Capstone Movies
Capstone Movies is a growing movie sales and rental chain wishing to upgrade their information systems. The original store was opened several years ago by three young entrepreneurs Peter Young, Mark Goh and Alice Wong. Peter and Alice were movie fans and very knowledgeable about movies, but Mark was particularly interested in it as a business opportunity filling a market niche. The niche he perceived was that while the major movie hire chains provide the latest and more popular movies which people must collect and choose for themselves, Capstone Movies could provide extra services to customers such as pickup and delivery, personal assistance to customers about their selections and to provide a far more extensive selection of movies for hire or sale from around the world and from the past.
The stores have been far more successful than the owners could have imagined. The company now has five stores in Melbourne instead of one and can see opportunities to expand the chain into other cities and states. As well as finding their niche, success has come about through careful selection of locations and of committed and knowledgeable managers to run each store. So far the owners have been able to manage and support store managers effectively by regular personal contacts. However, it is clear that if they are to expand this will become more difficult and there must be an improvement in the information systems to monitor performance and provide support.
Currently, each store has its own software to manage the hire and sale of movies but these are not directly linked. For management purposes each store prepares its own individual reports but also summary reports are sent to Head office where Mark Goh then consolidates them for the company as a whole. Each store has a list of titles available through the company but not what is held in other stores and the customer relies entirely on the expertise of the store manager and staff to provide advice about movies that are available and obtaining them.
To supervise and plan the development of a new information system, the owners of Capstone Movies have hired you – the services of Holmes IS Consulting Organisation (HISCO). Your first task is to understand their current system.
Description of the Current in-store systems
The information system at each store would clearly have to perform the basic functions. A few of the more important ones are described below.
Customer maintenance
Customers should register with Capstone Movies by giving their name, address, home telephone number, work telephone number, mobile number, email address and drivers licence number. If the customer does not have a driver’s licence, a Medicare Number or passport number may be used as a substitute.
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The customer must produce 3 forms of current identification, one of which must include a photograph. At least one of the forms of identification must include the current address of the client. A photograph of the customer will be taken at the store and recorded as a visual check on the customer should he not have his card for any reason.
The information will be captured online and a contract printed for the customer to sign. A laminated borrowing card will be produced enabling the customer to commence borrowing immediately.
Process a loan for a movie
This involves recording the customer identification number and movie copy identification number1, date and time of loan and period of the loan. The customer is checked to ensure that their membership is current, whether they have any overdue loans or fines that might bar them from taking out a loan. Sometimes there might be other reasons why a customer is not allowed to take out a loan so there is a provision to flag such a person and a reason why they are not allowed to take out a loan at this time. There are also limits on the total number of loans that a person may have out at any time depending on the number of overnight or weekly loans. Currently, the maximum a customer can borrow at any time is 4 overnight loans plus 10 weekly loans, however, stores policies on this change from time to time. The manager (or an authorised assistant) should be able to override the system and issue a loan even if they exceed the borrowing limits or if there are outstanding payments or if the customer is flagged for some other reason.
The customer will present the required movies to the attendant together with their membership card. The bar code on the card will be scanned and the system will check to see if there are any outstanding loans or fines for late return. Loans can still be issued without a card but the attendant at the time is required to verify the customer is who they say they are by matching the customer with the photograph recorded in the system.
The attendant will scan the titles and the system will calculate the amount payable. The system must be capable of automatically taking into account promotional offers when calculating the amount payable, e.g., rent one new release and get one free. The titles will then be flagged as being unavailable together with the due date for their return. Any payments and the movies borrowed by the customer will be recorded.
Overdue loans
When a title is more than one day overdue a list of overdue movies together with customer names and contact details (phone numbers) will be generated so that the store can contact the customers to let them know their movie(s) is overdue. Also if a customer has an email account, a notification can be automatically generated and sent.
1 Note that there may be several copies of the same movie for rent. The bar code identifying a movie is the same for all copies of the same movie. To track each copy of a movie Lilydale Movies assigns its own individual identification number for each copy.
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Return a loan
The movie id and the date and time of return of the movie are required. Fines are imposed for late returns depending on the movie category and how late the movie was returned. Fines are calculated on a per day basis (e.g., an overnight movie hired at $3 would be charged $3 per day late but a weekly hired for $2 might be charged only at 40 cents per day late). If a movie is reserved and a copy of that movie is returned then the system should flag this so that the movie can be put aside for the customer requesting the movie.
