access, MS SQL (along with other SQL versions), and Oracle. This is one of the ways that Overton’s diversifies their information systems. By spreading out the number of programs used they become less reliant on a single software package. This is considered by the IS manager to be a great benefit to the functionality of the department.
2.2 Objectives
As the manager of the Information Systems department Dan Hardison’s duties are to oversee the budget in IS and to advise and manage the IS department. Mr. Hardison is the authority to whom all IS employees report. When new programs or systems are needed for Overton’s Mr. Hardison supervises and authorizes their implementation. Mr. Hardison also sees that the IS department strategy is utilized and correctly incorporated into Overton’s business strategy. The main focus of the IS department is that their goals are in line with the corporate business strategy. Overton’s business strategy is to continue to grow with the customers and meet their changing needs.
3.0 Company Website
Overton’s currently has three retail showrooms, one in Charlotte, Raleigh, and Greenville. Greenville is also the location for the main distribution center, where all of the orders are shipped across the globe. The website for Overton’s plays a major part in their sales, accounting for 30 percent of their sales last year. That amount has increased 7-9 percent every year since its creation in 1998. This shows that the Internet is truly the way of the future for Overton’s.
The peak season for Overton’s is from April to July; during this time the website can receive 900,000 to a million hits a week. An estimated 90 percent of their business is done in these months. The conversion rate or purchase rate for the hits on their website is between four and eight percent. This is very significant since Overton’s average order is over $100. Not only does the site receive orders but it also provides customers with important information about products. If customers wish to make purchases they can do so over the web, or by calling the 800 number.
Their website, which is hosted by Blast Internet Services, (formerly Emji) runs on Linux. Blast hosts the website out of Cary, NC. Overton’s does most of the web design for the page, but outsources most of the programming and web functions. The web page also has a live feed for customer service. This feature actually allows the customer to chat or ask questions about a product and receive feedback in real time after they type in the questions. Overton’s has done an excellent job so far of utilizing the Internet; however, in order to remain competitive they must continue to upgrade their web services and their computer systems to handle the large amounts of web traffic and sales data.
4.0 Personal Computers
Before 2001 there were no personal computers in the sales department. Only a few select employees used PCs, such as some managers. All sales transactions were done through dumb terminals. With PCs, the users can type in the order and the terminal relays the information or data directly to the point of sale (POS) server. The credit card orders are taken from the customers and from the website and processed in batches three times a day. In peak season between April and July there are approximately 118 employees working on order entry. This means that 118 personal computers had to be bought and setup for Overton’s sales department. This was a large change from using dumb terminals. Dan Hardison stated that it cost the company approximately $800,000 to install and manage all of the new personal computers.
4.1 Call Center
Overton’s also runs its own phone call centers with a large permanent staff and many temporary employees. During the peak season their staff can increase by 150 employees. This makes the total number of employees slightly over 500 during the peak season. The call center is located in their corporate office in Greenville, NC. It uses five T-1 servers; each of which can supply 24 channels for phones. For the most part, Overton’s runs the call center by themselves, but when problems occur they consult with Sprint for help.
Picture of Overton’s Call Center
4.2 Intel/Novell
The personal computers for the POS activities run on Intel/Novell servers. There are five Novell servers, each running approximately 30 PCs. All of the PCs are currently running on a Win95/98 operating system. There are two main reasons for using this operation system. One is that Windows is easier for users because Windows makes operations smoother and clearer. Second, software for Windows is much more abundant than for its competitor’s software. Mr. Hardison stated that in the future he would like to move to a UNIX based system for showroom sales. If everything works out effectively Overton’s will be able to implement UNIX on all of the PCs in the company.
