Hello,

Please refer to the attached document, its an assignment question consisting five question. You just have to do question 7.0,Section 1 ? To be completed by the ?Chief Executive Officer? of the IT Governance Team perspective.

Just answer it from CEO perspective using the case study and general knowledge.

please include referencing wherever possible.

Thanks

AF 302 SEMESTER 1 - 2017 MAJOR ASSIGNMENT - GROUP PROJECT (15%) (Due Friday 28th April, 3.30pm in Week 12) (Submit to School of Accounting Office-Note that Office closes by 4pm) Case Study-A Practical Approach to Information Communications Technology IT Governance Committee: Assume that you are part of the highly qualified IT Governance Committee employed by one of the US's largest pizza company named as 'Mama's Pizzeria' a pizza company which is internationally recognized and one of the delicious pizza company globally. Your IT Governance team comprises of 5 members who are as follows: IT Governance team Member 1 Chief Executive Officer (CEO) Member 2 Chief Financial Officer (CFO) Member 3 Chief Marketing Officer(CMO) Member 4 Chief Information Officer(CIO) Member 5 Chief Technology Officer CTO) Your IT Governance Committee is in-charge of governing the overall development and operation of IT/IS systems and has several important responsibilities such as: Aligning IT investments to business strategy. Investing funds and resources in the most beneficial IT systems will enhance the long-range goal of achieving the business strategy. Budgeting funds and personnel for the most effective use of the IT systems. Overseeing and prioritizing changes to IT systems. Within organizations, many user groups will concurrently request improvements or changes to their subsystem within the IT system and prioritizing these requests according to the best match to the business strategy and the feasibility of designing, developing and implementing the necessary changes. Developing, monitoring and reviewing all IT operational policies. The organization will maintain policies and descriptions of procedures for operating and developing its IT systems. Developing, monitoring and reviewing security policies. The organization will maintain policies and descriptions of procedures related to security. Establishing systems development process that controls the initiation, approval, development and maintenance of those changes. This process called the systems development life cycle (SDLC) can be generally described as the systematic steps undertaken to plan, prioritize, authorize, oversee, test and implement large-scale changes to the IT system. 1 Your IT Governance Team comprising of the above members' and positions' has been engaged to carry out its duties as per the requirements in the sections hereafter. 1.0 Introduction On the morning of October 31st, Peter Greyton, Chief Information Officer at Mama's Pizzeria, was waiting for both Jim Saxton, database administrator, and Elaine Black, operations manager, to come to his office for a meeting. While waiting, Peter was thinking about the surge of telephone and Internet orders expected to be received through the company's customer order centre within the next 12 hours. Halloween had always been the most popular day of the year for people in the greater Pittsburgh area to order pizza from Mama's Pizzeria. There were 49 restaurant locations to serve these customers, but only one location to receive all of the orders and forward them to the right restaurant. Peter's thoughts were interrupted as Jim and Elaine entered his office. The following conversation took place: PETER: JIM: ELAINE: PETER: JIM: PETER: ELAINE: Well, guys, it's here again, our biggest day of the year. Not only is Halloween a busy day, but we have the upcoming day after Thanksgiving, the week before Christmas, and Super Bowl Sunday. Can our current computer system's infrastructure and people keep pace with the orders we expect? I think our systems are all running at peak performance. We shouldn't have any computer concerns for today or those other busy days. Everyone in the customer order centre is focused on making sure that our customers get their pizzas as ordered. We have plenty of people scheduled to work tonight, so we're good to go. Terrific. But every time we face one of these peak sales days, I start wondering about the long-term capacity and effectiveness of our computer systems. Jim, we need to think long term about our computer system. I was just reading an article that I'd like you to take a look at. It's about Anheuser-Busch Companies and their use of data mining. I do agree with you, Pete; we should always be thinking about how newer IT systems can help us. Could you email me the link to the article? Sure, and I would like you to think about how we might use the same approach in our business. Elaine, your order centre people are doing a great job, but again there's something I'd like us to think about in the long run. As you know, we now have to manually enter all customer order centre sales and store sales into our general ledger (GL). I think we could improve a lot of things if those sales fed automatically into our GL software. Why don't you think about any advantages you see for an automatic interface, and we'll look at the costs compared to those advantages. How's that sound? I'll do that. I'll give it some thought and work on a report about an automatic interface between our GL software and the point of sale systems in our restaurants as well as the phone and Internet sales. How soon do you want to meet again to look at these issues? 