MASARYK UNIVERSITY BRNO

FAKULTY OF INFORMATICS

An analysis of the impact of cloud based

technologies on a small retail company

Master’s Thesis

Bc. Marek Andreánsky

Brno, 2013

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Declaration

I declare that this Master’s thesis is my original work and that I have writ-

ten it independently. All sources and literature that I have used during

elaboration of the thesis are correctly cited with complete reference to the

corresponding sources.

Marek Andreánsky

Supervisor: RNDr. JUDr. Vladimír Šmíd, CSc.

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Acknowledgement

I would like to thank my supervisor RNDr. JUDr. Vladimír Šmíd, CSc.

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Abstract

Cloud based technologies are an integral part of any successful retail

company. Without the use of modern technologies no business can stay

afloat in the long term. In the first part of this work a single company is

described. The second part lists the available cloud technologies that can

be used for the benefit of a business. The third part analyses the potential

impact each of these services can have on the business mentioned in the

first part.

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Keywords

Cloud, retail, service, software, internet

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Contents

1 Introduction ....................................................................................................... 7

2 The Company .................................................................................................... 8

2.1 Technologies currently in use ................................................................... 8

2.1.1 Content creation .................................................................................. 8

2.1.2 Marketing ........................................................................................... 10

2.1.3 Employee communication ............................................................... 11

2.1.4 Warehouse and accounting ............................................................. 12

2.1.5 Sales .................................................................................................... 13

2.1.5.1 Retail stores ..................................................................................... 13

2.1.5.2 Prestashop ....................................................................................... 13

2.2 The methodology - SWOT ...................................................................... 14

2.2.1 Definition ........................................................................................... 14

2.2.2 The analysis ....................................................................................... 16

2.2.3 The SWOT analysis of the company .............................................. 17

3 The technologies.............................................................................................. 24

3.1 Content creation ....................................................................................... 24

3.1.1 Operating systems ............................................................................ 24

3.1.2 Vector editor ...................................................................................... 27

3.2 Marketing .................................................................................................. 28

3.2.1 Word of mouth .................................................................................. 28

3.3 Employee communication ...................................................................... 32

3.3.1 Gsm telephone / Skype ..................................................................... 32

3.3.2 Email ................................................................................................... 32

3.3.3 Data sharing ....................................................................................... 34

3.4 Warehouse and accounting .................................................................... 35

3.4.1 Pohoda ................................................................................................ 36

3.4.2 Winstrom FlexiBee ............................................................................ 36

3.5 Sales ........................................................................................................... 36

3.5.1 Retail stores ........................................................................................ 37

3.5.2 E-commerce ....................................................................................... 37

3.6 Chapter summary .................................................................................... 39

4 Predicted SWOT analysis after changes ...................................................... 40

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4.1 Internal ...................................................................................................... 40

4.1.1 Strengths ............................................................................................. 40

4.1.2 Weaknesses ........................................................................................ 41

4.2 External ...................................................................................................... 42

4.2.1 Opportunities and threats ................................................................ 42

4.3 Resulting SWOT analysis ........................................................................ 42

5 Conclusion ....................................................................................................... 44

Bibliography ....................................................................................................... 45

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1 Introduction

The success of a modern company is based on many factors, one of them

being the technologies that the company uses. There are many technolo-

gies available on the market, but not all of them can be used by a small

retail company.

This thesis has the aim of describing such easy to use and imple-

ment technologies that can benefit a small retailer.

The first part describes the retail company that will be analyzed.

The second part concentrates on listing interesting cloud based

technologies that could have an impact on the company. These technolo-

gies will be briefly described and their general functionality will be ex-

plained.

The third part will describe the potential benefits that the company

can gain by implementing the services described in the second chapter.

In the last chapter a brief summary of the changed company will

be given.

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2 The Company

Pečiatky-Vizitky s.r.o. (will be mentioned as PV in the following text from

now on) is a small stamp selling retail company based in Kosice that has

been officially on the market since the year 1996, but its business model is

working since the year 1990. The company started selling stamps shortly

after the fall of communism by using the then modern technology of mak-

ing stamps by polymer.

After two years the technology was surpassed by using a laser engrav-

er1 in the creation of stamps.

This utilization of modern technologies has allowed the company to

steadily grow and hit its small retail limits of east Slovakia in a fairly fast

manner of a half decade. The company was then inhibited by its location

and environment that it was based in.

After several years of growth the company started to lose its edge. The

growth started to slow down and as the company failed to implement

new web-based technologies the gap on the market slowly became larger.

The company can be categorized as a new small (1), a company that

can gain significant benefits from modern technologies combined with the

fact that it has a small amount of employees.

2.1 Technologies currently in use

The company currently operates by using technologies that are mainly

unchanged from those that the company used 10 years ago.

The technologies can be divided by their expected impact on a spe-

cific part of business.

2.1.1 Content creation

The company’s main income comes from the creation of rubber stamps, it

therefore needs software in which the designs can be drawn, saved and

exported to a laser printer where they are engraved into rubber.

1 The device behaves the same way as a printer but uses a laser beam instead of

ink and can print into wood, rubber or steel,

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The company currently uses five Windows XP workstations that

are running Corel Draw, a commonly used commercial vector graphics

editor.

Each workstation uses a different Corel version, as there are some-

times compatibility issues. Sometimes a customer sends a file in an older

format and the legacy file can only be successfully opened in an older ver-

sion of Corel Draw.

Corel Draw is not a cloud based technology but it will be analyzed

more in this work as it is an important part of the business.

2.1.1.1 Windows XP

Windows XP is a legacy operating system with soon to be discontinued

customer support from Microsoft (2) that many smaller retail companies

still use even today.

The main reasons for its use are its ease of use, reliability and rela-

tively low hardware requirements and the fact that many companies

simply don’t need to upgrade an older system.

The company is still using this system for most of its computers

due to the above mentioned facts, the fact that some hardware is older and

also the fact that the drivers of the laser engraver currently in use are not

compatible with newer versions of Windows.

One of these issues can be solved by upgrading the hardware to a

newer laser model that has newer drivers available.

Windows XP is sadly a necessary evil for the company and even

after all of the hardware is upgraded a single workstation using this sys-

tem must remain.

2.1.1.2 Corel Draw

Corel Draw is a vector graphics2 editing software that is locally installed

on every workstation. It is not a cloud based technology but for the sake of

the initial company analysis a brief description of it will be given.

