782016 – Rev 1 1 Kellys Salon Case Study .docx

7/8/2016 – Rev 1 1
Kelly's Salon Case Study
In 1995, Kelly's Salon was opened by Kelly Kostanza in a strip
mall near the College campus. Kelly's Salon
started as a barbershop with one chair. Over the years, Kelly
has expanded her business to include hair
styling for both men and women. Her business has grown to
three barber chairs, three hair styling
stations, and a shampoo station. In response to her customers’
requests, Kelly would like to further
expand her business by adding two stations for manicures. The
small gift shop next door to her has
recently come up for sale, and she is thinking about acquiring
that area for manicures.
When Kelly's Salon first opened, it was the only barbershop
within a ten-mile radius. It was one of the
first businesses to open in the strip mall where it is located, and
the number of customers has increased
each year. Over the years a couple of other barbershops have
opened around the area, and there is
news that a Hair Cuttery (offering men’s and women’s haircuts
and styling only) will open about 5 miles

away. In the shopping center across the street, an expensive spa
has now opened where hair styling is
offered along with manicures. Just around the corner from
Kelly's Salon is a home with a sign offering
manicures.
While Kelly's Salon continues to grow and profits are
increasing, Kelly is sure that she could improve her
operation in the areas of scheduling, supply ordering, inventory
management, collecting customer
information, and marketing.
Customer and Employee Scheduling: Currently, Kelly takes
appointments by phone and accepts
walk-in customers on an as-available basis. If there is a
vacancy in the schedule, she is happy to have a
walk-in customer for that time slot. As her business has
expanded, Kelly has found that keeping track of
which employees will be working at any particular day and
time, and matching that with customer
appointments has become almost unmanageable. Until recently,
she has been comfortable with allowing
staff to decide what days and times they want to work, and most
of them are part-time. So far, little
effort has been made to find a substitute if one of her employees
cannot come to work. Now, Kelly has
recognized that she is turning away a significant number of
walk-in customers, and at other times, her
staff is not busy at all. It seems to Kelly that she is very busy
on Saturdays, and that Mondays are slow

days, but she has no real data to use to make a schedule for her
employees. She would like you to help
her improve her process for scheduling staff and customers.
Inventory Management: Now that she has employed four part-
time barbers, six part-time stylists,
and two part-time shampoo girls, and is contemplating adding at
least two manicurists, Kelly is also
concerned about maintaining an adequate stock of supplies. It
has become difficult for her to keep track
of what supplies have been used and what needs to be ordered.
She knows that if she runs out of
shampoo or hair spray, for example, that she will not be able to
serve her customers. She makes notes
to herself and sticks them on her office message board to
remind herself to place orders, but she only
knows to do so when one of the employees tells her that the last
container of a product has been taken
from the supply cabinet. Many times, the shop is very busy and
either the employee forgets to tell her,
or she forgets to make a note. Kelly is happy her business is
growing, but the chaos of making sure
there are adequate supplies is creating a great deal of stress for
her.
Supply Ordering: Even if Kelly successfully keeps track of the
supplies that have been used, she really
does not have time to place orders to her suppliers. Over time,
she has noticed that the prices she is

paying seem to be going up quickly, but she has no way check
to see if she could order supplies at a
lower cost. She is wondering if she could save money by
finding lower-cost suppliers, suppliers who offer
7/8/2016 – Rev 1 2
free shipping, or suppliers who sell in bulk. It has become
apparent that Kelly's Salon needs an improved
supply ordering process.
Customer Information: There are some regular customers who
come to Kelly's Salon, and Kelly
recognizes them, but often cannot recall their preferences.
Several of these customers have called
requesting appointments with their favorite barber or stylist,
and, while Kelly knows this is important to
them, she cannot assure the customers that it will be possible.
Many of her barbershop customers come
in every two weeks, while most of her customers who want a
haircut and style are more likely to visit a
few times a year. Kelly would like to know in which category
each of her customers fall. She is also
seeking your help in finding a better way to document the
process of maintaining customer preferences
and personal information.

