managing information systems case study: toromont industries taken from laudon & laudon (2002),...

Managing Information Managing Information SystemsSystems

Case Study: Toromont IndustriesTaken from Laudon & Laudon (2002), chapter 10, p334-335

Dr. Stephania Loizidou Himona

ACSC 345

Dr. S. Loizidou - ACSC345Dr. S. Loizidou - ACSC345 22

Toromont Industries LtdToromont Industries Ltd

Toromont Industries Ltd. is headquartered in Toromont Industries Ltd. is headquartered in Toronto, Canada, and is one of the largest Toronto, Canada, and is one of the largest dealerships for Caterpillar heavy-dealerships for Caterpillar heavy-construction equipment in North America. construction equipment in North America. Toromont also makes process systems, Toromont also makes process systems, industrial and recreational equipment, and industrial and recreational equipment, and operates a series of energy plants supplying operates a series of energy plants supplying Ontario’s deregulated electricity market.Ontario’s deregulated electricity market.


Toromont Industries LtdToromont Industries Ltd

Two-thirds of Toromont’s revenue, which Two-thirds of Toromont’s revenue, which amounted to US $494 million in 1999, amounted to US $494 million in 1999, comes from its equipment group, which comes from its equipment group, which rents and sells heavy construction and rents and sells heavy construction and mining equipment and parts. Toromont has mining equipment and parts. Toromont has more than 2,000 employees throughout more than 2,000 employees throughout North America.North America.


BusinessBusiness

Toromont’s success has not been based on Toromont’s success has not been based on selling more tractors, parts, and engines but selling more tractors, parts, and engines but on selling the kind of service that leads on selling the kind of service that leads customers to purchase 10-year contracts. customers to purchase 10-year contracts. The contracts call for Toromont to supply The contracts call for Toromont to supply them with heavy equipment and maintain them with heavy equipment and maintain that equipment.that equipment.


BusinessBusiness

Customers do not need to purchase such Customers do not need to purchase such equipment, which can amount to $150,000 equipment, which can amount to $150,000 per earth-moving machine, nor do they have per earth-moving machine, nor do they have to maintain their own warehouses or to maintain their own warehouses or mechanics. Toromont supplies the mechanics. Toromont supplies the machines and guarantees they will be machines and guarantees they will be maintained in top condition for the life of the maintained in top condition for the life of the contract.contract.


CompetitionCompetition

Toromont faces stiff competition. Many heavy-Toromont faces stiff competition. Many heavy-construction and mining equipment firms, including construction and mining equipment firms, including Komatsu, John Deere, and even Caterpillar itself, Komatsu, John Deere, and even Caterpillar itself, are putting more emphasis on customer service by are putting more emphasis on customer service by selling parts on-line over the Internet. There are selling parts on-line over the Internet. There are also Web sites such as Equipmentsite.com, also Web sites such as Equipmentsite.com, Point2.com, and Equipmentrader.com, which are Point2.com, and Equipmentrader.com, which are clearinghouses for heavy-construction equipment, clearinghouses for heavy-construction equipment, parts, and services.parts, and services.


CompetitionCompetition

The Internet appears to be turning heavy-The Internet appears to be turning heavy-construction equipment into a commodity. construction equipment into a commodity. “With so many others vying for your “With so many others vying for your customers’ attention, how do you convince customers’ attention, how do you convince them to buy from you instead of from a them to buy from you instead of from a discount place on the Internet?” asks Rob discount place on the Internet?” asks Rob Kugel, an analyst with FAC/Equities in Kugel, an analyst with FAC/Equities in Burlingame, California. Burlingame, California.


StrategyStrategy

Toromont’s management believes that the Toromont’s management believes that the company can stay ahead of these competitors by company can stay ahead of these competitors by offering the best possible customer service offering the best possible customer service through a new on-line system for ordering and through a new on-line system for ordering and maintaining equipment and for tracking customer maintaining equipment and for tracking customer accounts. The system, ideally, would provide more accounts. The system, ideally, would provide more interactive personalized service than could be interactive personalized service than could be obtained from any of its competitors.obtained from any of its competitors.


StrategyStrategy

For example, the system could provide oil quality For example, the system could provide oil quality and other maintenance statistics on-line that could and other maintenance statistics on-line that could help customers determine pre-failure conditions help customers determine pre-failure conditions faster, reducing the chances of costly downtime or faster, reducing the chances of costly downtime or worker injuries on construction jobs. Customers worker injuries on construction jobs. Customers could get quick answers to questions, such as how could get quick answers to questions, such as how fast they can obtain the part they need, when their fast they can obtain the part they need, when their equipment needs to go into the repair shop for equipment needs to go into the repair shop for maintenance, and how much they owe on their maintenance, and how much they owe on their accounts. accounts.


StrategyStrategy

Toromont’s senior management wants an Toromont’s senior management wants an interactive customer service capability as soon as interactive customer service capability as soon as possible and is willing to keep things simple to get possible and is willing to keep things simple to get this capability up and running. It doesn’t want this capability up and running. It doesn’t want customers to see the same generic information. customers to see the same generic information. Each Toromont client should be able to see Each Toromont client should be able to see precisely the information that is specific to their precisely the information that is specific to their company. Toromont currently provides customers company. Toromont currently provides customers with oil analyses and maintenance updates on with oil analyses and maintenance updates on their machines but must deliver this information via their machines but must deliver this information via fax.fax.


Question 1Question 1

What are Toromont’s requirements?What are Toromont’s requirements?



What Information System solution(s) do you What Information System solution(s) do you recommend?recommend?



What factors do you need to take into What factors do you need to take into account in order to implement these account in order to implement these recommendations?recommendations?



What are the risks associated with your What are the risks associated with your solution?solution?



How would you mitigate these risks?How would you mitigate these risks?

managing information systems case study: toromont industries taken from laudon & laudon (2002),...

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