It is mainly used for the design of stamps or marketing materials. It

is a reliable piece of software that the company started using in 1993 and it

is using it until today (with incremental software upgrades).

2 A graphic file is stored as a database of coordinates and the resulting image can

be enlarged indefinitely without losing any quality.

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The software is indispensable and cannot be replaced as most laser

engraving machines are optimized for it. There’s also the fact that the em-

ployees are used to this software and changing it would therefore induce

additional costs for training if a switch to another software was made.

For these reasons, the software will not be changed. There may be

similar applications that are cloud based but being in the cloud is not such

a significant benefit that warrants a change in core software.

2.1.2 Marketing

The company uses fairly old technologies, if any, for marketing. When the

company started, its marketing was primarily based on word of mouth

and this is partially true even today.

This was combined with email and telephone marketing. The compa-

ny uses these tools until today.

These methods may still be effective and are probably used by most

retail companies but they are not efficient – starting to use modern cloud

based technologies should have a positive impact on marketing.

The company could also implement a form of permission marketing

(3) by allowing free access to some of their designs and knowledge about

stamps on their website.

2.1.2.1 Word of mouth

A integral part of any successful business, word of mouth is always pre-

sent and companies should use tools that improve its efficiency.

In the past, reviews and customer feedback were relayed mostly by

word of mouth. If a customer was satisfied, he informed others or the

company and the business steadily grew.

Today, there are cloud based technologies that have a similar effect

– social media and e-commerce review portals. They can be used to en-

hance the impact of word of mouth and will therefore be mentioned in the

next chapters.

2.1.2.2 Email

The most commonly used cloud based technology today. No company can

survive without using it for communication and information sharing.

There are alternatives, but the legacy system must always remain

as customers are used to this form of communication.

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Newer technologies may be working in the background, but the

front interface must remain the same, as most customers can only use this

form of communication and this will probably remain true for a few next

generations.

2.1.2.3 Telephone

Another legacy system, telephone communication is still used if real-time

interaction between the customer and the company is needed.

Email is good when sending files or communicating simple orders

or tasks, but whenever there is a pressing problem with an order the only

real option is to use the telephone and call the customer directly.

This not only helps solve the problem quickly but also increases

customer satisfaction – the customer is usually happier when talking di-

rectly to a human instead of typing messages into a machine.

Voice communication can be enhanced by using cloud based tech-

nologies and will be analyzed more in the next chapters.

2.1.3 Employee communication

The company is also using standard technologies for intra-company

communications that are used in small retail companies – gsm phone with

an unlimited European Union call tariff, Skype and Email.

It can be debated whether a gsm internet phone is a cloud based

technology, but for the purposes of this work it will not be classified as

such.

Skype and Email, however, are cloud based technologies and will

be classified as such.

2.1.3.1 Gsm telephone / Skype

As mentioned in the previous chapter, the telephone is indispensable for

most businesses. This chapter expands on the options of the telephone by

also mentioning Skype, a cloud based technology.

Skype is not used for communicating with the customer, as most

customers are not used to it and therefore do not know how to use it.

But inside the company, every employee knows how to work with

this tool and it is commonly used for communicating critical problems or

sending files.

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Its main benefit is the price, which is free if only used for Skype-to-

Skype calls. This helps keep the costs down, as it is significantly cheaper

for each employee to use Skype instead of paying a significant monthly

fee for an unlimited gsm phone tariff.

The company uses both of these approaches and combines them so

that problems can be solved relatively swiftly and in case one system fails,

a spare can be used.

2.1.3.2 Email

The same benefits from the previous chapter apply. Is mainly used to col-

lect orders, mark them as finished and send files inside the company.

2.1.4 Warehouse and accounting

Every retail business needs to write down, log and manage its accounting

data.

The company is currently using Stormware Pohoda, an accounting

software that is use for keeping the money and warehouse records.

The software is installed on a client machine and can only be ac-

cessed locally. This is a large drawback and cloud access has to be added

so that the data is accessible from anywhere.

The technical options and possible implementations will be men-

tioned in the next chapters.

There are other non-technical problems, however, as migrating to a

new economical software is a large step for any business. There are many

new problems such and upgrade would bring. Some of them were men-

tioned in the Corel Draw chapter – retraining the employees being the

most problematic.

Due to the fact that changing accounting software would be one of

the most significant ones, the topic will be returned to and expanded in

the next chapters.

2.1.4.1 Stormware Pohoda

The company is currently using Stormware Pohoda for all of it accounting.

It is a commonly used solution that a significant amount of Slovak

and Czech companies use (4).

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The main benefit is its localization and age – it is custom made for

the local market while also being present for more than 10 years. It used to

be a solid base to build a company on but it slowly lost its technological

edge and now there are other solutions present that are more technologi-

cal advanced.

One of the technological advances of other solutions is the utiliza-

tion of the cloud – being able to access the company’s economical data

from anywhere with the right password is great benefit that Stormware

Pohoda currently does not possess.

More will be said to this topic in the next chapters.

2.1.5 Sales

The company currently primarily sells its products by a single channel,

two physical stores located in the Slovak cities of Kosice and Roznava.

The company is also using Prestashop, an online e-commerce sot-

ware that is enabled on the www.peciatky.sk domain. This eshop is cur-

rently not used by many customers and the revenue it generates is mar-

ginal compared to the revenue of the physical retail stores.

This is one of the main areas that a correctly chosen cloud based

technology can help improve, as by upgrading the eshop with additional

modules or switching to new solution, the revenue of the company could

grow.

2.1.5.1 Retail stores

The impact a retail store has on a customer can not be greatly influenced

by a cloud based technology. The stores will therefore not be analyzed any

more in this chapter.

2.1.5.2 Prestashop

Prestashop is a French e-commerce open-source3 solution that the compa-

ny currently uses to help further the sales of stamps online.

The eshop is configured to sell stamps locally inside Slovakia,

which is a fairly large market of five million people.

The solution is not optimal, as it was created for a different (French

and global) market and there are issues, one of them being not able to

3 Source code of the software is freely available for download and sharing

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generate pdf invoices with special Slovak characters, another being that

the store is no naturally connected to online marketing services that are

provided only in Slovakia.

E-commerce is one of the areas that can greatly benefit by upgrad-

ing or changing the current cloud based solution. It will therefore be ana-

lyzed in more detail in the2 following chapters.