2 PETER: Let's say in 2 weeks at the same time. As Jim and Elaine left his office, Peter continued to think about the features of the company's accounting information systems and whether or not data extracted from these systems could facilitate the multiple needs of the company. The focus had always been on providing accurate financial accounting information from the various locations; however, the company's aggressive growth strategies meant increased emphasis on the system's ability to analyze detailed customer information that could be translated into increased sales opportunities. Peter knew the challenges they faced could very well affect the company's ability to maintain its competitive advantage. He realized that his department must continually improve the company's information systems to help it achieve growth strategies. Operating state-of-the-art systems was imperative to position the company to execute those growth plans. However, he was concerned about the possibility that restrictions of the current information systems could actually prevent the company from doing what it wanted to do. Allowing restrictive systems to prevent them from achieving business strategies was a risk that Peter would not tolerate! 2.0 Background Mama's Pizzeria is a great American success story. Started by Dino in the 1960s, the business impetus was a family pizza recipe. Introduced to the public at a church festival in Pittsburgh's Little Italy, Mama's Pizzeria pizzas are now a recognized tradition in the Greater Pittsburgh area. A full menu and local expansion have led to its growing popularity over the years and have helped it achieve nearly 50% of the area market share. Annual sales now exceed $100 million. Following is a timeline of milestones in the company's history: 1962 Dino and Gloria contributed $500 and the family pizza recipe to a partnership that opened the first Mama's Pizzeria. 1965 The Mama's Pizzeria bought out their business partners. 1967 The first Mama's Pizzeria franchise opened. 1971-77 Dozens of new Mama's Pizzeria franchises opened throughout the surrounding region. 1983 Home delivery service began 1992 A central, one-number calling system for all restaurants was launched. 2003 Internet ordering began. The first \"prototype pizzeria\" opened. Today A total of 49 locations are in operation. The company has been known for its ability to get ahead of national trends. For instance, in the early 1980s, Mama's Pizzeria began offering delivery service; however, while the competitors were merely delivering pizzas, Mama's Pizzeria delivered many additional items from its extensive menu. The company was also on the cutting edge when it launched its one-number telephone ordering system whereby a single telephone number 3 was used to service sales orders for the entire region. Additional conveniences became available about ten years later when Mama's Pizzeria introduced online ordering. Recently, it has expanded its menu offerings and opened prototypes restaurants specially designed with new features (such as a full-service bar and a retail counter) that appeal to various customer groups. Each of these advancements has propelled Mama's Pizzeria growth over the past four decades. Dino's name is also well known for its tradition of supporting neighborhood organizations. Mama's Pizzeria promotes schools, amateur athletics and other community groups. Interestingly, some local student athletes were a tremendous help to Mama's Pizzeria in 1971 when the business was in trouble. A fire had destroyed much of the building containing Mama's Pizzeria original pizzeria and commissary. The commissary made menu ingredients for all of the Mama's Pizzerias, so the entire business was in jeopardy when this facility became inoperable. Area students and coaches helped with the clean-up and rebuilding efforts that made it possible for the facility to be reopened in a fraction of the anticipated time. Dino thanked them by establishing a hall of fame that has become a fixture of Greater Pittsburgh high school athletics. Mama's Pizzeria reputation for great Italian food and innovations in both customer service and community service have contributed to the company's ability to grow into the most popular pizzeria in the Greater Pittsburgh region. Mama's Pizzeria sales include an average of 110,000 pizzas per week. It has managed to stay ahead of the national competitors, which is an unusual feat. In fact, many people in and around Pittsburgh believe that pizza can only be Mama's Pizzeria! 3.0 Multiple Systems, Multiple Functions, Multiple Uses of Information There are three ways to place an order at Mama's Pizzeria: in-store, via telephone, or online. In-store orders In-store orders are taken by restaurant staff serving patrons dining in one of Mama's Pizzeria restaurant or walking in to place an order. Servers manually complete an order ticket at the tableside and input the information into the company's point of sales system through computer terminals located in the food preparation stations. Walk-in orders are typically entered directly into the system by staff using the computer terminal located at the counter. Telephone orders Approximately two-thirds of the company's business is processed via the telephone. Mama's Pizzeria phone ordering system is called a one-number system, referring to the convenience of ordering through a single phone number, regardless of the restaurant location nearest