Marketing: Kelly would also like to contact her customers and
keep them coming back, but currently
she has no way to do that. She would also like to make sure
when she contacts each customer that she
is doing so appropriately. She would also like to provide
special offers such as coupons around the time
of their birthday, believing that these types of marketing efforts
would increase her repeat business and
her profits. She would also like to reach more new customers,
especially as she expands her business.
Kelly's Salon uses very little marketing except word-of-mouth,
and essentially still operates the same as it
did in 2000 when Kelly opened her one-chair barbershop.
Kelly's Salon is a for-profit business and must cover its variable
costs, fund future improvements and
produce a reasonable profit for the owners. Kelly would like to
expand into the gift shop area next door,
and improve her current management practices. She also
believes that she could actually increase her
profits if she did a better job of marketing in combination with
better scheduling and management of her
supplies.
Kelly's Salon currently uses no technology. There is not even a
computer in the back office. Kelly has
hired you to help her with determining how she could apply
information technology to help her manage
her growing operation. Throughout this course you will assist

Kelly with analyzing her business and
applying a technology-related solution to improve the operation
of Kelly's Salon. Your advice will be
based on the business practices discussed in the class and the
course materials to help her increase
revenue, keep the business running, and bring the business into
the 21st century.
Note 1: You will be looking for a technology solution. While
installing a tea and coffee bar may attract
new customers, it is not a technology solution.
Note 2: As you approach the assignments, you will find it
helpful to think about your own experiences
with a barbershop or styling salon. Making a trip to a local
barbershop or salon may help you think about
the processes, challenges, and opportunities.
Identify and explain the next steps in implementing the solution
(Stage 5)
The case study and assignments address the Course Outcomes to
enable you to:
STAGED ASSIGNMENTS
There are four staged assignments which use the Case Study and
are designed to follow the relevant
course topics in the class schedule. The weight of the
assignments is shown in the Course Syllabus. The
Purpose of the Assignments

This case study specifically addresses the following course
outcomes to enable you to:
solutions enable strategic outcomes
information systems requirements
ntify and plan IT solutions that meet business objectives
7/8/2016 – Rev 1 3
due dates are shown with the Assignments. Upon completion of
these assignments, you will have
performed an array of activities to demonstrate your ability to
apply the course content to a “real world
situation” to:
generic strategy and process for
improvement
o Stage 1 Project: Business Environment Analysis (Word
document with analysis)
mine the functional (business) requirements by
analyzing inputs, processing and outputs for
the process selected for improvement, using the process model

provided
o Stage 2 Project: Business Analysis and Functional
Requirements (Word document with
table of inputs, processing and outputs)
o Stage 3 Project: IT Requirements (Word table)
implement your solution
o Stage 4 Project: Proposed IT
Solution
and Next Steps (Word document)
Course Learning Outcomes: These assignments are designed to
help you identify how to effectively
analyze and interpret information to improve the business. This
is an opportunity for you to apply course
concepts, vocabulary, and critical thinking skills and think like
a business professional. When you are
writing a paper or developing a presentation, write in third
person, preparing your document as if it is

going to the owner, Kelly Kostanza, whom you want to impress
with your knowledge and abilities.
Writing Expectations: For academic writing, the writer is
expected to write in the third person. In
third person, the writer avoids the pronouns I, we, my, and our.
The third person is used to make the
writing more objective by taking the individual, the “self,” out
of the writing. This method is very helpful
for academic writing, a form in which facts, not opinion, drive
the tone of the text. Writing in the third
person allows the writer to come across as unbiased and thus
more informed.
Do more than just going through the mechanics of pulling
together information -- think about what you
are doing, why you're doing it, whether it make sense, whether
the information seems realistic, and what
the results show. Support your recommendations with course
concepts, vocabulary, and your research.