2.2 The methodology - SWOT

The company will be analyzed using the SWOT4 method. Weaknesses will

be analyzed further and a cloud based solution to them will be consid-

ered.

If viable, the solution will then be expanded and theoretically ana-

lyzed in greater detail.

It is also imperative to mention that a simplified version of SWOT

from the online publication eshopkniha.cz will be used (5).

2.2.1 Definition

“A SWOT analysis (alternatively called the SWOT Matrix) is a struc-

tured planning method used to evaluate the Strengths, Weaknesses, Op-

portunities, and Threats involved in a project or in a business venture.

A SWOT analysis can be carried out for a product, place, industry

or person. It involves specifying the objective of the business venture or

project and identifying the internal and external factors that are favorable

and unfavorable to achieving that objective. The technique is credited

to Albert Humphrey, who led a convention at the Stanford Research Insti-

tute (now SRI International) in the 1960s2 and 1970s using data

from Fortune 500 companies. „ (6)

4 SWOT stands for Strengths, Weaknesses, Opportunities and Threats

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The main division of SWOT (6)

SWOT can be used to identify the obvious but hard to notice problems

that a company has in a short amount of time, usually in less than 2 hours

for small companies.

This result is achieved by looking at a business from four points of

view, namely looking at the specific Strengths, Weaknesses, Opportunities

and Threats.

2.2.1.1 Strengths

The strengths are the advantages that a business has when compared to

their competition.

Examples of the advantages of a small retail company are fast de-

livery, good customer support or a good price.

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2.2.1.2 Weaknesses

The weaknesses are the disadvantages a business had when

compared to their competition. It is the opposite of strengths.

Examples are slow shipping, bad products, complex business pro-

cesses or old technology.

This part of the model is interesting an all weaknesses will be ana-

lyzed in later chapters and a cloud based solution will be sought.

2.2.1.3 Opportunities

The opportunities are the chances a business can use to improve their

place on the market.

An example is discovering a hole in the market at a business can

fill such as finding a new and useful product that is being sold abroad but

has not yet arrived home.

2.2.1.4 Threats

Threats are elements in the environment that could cause problems in the

future for the company but are outside the area control and can therefore

not be changed, only prepared against to reduce the negative impact.

A perfect example of this is the economical depression that hap-

pened a few years ago – it was and still is a threat to most companies but

it cannot be influenced or prevented by any single company.

The only possible solution is preparation, the more a company is

prepared for a reduction in cash flow the better are its chances of survival.

2.2.2 The analysis

After finding each Strength, Weakness, Opportunity and Threat, every

single advantage or disadvantage is assigned two numerical values –

weight and rating. These values then help determine the result, a third

variable that explains the severity of every advantage or disadvantage.

By combining these results two additional variables are determined

– the external and internal summary. The absolute value of these two vari-

ables quantifies the amount of risk a company has from inside and outside

of the company.

A final variable, called the summary, is the sum of the external and

internal summaries and determines the overall risk a company is currently

at.

A low negative number means the company is in a large risk and

needs to improve, a high positive number means the company is working

fine and there aren’t any visible risks presents.

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An more in-depth explanation is provided in the attached swotEx-

ample.xls file – it contains an example table that is pre-filled with data and

the workings of this model can best be grasped from it.

2.2.3 The SWOT analysis of the company

This chapter will provide a SWOT analysis of the company, as it will be

necessary for determining the need for and impact of each cloud based

technology.

As mentioned earlier, the analysis will be done according to the

methods mentioned in eshopkniha.cz (7) (the publication is a paid digital

download only and has not been released as a book, therefore it has no

ISBN number nor a paper form).

A finished SWOT analysis xls file will be provided at the end of the

chapter that will contain the finalized analysis with all the relevant data.

2.2.3.1 Strengths

Each company must have at least a single strength to be able to survive

on the market.

In the case of PV, these strength are its own physical store with a

warehouse, a good company name, a long existence on the market and

personal contacts with most of the stamp makers.

2.2.3.1.1 Own physical store with a warehouse

PV has a physical store from the year 1992. The store also has it’s own small warehouse for storing stamps. The physical store cannot be outsourced, but a part of the ware-house could be outsourced to an external warehouse that can distribute products worldwide. Such warehouses exist and most of them provide a software module that can be used for connecting an e-commerce solution with the warehouse for better order management. A few such warehouse and ecommerce solutions will be analyzed in the next chapters.

2.2.3.1.2 Good company name

PV is present on the market for a long time and it therefore managed to gain a lot of customer recognition and a good company name. In terms of cloud based solutions, this attribute is relayed in the form of several company records in free and commercial Slovak company databases.

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It also means that PV has more than 20 years of records of com-munication with other companies which means that there are several communications channels that are and can be used to get more revenue.

2.2.3.1.2 A long existence on the market

As mentioned in the previous chapter, PV has a good company name and one of the reasons is that it is a solid company that has survived until now. As it has been mentioned before, this point will not be analyzed more.

2.2.3.1.4 Personal contacts with stamp makers

There were many stamp makers when PV was founded and some of them are still active on the market. PV can therefore use these contacts to scan the market for opportunities or gain new stamp making knowledge. It may also help in getting better deals from distributors and there-fore provide a competitive edge to the company.

2.2.3.1.5 Experienced team

More than half of its employees are in the company for more than ten years. These employees have good experience about the stamp market and are therefore a great asset to the company. They can not be directly influenced by cloud based technologies but improving the existing tools that are currently in use can help these experienced employees work more efficiently, which will have an impact on the company revenue (1).

More thought to existing cloud based solutions that can benefit the employees will be given in the following chapters.

2.2.3.2 Weaknesses

The weaknesses are critical problems that PV has to solve in the short

term to remain competitive.

The main weaknesses are the weak e-commerce that the company

is using, the lack of customer feedback management, the accessibility of

email from the cloud, webpage accessibility and the use of old hardware

and software.

2.2.3.2.1 Weak e-commerce

As mentioned in the previous chapters, PV is currently using Prestashop

as its e-commerce platform.

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Prestashop in configured and installed in its default settings and

the solution works – a customer can finish an order by using the system

but the conversion rates5 of the store are low and PV is therefore not us-

ing the full potential of the market.

This is one of the key problems of the company and this specific

weakness will be analyzed in more detail after alternative cloud based

technological solutions are mentioned in the following chapters.

