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KYLOD Information Technology Strategic Plan

3732 words (15 pages) Essay in Information Technology

08/02/20 Information Technology Reference this

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Part One

1. Business Statement –

The Kentucky “Logistics and Distribution Company (KYLOD) is centered in Chicago, Illinois” (University of Maryland, 2018) and has over 40 years of logistics and distribution experience. KYLOD services the Midwest region of the United States with its 200-vehicle fleet across five distribution terminals. The current depressed economy has stunted business growth. Current yearly profits are at 5%, however the company President, Kevin, desires a yearly 6% increase; for a total of 11% overall.

2. Business Strategic Objectives

  • Business Strategic Objective 1: Create local storage services of customer inventory to reduce customer delivery time.

    • Local storage of goods reduces delivery time, makes the product more readily available to local vendors, and minimizes fuel costs by preventing trucks from hauling loads over long distances.
  • Business Strategic Objective 2: Reduce costs by maximizing “percent of loaded miles” (University of Maryland, 2018) according to geographic area.

    • Loading each truck to capacity based on a geographical sequence of zip codes expedites the loading/unloading process thereby increasing the performance goal and reducing time between deliveries.
  • Business Strategic Objective 3: Maintain visibility of freight from pick to delivery “to provide accurate delivery dates and times.” (University of Maryland, 2018).

    • Implementing a freight visibility system allows distribution centers to provide detailed order delivery information to customers which would improve customer service. Additionally, this will facilitate predictive analysis for delivery operations.
  • Business Strategic Objective 4: Federal Motor Carrier Safety Administration (FMCSA) automated tracker to ensure compliance with mandated rest breaks.

    • The FMCSA currently list time-based, “hours of service regulations for property-carrying drivers.” (US Department of Transportation, 2017). The management team could use this automated tracker to ensure compliance with Federal regulations and to accurately report “the number of hours per week for each driver” (University of Maryland, 2018).

3. IT Vision and IT Mission Statements

The Kentucky Logistics and Distribution Company has a long-standing presence in the Midwestern United States. Our goal is to provide superior, timely and accurate distribution services to our customers while maintaining the highest level of equipment maintenance/readiness.

Through the implementation of information technology solutions, we will launch KYLOD onto a higher plateau of management and service delivery. The Kentucky Logistics and Distribution Company’s IT services will bring employees and customers closer to operational processes allowing for faster receipt and processing of bills of lading and freight tracking from every platform (mobile, laptop, etc.).

4. Governance

Information Technology governance is essential to KYLOD operations, “IT governance and risk management improves upon the management and control of IT activities and allows executive management to exercise proper oversight” (National Computing Centre, 2005). Aligning IT governance to KYLOD strategic goals will ensure compliance and mitigate risks from pick-up to delivery. Normalizing operations through governance provides predictability which enables proactive decision-making.

Additionally, it’s essential for each entity listed below to provide input/act as the IT governing body, providing input on processes and procedures as KYLOD strategic goals, industry and IT evolve. With this in mind it is essential that key individuals participate in and exert influence over governance to ensure compliance throughout KYLOD:

  • President – Act as the leading governance board member and provide oversight.

Vice President of Operations – Serve as the governance co-lead and ensure compliance throughout the entire organization for IT and operations governance.

  • Chief Information Officer – Develop IT governance, act as the lead for the IT steering committee, and ensure IT processes synchronize with operations processes. Additionally, ensure IT governance supports operations.
  • Chief Financial Officer – Provide input to IT governance for finance and accounting operations. Also ensure IT/finance operations governance is in accordance with applicable “Sarbanes Oxley financial audit and reporting requirements.” (University of Maryland, 2018).
  • Fleet Manager – Develop fleet maintenance operations governance. Also, provide input to IT governance for fleet maintenance operations to maintain compliance with Federal Motor Carrier Safety Administration reporting requirements.
  • Sales Manager – Develop sales governance and associated documentation “to provide warehousing services.” (University of Maryland, 2018). Also, provide input to IT governance for sales operations.

Governance methodology should consist of a hybrid solution of COBIT and ITIL, “both are essential; contain unique, complimentary end-states; and deliver governance on BBPs for companies to flex for individual scenarios.” (Watts, 2017). This will provide potentially required flexibility in governance decision-making. Prioritization of IT projects should be based on a set list of tasks which are ordered based on value from the most important to least important, “review critical tasks and identify high value targets for your organization.” (Sussex, 2018). Priorities should be clear, concise, and communicated throughout the organization.

5. Inventory of Current IT Systems

KYLOD employs several IT systems to electronically facilitate business processes. Individual systems provide KYLOD the ability to conduct daily operations. The table below lists each IT system and its associated function, strategic goal, business unit, and IT resource. Each system must be properly operated, maintained and updated as necessary “from day-one to prepare your business for growth.” (Forbes, 2011).

