Executive Summary

Aalsmeer Flower Auction is an organization that deals with flowers auction market. The
marketplace is located in Netherlands. They have planned to establish online auction market due
to the some threat that threatened their comfortable position. These threats are identify using
Porters five forces analysis. Business and information requirement are also look into, to know
what are the business requirement and information requirement for the online auction market.
After getting to know the business requirement and the information requirement, system
development was evaluate to know which method is appropriate for AFA. Waterfall system
development methodology was chosen as appropriate for AFA due to the business and
information requirement of AFA. Effectiveness of the new system developed was consider on
the organization, management and the employee.
1. Introduction
Aalsmeer Flower Auction (AFA) is an auction house that offer global growers, wholesalers and
exporters a central marketplace in which to trade flowers and plants. New developments in
auction market threatened their comfort ability position, firstly, the need for emergence of
alternative, electronically driven flower markets. Secondly, Retailers asked for fresher products,
more varieties, smaller quantities and multiple deliveries each week. And lastly, merger and
acquisitions among retailers increased their size and power. After studying the case, using the
porter’s five forces, it is realized that AFA has some strength to overcome all these threats. By
this the report suggest to Aalsmeer Flower Auction (AFA) the need to restructure the
organization of the flower market by forming alliance with other business to enable them to have
wider market range.

Alsmeer Flower Operation System

1.0 Introduction and objectives

The Aalsmeer Flower Auction based in Netherlands and have 44% market share in the
flower market. It offers growers, wholesalers and exporters a market place to trade
flowers and plants acting as a mediator. When acting as a mediator they receive a
commission from growers for every plant sold. They came to a decision that they have to
move on with technology more as most of the markets have in order to keep up with the
demands of consumers. The initial objectives of moving on to an e-business is to enable
innovation, redefine the value chain reduce costs, strengthen the link with wholesalers
and retailers by providing a better customer service, keep up with competition and
increase market share.

Below is a the business chain of the Aalsmeer flower auction;

(www.infoci-journals.com 2005)

1.1 Information Strategy

In order for the Aalsmeer Flower Auction to achieve their business objective and ensure
competitive advantage in the

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industry, suitable information strategy must be put in place. Information strategy is a plan of
action to produce general strategic information systems design to meet business objectives
and aligns with the general business strategy. The system that Aalsmeer wants to put up must
fit in the business’ chainto be able to perform effectively. Information systems are a way of
looking at the business, which is systematic and independent of technology. It also includes
people aspects, such as training, and organisational aspects, where required
(www.cics.dept.shef.ac.uk).

Formulating an information system is seen as a fundamental necessity in the modern

organisation, where business tasks are linked both internally and via networks (Trevor
Bently 1998). According to Laudon & Laudon (2004) information systems can perform
calculations or process paperwork much faster than people and helps companies to learn
more about the purchase pattern and preferences of their customers.

Porter Five Forces

Porter Five Forces

Porter’s Approach is taken from his 1980 book “Competitive Strategy: Techniques for
Analyzing Industries and Competitors. Porter’s theory has often been used by many
people to understand more about a company’s structure and the method or plan used to
run its business.

In his book, Porter identified 5 external forces that will affect an industry or a market.
The type of forces can help us to understand or to analyze how a company makes its
profits, or how it could attract others to do business with. Porter also helps to identify the
specific company’s competitor.