the customer 4 Most phone orders are received by an operator, who enters the order directly into a computer terminal while speaking with the customer. Customer phone numbers are used to present the customer with his or her choice of the nearest pizzeria for preparation and carry-out or delivery. The software in the system references a street database to verify that the street address exists. Credit card numbers are obtained from customers paying by credit card. The customer service representative verifies the order and credit card number before ending the call. Upon confirmation of an order, the order is sent directly to the restaurant, where it is processed through the company's transaction processing system and printed at the appropriate food preparation station(s). Credit card numbers are included in the transmission, and all credit card transactions are processed at the restaurants at the time the order is received. There are several advantages of handling phone orders through a customer order center rather than at an individual restaurant location. Above all, the reduction in background noise improves the accuracy of the order-taking process. In addition, the customer's wait time is greatly reduced. Before Mama's Pizzeria implemented its one-number system, customers' wait time at peak could be up to 15 minutes. The order center's average wait time goal is now one minute or less. Internet orders To place an online order, a customer must be registered. Registration is a simple process that can occur anytime during business hours. Customers are asked to provide identifying information that will be retained in the system. Repeat customers will not have to go through the registration process again. Web-based ordering is tied to the company's one-number system. When a customer enters an order online, customer information is pulled from the one-number system. Identifying data such as phone number and address does not have to be entered. Menu offerings are presented on the screen in various drop-down boxes so that any combination of items can be ordered with many different choices of toppings or accompaniments. A customer must answer a series of questions regarding the order, similar to the questions that would be asked if the customer had been speaking with an operator. Online orders also require confirmation of the menu items and restaurant location before the call is ended. Credit card information may be entered online and the transaction will be processed at the restaurant filling the order (as is done for telephone orders). Two firewalls protect the security of customer information submitted online. Customer Service Up to 135 customer service representatives may be on hand at the customer order center to process orders coming in to the business at peak. In addition, Mama's Pizzeria employs 5 approximately 10 home-based agents to handle incoming orders. Home-based agents may perform any of the customer service functions from a computer terminal located within their homes. All operators are required to undergo a one-week training program before they begin serving customers. After the training program, operators are subject to one week of supervised on-the-job training, followed by ongoing performance evaluations. Supervisors at the customer order center perform order scanning, whereby orders are randomly reviewed for reasonableness. Order scanning is performed more frequently for orders taken by new operators. Supervisors also follow up on errors and customer complaints, and may listen in on calls to review the operator's performance. If customers are in need of customer service, they may call or e-mail the company. Supervisors handle these types of calls and e-mail messages, and will respond either via telephone or reply email. Restaurant managers can also print customer complaints at their respective locations. Accounting Functions Mama's Pizzeria ordering systems and transaction processing systems are the source of all sales information sent to the accounting department. Restaurant managers prepare daily sales summaries and submit them to the company's administrative offices on the following day. These summaries are transmitted electronically via the intranet and are received in the accounting department. Accounting staff prepare general ledger entries based upon these sales summaries and key the information into the company's accounting software. The transaction processing system provides sales by restaurant for call-in and Internet orders, which are reconciled to the restaurant summaries on a daily basis. Once the accounting system is updated and the daily reconciliations are performed, the data is stored in an on-site server. Although there is a lot of information to manage, coming from many different locations, and the capacity of the system is nearly 25 times its current load. Information Technology The information technology staff at Mama's Pizzeria is continuously engaged in system maintenance activities. Because the business changes so frequently, systems maintenance is an ongoing process. Every time a new coupon is offered, a price is changed, or a new menu item becomes available, the related information must be integrated into the transaction processing system. Each menu addition has its own level of complexity, and many of the items include options to customize to individual tastes in a plethora of combinations. This poses a challenge in ordering; however, the menu presentation continues to be improved to eliminate chances of an incomplete or incorrect order. The options are available online and to customer service representatives via drop-down boxes on their computer screens. Most screens require an entry, even if it is \"none,\" in order to ensure that no part of the order is forgotten. 