Video/DVD maintenance
Capstone Movies purchase videos/DVDs for sale and rental. These are available from a number of suppliers.
When movies are to be purchased the details will be entered into the system which will then generate a purchase order, each of which is identified by a unique number generated by the system. The purchase order will then be sent to the supplier. The supplier will then despatch the ordered titles together with an invoice. New stock is sent to Head office, recorded and sent to the stores as required. Payment of invoices is NOT part of the system to be developed.
When new movies (or additional new copies of currently held movies) are received which have been ordered for rental, these will be recorded and placed on appropriate shelves.
Depending on demand, movies change categories from overnight to weekly. This will necessitate changing both the videos/DVDs loan criteria, i.e., overnight to weekly and changing the shelf position. Also as demand for a movie falls some copies of the movie are removed from the rental shelves and placed on sale at a discount to the new price. When copies are damaged or lost this must be recorded on the information system.
Movie copies can also be moved from one store to another store if required. For example, this might happen if one store has a high demand for a particular movie but another one has low demand for the same movie.
Movie sales
A customer may purchase a movie that was previously a rental in which case the movie copy identification number is recorded together with the purchase price and date of purchase. A new movie (one which was never for rental) will not have a movie identification number in which case the bar code for the movie is recorded. If a member decides to purchase a movie the sale will be recorded for warranty purposes and possibly marketing purposes against the member’s identification number. Sometimes customers who are not members may buy a movie but in that case no customer information is recorded and the customer must retain their receipt in case there are any problems with the movie.
Sales of new movies should be monitored so that appropriate stock levels can be maintained at each store.
Reservations
A person can reserve a movie if none are available at the time. When the movie arrives the customer should be contacted by phone or email. At the moment, reservations are handled manually. When a customer requests a movie that it is not available, the customer’s name and contact number is recorded (e.g., on a sticky note or in note pad) and when the movie returns the customer is contacted. This is rather informal and some stores handle this better than others.
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Renewals
A movie can be renewed provided that there are no unfilled reservations. Renewals are made at the normal amount charged and loan period. The amount charged can be overridden if special deals apply at the time of renewal. A renewal is essentially the same as taking out the movie again except that you don’t have to return it and record the loan.
Security:
It was agreed between Capstone Movies’ management and HISCO that, for privacy and security reasons, each store would be responsible for and be able to modify only its own data. This would apply whether data was stored centrally or distributed in each store. Read only access would be allowed across all stores to determine the availability of movies at other stores, but no other data (e.g., customer data) would be visible across stores.
Internet Access:
Currently, Capstone Movies has a website which is very basic and only allows staff or customers to search for movies for rental or sale. If they identified an item or items that they wish to purchase, they must download a purchase order form and email it to the store. Information about quantities of items in-stock or whether an item is out of stock is not clear on the website. The website does not support activities such as: payments, orders, movie reservations, renewal of a movie currently on loan and purchasing of a movie which is for sale.
Requested Reports:
These reports should be able to be generated by store managers for their own store. If generated at Head office, the same report can be run on a consolidated basis (i.e., for all stores together) but the store number may also be included so that, for example, figures can be compared store by store if required.
Member transaction history
This lists members, their movie rentals over the requested period of time (usually quarterly or annually). The movie borrowed, date of borrowing, scheduled return date should be provided. This report will help in analysing the current market and develop customer mailing lists. One such mailing list for example would be for members who have not borrowed a movie for a specified period to make a special offer to them as an incentive to rent another movie.
The report would provide member identification number, member name, member address, total amount spent by the member on rentals over the specified period, movie identification number, movie title, movie rental price, rental transaction number, date, etc.
Overdue list
This is provided so that members can be contacted about overdue loans. The report would provide the member identification number, member name, telephone numbers, and movie identification numbers, movie titles that are overdue with their corresponding due date.
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Movie rentals report
This provides the status of all movies currently available for loan. The report provides the movie identification number, the store where the movie was rented, member identification number, date loaned and the date due back. This report is used to determine rental frequency (the number of times a movie was rented), as well as how many times the movie was out of stock when requested. The report also provides the rental rate, which is calculated by dividing the number of days a movie was rented by the number of days since the movie was first purchased.