This weakness must be solved, as it is the key blocker for the fu-

ture growth of the company.

2.2.3.2.2 No customer feedback management

Collecting customer feedback is important – without it problems can not be

discovered and solved in a timely manner. These problems will then re-

main and hinder the growth of the company.

PV is currently not using any automatic cloud-based system that

allows customers to provide feedback. This is a significant problem as

there is no way for the employees to troubleshoot problems.

And even if an employee gets customer feedback by another

channel such as an email or phone, the knowledge is not stored anywhere

expect for the employees head.

This means that the owner of the company may not get the cus-

tomer feedback or the knowledge may be lost if the employee leaves the

company.

There also isn’t a way to measure or promote customer satisfac-

tion, which means the company may have significant problems but does

not know about them.

There are simple cloud-based solutions available that can help in

solving this problem and the company is currently in the process of im-

plementing them.

These solutions will have their own chapter in which their analysis

and implementation will be described.

2.2.3.2.3 Email accessible only locally

Email communication is being handled by downloading all email locally to Outlook. This is not an optimal solution as all of the sensitive data is located locally and in case of computer fault the data may be lost. There is a backup available but restoring full functionality will take time, and this de-lay may influence the business operation and may even lead to a loss of revenue.

5 The number of visitors that become paying customers

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There is also the problem of accessing the emails from outside of the company – email can not currently be read from any other work-stations than those inside of the company. If a critical email is received during a longer holiday, it may remain unnoticed for several days. There is a solution that is currently being implemented and the cloud based technology that the solution uses will be analyzed in the next chapters.

2.2.3.2.4 Webpages not accessible from local network

The current company website is not accessible from inside the company network. The server that the website is stored on is in the local network and the configuration of the DNS server does not enable any other local com-puters access to the server via a domain name. The website can only be accessed by using an IP address. PV is in the process of migrating it’s hosting to another provider and this problem is expected to be solved after this work is published. The reasons, analysis and explanation for the selection of a new hosting provider will be mentioned in it’s own chapter.

2.2.3.2.5 Old hardware and software

The company is using older hardware that mostly runs Windows XP oper-ating systems. The reason for this is hardware compatibility and the cost and risks of upgrading - some hardware may cease to function properly. The solution for this is a sequential upgrade – computers will be upgraded one by one and any faults will be discovered and solved on the spot. The main laser engraving machine is dependent on Windows XP, as it is an older machine and no new drivers exist. This can be solved by ordering new hardware that is compatible – this was previously not a via-ble option as the cost was too high but the hardware has fallen in price significantly and the upgrade is now worth it financially.

2.2.3.3 Opportunities

Opportunities are the possibilities that can improve the business but can not be influenced by the company.

An example can be a sale from the distributor – PV can not influ-ence if the distributor temporary reduces the price but it if happens it will have a positive impact on the business.

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2.2.3.3.1 Lower price of shipping

This opportunity can benefit any business that sends their products via

mail.

It will however benefit all the companies that are present in the

market, and the benefit that it brings is therefore not significant.

2.2.3.3.2 A sale from the product distributor

Most business have this opportunity – when the distributor has a one time sale it can benefit the business by providing cheap products to sell to cus-tomers or to use as a price bait. There is little assistance that a cloud based technology can bring, this opportunity will therefore not be mentioned in the text any more.

2.2.3.4 Threats

There are three main threats that can negatively impact PV – a hardware failure, employee problems and a change in the costs in running the busi-ness.

2.2.3.4.1 Hardware failure

One of the biggest threats for PV is the hardware failure of one of its laser engraving machines. There are spares available but not all of the bugs have been fixed yet. In case of a failure the company will have problems with keeping up with the production. The problem can only be solved by communicating with the Chi-nese laser distributor and working out the bugs. Communications is prob-lematic, as the Chinese level of English is usually not the best for an effi-cient technical communication. There are cloud-based tools, however, that can help improve the communication and therefore help in solving this problem. These tools will be mentioned later in more detail in its own chap-ter.

2.2.3.4.2 Employee problems

A company is dependent on the well being of its employees. Problems might arise if an employee quits or leaves due to health problems. This problem can not be solved by any technological solution as they are mostly natural, and will therefore not be mentioned again.

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2.2.3.4.3 Change in the costs of running a business

Another threat that can not be averted by any technology is the rising costs of running a business, be it a change in law or an increase in the costs of renting a physical store. This threat will therefore not be men-tioned again.

2.2.3.5. The result

After theoretical consideration, every Strength, Weakness, Opportunity and Threat is written down and two numerical values are assigned to each one. The result is attached in the SWOT1.xls file. It is important to note that the summary of the weights in each of the four tables must be equal to 1. A positive rating is attached to every Strength and Opportunity and is in the range from 1 to 5, a higher number meaning a more valuable attrib-ute. A negative rating is attached to every Weakness and Threat and is from the range of -1 to -5, a lower number signifying a more problematic attribute. Each S,W,O,T has a summary, a number that defines how positive or problematic an attribute is for the business. The final, fifth, table lists the sum of external (Opportunities and Threats) and internal (Strengths and Weaknesses) summaries. This num-ber signifies how dependant a company is on variables that it can influ-ence (internal) and on those that it can not influence (external). These two values are then combined to return a single and final variable, a number that defines the risk the business is currently in. The higher the number is, the better is a business prepared to face problems. The summary of the current state of PV can be seen in the follow-ing table:

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Own physical store with a warehouse Lower price of shipping

Good company name A sale from the product distributor

Long existence on the market

Personal contacts with other stamp makers

Experienced team

Summary – strengthts 3,8 Summary - opportunities 3

Weak e-commerce Hardware failure

No customer feedback management Employee problems

Email accessible only locally Change in costs Webpages not accessible from local net-work

Old hardware and software

Summary – weaknesses -4,2 Summary - threats -4,6

Internal -0,4 External -1,6

Summary -2 . This table is a summary from the SWOT1.xls file.

The internal summary is negative (-0,4), which means that that PV is currently in a small risk from internal problems. Some of these problems can be solved changing some of the technologies that PV can use. The external summary is also negative (-1,6), but is four times as large as the internal value. This poses a large problem for PV and signifi-cant improvements have to be made for the company to be able to with-stand any of those problems. Due to the fact that both internal and external summaries are nega-tive, the overall summary is also negative (-2).