We may use Porter’s competitive forces to analyze how it can have an impact to the
operations of Cold Storage.
Threat of New Entrants
For the past 30 years, the food industry has seen the up and rising supermarket industries,
which has become dominant in recent years. These large supermarkets focus heavily on
operational efficiency, especially relying on the importance of one stop shopping for
customers,and Cold Storage also operates in such manner. Such method of operation
affects a lot of small traditional shops such as butchers and bakers. This makes it very
difficult and creates a barrier for other new supermarkets to enter this industry. Due to a
large fixed cost and huge capital involved, new entrants’ supermarkets find it hard to
break into the market.
Bargaining Power of Suppliers
The power of the suppliers can be highlighted as they often do business with large food
chains, and also there is a fear of losing these suppliers and their business to other larger
retail supermarket. In Singapore, Giant and Carrefour, as a direct competitor to Cold
Storage, often gets better promotional prices from suppliers, in which we can see that the
smaller retailers cannot compare. In the terms of the suppliers, the huge growing
prospects of these large supermarkets make it difficult for them to source products from
overseas. With this in mind, the suppliers are restricted to operate freely and will...
E-Business

INTRODUCTION OF THE TOPIC

In the emerging global economy, e-business have increasingly become a necessary

component of business strategy and a strong catalyst for economic development. The
integration of information and communications technology (ICT) in business has
revolutionized relationships within organizations and those between and among
organizations and individuals. Specifically, the use of ICT in business has enhanced
productivity, encouraged greater customer participation, and enabled mass customization,
besides reducing costs.

With developments in the Internet and Web-based technologies, distinctions be-

tween traditional markets and the global electronic marketplace such as business
capital size, among others-are gradually being narrowed down. The name of the
game is strategic positioning, the ability of a company to determine emerging op-
portunities and utilize the necessary human capital skills (such as intellectual re-
sources) to make the most of these opportunities through an e-business strategy
that is simple, workable and practicable within the context of global information
and new economic environment. With its effect of leveling the playing field,
e-commerce coupled with the appropriate strategy and policy approach enables
Small and medium scale enterprises to compete with large and capital-rich
businesses.

On another plane, developing countries are given increased access to the global
Marketplace, where they compete with and complement the more developed economies.
Most, if not all, developing countries are already participating in e-commerce, either as
sellers or buyers. However, to facilitate e-commerce growth in these countries, the
relatively underdeveloped information infrastructure must be improved.

3.1 Organizations and Information Systems

Information systems must be aligned with the organization to provide information
that important groups within the organization need. On the other hand, the
organization must be aware of and open it self to the influences of information
systems in order to benefit from new technologies.

The interaction between information technology and organizations is very complex

and is influenced by a great many mediating factors, including the organization’s
structure, standard operating procedures, politics, culture, surrounding environment,
and management decision (see Figure 3.1)
Figure 3.1 The two-way relationship between organizations and information
technology. This complex two-way relationship is mediated by many factors, not the
least of which are the decisions made—or not made—by managers. Other factors
mediating the relationship are the organizational culture, bureaucracy, politics,
business processes, and pure chance.

The organization's environment, culture, structure, standard operating procedures,

politics and management decisions are all mediating factors that influence the
interaction between information technology and organizations. There is no singular
effect of computers in all organizations. Instead, different organizations in different
circumstances experience different effects from the same technology. The
organization's environment, culture, structure, standard operating procedures,
politics and management decisions are all mediating factors that influence the
interaction between information technology and organizations. There is no singular
effect of computers in all organizations. Instead, different organizations in different
circumstances experience different effects from the same technology.

3.4 Information Systems and Business Strategy

What is a Strategic Information System?
Strategic information systems are computer systems at any level of the organization
that change goals, operations, products, services, or environmental relationships to
help the organization gain a competitive advantage.

Strategic information systems should be distinguished from strategic-level systems

for senior managers that focus on long-term, decision-making problem. Strategic
information systems can be use at all organization levels and are more far-reaching
and deep rooted than the other kinds of systems we have described.
Business-Level Strategy and the Value Chain Model
The most common generic strategies at this level are (1) to become the low cost
producer (2) to differentiate your product or service, and (3) to change the scope of
competition by either enlarging the market to include global markets or narrowing
the market by focusing on small niches not well served by competitors digital firm
provide new capabilities for supporting business level strategy by managing the
supply chain, building efficient customer “sense and respond” system and
participating in “value webs” to deliver new products and services to market.

