Understanding Business
Understanding Business
12th Edition
ISBN: 9781259929434
Author: William Nickels
Publisher: McGraw-Hill Education
Bartleby Related Questions Icon

Related questions

Question
100%

2 and 3 

26 PART 1 Information Systems in Business and Society
Case Study
SYSTEMS AND PROCESSES
Customer-Focused Innovation Drives CarMax
CarMax transformed the used car buying experience back
in the 1990s with its no-haggle car prices that allows the
customer to focus on other features (such as fuel econ-
omy, safety features, entertainment package, and so on) of
the auto. Today, CarMax is the largest used car retailer in
the United States with 173 used car stores and an aggres-
sive growth plan that calls for the opening of more than a
dozen new stores each year. During the fiscal year ended
February 28, 2017, total revenue was $15.9 billion from the
retail sale of just over 1 million used cars. CarMax continues
to revolutionize car buying through consumer insights
and customer-focused technology innovations that further
distance CarMax from its competitors.
Since 90 percent of used car buyers start their search
online, CarMax built a Web site search platform similar to
the highly effective "Amazon product description" design
with which most consumers are familiar. CarMax has a cen-
tralized vehicle inventory system with information on over
50,000 CarMax Quality Certified vehicles. Its customers can
search through this inventory using their mobile devices
or portable or desktop computers. Consumers may even
request that CarMax transfer the car of their choice to a
store near them and, indeed, nearly 30 percent of the cars it
sells are transferred for this reason.
CarMax launched a new online financing app to enable
customers to get prequalified for a loan prior to visiting a
store. This app helps move the customer further along the
sales process and provides a faster in-store shopping expe
rience. It has been received well by customers and contrib-
utes to increased leads, which CarMax believes generates
incremental sales.
When a customer arrives to sell his or her car, a CarMax
associate armed with a mobile device can evaluate the
vehicle in real-time without ever leaving the customer or
the vehicle. The associate has access to all the information
needed to provide an accurate appraisal via a mobile app.
This creates a positive initial experience both for the cus-
tomer and the associate. CarMax associates use their mobile
devices and the same app to appraise vehicles at off-site
auto auctions. This enables them to buy the best cars at the
best prices so that CarMax can make them available to its
customers.
CarMax customers interested in getting an appraisal
value for their vehicle can also submit their vehicle informa-
tion online without having to come to a store.
CarMax plans to add an app to support a loyalty pro-
gram for car owners. This will help them maintain and
replace auto parts and obtain roadside assistance. There will
also be a wallet-like feature where customers can store their
vehicle ID number and insurance information.
CarMax has a strong program for onboarding infor-
mation system new hires. Once new software developers
arrive at CarMax, they attend Information Technology
Academy. This academy is an eight-week program designed
to jump-start their CarMax career. Here they learn about
the primary technologies and tools as well as the software
development process used at CarMax, thus laying a strong
foundation for success in their new role. They also visit
CarMax stores to observe first hand, different business pro-
cesses and learn how CarMax information systems support
employees and customers alike. This experience helps them
to appreciate how their contributions will have a direct and
significant impact on the organization's ongoing success.
At the end of the eight-week program, each graduate is
assigned to a product team matching their skill set, interests,
and aptitude. CarMax fuels the innovation process by
creating multi-functional product teams consisting of up to
10 people including a product manager, lead software devel-
oper, and people from quality assurance and user design.
The team is challenged to go after business objectives and
key results such as how many leads they generate or how
many prospect-to-customer conversions they deliver. It's up
to them to determine the best solution for each customer to
meet their goals. Every two weeks, the product teams con-
duct open houses that anyone can attend. A team member
presents what the product team has accomplished against
its business objectives. CarMax senior managers, including
an occasional board of directors' member, regularly attend
these open houses.
Critical Thinking Questions
1. Would you classify the new auto appraisal system as
operating in the personal, workgroup, enterprise, or
interorganizational sphere of influence? Why? Identify
key organizational complements CarMax needed to
put in place to ensure that the new system would be
successful.
2. How do you think the CarMax IS organization is per-
ceived by the rest of the organization? Support your
opinion.
3. Based on their use of multi-functional product teams,
what personal traits, technical skills, and non-technical
skills do you think CarMax looks for in its information
systems new hires?