The number signifies the fact that there could be problems in the future if the issues are not solved. The next chapter will list technologies (some of2 them cloud-based and some not) that could help improve the results of this analysis and therefore better prepare PV for the future.

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3 The technologies

This chapter will list possible technologies that are currently available on

the global market and that can be used to benefit the business.

A cloud-based solution in this text is expected to provide access to

the data stored inside it from anywhere in the world. It does not matter if

it is working only in a web browser or client software is needed to be in-

stalled, only the data availability is important.

This chapter will be divided in the same manner the first part of

the fir chapter was. Cloud-based technologies that can benefit each part of

the business - content creation, marketing, employee communication and Ware-

house, economy and payments management will be mentioned and their price

and potential business impact will be analyzed.

3.1 Content creation

PV mainly uses CorelDraw, a vector graphics editor, to design stamps.

This software is only compatible with the Windows operating system and

is therefore not the optimal solution – if an employee wants to work from

home another software license must be bought.

Another issue is with data sharing – any CoreDraw file that is

saved on a home computer is only stored locally and must be imported

into an external data storage service for it to be accessible from a work

computer.

There are several solutions on the market that are aimed at cloud

data storage, the most significant being Dropbox. They will be compared

and an optimal solution for PV will be suggested.

3.1.1 Operating systems

There are three dominant operating systems available –Windows, MacOS

and Linux.

25

3.1.1.1 Windows

Windows is the most dominant operating system in the world (7) that is

maintained and distributed by Microsoft. As mentioned earlier, PV is us-

ing workstations that have Windows XP installed.

As the most dominant system, Windows provides a stable plat-

form that most applications can run on.

Most older hardware can only work with Windows XP as there are

no divers available for other platforms, so having at least a single work-

station running this operating system in the company is required.

All but one workstation can be upgraded to a newer version of the

operating system and this upgrade should not impact normal working

conditions.

The current hardware could not run efficiently with the newer ver-

sions however, as their hardware requirements are above the average

computer that is currently available at the company.

The software upgrade would therefore warrant a hardware up-

grade, which may end being a significant cost for the small company if

upgrade costs for IT specialists are included.

3.1.1.2 MacOS

MacOS is an operating system that is being developed by Apple.

The price of Apple hardware is above the average prices of com-

puters on the market. The higher price does not warrant the upgrade.

Even if the pricing was lower, there are still issues with compatibil-

ity.

The company gets most of its hardware from Chinese distributors

and the mandatory system is Windows. If the company would migrate to

MacOS and Apple computers there would be a high risk of some new

hardware not working properly on an unsupported system.

As it is currently problematic to gain reliable information from the

distributors (due to problematic communication) migrating to this operat-

ing system is not advised.

3.1.1.3 Linux

The third upgrade option is Linux, a free and open-source operating sys-

tem.

26

The system is technologically advanced but suffers from a frac-

tured community, problematic support and the same compatibility issues

that MacOS has with older laser engraving hardware.

As a new and relatively complex system to administer, the price of

support for the system would be higher than that of Windows, which is

more used and therefore more competition exists on the market for IT

specialists and the price is therefore lower.

The fractured community makes working with the system harder,

as there are several versions of the operating system available, each hav-

ing small differences that are usually insignificant for the user but make

troubleshooting problems harder as each distribution is configured differ-

ently – a solution that works for one distribution may end up breaking

another.

This makes the initial benefit of a lower price (Linux is free to

download and use) less significant, as the variable costs for upgrading the

system may end up costing more in the long term than buying Windows

or MacOS.

There is also the problem of a slightly different interface, which

also adds costs as the employees need to be trained in the proper use of

the system.

For a data server, however, this operating system is a good choice,

as its advanced technology can benefit the company.

PV is currently not using any Linux workstations but it is using

and unspecified number of Synology6 network attached storages that are

running a modified Linux to back up an synchronize data. The number of

servers will not be disclosed in this work as it may compromise data secu-

rity.

3.1.1.4 Recommendations

The current architecture of Windows workstations combined with several

Linux based data servers is currently an optimal and cost effective solu-

tion.

The Windows XP workstations should be replaced with newer

hardware that is running at least Windows 7, but the old computers

6 A company that is a dedicated Network Attached Storage Provider

27

should pre preserved in case of an emergency or the need to use older

hardware.

3.1.2 Vector editor

The company currently uses CorelDraw, a Windows only vector editor.

There are other options for vector editing software on the market –

Inkscape and Adobe Illustrator.

3.1.2.1 CorelDraw

CorelDraw is the vector editor that PV is currently using. It is designed to

work on the Windows operating system only.

This single platform is its main limitation. It can be run on other

operating systems using virtualization (8) but the effect is not optimal –

the software performs slower and printing may prove problematic.

The software is still one of the best on the market, as it is easy to

use, the software is not expensive and it is compatible with most laser en-

gravers.

Chinese distributors also provide specialized engraving modules

that integrate into CorelDraw.

These advantages make this software the optimal solutions, but

two other alternatives will be mentioned and the reasoning behind not

using them will be explained.

3.1.2.2 Adobe Illustrator

This software is similar to CorelDraw but it is available on two operating

systems – Windows and MacOS.

The software has similar functionality as CorelDraw, the main ben-

efit being Adobe Creative Cloud7. Using the cloud requires a monthly fee

per employee, which means the software is significantly more expensive

than CorelDraw.

The higher price does not currently bring any benefits to the busi-

ness, therefore PV will not use this software.

7 A subscription cloud-based services that allows access to Adobe software for a

monthly fee.

28

3.1.2.3 Inkscape

The third available option is to use open-source software which is free to

use.

The main benefit of this solution is seemingly the price, but the

costs if implementing and using this software would be higher than buy-

ing a commercial solution.

Inkscape has a problematic PDF export function – creating docu-

ments with printing marks is too complicated and the result is not always

usable.

There is also the problem of opening Inkscape vector files in other

software – the vectors don’t keep their positions and the graphics are

therefore damaged.

Repairing this damage manually requires human resources which

means this software wastes money and time.

Support is also problematic, there may exist a community that can

help solve problems but commercial support is usually faster.

Until the critical problems are fixed, using this software is not an

option for PV.

3.2 Marketing

The company uses telephone and email marketing. As telephone market-

ing is heavily dependent on human resources and technologies can not

currently solve this problem (there are not yet any sophisticated voice

emulators that can do telephone marketing that I am aware of) it will not

be analyzed in this work.