6 4.0 Instructions for Students: This is a group assignment on a practical approach to Information Communications Technology and you need to complete this task as a member of the IT Governance Committee and as a team generally. This assignment is based on 'a practical approach to information communications technology' for the company 'Mama's Pizzeria (USA) Limited'. This company is the parent body and has been in operation since 1962. This assignment is produced for helping 300-level information systems students of the USP in broadening their understanding of applying the basic information systems and information technology principles, procedures, concepts and techniques in a practical situation in an ever-challenging digital environment. You need to discuss this case study with your fellow IT Governance team members and make an individual effort to complete this assignment and then you need to submit this assignment as a team. 5.0 Requirements for Students: Mama's Pizzeria, your employer is seeking your assistance in governing the overall development and operation of information systems and information technology of the company which is operating globally in different locations. There are 5 sections in this case study. The requirements of each member of the IT Governance team are provided specifically in each section of the case study. You need to individually complete your section ONLY and submit to the IT Governance team, which will then collate and combine all the tasks performed by each member of the team and present in a report form. Each case in each section needs to be considered independently. There will be only 1 part for your assignment: 1. 1. Written Report Submission 15 % Total weighting towards coursework 15 % Written Report Submission in Week 12 (15%): For written report submission, each group needs to submit ONE assignment in a report format, typed using Microsoft 12-point time's new roman font. All reports must be typed and binded. Hand-written reports will not be accepted. The report will be due in the week 12. You need to submit the written report to the School of Accounting secretary in Week 12. Late submissions will incur a penalty of 10% marks off each day late from their total marks. No reasons or excuses will be accepted for late submissions. Each member of the Governance team needs to complete his/her section as required and submit to the Group for compilation and binding. Each section will have an equal weighting and each member will be given an equal mark allocated to the overall report. This means that all the members will be entitled to receive EQUAL marks irrespective of their positions or requirements from the assignment. However, if a team member fails to co-operate with 7 the group then the remaining group members' marks will be scaled-up to meet the total of 15%. This will only be done when a particular group member fails to complete his/her assigned task and fails to submit his/her section in the overall report with the other members. In any case, if a group member fails to submit his/her share then he/she will automatically get a mark of 'zero' for his/her assignment while the other members will still get their share of work. The mark allocation for the written submission will be as follows: Chief Executive Officers' Section Chief Financial Officers' Section Chief Marketing Officers' Section Chief Information Officers' Section Chief Technology Officers' Section Total marks for the content of the report Format & Presentation Content & Preciseness Clarity & Completeness Illustrations & Models Bibliography & References Total marks for Written submission 2% 2% 2% 2% 2% 10 % 1 % 1 % 1 % 1 % 1 % 15 % Note: This is one of the major course assessments for your coursework and final grades in this AF302 Information Systems course. This assignment is compulsory and failure to meet all these requirements will affect your performance and weighting towards the 15% marks in your course assessment. This will result in the course lecturers' discretion for your final marks and grades in this AF302 course. 6.0 Format of the Report: Your solutions should be in a report form, which needs to be arranged in the following format and order: Title page including members' details Table of contents Solutions for Member 1 Solutions for Member 2 Solutions for Member 3 Solutions for Member 4 Solutions for Member 5 Bibliography & References 8 7.0 Questions: Section 1 - To be completed by the 'Chief Executive Officer' of the IT Governance Team You are the Chief Executive Officer of Mama's Pizzeria involved as part of the IT Governance team to provide your opinion and solutions for the following questions: Required: 1. After reading the Mama's Pizzeria case information, list and briefly describe each business process included in the case description. 2. Think about, list, and briefly describe other business processes that probably occur at Mama's Pizzeria. The following additional information is provided: Notice that only a couple of years prior to the case time frame, you as part of the management of Mama's Pizzeria had begun an Internet order system. As you considered the advantages of the Internet order system, you should also have considered the inherent risks of conducting business via the Internet. 