5.0 Order Entry
All sales data is currently stored on the user’s PCs and updated to the order entry server or POS server on the hour. The hardware used for Overton’s order entry system, Ecometry, is an e3000 server running the MPE/ix operating system; both of these are from Hewlett Packard. Dan Hardison said Overton’s chose to use these products because they are “extremely stable and can handle thousands of users simultaneously with no problem.” MPE/ix stands for Multiprogramming Executive with Integrated Portable Operating System Interface (POSIX). It is the Internet enabled operating system for the e3000 series servers, which utilize HP precision architecture reduced instruction set (PA-RISC). MPE/ix is used by businesses like Overton’s because it is completely scalable from the entry level servers all the way up HP’s e3000 ladder to the mainframe level servers. MPE/ix is especially good at symmetric multiprocessing and commercial online transaction processing (OLTP). High end servers running this operating system can handle twelve symmetric processes at once, and the system can handle up to 16GB of main memory.
Hewlett Packard has recently discontinued the e3000 line of servers. They announced that they will no longer sell the e3000 after October 31, 2003 and will discontinue support for the e3000 on December 31, 2006. Overton’s uses another HP server type for the accounting and warehouse systems, called Lawson and IRMS respectively. The e9000 server runs HP-UX, which is a UNIX platform proprietary to HP, this is HP’s larger and more expensive replacement for the e3000. To integrate HP-UX and Windows, Hewlett Packard has a system called CIFS, which stands for Common Interface File System. This system is based on Samba so it follows the open source philosophy. With this system the Windows platform can integrate with UNIX based systems. This way data can be centrally stored, and easy to retrieve.
6.0 Disaster Recovery
Data is entered into the servers three times a day from the PC’s, and then that data is backed up every night. The data is backed up on two different types of tape storage and put in different locations. All of the data from the corporate office (where all IS activity is done) is kept in the distribution center as well as a copy in the corporate office. The data from the distribution center is also backed up and stored in the corporate office. This is an easy way for Overton’s to ensure that valuable data is not lost. However, if a major disaster occurs and affects both the distribution center and the corporate office (both in Greenville) Overton’s may have to rethink their easily implemented disaster recovery plan and look into a more costly and secure method.
Overton’s was very lucky during the recent flooding that none of their information systems were affected. The only items that were damaged were a few trucks of inventory that were waiting to be shipped. This still hurt Overton’s financially, since thousands of orders were backed up and not delivered on time. Another way that Overton’s could protect themselves in the future would be having another distribution center in a separate region of the country. This way in case of an emergency they have another location to ship from and make sure that the orders are completed on time. This will also become necessary as Overton’s continues to grow and cannot support all of its sales from a single warehouse.
7.0 File Servers
Overton’s has decided to use an Intel/RedHat system for their File/Print servers. These Linux servers allow for centralized storage of files instead of individual storage on PCs. This makes it easier to backup data and allows access to data from multiple PCs. Using Linux also saves them a great deal of money for RedHat is free. This way they do not have to purchase an operating system such as NT. Also, RedHat is more stable for this purpose than NT so it is much better to use for running a printing server. The UNIX environment is inherently more stable than NT for large amounts of users.
Overton’s uses Samba to handle their actual printing needs. Samba is an open source free software program that makes Linux look and act like an NT machine. Samba allows users to access file and print services from a centralized computer from any PC on the network via a Cat. 5 cable. Each PC is connected to one of three switches which are then connected to a router. They run this through the central RedHat servers; therefore, they do not have to install printers and print drivers on each individual PC. This saves Overton’s a great deal of time and money by using more reliable free software that can efficiently and effectively meet their computing needs. Overton’s however has chosen to NT for several of their other applications.
7.1 Windows NT
Overton’s uses Windows NT for many stand-alone databases and single application servers. This application is used because it utilizes Windows, which most people are used to working with. Windows is very user friendly and is simple to setup and configure to Overton’s unique needs. Overton’s uses NT for e-mail, payroll, tape backup for disaster recovery, intranet, timekeeper, and MS-SQL. Overton’s however, does not use the NT platform for any procedures which are critical to the survival of the company since NT is not always stable with large numbers of users. Overton’s relies on the HP3000 mainframe for its critical POS activities.
HP e3000 Business Server
The HP e3000 runs many of Overton’s core business functions and is considered to be one of their most reliable machines. Eventually Mr. Hardison would like to run more systems on the HP e3000, including many of the showroom activities.