Neither will sms marketing be considered, as it is a form of spam

marketing and may end up damaging the name.

3.2.1 Word of mouth

Word of mouth ratings about a company can be extended to cloud-based

applications by gathering and promoting customer reviews.

If a company has an eshop it can combine it with Heureka.sk to get

and publish customer feedback.

A company can also use Nicereply.com to gain feedback on email

communication. This feedback can then be published on the company’s

website.

29

3.2.1.1 Heureka.sk

Heureka.sk is Slovak an e-commerce product and search aggregator that

also includes reviews of Slovak e-commerce websites.

It can be classified as word of mouth as any satisfied or unsatisfied

customer can post a review of the e-commerce website that he has just

used.

Heureka.sk can also be integrated directly in an eshop – 10 days

after a product is ordered and mail is sent to the customer which allows

him or her to review the eshop. This can be the source of cloud-based

word of mouth marketing, as the review is then publically available to all

potential customers.

The tool can also be used for pay-per-click marketing. The prod-

ucts list of an eshop can be imported into Heureka.sk. The cloud tool then

analyzes the products, categorizes them and allows searching through the

product stock of the store. Money can be added to a company’s Heure-

ka.sk store account, which is then used as credit and is subtracted each

time a customer is redirected to the store.

As each click costs 0.02 Euro in average, it is a cost effective option

of promoting a company while also helping get new customers and reve-

nue.

PV is already registered on Heureka.sk but as of writing this text

there are not enough reviews publicly available, therefore it is not yet a

good marketing channel. This will change as more reviews are added.

3.2.1.2 Nicereply

Nicereply is a customer satisfaction collection cloud-based tool. It can be

used to gather feedback from existing customers and then share it to pro-

mote the services of a company.

The cloud-based services is subscription based – there are three

different tiers – the cheapest costing 19 dollars per month. The pricing is

relatively high for a small company but as PV is also a customer of Web-

support 8 it gets the first tier for free.

PV is currently in the process of implementing Nicreply.

8 A Slovak web hosting provider

30

A simple Nicereply.com customer feedback form

3.2.1.3 Email

Email is still a valid marketing channel (9) for approaching existing cus-

tomers.

3.2.1.4 MailChimp

MailChimp is a cloud-based email marketing and customer engagement

tool.

The tool can be accessed from a web browser and can be used to

create every aspect of a marketing campaign.

The tool has its own email designer that can be used to create mar-

keting emails. A design can be either selected from a gallery of prepared

templates or a custom design can be created from the grounds up.

Every template available is optimized for mobile devices, tablets

and personal computers, therefore it is best to use an existing template.

31

MailChimp Tempate editor

MailChimp also provides tools for A/B testing9 (10).

Sending two sets of emails and measuring their conversion rate

allows a business to slowly improve their marketing campaign.

Mailchimp also provides case studies that provide research on

email marketing which should help with the reach of a campaign (11).

The main disadvantage of the cloud-based solution is its language

– it is currently not translated into the Slovak language which means that

the employees of PV can not use it, as they can not speak English.

This can, however, be solved by using the automatic translator in-

side Google Chrome to machine translate the tool.

The pricing of the tool is also affordable – it has a monthly sub-

scription model that starts at a free price for up to 12000 mails and 2000

subscribers per month.

MailChimp is a great solution for email marketing and PV should

thereof re start using this tool to improve its marketing.

9 A form of testing where two different versions of marketing email are sent to

two different groups of customers and their performance is measured and com-

pared.

32

3.2.1.5 Telephones

Telephone marketing does not scale well and can not gain much benefit

from any cloud based apps, it will therefore not be considered.

3.2.1.6 Facebook

Facebook can be used as another marketing channel. PV currently has a

fan page with a few followers. The page is used for posting pictures of

graphical designs and special sales.

Facebook could be used to promote the company and help gain

customer feedback.

3.3 Employee communication

Employees can use voice or written word to communicate. There are sev-

eral possibilities for communication, the ones PV is using now is Skype, a

gsm phone and email.

There is currently no efficient way to exchange data implemented

in PV, as files are usually shared using email.

The alternatives for sharing files are using Windows compatible

cloud-based data storage such as SkyDrive or Dropbox.

3.3.1 Gsm telephone / Skype

As PV is using a combination of a phone with unlimited calls and Skype,

and Skype is a cloud-based solution that currently suffices for the needs of

the company this aspect of the business will not be analyzed.

It is also interesting to note however that Skype is being also some-

times used for data sharing.

3.3.2 Email

The company is currently using Outlook for most email communication.

This solution is not optimal as email can not be accessed outside of work.

There are several cloud-based solutions available, such as migrat-

ing to Google Apps for Business or migrating to a different hosting com-

pany such as Websupport.

33

3.3.2.1 Google Apps for Business

This cloud-based service is provided by Google and is hosted on their

servers. The pricing of the services was changed two years ago – it used to

be free for up to 10 user accounts but now it is only available if a monthly

subscription of 5 dollars per user is paid.

The service also includes 30 GB of Google Drive storage including

access to their cloud-based office tools.

Choosing this service is a valid option for PV, as the interface of the

service, the ease of use and the extra benefits of cloud-based storage

would be a boon to the company.

There are, however, similar, solutions available on the Slovak mar-

ket that can provide comparable email hosting capabilities with the added

benefit of web hosting, which Google does not provide.

3.3.2.2 Websupport

Websupport is a company that provides web and email hosting. PV is cur-

rently moving its domain to this new hosting as part of improving cloud

access to email and its website.

Websupport provides an email cloud-based application that is us-

ing Roundcube10. This alternative may not have all the capabilities of

Google Apps for Business such as labels and dividing messages by type in

tabs, but it is a valid solution as it provides easy to use cloud access to

email.

The pricing of the service is 3 Euro per month, but the price also

includes 4 GB of web hosting. It also includes free access to the first sub-

scription tier of Nicereply.com that is worth 19 dollars.

This is the most cost efficient solution currently available, as PV

has access to a solid cloud-based email tool from a large Slovak company

for little monthly investment.

The support and technical assistance that the company provides

for its services is an improvement from the previous hosting company that

PV has used, as a reply is received in under an hour and problems are

solved swiftly.

10 An open-source web client for email

34

The replies are also more specific and a solution to a problem can

be achieved in a short amount of time as the support personnel has more

technical knowledge then the previous host.

