1. Dirt Bikes Case Study
Team E :

 Ryadh ZITOUNI
 Ekaterina YAZYKOVA
 Melissa ZEPHIR
 Yann LANDREVIE

2. Contents
1. Business Challenge

 Current Situation
 Challenge
2. Business Solutions (Objectives)

3. Information System (Plan)

 3.1. ERP System
 3.2. Benefits of an ERP
 3.3. ERP Modules
 3.4. Providers (SAP, ORACLE, OPEN SOURCE)
 3.5. Investment Analysis
 3.6. Securing IS
4. Controls

 4.1. Balance Score
 4.2. Financial Perspective
5. Backups / Sources


3. Diagram of IS
Business
Challenge
People
Information Business
Organization
System Solutions
Technology

4. 1.1 Current Situation
Dirt Bikes USA is a small company

founded in 1991 that manufactures and
sells racing and off-road dirt bikes.
 Dirty Bikes produces 4 bikes models :
Enduro 250, Enduro 550, Moto 300,
Moto 450, and sells it between $3.250
and $9.000
 Headquarters are in Carbondale,
Colorado. The company has approx.
129 employees.

5. 1.1 Current Situation
As Top Managers we have to focus on

Financial Reporting based on the information
we have on the consolidated statements of
income and the balance sheet from 2006 to
2008.

6. 1.1 Current Situation
DUPONT ANALYSIS :

To Be Successful, a business must manage its:
– Operating Profits
– Level of Assets
– Amount of Debt
FIVE KEY FINANCIAL RATIOS :

• Profit Margin (PM)
• Total Asset Turnover (TAT)
• Equity Multiplier (EM)
• Return on Investment (ROI)
• Return on Equity (ROE)

7. 1.1 Current Situation
Assets / Liabilities / Equity
2008 2007 2006
Accounts Receivable 12 872 000 12 981 000 13 083 000
Accounts Payable 7 592 000 8 694 000 8 943 000
Cash & Cash equivalents 6 891 000 7 197 000 6 994 000
Total Assets 59 442 000 62 527 000 65 077 000
Total Liabilities 25 136 000 27 414 000 29 592 000
Shareholders’ Equity 34 306 000 35 113 000 35 485 000

8. 1.1 Current Situation
Formula 2008 2007 2006
PM = Net Income / Revenue 15,03% 11,41% -2,40%
TAT = Sales / Total Asset 1,04 1,02 0,92
EM = Total Asset / Total Equity 1,73 1,78 1,83
ROI = Net Income / Total Asset 103,51% 102,46% 92,42%
ROE = NI/S x S/TA x TA/SE 26,95% 20,82% -4,07%
PM = Profit Margin SE = Shareholders Equity
TAT = Total Asset Turnover
EM = Equity Multiplier
ROI = Return on Investment
ROE = Return on Equity

9. 1.2. Business Challenge
More Competition (new comers)

 Market is growing up
 Outdated systems
 Manual business processes

10. 2. Business Solution
Reduce Costs

 Increase capacity by squeezing costs
 Improve asset turnover
 Reduce excess inventory
 Decrease Account Receivable / Increase
Cash on Hand
 Increase profitability 10% per year
 Increase productivity

11. 3. Information System
People :

 Appoint new management team (tech friendly)
 Design strategic transformation plan
Organization

 Adopt best-practice processes
Technology

 Implement ERP
 Deploy Intel server running windows operating
system
 Depoy SQL Server database

12. 3.1. ERP System
Enterprise resource planning (ERP) is an

enterprise-wide information system designed
to coordinate all the resources, information,
and activities needed to complete business
processes such as order, fulfillment or billing.
An ERP solution is characterized by

supporting a variety of business functions such
as manufacturing, supply chain management,
financials, projects, human resources, and
customer relationship management from a
shared date store.

13. 3.2. Information System : ERP
Benefits of an ERP System :

 Help reduce operating costs :(inventory
control, production, marketing and help desk
support)
 Facilitate day to day management :
(backbone data warehouses, better
accessibility to data for decision making and
managerial control. helps track actual costs
of activities and perform activity based
costing)
 Support Strategic Planning

14. 3.3. IS : ERP Modules

15. E.G :Order Fulfillment Process
Generate Submit
Sales
Order Order
Accoun Check Approve Generate
ting Credit Credit Invoice
Manufa Assemble Ship
cturing Product Product
Fulfilling a customer order involves a complex set of steps
that requires the close coordination of the sales,
accounting, and manufacturing functions

16. 3.4. Providers & Costs Study
Implement ERP System :

 Software : SAP, ORACLE, OPEN SOURCE
 Hardware : Dell and Microsoft
 Training : 20 named users
 Maintenance : Flat Support or per user
Costs : * Delivery

 SAP : $16,8 Million . SAP : 20 Months
 ORACLE : $12,6 Million .Oracle : 18,6 Months
 Open Pro : $200,000 . OP : 17,8 Months

17. 3.4. Open Pro

18. OpenPro Cost Study
Number of employees: 129

Number of named users: 20

Upfront costs (licenses, customization,

training, and implementation): $40,000 or,
$2,000 per user
 Hardware and operating system (Dell and
Microsoft): $30,800
 On-going support from Compiere partner:
$24,000/year or, $1200 per user
 On-going support as percentage of upfront
costs ($24,000 / $40,000): 60%

19. 3.5. Investment Analysis
Feasibility :

 Fixed costs (Hardware, Software Training) : $70,800
 On going costs (Support, Maintenance) : $64,000
 Other Costs : $50,000
 TOTAL : $184,800
Acceptability : The ERP System will increase

profitability 10% per year
 Current Gross Profit : $20 457 000
 20,457,000 x 0,10 = $2,045,700
 ROI = 2,045,700 / 184,800 = 11,07
 Delay : 18 Months
Risk : Very low


20. 3.7.Securing IS
Confidentiality

 Availability
 Integrity
 Access control
 Identification
 authentication

21. 4.1. Balance Scorecard

22. 4.2. Financial Perspective
Objective Measure Target Initiative
 10% per year  Sales
Profitable ROE
 10% per year  # of Customer
Revenue Growth PM
 Costs  5%  Investment
ROI
Dividends 3%  Sales
PM

23. 5. Sources
Wikipedia
 (http://en.wikipedia.org/wiki/Information_security )
 Prenhall / Laudon
(http://wps.prenhall.com/bp_laudon_mis_9/32/8212/2102336.cw/index.html )
Managing Information System (Prentice

Hall 2007)
 Oracle / SAP / OpenPro

24. Thank You