Current System

Function/

Description

Strategic Goal aligned to

Business Unit/

Department

Business Benefits

IT Resources (people, equipment)

Mobile Sales application

System outlines business capability, services provided and costs.

“Increase profitability and grow the business.” (University of Maryland, 2018).

Sales; Finance and Accounting

Improves the customer experience and provides freedom of movement for sales employees.

Marketing manager, CIO, CFO, sales staff, IT staff, programmer, web designer

Routing Optimization and Freight Tracking

Manages transport of cargo from source to target.

“Increase the number of loaded miles to reduce costs.” (University of Maryland, 2018).

Operations

Facilitates a more effective system of transport to reduce fuel expenditure.

CIO, CFO, programmers, IT staff, dispatchers, fleet drivers

Fleet Maintenance Scheduling System

Populate and maintain fleet maintenance schedule.

“Stay in compliance with federal requirements to conduct a vehicular safety inspections per 10,000 miles.” (University of Maryland, 2018).

Fleet Management

Improves situational awareness on vehicle condition/performance. Facilitates proactive vehicle maintenance and parts acquisition.

CIO, CFO, fleet drivers, maintenance shop personnel, IT staff

Accurate Financial Reporting System

Create, maintain, and update financial statements and accounting records.

“Increase profitability and grow the business.” (University of Maryland, 2018).

Finance and Accounting

Maintains financial records. Provides oversight and adherence to “the Sarbanes Oxley financial audit and reporting requirements.” (University of Maryland, 2018).

CFO, CIO, programmers, accounting staff, IT staff

Management Reporting

Provides KYLOD compiled financial information.

“Ensure the company remains compliant with applicable federal and state regulations” (University of Maryland, 2018)

Senior Management

Leverages IT assets across KYLOD to providing a common financial operating picture to allow informed decision making for senior management.

Senior management, programmers, CIO, CFO, IT staff

Part Two

  1. IT Strategies –

IT Strategy

Strategic Objective, then Explanation of Alignment to Business Strategic Objective

Internal/Business Enabling

Improve customer relations

Customer inventory warehousing supports KYLODs business strategy to offer local storage services of customer inventory to reduce customer delivery time. This internal IT strategy will improve customer satisfaction by utilizing its route optimization system to provide warehousing services to local vendors. 

Internal IT Strategy

Increase freight efficiencies

Freight tracking & expense optimization supports two of KYLODs business strategies:

a)        Reduce costs by maximizing “percent of loaded miles” (University of Maryland, 2018).

b)       Maintain visibility of freight from pick to delivery “to provide accurate delivery dates and times.” (University of Maryland, 2018).

This internal IT strategy will leverage the freight tracking system to reduce costs and increase KYLODs profits. Reduction of costs increases profit margins and allows for investment in other business/IT strategies.

Internal IT Strategy

Increase customer base

Supports KYLODs overall business strategy to “increase profitability and grow the business” (University of Maryland, 2018). This IT strategy is facilitated by the mobile sales application which will place KYLOD “fleet information, available distribution services, freight costing, and competition comparisons.” (University of Maryland, 2018) at the fingertips of sales representatives.

Business Enabling

Maintain/improve compliance standards

Maintain “compliance with all applicable federal and state regulations. Two KYLOD IT systems will enable this strategy; the fleet maintenance scheduling to monitor Federal safety check and Federal Motor Carrier Safety Administration compliance. Also, the accurate financial reporting system to balance the requirements of the “Sarbanes Oxley financial audit and reporting requirements.” (University of Maryland, 2018).

Business Enabling

  1. IT Portfolio Roadmap – The following diagram depicts the information technology system rollout schedule for The Kentucky Logistics & Distribution Company over an 18-month period (six quarters) spanning a timeframe for each project listed by functional area. Items listed under each functional area “in black” are IT projects which are currently underway and their associated timelines. Items listed under each functional area “in blue” are legacy/preexisting IT systems/equipment. Items listed under each functional area “in red” are newly proposed IT projects with no “start/end” date.