3. Describe the new risks of Internet orders that you as part of Mama's Pizzeria management should have considered. The risks you describe should be specific to the Internet order system. 4. Describe internal controls that Mama's Pizzeria should have implemented to lessen the risks you identify in part 3. 5. From the facts of the case, identify Mama's internal and external stakeholders. 6. Other than by its product offerings (pizza, etc,) identify any ways that Mama's pizzeria influences its business community. Imagine that you have been approached by the external auditors to perform a financial statements audit for Mama's Pizzeria. This is the first time the company has had an external audit. 7. What steps would your firm go through in the planning phase for this initial audit engagement? 8. What computer-assisted audit techniques could you use in conducting this audit? Use details from the case to explain why you believe these techniques would be appropriate for Mama's Pizzeria. 9 Section 2 - To be completed by the 'Chief Financial Officer' of the IT Governance Team You are the Chief Financial Officer of Mama's Pizzeria involved as part of the IT Governance team to provide your opinion and solutions for the following questions: Consider the following issues that relate to Mama's Pizzeria payroll and fixed assets systems, then answer the questions pertaining to these expenditures processes. As mentioned in the opening part of the Mama's Pizzeria case, there are now 49 locations throughout the greater Pittsburgh area. Each one of those restaurant locations employs a full-time store manager and varying numbers of kitchen staff, servers, and delivery staff. The kitchen staff, servers, and delivery staff vary between full-time and part-time status. There tend to be high rates of turnover, especially among the part-time staff. Mama's Pizzeria pays its employees on a weekly basis each Friday for the week ending on the previous Saturday. Employee paychecks include withholdings for federal taxes as well as state and local taxes applicable for the employee's residence. Employees may live in one of the three states and over twenty-five municipalities that are included in the greater Pittsburgh regional area. All payroll accounting is handled by Mama's Pizzeria at its home office. Each restaurant must also maintain various fixed assets in order to operate. Following is a general list of fixed assets for each store: Furniture and store fixtures, including tables, chairs, and built-in items such as shelving, counters, and booths. Kitchen equipment, such as refrigerators, stoves, ovens, and dishwashing machines Computers Note that the number of each of these fixed assets maintained at each location varies, depending upon the size of the store. Also note that each member of the delivery staff uses his or her personal automobile (rather than a company-owned car) for customer deliveries. In addition, the home office maintains the following types of fixed assets: Land and the office building Office furniture and fixtures Computers and other office equipment Telephone systems Finally, fixed assets maintained at the commissary include the following: Fixtures, such as built-in cabinets and shelving Kitchen equipment Computers Delivery trucks 10 All fixed asset accounting is handled by Mama's Pizzeria at its home office. Required: 1. Describe how you believe an efficient and effective payroll system should be organized at Mama's Pizzeria. Include details on: a) What types of payroll documentation should be prepared at the restaurant locations? b) How will the necessary information for payroll flow between restaurants and the home office? c) How could IT systems be used in the payroll processes? 2. How could Mama's Pizzeria prevent the occurrence of a ghost employee at one of its restaurant locations? 3. From a cost-benefit perspective, what risks factors exist in Mama's Pizzeria payroll processes that make it worthwhile to implement thorough internal controls? Describe the related internal control that could help detect or prevent each risk. 4. If Mama's Pizzeria wished to reduce the payroll risks you identified previously, it could consider outsourcing much of the payroll processing. (ADP is an example of a payroll processing company.) Search the website of a payroll processing firm to determine the benefits to Mama's Pizzeria of outsourcing a substantial portion of its payroll processing. Describe these benefits, the risks avoided by outsourcing and the risks still borne by Mama's Pizzeria after outsourcing. Also, describe the payroll record keeping functions that Mama's Pizzeria must still maintain even if it outsources a substantial portion of its payroll processing. 5. Describe how you believe an efficient and effective system of fixed assets accounting should be organized at Mama's Pizzeria. Be sure to include the following issues in your response: a) How should the fixed assets accounting department maintain control over fixed assets in the various restaurant locations? b) How should IT systems be used in the fixed assets process? 6. Considering the nature of the relationship between Mama's Pizzeria home office and its franchise owners, the company may be quite vulnerable to theft or fraudulent financial reporting committed by these franchise owners. Describe the 3 components of the fraud triangle and how each would relate to a franchise owner's likelihood to defraud Mama's Pizzeria. 