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An I.T. Solutions Proposal for a Stronger, Swifter AVK Industrial Valves Singapore

Optimising Processes with

Information System

Joshua Quek, IT Systems Consultant

AVK Industrial Valves SG

Quarter 2, FY 2013

it.support@avk-indvalves.com.sg

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Why Is There a Need?

Part 1: Outstanding Issues.

After a vigorous four-week study on the system processes within AVK, the following IT-related

shortfalls have been identified below:

1. Operations

a. Efficiency is low as internal operations are not automated (see Figure 1)1.

Quotations and Invoices are manually processed via templates. At the moment,

our staff only utilize rudimentary excel and word files during daily operations.

b. Product data is not available locally on our network drives. The company’s

data, especially the technical product data which is required for employees in

the Sales department, is fragmented amongst its sub-companies’ various

Databases around the globe.

2. Finance

a. Data entry and retrieval is time consuming and messy due to the large number

of documents and excel

files.

3. Human Resource

a. Handles Manpower and

Logistical matters.

b. Data entry is once again

tedious and there are

many documents to

handle in the network

drive.

4. Corporate Discipline Board

a. A separate department that regulates departmental processes and does

regular termly audits (as well as surprise checks) so as to maintain the integrity

of the systems and processes within the various departments, especially the

IT and Finance departments, since they have the access rights to sensitive

information.

b. Strictly unbiased and hard against the other departments.

1 Figure 1 - image source : http://riacestalily.files.wordpress.com/2012/02/messy-files.jpg

Figure 1 (above) 1: Too many unsorted files

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Part 2: Lesser Hassle for Greater Returns.

As the Information Systems professional in AVK Industrial Valves Singapore, I personally

believe that the procedures and work systems within AVK can be optimised via the use of

Business Technologies to yield better results, primarily:

1. Less Discrepancies - due to human error during manual data entry.

2. Greater Efficiency - Less time spend on manual entry.

3. Greater Versatility – The system can be modified as the company evolves.

4. Greater Cost savings - Process automation eliminates the need for extra data entry

clerks.

5. Security – Data is kept secure on the company’s servers, rather than on the individual

employees’ computers.

6. Convenience – eliminates bureaucracy required for error checking. Error checking is

automated too.

7. Vision – allows businesses to focus more on its core operations and less resources on

HR management.

These are the 7 salient factors (they could also be considered to be the objectives of

implementing information systems in an organisation) that have led many industry players to

turn to Information Systems Solutions.

After thoroughly evaluating AVK’s business processes, it could clearly be seen that much

can be done to attain the aforementioned objectives (the seven pointers mentioned earlier) for

the betterment of the organisation. If we were to take a look at the grand scheme of things, we

will have to understand what AVK truly needs in order to remain competitive. IT in a firm should

always be used as a means to fulfil the core objectives of a business, and never the other way

round. For AVK, it must be able to focus on the following to remain competitive and profitable:

a. Sales of industrial valves to existing clients

b. Sourcing for more clients to sell to.

c. Ensuring that existing clients are loyal.

These are crucial in ensuring both performance and excellence, but with the issues that is weighing AVK down, is this really possible? What can we do to overcome them in order to achieve greater results? The answer lies below.

The Solution

The solution to the issues identified in Part 1 of this proposal can be resolved by

implementing a Database System, similar to that implemented by the larger MNCs ( some

examples are SAP, Oracle ERP, xTuple2, etc. ), but at a fraction of the cost of what industry

leaders are paying for. This database is also adapted to AVK’s needs as a provider of Industrial

Valves.

The idea is to reduce redundant data entry tasks by automating them, while ensuring that

the following are not compromised:

1. Information Security

2. Operational Reliability

3. User Friendliness

How do we go about doing this?

2 xTuple ERP Systems, : http://www.friendlysystems.com/blog/2013/09/xtuple-erp-again-makes-the-list-of-best-open-source-software/

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The Solution: A Database:

Details : o Database Type – Microsoft Access 2013

Data Storage – Tables.

Querying – for automatic data retrieval.

Forms – To provide a front end UI for various stakeholders within the

company to enter data (INPUT).