Projects by Functional Area

Qtr. 1

Qtr. 2

Qtr. 3

Qtr. 4

Qtr. 5

Qtr. 6

Marketing

 

     Mobile Marketing Application

Fleet

    

     Route Enhancing and Freight Tracing     

     System Interface

     Fleet Maintenance

     Vehicle Operation Compliance Tracking

     System

Senior/Executive Management

 

     Management Reporting System

     Enterprise Resource Planning System

 

Finance and Accounting

 

     Current Finance and Accounting System

 

     Accurate Financial Reporting System  

End-Point Support

 

     Servers (15 each)

     Personal Computing Devices

           (38 local and 40 VPN) 

  1. Proposed Project – In addition to ongoing projects, an enterprise resource planning (ERP) system to “standardize, streamline, and integrate KYLOD business processes.” (Wailgum & Perkins, 2018) is underway to enable full-spectrum near real time operations management. The benefits of an enterprise resource planning system is the centralization of data (common database) which allows correlation of activities across multiple applications and reporting on the entire enterprise improving “internal efficiency, decision-making, agility, and security.” (Wailgum & Perkins, 2018). This will enhance KYLODs management reporting system providing visibility on all Federal compliance mandates.
  2. Risk Management –

(1)   Decreased Customer Base

The mobile marketing application will allow “sales personnel to demonstrate/display data on the fleet, distribution services available and cargo rates, including a contrast to the competition.” (University of Maryland, 2018), however, the application will take 2 months to complete. As contracts expire, this application may be the deciding factor for current customers to remain in league with KYLOD. This risk must be controlled by conversing with customers (old and new) to inform them of the IT transformation and its benefits to their business and experience with KYLOD.

(2)   IT Funding Cuts

The CFO was placed in charge of projects to meet strategic goals for the business. In turn, the CFO requested the CIO “modernize IT systems to support the new plans.” (University of Maryland, 2018). The CIO must ensure the IT strategic plan projects remain in scope to prevent additional costs and close in-line/prior to KYLOD strategic goal deadlines. This risk must be avoided by potentially redistributing manpower to more essential IT projects to complete them sooner.

(3)   Operational halt due to Federal Compliance Failure

Federal compliance is a no-fail-mission for KYLOD. The management team identified three Federal/State regulations the company must observe. Failure to adhere to these rules could result in a halt of all vehicle operations, “breach of DOT compliance can result in “suspension of a company’s ability to operate.” (CDL Consultant, 2018).  This risk must be watched/monitored with system performance measures which include “availability, reliability, response time, usability” (UMUC Faculty, 2018), information confidentiality/integrity/availability, and vulnerability. New IT systems must process information efficiently and securely. Additionally, employees must be familiar with new systems to prevent possible mismanagement/loss of information critical to operations and auditing requirements.

(4)   Project Creep

The integration of legacy hardware/applications into modern technology is sometimes unpredictable, “If the original software is not scalable and users are increasing, difficulties will only keep piling on.” (Forbes Technology Council, 2017). Any delay in releasing the projected software for use will incur additional expenses leading to funding cuts. This risk must be controlled by dividing the “project into phases making it possible to lead it in the best possible direction.” (Harmsen, Kramer, Sesink, & Zundert, 2006).

  1. Business Continuity Planning–

(1)   The business continuity plan (BCP) will help KYLOD in the event of a disaster. Creating a BCP is essential as it “outlines procedures and instructions an organization must follow during catastrophe.” (Lindros & Tittel, 2017). Overall development of the BCP should be completed by “the President, Vice President of Operations, Chief Financial Officer (CFO), Chief Information Officer (CIO), Sales Manager, and Fleet Manager” (University of Maryland, 2018) and employees who operate/maintain systems within the company to ensure all areas of KYLOD are addressed in the BCP. Jenny, the CIO, must develop a BCP for information systems which will consist of a continuity of operations plan (COOP), business impact analysis (BIA), recovery strategy and testing.

(2)   Business critical systems for KYLOD are the Route Optimization and Freight Tracking System, Financial Reporting System, and the Fleet Maintenance System. The route optimization and freight tracking system will be tied into the Accurate Financial Reporting System in two weeks. Tying these applications together will aid KYLOD in maximizing its “percentage of loaded miles” (University of Maryland, 2018) . Incorporating the financial system will enable correlation of loaded mile/unloaded mile costs to ensure “reduction of costs in freight delivery by geographic area.” (University of Maryland, 2018). Loss of the route optimization and freight tracking system could cause delays in shipping and delivery, negatively impacting customer satisfaction and KYLODs reputation. The financial reporting and fleet maintenance systems enable compliance to Federal law. Non-compliance could result in “withdrawal of ‘license to operate’, unfavorably affecting market value and customer loyalty.” (Lindros & Tittel, 2017) which could lead to bankruptcy, loss of assets, revenue, and employees.

(3)   BCP:

  • Continuity of Operations (COOP) Plan – In the event of disaster, essential functions must continue to work to retain revenue. The purpose of the COOP “concentrates on reestablishing mission essential functions for up to 30 days prior to resumption of normal operations.” (Swanson, Bowen, Phillips, Gallup, & Lynes, 2010). The CFO, CIO, and Fleet Manager should develop a COOP for critical KYLOD information systems to ensure sustainment of operations during operations recovery phase.
  • Business Impact Analysis – Senior management needs to conduct a business impact analysis to “calculate the cost and impact of a loss of business functions.” (Lindros & Tittel, 2017). The BIA should:

(a)   Categorize critical business areas, functions and threats to determine the effects of system disruption. The disruption should assess “the maximum time KYLOD can withstand an outage while maintaining operations.