7. Identify 3 types of fraud to which Mama's Pizzeria may be susceptible. For each of your three responses, indicate whether the fraud is classified as management fraud, employee fraud, vendor fraud, customer fraud, or computer fraud. In addition, for 11 each of your three responses, suggest an internal control that could be implemented to prevent or detect the potential fraud. Section 3 - To be completed by the 'Chief Marketing Officer' of the IT Governance Team You are the Chief Marketing Officer of Mama's Pizzeria involved as part of the IT Governance team to provide your opinion and solutions for the following questions: Consider the following issues related to the revenues processes at Mama's Pizzeria. As Peter Greyton reflects on his meeting with Jim Saxton and Elaine Black, he considers where the company has been and where it is heading, and ponders the current issues regarding Mama's Pizzeria accounting information systems and its ability to take and record sales. He is concerned about the limitations of the current accounting information system. Are internal controls strong enough? Would a new, integrated IT system yield improvements? As he contemplates the integration of the POS systems at the restaurant locations with the GL software at the home office, he wonders about the requirements for developing and implementing such a system, and how to best utilize the system to support Mama's Pizzeria plans for growth. Peter realizes that his ability to address these issues will be critical not only to the success of the company, but also to his career. Required: 1. Discuss whether Mama's Pizzeria Internet order activities can be termed as ecommerce. 2. Given the privacy practices, describe the kind of customer data that Mama's Pizzeria could reasonably collect and store, and also describe some data that Mama's Pizzeria should not collect and store. Explain the reasons for these differences. 3. Describe the internal controls related to Internet orders that Mama's Pizzeria should have in place. 4. Briefly describe the differences in Mama's Pizzeria 3 order entry systems (instore, telephone, and Internet). For each method, specifically identify the employees needed and describe the tasks performed by these employees. 5. Draw 3 process maps of the ordering and sales processes at Mama's Pizzeria. One process map should depict in-store sales, second map should depict phone orders, and the third map should depict on-line orders. From the descriptions of Mama's Pizzeria various revenue and collection processes, answer the following questions regarding internal controls: 6) Separately identify at least one internal control strength and/or weakness for each of the 3 ordering systems (in-store, telephone, and Internet). 12 7) What is the control purpose of the drop-down boxes in the Internet ordering system? Section 4 - To be completed by the 'Chief Information Officer' of the IT Governance Team You are the Chief Information Officer of Mama's Pizzeria involved as part of the IT Governance team to provide your opinion and solutions for the following questions: This section presents a process map (Exhibit 4.1), a document flowchart (Exhibit 4.2), and a data flow diagram (Exhibit 4.3) for a small, local restaurant. In those exhibits manual records and documents as well as manual processes are depicted. On the basis of the case information and the 3 exhibits mentioned, complete the following requirements: Required: Read the article Peter Greyton mentioned regarding Anheuser-Busch at http://www.cnn.com/2004/TECH/ptech/02/25/bus2.feat.beer.network/index.html. Use this article regarding the sales and inventory management systems in place at Anheuser-Busch, and answer the following questions: Required: 1. Describe the purpose of a data warehouse and describe how Anheuser-Busch uses data warehousing. 2. Describe the purpose and use of data mining and describe how Anheuser-Busch uses data mining. 3. Describe how data warehousing and data mining can facilitate reporting and analysis at Mama's Pizzeria. Now assume that you as part of Mama's Pizzeria management you wish to upgrade its accounting software to an ERP system. To answer some of the questions here, you may have to do research about ERP systems on the Internet. One example of a website with information about accounting software is www.accountingsoftware411.com or www.2020software.com 4. What advantages could Mama's Pizzeria expect by upgrading to an ERP system? 5. As Mama's Pizzeria considers modules to purchase, which four or five modules do you believe would be most critical? Why? 6. Which method of implementation of an ERP system do you suggest for Mama's Pizzeria? Why? 7. Recommend two or three ERP systems that would be appropriate for Mama's Pizzeria. be specific with respect to the name of the ERP software system and the 13 provider company. When making these recommendations consider the size of Mama's Pizzeria and, therefore, what it might be able to afford. Section 5 - To be completed by the 'Chief Technology Officer' of the IT Governance Team You are the Chief Technology Officer of Mama's Pizzeria involved as part of the IT Governance team to provide your opinion and solutions for the following questions: Consider the following additional paragraphs and answer the question that follows: Back at his desk, Peter Greyton is thinking of the day's developments. He reflects upon his meeting with Jim Saxton and Elaine Black. He considers where the company has been and where it is heading, and ponders the current issues regarding Mama's Pizzeria accounting information systems. Overall, Peter feels that he needs help aligning Mama's Pizzeria business strategy with its IT systems. In addition, he is concerned about the limitations of the current accounting information system. Are internal controls strong enough? Would a new, integrated IT system yield improvements? As he contemplates the integration of the POS systems at the restaurant locations with the GL software at the home office, he wonders about the requirements for developing and implementing such a system, and how to best utilize the system to support Mama's Pizzeria business strategy. Peter realizes that his ability to address these issues will be critical not only to the success of the company, but also to his career. He asks himself, \"What should I do now?