Reports – For automatic document generation (OUTPUT).

o User Interface:

A Front-end UI (User Interface) is to be created for the various

departments: Sales, Finance, HR and Operations.

A special UI is to be created for the upcoming Corporate Discipline

board for auditing purposes.

o Security

User based access rights are implemented with the use of Visual Basic

(VBA) and via the native Microsoft Cryptographic API.

The database and clients are two separate entities. Remote access

will be secured by a 2048-param cryptographic key over a secure VPN

(OpenVPN System), which is already in place.

Timeline :

Total Cost :

o SGD $149 per user3 (Database software – Access 2013).

o 1.5 hours’ worth of training time per staff.

o $279 for a server4, running on Debian Linux.

o $279 for a backup server.

o Monthly Maintenance Time : 2 hours

3 Microsoft Access 2013 Price (Single License) - http://www.microsoftstore.com/mssg/en-SG/store/software/263952700 4 Western Digital Mybooklive 3TB Price - http://www.courts.com.sg/Products/PID-IP047932(Courts)

Weeks 1 to 4:

• The IT Support personnel will collate the business processes and procedures from the various departments.

• Creation of Back-end system : Data Storage and Querying mechanisms.

• -- Data Tables

• -- Data Queries

• Meeting with department heads for clarification and checking ( to ensure that the database structure is aligned with the envisioned system ) (Objective alignment meeting).

Weeks 5 to 8 :

• Creation of Front-end System: INPUT/ OUTPUT interface.

• -- OUTPUT: Creation of Reports (documents to be generated ).

• -- INPUT: Creation of Forms (data that needs to be confirmed and any additional data that needs to be inputted ) .

• Routine Meeting for Objective Alignment.

Weeks 9 to 14:

• Bridging the Front-end and Back-end systems.

• Alpha Testing

• -- User Interface refinement

• -- Systems debugging

• Routine Meeting for Objective Alignment.

• User Beta Testing -- Systems ready once the 3 week beta testing phase ends.

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Risk Involved :

o Staff adaptability; whether users are able to accept the new system.

o Possible minor technical difficulties that might delay the setup process.

Quantitative Benefits : o Figure 2 and 3 (below) – Valuation Metrics5 Data for AVK Industrial Valves

Singapore. In this case, we would be looking at the sale of a unique Desponia6

Butterfly Valve DN-65 as a comparative example on how implementing the

Database would produce a greater Rate of Return.

o As seen from the graph, the Initial investment is $1154, which includes the

Access 2013 licenses and the Western Digital Server prices. After calculations,

the Net Return on Investment (NPV) is $7,042.

o Compound Annual Growth Rate7 (CAGR) as an alternative indicator of returns:

Over the course of 3 periods, investment grew from $1,154.00 to

$12,358.00, its compound annual growth rate, or its overall return, is

120.42%. Using CAGR essentially smoothens out the progress of the

investment over a period of time, providing a clearer picture of annual

returns after the implementation of a Microsoft Access Database. Summary: Overall, it could be seen that with the adoption of a system database, AVK has much to benefit. Qualitatively, this would mean greater convenience, less discrepancies, increased versatility, improved security and less resources spent on managing manpower. Quantitatively, implementing a Database would result in greater cost savings and higher efficiency (more work done per hour). We want to extend our warmest thanks to you for taking the time to read this proposal. We hope that you would consider this as a viable option in strengthening AVK internally, so as to achieve our core business objective in boosting the sales of industrial valves to current clients, as well as to the clients who have yet to come.

Once again, Thank You.

5 Table 3.3 from Curley(2004), Managing IT for Business Value, pg. 74 6 Desponia is an industrial valve series produced by InterApp, a firm acquired by AVK International. InterApp is now a company of the AVK International Group - http://www.interapp.net/content/?lang=en 7 Compound Annual Growth Rate, an indicator which gives a smoother, more accurate rate of growth for investments -

http://www.investopedia.com/terms/c/cagr.asp

Figure 2 (above): Valuation Metrics Calculations Figure 3 (above): Valuation Metrics Summary