Resources: Several of the assignments require external
research, using sources other than the
materials provided in the classroom. It is important that you
identify relevant, timely resources that
specifically support the points or information you provide in
your assignments. You should read the
source and assimilate the information first, and then put it into
your own words and incorporate it into
the flow of your writing (with an appropriate in-text APA
citation and a list of references at the end of
your paper). Direct quotes should be used very sparingly—only
when the author’s own words uniquely
present a concept that would be lost if paraphrased by you.
Evaluation: The grading rubric is included with each
assignment. Review the rubric to ensure all
aspects of the assignment have been addressed.
Example: Be sure to read and refer to the “Walmart Example”
posted in the classroom to help you

understand what is expected for each of the assignments.
Format: One of the prerequisites for this course is that you
have a fundamental working knowledge of
word processing software. Detailed instructions for each Staged
Project, 1 through 4, are posted in the
designated area of the classroom. You must prepare each
assignment in the indicated format (i.e., table,
outline, report, double-spaced, or other specified format) and
submit it by the date indicated in the
schedule. No credit will be given for late assignments or those
submitted in file formats other than those
stated in the assignment instructions.
7/8/2016 – Rev 1 4
Software Expectations: Because these assignments require you
to use Microsoft Word, or produce

documents that can be read using MS Word (as indicated in the
instructions), you may need to "brush
up" on your familiarity with Word to use functions that perhaps
are new to you. Therefore, do not wait
until the last minute to begin an activity. You should read
through all the assignments in advance to
ensure you (1) understand what is expected, and (2) allow
enough time to effectively create the
information being requested.
There is a significant amount of information available to you to
assist in developing your skills in using
the Microsoft Office Products. MS Word, or its equivalent, is
required for these exercises. Do not
hesitate to use the on-line help and wizard tools built into the
MS Office applications for help as you work
with the software tools. There are also many web sites that
provide tips. Even YouTube has some useful
videos demonstrating various techniques.

If you use software tools other than Microsoft, it is your
responsibility to ensure that the documents you
submit can be read, and retain their formatting, when they are
read and reviewed using the Microsoft
Office suite.
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11/6/2016 Rev 4
Walmart Example
We will use Walmart as an example to illustrate the various
course concepts. The examples provided in this
document are to assist you in understanding the concepts and
applying them to the class assignments, which

consist of a case study and four staged projects. The examples
are provided for illustrative purposes only, and
may not precisely conform to the specific directions given in
the class assignments. Student should follow the
instructions provided in the assignments.
Business Analysis (Stage 1) – Follow the directions in the Stage
1 Assignment
The following is a discussion of the Five Forces Analysis,
Generic Strategy for Competitive Advantage and
business process improvement to help you understand the
topics. Your assignment specifies the content and
format to be used for your paper.
Applying Porter’s Five Forces Analysis

The Five Forces are explained in the reading assignments for
Week 1. Below is an example showing the
application of the Five Forces analysis to Walmart.
We know that Walmart’s objective is everyday low prices,
which is their competitive advantage. When we
look at the Five Forces model as applied to Walmart, we can
determine that the Buyer Power of their customers
is high because patrons have many other choices. However,
customers expect and demand the lowest prices
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11/6/2016 Rev 4

from Walmart, and they are willing to overlook, but not ignore,
other factors like customer service, store
location, and atmosphere.
Walmart's Suppliers have little power because of the sheer size
of Walmart, and because being a Walmart
supplier can provide huge sales potential. The suppliers must
do what Walmart wants regarding business
processes and technical requirements. They will also be
pressured for lower prices, which may cause the
suppliers to move production to lower priced labor markets.
The threat of substitute products means that customers can go
elsewhere for the same or substitute items. There
could be some threat here only because of web based stores as
they may be able to have lower prices because of
low overhead.

Threat of new entrants in the Brick and Mortar Store area is
low, because of the costs involved in building
stores and the infrastructure to support the business processes.
The threat of new entrants in the Internet market
would be high, because of the low costs involved and the
potential to specialize in different areas with
especially low prices.
Rivalry between competitors at a store level would be high and
could be affected by the breadth of products and
quality of customer service or even the cleanliness and
appearance of the store. On a company level, Walmart’s
Sales are $418 billion and Target, their closest competitor, has
annual sales of $67 billion, so while it may seem
there is a large rivalry, the size of Walmart limits the threat.