Leveraging Technology in the Value Chain

At the business level the most common analytic tool is value chain analysis. The
value chain model highlights specific activities in the business where competitive
strategies can be best applied and where information systems are most likely to have
a strategic impact. Primary activities are activities most directly related to the
production and distribution of a firm’s products or services. It include inbound
logistics, operations, outbound logistics, sales and marketing, and service.
Supporting activities make the delivery of a firm’s primary activities possible. Consist
of the organization’s infrastructure, human resources, technology, and procurement.

Information System Products and Services

Firm can use information systems to create unique new products and services that
can be easily distinguished from those of competitors. Strategic information system
for product differentiation can prevent the competition from responding in kind so
that firms with these differentiated products and services no longer have to compete
on the basis of cost.

System to Focus on Market Niche

Businesses can create new market niches by identifying a specific target for a
product or service that it can serve in a superior manner. Through focused
differentiation, the firm can provide a specialized product or service for this narrow
target market better than competitors.

Supply Chain Management and Efficient Customer Response Systems

A powerful business- level strategy available to digital firms involves linking the value
chains of vendors and suppliers to the firms through linking the customer’s value
chain to the firm’s value chain in an “efficient customer response system.” Firms
using systems to link with customers and suppliers can reduce their inventory costs
while responding rapidly to customer demands.

Supply chain management systems can not only lower inventory costs but can also
deliver the product or service more rapidly to the customer. Supply chain
management can thus be used to create efficient customer response systems that
responds to customer demands more efficiently. An efficient customer response
system directly links consumer.

Firm-level Strategy and Information Technology

A business firm is typically a collection of businesses. Often the firm is organized
financially as a collection of strategic business units, and the returns to the firm are
directly tied to strategic business unit performance. The question are “How can the
overall performance of these business units be achieved?” and “How can information
technology contribute?”

There are two answers in the literature to these question: synergy and core
competency. The idea driving synergies is that when some units can be used as
inputs to other units, or two organizations can pool markets and expertise, these
relationships can lower costs and generate profits.

How can IT be used strategically here? One use of information technology in these
synergy situations is to tie together the operations of disparate business units so that
they can act as a whole.

Enhancing Core Competencies

A core competency is an activity at which a firm is a world-class leader. Core
competencies may involve being the word’s best fiber-optic manufacturer, the best
miniature parts designer, the best package delivery service, or the best thin film
manufacturer.

Industry-level Strategy and Information Systems: Competitive Forces and

Network Economics
Firm together comprise an industry, such as the automotive industry, telephone,
television broadcasting, and forest products industries, to name a few. The key
strategic question at this level of analysis is, “how and when should we compete as
opposed to cooperate with other with other in the industry?” whereas most strategic
analyses emphasize competition, a great deal of money can be made by cooperating
with other firms in the same industry or firm in related industries.

Information Partnership
Information Partnership is cooperative alliance formed between two or more
corporations for the purpose of sharing information to gain strategic advantage.

The Competitive Forces Model

It is model used to describe the interaction of external influences, specifically threats
and opportunities, that affect an organization’s strategy and ability to compete.

Network Economics
It is model of strategic systems at the industry level based on the concept of a
network where adding another participant entails zero marginal costs but can create
much larger marginal gain.

Using Systems for Competitive Advantage: Management Issues

Management Strategic Transitions

Strategic Transitions is a movement from one level of sociotechnical system to
another. Often required when adopting strategic systems that demand changes in
the social and technical elements of an organization.

What Manager Can Do

Managers must take the initiative to identify the types of systems that would provide
a strategic advantage to the firm. Some of the important question managers should
ask themselves are as follows:
- what are some of the forces at work in the industry? What strategies are being used
by industry leaders?
- How is the industry currently using information and communication technology?
Which the organizations are the industry leaders in the application of information
systems technology? What kinds of systems are applicable to the industry?
- What are the direction and nature of change within the industry? From where are
the momentum and change coming?
One the nature of information systems technology in the industry is understood,
managers should turn to their organization and ask other important questions:
-Is the organization behind or ahead of the industry in its application of information
systems.
- What is the current business strategic plan, and how does that plan mesh with the
current strategy for information services?
- Does the firm have sufficient technology and capital to develop a strategic
information systems initiative?
- Where would new information systems provide the greatest value to the firm?
- Are there strategic benefits from using Internet technology in operations,
marketing, or customer service for this specific firm?