(b)   The second step taken by senior management should be to identify “essential resources to resume job processes together with interdependencies as soon as possible.” (Swanson, Bowen, Phillips, Gallup, & Lynes, 2010) to ensure critical ancillary processes are not overlooked.

  • Recovery strategies will determine the order systems are brought back online, this is determined “from critical business processes and functions.” (Swanson, Bowen, Phillips, Gallup, & Lynes, 2010) listed in the business impact analysis. The CIO and CFO must determine these priorities to ensure the most important business areas are minimally impacted.
  • Plan development is essential because it “contains detailed roles, responsibilities, teams, and procedures associated with restoring an information system following a disruption.” (Swanson, Bowen, Phillips, Gallup, & Lynes, 2010). Documenting the BIA, structuring recovery teams with detailed personnel listings and plan validation are completed
  • To validate the plan and ensure all dependencies and gaps have been identified and properly documented, it is important to test/exercise plans to verify proficiencies and functionality.

References

  • CDL Consultant. (2018). DOT Violation, Examples and Fines. Retrieved from CDL Consultant: CDL Consultant. (2018). DOT Violation, Examples and Fines | CDL Consultant. Retrieved
  • Department of Homeland Security. (2018). Business Continuity Plan. Retrieved from Ready: https://www.ready.gov/business/implementation/continuity
  • FEMA. (2018). Business Continuity Plan. Retrieved from Ready: https://www.ready.gov/business/implementation/continuity
  • Forbes. (2011, November 15). How to Create Systems That Enable Business Growth. Retrieved from Forbes: https://www.forbes.com/sites/yec/2011/11/15/how-to-create-systems-that-enable-business-growth/#17e981755ec3
  • Forbes Technology Council. (2017, September 06). 14 Challenges/Strategies When Upgrading Your Legacy Platforms. Retrieved from Forbes: https://www.forbes.com/sites/forbestechcouncil/2017/09/06/14-challengesstrategies-when-upgrading-your-legacy-platforms/#55bcea55d9fd
  • Harmsen, H., Kramer, R., Sesink, L., & Zundert, J. v. (2006). Project Management Handbook. The Hague: DANS – Data Archiving and Networked Services. Retrieved from https://www.projectmanagement-training.net/wordpress/wp-content/uploads/2015/11/book_project_management.pdf
  • Lindros, K., & Tittel, E. (2017, July 18). How to create an effective business continuity plan. Retrieved from CIO: https://www.cio.com/article/2381021/best-practices/best-practices-how-to-create-an-effective-business-continuity-plan.html
  • National Computing Centre. (2005). IT Governance Developing a successful governance strategy. Manchester: Oxford House.
  • Sussex, T. (2018, October 11). How to Prioritize Work When Everything is #1. Retrieved from The LiquidPlanner Blog: https://www.liquidplanner.com/blog/how-to-prioritize-work-when-everythings-1/
  • Swanson, M., Bowen, P., Phillips, A. W., Gallup, D., & Lynes, D. (2010). NIST Special Publication 800-34 Rev. 1, Contingency Planning Guide for Federal Information Systems. Gaithersburg, MD: National Institute of Standards and Technology. Retrieved from https://nvlpubs.nist.gov/nistpubs/Legacy/SP/nistspecialpublication800-34r1.pdf
  • Trustwave Holdings. (2018). SOX Compliance. Retrieved from Trustwave: https://www.trustwave.com/Solutions/By-Compliance-Mandate/SOX-Compliance/
  • UMUC Faculty. (2018). Performance Measures. Retrieved from Week 4 Content: https://learn.umuc.edu/d2l/le/content/394097/viewContent/13670327/View
  • University of Maryland. (2018). Case Study KY Logistics & Distribution Company (KYLOD). Retrieved from University of Maryland University College: https://learn.umuc.edu/d2l/le/content/394097/viewContent/13670369/View
  • US Department of Transportation. (2017, March 09). Summary of Hours of Service Regulations. Retrieved from FMCSA: https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-regulations
  • Wailgum, T., & Perkins, B. (2018, February 12). What is ERP? A guide to enterprise resource planning systems. Retrieved from CIO: https://www.cio.com/article/2439502/enterprise-resource-planning/enterprise-resource-planning-erp-definition-and-solutions.html
  • Watts, S. (2017, May 15). COBIT vs ITIL: Understanding IT Governance Frameworks. Retrieved from bmc blogs: https://www.bmc.com/blogs/cobit-vs-itil-understanding-governance-frameworks/
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