PV currently migrated only a single domain to Websupport but

more domains will be migrated in the future as the business will grow.

3.3.3 Data sharing

Exchanging data inside a company can be regarded as part of employee

communication.

There are several options for data sharing available, but this chap-

ter will only analyze the two most dominant cloud-based solutions for the

Windows operating system – Dropbox 11 and SkyDrive12.

3.3.3.1 Dropbox

Dropbox is a cross-platform13 cloud-based data sharing service. It can be

used to store, back up and share stamp design files and other company

documents.

The Dropbox client software can be installed both on work and

home computers to keep the important project files accessible from both

places.

Dropbox can not be used for large backups however, as the free

version is limited up to 2 GB of storage (12). Each additional 100 GB cost

10 dollars per month which is too expensive, as PV has already invested

into NAS14 that can do large backups for a low variable cost.

PV is currently using Dropbox on some computers but it is mainly

used for small backups instead of sharing work files.

3.3.3.2 SkyDrive

SkyDrive is a similar cloud-based service as Dropbox, the main difference

being that it provides 7 GB in its free plan.

11 http://www.dropbox.co 12 http://skydrive.live.com 13 Can be installed on Windows, MacOS, Linux, Anroid, iPhone and Windows

phone 14 Network Attached Storage

35

SkyDrive is also installed on every Windows 7 operating system by

default as it is a service provided by Microsoft. An additional 100 GB of

storage cost 50 dollars per year (13), which is cheaper than Dropbox.

But as mentioned in the previous chapter, PV is using NAS to back

up large files, therefore the lower price or large free account is not a large

benefit.

3.3.3.3 Synology NAS

For large backups and data sharing, PV is using several Synology NAS

units.

Each unit serves as a network drive where all data is stored. This

data is synchronized to other physical locations during the night to pre-

vent any data loss that could cripple the company.

Synology is based on Linux and software upgrades are free, the

only investment into the system was its initial cost.

The storage can be attached to any operating system as a network

drive.

Each unit cost 350 Euro but this was a single fixed cost – when cal-

culating the long term variable costs the system is cheaper than Dropbox

or SkyDrive when storing large amounts of data.

3.4 Warehouse and accounting

Both the warehouse and accounting are being managed in Stormware

Pohoda.

One version that manages the warehouse and sales is installed in

the retail store while another copy is installed in the accounting depart-

ment.

There are several problems with this solution, the main being the

sharing of data which has to be achieved by physically copying and send-

ing the data on an external dive.

Another problem is with data access – accounting can only be

checked locally. This poses a problem when information is immediately

needed.

36

There is another competitor on the Slovak market – WinStrom

Flexibee15 that could solve these problems.

3.4.1 Pohoda

Both the warehouse and accounting are being managed in Stormware

Pohoda, a Slovak and Czech software.

It is officially compatible with Windows only, but can be used on

MacOS using virtualization (14).

The software was chosen by the company more than 10 years ago

because it was the dominant solution for accounting on the market and

therefore most accountants could work with the software.

But the software did not date well and currently is not using ad-

vanced technologies that would allow remove access to the software.

The benefits are that due to the fact that it is commonly used in

Slovakia, it can be connected with most e-commerce solutions.

Exchanging the software would require retraining or replacing the

accountant, which would prove problematic.

Migration to a different accounting software is therefore not viable.

3.4.2 Winstrom FlexiBee

This accounting software can be used locally or in a cloud. It is both

younger than Pohoda and more expensive.

The pricing of Winstrom FlexiBee is per company, meaning that if a

single company is divided into smaller ones the software becomes more

expensive than Pohoda.

It provides a better interface and is available on all platforms, oth-

erwise it performs exactly the same as Pohoda .

When calculating the costs of retraining the accountant and the

higher price of software, the upgrade currently does not make financial

sense for PV.

3.5 Sales

Sales are the area that could benefit the most from a cloud-based solution

as the company currently mostly sells its products by a physical store on-

ly.

15 http://www.flexibee.eu/

37

3.5.1 Retail stores

Cloud-based technologies cannot directly affect the sales of a retail store,

and indirect effects such as marketing have already been mentioned.

3.5.2 E-commerce

As mentioned earlier, PV is using Prestashop 16as its e-commerce solution.

The eshop is not performing as well as it should and an alternative solu-

tion is to use a subscription cloud-based service called ShopTet17.

3.5.2.1 Prestashop

PV is using this open-source eshop for over 2 years but the sales are not

comparable to the sales of the physical store.

Prestashop is an open-source eshop that is freely available for

download. Unofficial support for it can be gained free of charge from the

official forums.

The eshop can be extended by adding modules, which are availa-

ble for free or can be bought.

Prestashop natively supports multiple language, which means that

PV can easily extend its services abroad.

Prestashop may initially seem as a cheap solution, but selecting

this solution can limit future growth as the costs for upgrading and servic-

ing the system raise in time and it may end up being more expensive as

custom made solution (15).

The price of commercial extensions for the system varies between

ten to a few hundred Euro, therefore creating a highly customized eshop

will be expensive.

The system is also not optimized for the Slovak market as it does

not include modules that can connect to Heureka.sk – PV had to buy the

module from a Czech company. PV also had to buy a module for 100 Euro

that would allow customers to attach files (stamp designs and logos) to

their orders. Prestashop had this functionality by default but it was se-

verely limited as it did not allow uploading pdf and cdr files.

16 http://www.prestashop.com/ 17 http://www.shoptet.sk/

38

Prestahop is also hard to upgrade after advanced modifications to

the store, as all changes to the core will be overwritten after an upgrade.

This is especially problematic when a store is using Prestashop for

a longer amount of time as PV is. It would be beneficial to upgrade the

store that PV is using but too many core modifications have been made

and the upgrade would be too expensive if an expert would be hired to

make the upgrade.

Prestashop was chosen by PV for its low price and extensibility.

Overall, it was the right solution that PV chose Prestashop two

years ago but the solution has not scaled well and looking back, a sub-

scription based eshop would have been a better choice.

3.5.2.2 ShopTet

ShopTet is a subscription based Czech e-commerce cloud-based service.

PV could order this eshop for 9 Euro per month and get most of the fea-

tures that Prestashop provides.

The problem is with customer file uploads – ShopTet currently

does not allow attachments to be added to orders. This could be imple-

mented as Shoptet has replied that it could implement this feature. The

final price would be more expensive than the module that was bought for

Prestashop but in the long term, the solution would be cheaper than

Prestashop.