Generic Strategy for Competitive Advantage
If we look at the table below, we can see that the Generic
Strategy for Walmart is in the upper left quadrant,
Broad Market and Low Cost. You can see how they compare to
the other retailers shown in this example.
(Baltzan, 2014, p. 22)
The broad market will bring in the largest number of buyers,
which would have the effect of lowering buyer
power. The Low Cost indicates that many things could affect
Walmart’s costs, but their biggest cost is for the
goods that they sell and therefore the Suppliers are important
and Walmart uses their size to decrease the
Supplier power. The Generic Strategy identified makes sense.

The Five Forces analysis above indicates that two areas of
highest concern for Walmart would be
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-related activities, like Supply Chain Management
(SCM), supplier training, supplier selection,
and supplier facilitation, that would reduce Walmart’s costs;
and
-related activities, like easy payment, easy return of
merchandise, web purchasing with free
delivery to the nearest store, and stocking the items wanted in
the community, which would increase the
number of customers and retain the ones they have; these also
help reduce operating costs.

Note that neither the Five Forces Analysis nor the table of
Generic Strategies for Competitive Advantage
mentions IT or computer systems. IT is not a strategy; the
initial focus is on improving the business processes,
which may or may not have anything to do with IT.
Business Process to be Improved
If Walmart decided to improve its business processes to
increase profits, it would begin with the processes
related to the identified strategy for competitive advantage
(Low Cost Strategy). Each process that needs to be
improved would have its own team. Walmart would then
assemble a team of individuals from different areas
that are involved in the process, and are familiar with the
current process. The next step is for the team to
document the As-Is process, its objective, its inputs and

outputs, and the steps in the process. This is usually
done with some kind of a process diagram or model, or written
step-by-step description of the how the process
works. The process selected to help reduce overall costs is the
item return process. The team believes that
improvements in how the store accepts returned items from
customers can help reduce costs.
For this Walmart Example, the following would apply:
GENERIC STRATEGY FOR COMPETITIVE ADVANTAGE:
Low Cost Strategy
BUSINESS PROCESS TO BE IMPROVED: Item Return
Process
Background for Stage 2
The Walmart team has come up with the following idea for

improving the Item Return Process:
Upon entering the store, the customer is met by the Greeter,
who determines if the customer has an item to
return. If there is no return, he assists the customer with a cart.
If the customer wishes to return an item, the
Greeter asks if the customer has a receipt. If the customer says
“no,” the Greeter attaches a “To be returned”
tag to the item and assists the customer with a cart. If the
customer has a receipt, the Greeter scans the Sales
Receipt Number using a hand held wireless device and if the
item is bar coded, the Greeter will scan the bar
codes of all items to be returned using the hand held device and
indicate that these are returned items. If there is
no bar code on the item the Greeter will select the appropriate
item from the sales receipt image on the hand
held device and indicate the item being returned. The Greeter

will then indicate the quantity of each item being
returned. The Greeter’s hand held device will print a credit slip
that can be redeemed for credit (if it was a
credit or debit card purchase) or cash at any cashier. The
handheld device will also print two copies of the
return receipt. One will be attached to the returned item and
one will be given to the customer along with the
original receipt with the returned items crossed out. The greeter
will attach the appropriate documents to the
returned items and place them in a cart for later processing.
This new process will reduce the amount of time overall in
handling returned items, help expedite the
restocking of returned items or determining their final
disposition, and help Walmart keep its costs low.
The Process Diagram for the Walmart Expedited Return Process

(WERP) is shown below (use the plus sign at
the top of the Adobe screen to increase the font for readability):
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Functional (Business) Requirements (Stage 2) – Follow the
directions in the

Walmart Expedited
Return Process
1
2
GREETER ATTACHES
DOCUMENTS TO
RETURNED GOODS
GREETER PUTS
RETURNED
GOODS IN A CART
GREETER PRINTS
APPROPRIATE

DOCUMENTS AND
MARKS ORIGINAL
GREETER HANDS
CUSTOMER
RECEIPTS
GREETER WELCOMES
CUSTOMER AND
CHECKS IF THE
CUSTOMER HAS A
RETURN
GREETER IDENTIFIES
THE ITEM ON THE
SALES RECEIPT
IMAGE ON THE
HAND HELD
GREETER ASSISTS
CUSTOMER WITH