\" Required: Assume that you are Jim Saxton preparing a report for Peter Greyton, the CIO. Address the following: 1. Do you think Mama's Pizzeria business strategy is driving the development of its information systems, or vice versa? Use points from the case to support your answer. 2. Describe the steps Mama's Pizzeria should take (according to the systems development life cycle stages) to ensure that its IT systems are aligned with its business strategy. Consider the following issues that relate to Mama's Pizzeria purchases of ingredients and supplies, and then answer the questions pertaining to its expenditure processes. 14 As mentioned in the opening part of the Mama's Pizzeria case, there are now 49 locations throughout the greater Pittsburgh area. Each one of those restaurant locations needs an ongoing supply of the many ingredients of pizzas and the other foods served. The raw materials each restaurant needs to make and sell pizzas and other menu items are things such as flour, salt, sugar, tomatoes, potatoes, lettuce, tomato paste, spices, meat, cheeses, and buns, as well as supplies such as napkins, take-out packages and doggy-bag containers. Each restaurant must maintain an inventory of all of these items in order to properly serve customers. However, it is a difficult balance to maintain the right amount of each of these items. As you know from your experience in eating at restaurants, it can leave a negative impression in your mind if the restaurant has run out of the food you intended to order. Thus, there must always be enough ingredients and supplies to meet customers' desires. Two factors make it difficult to maintain enough inventory of food can supplies: predicting demand, and time or space limitations. First, it can be difficult to predict customer demand for any particular day or week. The less predictable the stream of customers eating at the restaurant, the harder it can be to know how much inventory of food and supplies to keep. Secondly, time and space limit the amount of inventory a restaurant can keep. Food inventory is perishable, and much of it has a very short shelf life. For example, lettuce and tomatoes may remain fresh for only a couple of days. Other food items, such as flour and salt, may remain usable for months. But even for items with a long shelf life, it is hard to keep a large inventory at a restaurant because of limited storage space. Most of the space in a restaurant is for customer dining and the kitchen. Mama's Pizzeria uses a central commissary to prepare some of the ingredients before they are shipped to the restaurant. For example, the individual restaurant locations do not make dough on the premises. The flour, salt, yeast, and other ingredients are maintained, mixed, and prepared at the commissary, and this premade dough is then shipped by truck to restaurants daily. The pizza sauce and many ingredients for sandwiches and salads are also premade at the commissary. All of these factors taken together mean that Mama's Pizzeria must continually be purchasing the ingredients for pizzas and other foods, and supplies. These inventory items must be delivered to the commissary and then to each of the 49 Mama's Pizzeria locations to ensure that they never run out of the items needed to serve customers. Since there is a short shelf life for much of the inventory, the purchasing takes place on a daily basis to keep the commissary and each restaurant location properly stocked. 15 Required: 3. Describe how you believe an efficient and effective purchasing system should be organized at Mama's Pizzeria. Consider details such as the following: a) How many purchasing agents should be employed? b) Where will these purchasing agents be located? c) How will the necessary information for purchasing flow between restaurants and these purchasing agents? d) How will IT systems be used in purchasing? e) How and when will purchased items be delivered to the restaurants? (Remember that all 49 locations are within the Pittsburgh area and none would be more than a one-hour drive from the corporate Headquarters.) 4. Draw a process map of your proposed purchasing system. 5. Describe any IT controls that would be necessary or desirable in your purchasing system. 6. Briefly describe Mama's Pizzeria conversion processes; that is, what gets converted, how is it done, and where are the underlying processes performed [at which Mama's Pizzeria location(s)]? 7. What procedures and internal controls would you recommend to Mama's Pizzeria to minimize the risk of lost sales due to stock-outs (i.e., running out of ingredients) and the resulting idle time that may be incurred while employees are awaiting delivery from the commissary? THE END 16