Out of stock report
This lists all the movies that were out of stock when requested by a member. The report provides the movie identification number and the frequency of the movie being out of stock over a specified period.
Movie vendor list
Itemises all movies purchased over a specified period. The report includes movie identification number, vendor, movie category, cost of the movie and movie title. The report also summarises the total dollar volume of all movies purchased from the vendor.
Rent analysis report
This lists all movies in stock including rental and sale prices, and the number of times a movie was out of stock when requested by a customer. This report is used to analyse rental revenues.
Sales analysis report
This relates to sales of movies including exchange and return data. The data on exchanged items includes the reason for the exchange (exchanges are usually gifts or the movie was defective in some way). If a movie is exchanged, its value is recorded at the standard price rather than a special price which may apply at the time of exchange.
Catalogue of movies
This lists all important data for each movie, the category of the movie (e.g., drama, science fiction, horror, animation, etc), rental and sale price, sale and rental frequency, and quantity on hand.
Problems:
HISCO’s initial discussions with the owner highlighted several of the problems that need to be addressed.
Even with the number of stores they have now, there has been a need identified for additional processing and more detailed reports. Consolidation of management information is also a critical issue in the future as the number of stores increases and the chain becomes geographically more spread.
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As well, with the increasing number of titles available through Capstone Movies it is important to provide better support to staff and customers to help them find the movies that they want. The way through this is expected to be through a search facility that will assist people to find particular movies or lists of movies selected by appropriate search criteria.
While the chain as a whole wishes to maintain a large inventory of movies, within each store there is only limited space so each store manager wishes to hold only those movies that are most popular for their area and in quantities that are appropriate to their usage. As they become less popular they should be sold off. Therefore, usage figures for movies need to be available. Movement of movies from one store to another as required also needs to be facilitated. For those movies that are infrequently required, it is anticipated that one or two copies will be held in one “superstore” though if the chain becomes large enough or spread too far geographically more of these superstores might be created. When requested, movies would be transported to the appropriate store or sent to the customer directly.
One mother, a frequent Capstone Movie customer, had complimented Capstone Movies on the cleanliness of the store and efficiency when checking out movies. The mother added, however, that she wished the Capstone Movie better understood all her needs. For example, she allows her children to pick out movies and games, but she found that the industry rating system for appropriateness of content was not always consistent with her view. She suggested that it would be great if she and other parents could submit and view their own comments about the appropriateness of videos and games. That way, parents would be more aware of the content of the products and the reactions of other parents.
All stores have their own system to manage membership, borrowing, selling… activities. However, these systems do not really talk to each other. So, members’ information is not shared between stores. Through their current website, they can check video or game availability, but they cannot check customers’ history, borrowing list through the system. Therefore, when customers who joined their membership from store A and want to borrow videos from store B, the staff in store B have to call store A to obtain members’ borrowing history.
Some ideas of the new system:
Today, Capstone Movie sells and rents videos, music, and games to customers. Capstone Movie is profitable and growing. Increased competition from existing and emerging competitors requires Capstone Movie constantly to consider better ways to meet the needs of its customers. Increasingly, customers want information services as well as products as part of the relationship with the stores. Customers want the business to be aware of their likes, dislikes, and preferences, and want the business to create a sense of community for the exchange of information among customers. The vision of Capstone Movie is to be a market leader in the use of technology to provide the highest-quality customer service with the broadest range of products and services. Even though providing information services as part of relationship with their customers is consistent with this vision, no such services are provided today. The purpose of the proposed project is to prove (or disprove) that such customer information services will improve customer satisfaction and lead to increased revenue and potentially increased market share. The new system should be able to help stores and business better understand their customers, not just provide them the products and services, rather how stores and business better understand and support all of customer needs for home entertainment.
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Specifically, the proposed system will provide information services such as:
• Ability for customers to submit unstructured and structured comments about movies, music, and games they have bought or rented;
• Submit requests for new products for sales and rent;
• Check on due dates for a customer’s outstanding rentals;
• Extend a rental without penalty for a minor fee to be applied when the item is returned;
• Review the inventory of items carried in the store;
• Parents can monitor (see a list of) items rented or purchased by their children.
Furthermore, over the past few years and with the challenge presented by the significant growth in online rental subscription services, Capstone Movie recognizes that, in order to remain competitive in this business, it needs to seek out opportunities which will keep their business competitive and then to invest in these opportunities.