A SHOPPING CART
CUSTOMER
SHOPS IN THE
STORE
RETURN?
NO
YES
GREETER
ATTACHES A
RETURN MARKER
TO RETURN ITEM
GREETER SCANS
THE SALES
RECEIPT
SCANS BAR CODES
FROM ITEMS
RETURNED

GREETER INDICATES
RETURNED QUANTY
NEXT TO ITEM ON
HAND HELD
BAR CODE
ON
PRINT CUSTOMER
RECEIPT WITH THE
RECEIPT NUMBER
SHOWN IN TEXT AND
BAR CODE
CUSTOMER TAKES
SALES RECEIPT
RECEIPT?
C
CUSTOMER

CHEECKS OUT
AT POS
NO
NO
YES
YES
CUSTOMER
RETURNS ITEM
AT CUSTOMER
SERVICE
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11/6/2016 Rev 4
Functional (Business) Requirements (Stage 2) – Follow the
directions Stage 2

Assignment
Your assignment specifies the content and format to be used for
your paper. See Background for stage 2 above.
For this Walmart Example, the following apply:
Low Cost Strategy
Process
The Stage 2 assignment calls for a table like the following one
to be completed. Using the above process
model, for the steps labeled "Greeter scans the sales receipt"
(labeled with the "1" in the red box) and "Greeter
indicates returned quantity next to item on handheld" (with the
"2" in the red box), the following input, process

and output entries would be appropriate:
Table of Functional (Business Requirements)
Steps in the Item Return Process
Process
Step
Input
Information/data item
entered into the system
as part of this step
Process
Processing or action the
system must perform for

this step
Output
Information/data item
displayed or printed out
for the user in this step
1 Sales receipt data Read, store and display sales
receipt
Scanned sales receipt
2 Quantity of item returned
(entered next to the item
on the receipt shown on
the handheld device)
Record quantity of item

returned, calculate amount to
be refunded and print results
Return receipt showing item
returned, quantity and total
amount to be refunded (one
for customer, one to be
attached to returned item(s))
3
4
5
6
7

8
9
These inputs, processing, and outputs will become the
functional (or business) requirements for the system.
IT Requirements (Stage 3) – Follow the directions in the Stage
3 Assignment
Your assignment specifies the content and format to be used for
your paper.
For this Walmart Example, the following apply:
Low Cost Strategy
Process

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11/6/2016 Rev 4
In addition to the functional requirements for a new system, the
IT requirements must also be developed. We
will do this by evaluating the applicability and importance of
each IT requirement listed. The requirements that
are identified as relevant to the business process will form the
IT (technical) requirements for a system. In
evaluating and selecting an IT system, both the functional
(business) requirements and the IT requirements need
to be considered. The areas that need to be considered in
developing the IT requirements are listed below in the
Table of IT Requirements, which is similar to the one you will
complete in the Stage 3 assignment. Only a few

of the rankings and explanations are filled in here, but your
table will rank and explain them all. (Be sure to use
the table and instructions provided in the assignment.)
IT Requirement
Importance/
Relevance
High,
Medium,
Low, or
Not Applicable
(N/A)
Explanation for Ranking

(Write a minimum of 3 good
sentences for each; both the
process to be improved and
the case study should be
mentioned in each
explanation; the data used
in the process should be
included in the explanation
where applicable.)
1 Usability
2 Maintainability
3 Scalability Medium The system must be able to
handle an increase in the
number of users and devices

being used for Returns during
peak hours. Also, during the
holiday season Walmart handles
a large volume of returns.
Walmart expects its business to
continue to grow, and returns
will grow along with the rest of
the business.
4 Reliability/ Availability
5 Extensibility
6 Portability
7 Security
8 Data Accuracy
9 Data Completeness
10 Authentication High Walmart does not want
customers to use the device.
The system will require the

Greeter to provide specified
login information. This
protects Walmart from
fraudulently recorded
returned items.
11 Enterprise Systems (ERP,
CRM, SCM)
12 Networks
13 Database
14 Data Warehouse
15 Data Mining
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11/6/2016 Rev 4

In this particular case, only a few of the IT requirements are
evaluated above, to provide an example.
IT

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