PV can also benefit from the fact that ShopTet is a Czech and Slo-

vak solution, as it is integrated into the market and provides modules

such as Heureka.sk integration for the 9 Euro per month fee. The fee also

includes hosting for the store.

ShopTet can be easily expanded – an additional module can be

either bought directly for a higher price or a monthly subscription of the

module can be ordered.

This is a significant benefit over Prestashop – the upgrades are

seamless and cheaper to implement. PV would also have the benefit of

commercial customer support that ShopTet provides for all of its custom-

ers.

Another option is to buy a higher subscription tier – each tier adds

additional modules and expands the number of products that a customer

can display on the eshop.

The highest subscription tier costs 39 Euro per month and includes

all of the 42 modules and up to 20 000 products displayed.

39

Overall, PV should either switch to ShopTet or use a secondary

domain and try to also sell stamps using both systems. After a year of test-

ing PV should decide which solution is the best for the company and dis-

able the other one.

3.5.2.3 Custom e-commerce solution

Buying a custom made to fit solution is not currently a cost efficient op-

tion as the previous two alternatives are significantly cheaper to imple-

ment and should suffice the needs of PV until it grows more.

3.6 Chapter summary

This chapter provided examples of technologies, some of them cloud-

based, that can be used to solve some of the critical problems that were

discovered in the SWOT analysis. There are many other services available

but only the most important options were mentioned, as too many ser-

vices would complicate the solution.

40

4 Predicted SWOT analysis after changes

A new SWOT analysis will be calculated that takes into account the im-

plementation of some of the technologies that were mentioned in the pre-

vious chapter.

A new SWOT summary will be provided at the end of the chapter.

4.1 Internal

The internal attributes can be improved by implementing Nicere-

ply.com, changing the e-commerce software and fully migrating to a

new web hosting provider.

Upgrading vector graphics software is not suggested, as

CorelDraw performs sufficiently and combining it with Dropbox

should provide cloud access to the files that the company is current-

ly working on.

4.1.1 Strengths

The strengths of PV are considerable and little improvement can be

achieved by using cloud-based solutions. PV should start getting

new orders by utilizing MailChimp for sending new offers and add-

ing new products to their store so that they can be found on Heure-

ka.sk

4.1.1.1 Own physical store with a warehouse

None of the cloud-based technologies mentioned can strengthen the

physical store directly. An exchange of accounting software could

improve the management of orders but the current software is suffi-

cient.

Cloud access to the warehouse can be achieved by storing all

of the Pohoda accounting files on Dropbox, thou a license on all the

machines wanting to access the data would still be needed.

41

4.1.1.2 Good company name

Improving the company name further is difficult, as PV is well

known. More marketing done using MailChimp or Facebook could

help gain more revenue. Heureka.sk will also benefit the company

in the long run.

4.1.1.3 Long existence on the market

No technology can help improve this point.

4.1.1.4 Personal contacts with other stamp makers

This point can also not be improved by cloud-based technologies.

4.1.1.5 Experienced team

Improving communication inside the company can be achieved by

adding Dropbox file sharing to every workstation.

Adding an option to rate every email that is sent from PV in

Nicereply should provide enough feedback to help further increase

the experience of the employees.

4.1.2 Weaknesses

Most of the weakness mentioned in the previous analysis can be

solved by fully migrating to Websupport. The accessibility of the

eshop would allow employees to better manage and optimize the

store.

Switching to ShopTet would also help in some areas, alt-

hough some functionality currently available may be lost.

4.1.2.1 Weak e-commerce

Prestashop is currently working but is not a viable solution in the

long run. The eshop should be modified with additional commercial

modules while also negotiating with ShopTet to implement file up-

loads to orders.

After ShopTet implements the feature, migrating to this

cloud-based service is possible.

42

4.1.2.2 No customer feedback management

Nicereply has to be integrated into PV and every email sent must

use this service.

4.1.2.3 Email accessible only locally

Fully migrating mail servers to Websupport is needed. This should

remove the problem altogether from the list of weaknesses.

4.1.2.4 Webpages not accessible from local network

Hosting also has to be migrated to Websupport, which will solve

this problem and remove it from the list of weaknesses.

4.1.2.5 Old hardware and software

This weakness can be achieved by buying additional hardware. Mi-

grating to different stamp design software would worsen the prob-

lem, therefore it is not advised.

4.2 External

Cloud-based solutions can only marginally improve the risks and

impact of external problems, as most problems are not technology

based.

4.2.1 Opportunities and threats

Both opportunities and threats mentioned in the SWOT analysis can not

be improved any further by any cloud-based software.

4.3 Resulting SWOT analysis

43

The prediction of the state of PV after implementing the changes can be

seen in the attached file SWOT2.xls.

Own physical store with a warehouse Lower price of shipping

Good company name A sale from the product distributor

Long existence on the market

Personal contacts with other stamp makers

Experienced team

Summary – strengths 4 Summary - opportunities 3

Weak e-commerce Hardware failure

No customer feedback management Employee problems

Change in costs

Old hardware and software

Summary - weaknesses -2,05 Summary - threats -4,6

Internal 1,95 External -1,6

Summary 0,35

The resulting SWOT analysis shows an improvement, as the risk

the company was before the potential change was rated at -2 but after the

company implements the changes the risk would be rated at 0.35.

This result proves that cloud-based technologies can have a signifi-

cant impact on the company and the company should implement them at

least in the scale mentioned in this analysis.

44

5 Conclusion

The main point of this work was describing a real retail company, analyz-

ing its strengths and weakness using the SWOT method and describing

possible technologies that could help improve the results gained from it.

As the second SWOT analysis shows, a small part of the problems

this company faces can be solved by cloud-based solutions, but there are

many more that are outside the reach of technology.

PV will have to deal with these issues individually and can there-

fore not fully depend only on advanced technology in its stamp making

business.

I think that the company can greatly improve its standing on the

market for little investment by changing the hosting provider and by cre-

ating a secondary eshop using ShopTet.

These changes should provide enough revenue that can then be

invested into buying a more advanced e-commerce solution that could

give PV and edge on the market.

45

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Attachments

SWOT1.xls – the file contains the initial SWOT analysis of the company

before any technological changes are taken into account

SWOT2.xls – the file contains the second SWOT analysis which is calculat-

ed after implementing the described changes to the company