7.2 Intel/Novell
The showroom in Overton’s consists of an Intel/Novell platform, which is used as a POS to record all sales for the day and to keep track of inventory. This is a 3-5 user system, which is critical to the success of the showroom floor. This is not the operating system that Dan Hardison, Director of Information Systems, would like to use but it is the only platform that their current provider supports. In the future Overton’s would like to move onto a UNIX based system so that it integrates better with the rest of their existing system.
Overton’s Showroom
8.0 Strengths
Overton’s Information Systems Department has many strengths including their resistance to discontinuations, strong future planning, their backup system, and being on the cutting edge of new technology. Overton’s software and hardware diversification allows them to easily transition from discontinued applications, such as the HP e3000 server which is being discontinued in November 2003, to newer and more dependable machines without causing major turmoil. Having many different platforms allows the company to know that any application can be implemented on more than one system. If one of the systems shuts down temporarily, it can be replaced with another and its workload can be transferred without having to purchase new equipment.
A strength of Overton’s in the past has been their strategic planning. Less successful companies do not realize the speed at which technology changes, and therefore plan too far into the future. Information technology is very hard to manage because of the pace at which technology changes, the youth of IT, and how specialized IT is becoming. Overton’s longest IT plan spans three years, with most plans only lasting a year. By limiting the length of IS planning Overton’s has a smaller chance of failure with a plan that is no longer feasible due to changing technology.
Another one of Overton’s strengths is their disaster recovery process. They have a very effective and cost efficient way of backing up their data. By choosing a stable medium such as tape storage and storing the backups in different locations as the originals, Overton’s ensures that a disaster will not cripple the firm. This is extremely important to a company like Overton’s that relies on their information systems for survival.
Overton’s to date has successfully stayed on the cutting edge of technology. Through creating their website in 1998 they have captured a new and improved market for their products. Their website now contributes to almost one third of their total sales. This investment in technology is definitely one that has paid off. Overton’s also stocks their catalogs with all of the latest and greatest sporting equipment. They ensure that they have all of the products their customer’s desire.
9.0 Weaknesses and Threats
Having such a diversified architecture of software and hardware is potentially a danger for large companies. Diversity is good for scalability and emergencies, but it requires more skilled support employees and more specialized workers. Compatibility becomes an issue when updating and purchasing new equipment. Having many different systems can also be more expensive than having one general platform throughout the company. Simplifying your information systems makes it easier for everyone that is affected by them.
The current path for Overton’s currently is one that does not foresee any growth. Overton’s recently purchased several hunting and fishing mail order catalogs in order to increase their diversity. Overton’s expected this venture to increase their market and gain revenue. With these new venues Overton’s hoped to corner other markets like they have done in the water sports industry. However, this endeavor did not yield the results Overton’s expected and resulted in the selling of their recently purchased companies. This loss in capitol has severely hindered their ability for future investments.
By not investing any money for the future, Overton’s may soon find themselves chasing after other companies. Without investing more capital there will be no future growth. In a few years, other companies may enter Overton’s market and steal much of their market share. In order to remain competitive Overton’s must continually strive for improvement in all of their business practices. Overton’s should continue to invest capital in future technology to remain on the cutting edge.
10.0 Opportunities
The future for Overton’s looks very positive. Overton’s is a relatively stable company which has grown and expanded for the past twenty-five years. An example of their stability can be seen in last year’s terrorist attacks in New York City. Overton’s endured their worst two months of sales in ten years following the attacks. Somehow they still pushed on and made a profit for the year, and did not have to cancel any of their expenditures. Overton’s has a great share of the market and an excellent name for customer service and quality. Their global name and there market presence will not easily be interrupted. As Dan Hardison states, “recreation is the number-one growing industry.” With this being said there is an excellent opportunity for Overton’s to continue to grow. Their website is a major key to their future as it continues to become a larger part of their sales mechanism. Continuing to upgrade and excel in ecommerce will allow Overton’s to remain successful. With the philosophy of Parker Overton’s of “growth and knowledge,” Overton’s will continue to grow and remain the number one water sports retailer in the world.
Appendix 1: Email from Dan Hardison, IS Manager, stating all of the computer systems utilized by Overton’s.