SPIRAL MODEL

The spiral model [2] was a further improvement on the evolutionary model. It integrates
the concepts of project objectives, risk management, prototyping and project cost to the
evolutionary model. In the spiral model the development is done in cycles of a spiral.
Each cycle starts with determination of objectives, alternatives and constraints for the
cycle. With a good project overview, the objectives of a cycle can be decided. Having the
objectives in place, the next step in a cycle is to evaluate alternatives and identify and
resolve risks. In order to manage the risks involved in a cycle, prototyping, simulation,
benchmarking, etc. are done. Thus the project team is able to zero-in on the best methods
and tools for development. The next step in the cycle is to develop as per the objectives
and methods decided for the cycle. In an early cycle, the development might involve
development of concept of operation or software requirements, whereas in a later cycle it
might mean development of software design, detailed design, or code. Development also
involves validation of the developed output. After development, the last part of the cycle
is to reflect on the work done in the cycle and plan for the next cycle. In an early cycle, it
might be requirements or life cycle plan, whereas later on, it might be an update of earlier
plans (based on the experiences of the cycle), development plan or integration and test
plan. Each cycle has an associated cost. The radial dimension of the spiral is the project
cost and the angular dimension is the project progress for a cycle. The spiral model was a
big improvement as it stressed on evolutionary incremental development, risk
management, prototyping, and project overview and planning.

WATERFALL MODEL

It was understood that software had a life-cycle starting from the decision to make that
software to the time the software was in operation. The term software life-cycle was
based on a basic software process model, indicating the stages software would go through
in its life-cycle. The first response to the software crisis was the discovery of the waterfall
software process model. It was thought that the root cause of the problem was that the
requirements were not understood well enough before the software design and proper
design was not done prior to coding. Applying the engineering paradigm of freezing
requirements before design and freezing design before manufacture, the waterfall model
stipulated that software should be made in a sequential series of stages, like requirements'
analysis, design, detailed design, coding, integration, installation, operations and
maintenance. Slowly, it became apparent that it was not possible to have water-tight
compartments and it was desirable to have feedback between successive stages. Thus a
design error found during coding would lead to a correction of design and then the coding
would continue. This was in line with the engineering practice for a design error found
during manufacture is first corrected in design and than manufacturing is done as per the
modified design. Also, taking the clue from engineering again, it was felt that making a
prototype of the system in early stages would help in understanding the requirements
better and would eventually help in making a better system.

SSADM (Structured Systems Analysis &

Design Method)
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SSADM (Structured Systems Analysis & Design Method) is a widely-used computer

application development method in the UK, where its use is often specified as a
requirement for government computing projects. It is increasingly being adopted by the
public sector in Europe. SSADM is in the public domain, and is formally specified in
British Standard BS7738.

SSADM divides an application development project into modules, stages, steps, and
tasks, and provides a framework for describing projects in a fashion suited to managing
the project. SSADM's objectives are to:

• Improve project management & control

• Make more effective use of experienced and inexperienced developmentstaff
• Develop better quality systems

Learn More

• Traditional Models (RUP, V-Model, CMMI, Waterfall)

• Software Quality Resources

• Make projects resilient to the loss of staff

• Enable projects to be supported by computer-based tools such as computer-aided
software engineering systems
• Establish a framework for good communications between participants in a project
SSADM covers those aspects of the life-cycle of a system from the feasibility study stage
to the production of a physical design; it is generally used in conjunction with other
methods, such as PRINCE, which is concerned with the broader aspects of project
management.

In detail, SSADM sets out a cascade or waterfall view of systems development, in which
there are a series of steps, each of which leads to the next step. (This might be contrasted
with the rapid application development - RAD - method, which pre-supposes a need to
conduct steps in parallel.). SSADM's steps, or stages, are:

• Feasibility
• Investigation of the current environment
• Business systems options
• Definition of requirements
• Technical system options
• Logical design
• Physical design

For each stage, SSADM sets out a series of techniques and procedures, and conventions
for recording and communicating information pertaining to these - both in textual and
diagramatic form. SSADM is a very comprehensive model, and a characteristic of the
method is that projects may use only those elements of SSADM appropriate to the
project. SSADM is supported by a number of CASE tool providers.

rapid application development (RAD)

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RAD (rapid application development) is a concept that products can be developed faster
and of higher quality through:

• Gathering requirements using workshops or focus groups

• Prototyping and early, reiterative user testing of designs
• The re-use of software components
• A rigidly paced schedule that defers design improvements to the next product
version
• Less formality in reviews and other team communication
Some companies offer products that provide some or all

CASE (Computer Aided Software Engineering) technologies are tools that provide the
assistance to the developer in the development of software. Main purpose of the CASE
tools is to decrease the development time and increase the quality of software. Even the
presence of these qualities CASE tools are not being used most often or freely. These
tools are not used freely as they should be; there are some points that need improvement,
so that the use of CASE tools can be increased. No a days most of the software houses
don’t bother to use the CASE tools in their development process. And finally the hurdles
in the promotion of the CASE tools as a standard.

2.0 Introduction

CASE tools reduce the time and cast of software development and ensure the quality of
software. The objective of introducing Computer Aided Software Engineering (CASE)
tools was the reduction of the time, cost of software development and for the
enhancement of the quality of the systems developed (Diane Lending et al. 1998).

Advantages of RAD Software Development

1. The time required to develop the software is drastically reduced due to a reduced
requirement analysis business requirements documentation and software
requirement specification) and planning stage.
2. All the software prototypes produced can be kept in a repository for future use.
The reusability of the components also enhances the speediness of the process of
software development.
3. It is much easier for a project manager to be accurate in estimating project costs
which of course means that project cost controls are easier to implement and
manage as well.
4. It is a big cost saver in terms of project budget as well as project time and cost due
to reusability of the prototypes.
5. If a component is being picked for the repository, it is already tested and hence
need not be tested again. This helps in saving time required for testing.
6. The project management requirements are collected in a dynamic manner. Every
time there is a prototype ready, requirements are studied and matched. If there are
any additional requirements, these are then included in the next prototype built.
7. There is a strong and continuous participation of the project sponsor who keeps
giving feedback in the whole process. Hence the end user satisfaction level is
higher when the end result is produced.
8. It promotes better documentation through written test cases.

Disadvantages of RAD Software Development

1. This method may not be useful for large, unique or highly complex projects
2. This method cannot be a success if the team is not sufficiently motivated and nor
is unable to work cohesively together.
 3. Success depends on the extremely high technical skills of the developers.
4. There are times when the team ignores necessary quality parameters such as
consistency, reliability and standardization. Hence this can make project quality
management hard to implement during the project management life cycle

A schematic representation of proto-typing is given below:

Advantages of Prototyping:

The major advantages of prototype are as follows:-

• Ability to ‘tryout’ ideas without incurring large/ huge costs.

• Lower overall development costs when requirements change frequently
• The ability to get a functioning system into the hands of the user quickly.
• Reduced application development time to achieve a functioning system.
• Effective utilization of scarce human resources.

Disadvantages of Prototyping:

• Prototyping is better suited for smaller modular applications.

• Rapid prototyping can gross over essential steps in systems development.
• The performance may be rather inefficient.
• As the system can be changed easily, documentation may not be kept up-to-date.
• User must be willing and committed to providing ongoing and meaningful
feedback.