* HP3000/MPEiX - This is more of a mainframe-based platform that
runs an O/S called MPEiX. MPEiX and the HP3000 platform are extremely
stable and can handle thousands of users simultaneously without problem
(
<> ). The
major issue with this platform is that it is NOT open source and/or
non-proprietary. This being the case, it makes it somewhat difficult to
interface with other platform types. Used for our Order Entry System
named Ecometry ( <> ).
* HP9000/HP-UX - This is a UNIX-based platform running a flavor of
UNIX from HP (HP-UX). Although HP-UX is proprietary to HP it still
follows the open source philosophy which allows for easy interface with
other platform types (
<> ).
Used for our Accounting System named Lawson (
<> ) and our Warehousing System named IRMS (
<> ).
* Intel/NT/Win2k - Overton's utilizes the Intel platform with
Windows NT/Win2k mainly for standalone database and application servers.
NT/Win2k is easy to setup/configure and there are numerous
databases/applications from which to choose. We currently use NT/Win2k
for the following applications: intranet, email, payroll, timekeeper,
DNS, tape backup, MS-SQL databases and a few others NT/Win2k is NOT used for applications/databases that are
extremely critical to 24x7 operations since it is not very stable and is
prone to crashing under heavy loads.
* Intel/Novell - Used for our P.O.S. (Point Of Sale) systems in
our showrooms. These Novell systems are only 3-5 user systems and
critical to showroom operations. We are looking to move to a UNIX based system in the near future.
* Intel/RedHat - RedHat for our File/Print servers. These clustered Linux servers will allow users to store all their data on a central file server vs. storing data directly on their PCs, thereby allowing for easy data backup/recovery and easy access from
any PC. We will also be utilizing these servers for centralized
printing. Utilizing a program called Samba (
<> ), we are able to
install/configure all available printers on the Linux server and have
users print through this server directly. This will keep us from having
to install individual print drivers on individual PCs. We have chosen
to use Linux over NT/Win2K/Novell for several reasons.
* Cost - Linux and Samba are open source and free! Rolling out
the same configuration using NT/Win2k/Novell would cost the company tens
of thousands of dollars in licensing fees. RedHat will serve the same
purpose for much, much less.
* Stability - Inherently, any flavor of UNIX is much more stable
than NT/Win2k/Novell.
* Intel/Win95/Win98 - We utilize the Intel platform running
Win95/98 on all PCs throughout the company. This is mostly due to the
numerous applications available on the Windows desktop platform and also
because it's pretty much an industry standard. I would prefer to use
RedHat on the desktop as well, but the application arena is not yet up
to par with Windows.
Appendices 2: Porter’s Competitive Forces Model
Porter’s competitive forces model is a framework that models an industry being influenced by five forces. Porter’s model is designed for managers that are seeking a competitive advantage over rivals and/or a better understanding of the market in which a firm operates. The following is a critique of Overton’s using Porter’s five forces.
1. Customers
Overton’s does not allow for total switching cost for their customers. Overton’s believes that their customers are their number one asset, so they try very hard to keep them. However, they do lower the spread of cost by trying to stay in the competitive pricing range of their rivals.
2. Suppliers
Since Overton’s deals with a lot of specialty items the supplier’s power stands to be fairly high. To counter this, Overton’s raises the price of the specialty item.
3. Rivals
Overton’s tries to dominate their market by using low cost, product differentiation, focused differentiation, and the creation of tight linkages through their departments. Product differentiation is simple; they supply consumers with specialty items that cannot be found easily. Overton’s uses a wide base of marketing to focus on an enormous spread of customers. This way they can expand their cliental.
4. New Entrants
Overton’s carries barriers to entry for the market of water sports recreation. With their customer base being so large and outstanding customer service, it will be hard for new entrants into the market to compete at their level.
5. Substitutes
Since Overton’s is a retail business they really cannot compete with substitutes in the market. The only substitutes that could interfere with Overton’s would be another company’s website.
The information system department for Overton’s uses IS to deal with each of Porter’s forces. The firm uses IS for customer power by using in depth technical support on their website and for their products which increases the value of the products and imposes switching cost.