SOURCES "CarMax Investor Relations," http://investors.carmax.com/
bome/default.asp"CarMax Fiscal 2017 Annual Report," butp://s21
.qacdn.com/483767183/files/doc_financials/Annual%20Report/2017/
FY17-ARS-FINAL-Printed-Report.pdf, Martha Heller, "Why CarMax's
"Shock The System Digital Strategy Is Working," CIO, April 26, 2017,
http://www.cio.com/article/3191884/careers-staffing/uby-carmax-
s-shock-the-system-digital-strategy-is-working.html; Shareen Pathak,
"We're Not Google': How CarMax is trying to attract tech talent,"
Digiday, October 30, 2015, https://digiday.com/marketing/not-google-
carmax-trying-attrad-tech-talent; Shamin Mohammad, "CarMax, the
Automobile Business with IT at the Core, CIO Review, http://automotive
cioreview.com/cicieupoint/carmax-the-automobile-business-with-it-at-
the-core--nid-12777-cid-4.html, accessed June 12, 2017; and "IT Software
Developer," CarMax, Inc., http://webcore.cs.ut.edu/files/css/CarMax%20-
%201%20Software%20Deweloper.pdf.
Copyright 3021 Cangage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Das to electronic rights, so third party content may be supposed than the clock ander Chapter
Edicial review bas deed that any apprum cont do not mierially affect the overall learning experience Cengage Learning reserve the right to move additional con any was voquent rights requirit
expand button
Transcribed Image Text:26 PART 1 Information Systems in Business and Society Case Study SYSTEMS AND PROCESSES Customer-Focused Innovation Drives CarMax CarMax transformed the used car buying experience back in the 1990s with its no-haggle car prices that allows the customer to focus on other features (such as fuel econ- omy, safety features, entertainment package, and so on) of the auto. Today, CarMax is the largest used car retailer in the United States with 173 used car stores and an aggres- sive growth plan that calls for the opening of more than a dozen new stores each year. During the fiscal year ended February 28, 2017, total revenue was $15.9 billion from the retail sale of just over 1 million used cars. CarMax continues to revolutionize car buying through consumer insights and customer-focused technology innovations that further distance CarMax from its competitors. Since 90 percent of used car buyers start their search online, CarMax built a Web site search platform similar to the highly effective "Amazon product description" design with which most consumers are familiar. CarMax has a cen- tralized vehicle inventory system with information on over 50,000 CarMax Quality Certified vehicles. Its customers can search through this inventory using their mobile devices or portable or desktop computers. Consumers may even request that CarMax transfer the car of their choice to a store near them and, indeed, nearly 30 percent of the cars it sells are transferred for this reason. CarMax launched a new online financing app to enable customers to get prequalified for a loan prior to visiting a store. This app helps move the customer further along the sales process and provides a faster in-store shopping expe rience. It has been received well by customers and contrib- utes to increased leads, which CarMax believes generates incremental sales. When a customer arrives to sell his or her car, a CarMax associate armed with a mobile device can evaluate the vehicle in real-time without ever leaving the customer or the vehicle. The associate has access to all the information needed to provide an accurate appraisal via a mobile app. This creates a positive initial experience both for the cus- tomer and the associate. CarMax associates use their mobile devices and the same app to appraise vehicles at off-site auto auctions. This enables them to buy the best cars at the best prices so that CarMax can make them available to its customers. CarMax customers interested in getting an appraisal value for their vehicle can also submit their vehicle informa- tion online without having to come to a store. CarMax plans to add an app to support a loyalty pro- gram for car owners. This will help them maintain and replace auto parts and obtain roadside assistance. There will also be a wallet-like feature where customers can store their vehicle ID number and insurance information. CarMax has a strong program for onboarding infor- mation system new hires. Once new software developers arrive at CarMax, they attend Information Technology Academy. This academy is an eight-week program designed to jump-start their CarMax career. Here they learn about the primary technologies and tools as well as the software development process used at CarMax, thus laying a strong foundation for success in their new role. They also visit CarMax stores to observe first hand, different business pro- cesses and learn how CarMax information systems support employees and customers alike. This experience helps them to appreciate how their contributions will have a direct and significant impact on the organization's ongoing success. At the end of the eight-week program, each graduate is assigned to a product team matching their skill set, interests, and aptitude. CarMax fuels the innovation process by creating multi-functional product teams consisting of up to 10 people including a product manager, lead software devel- oper, and people from quality assurance and user design. The team is challenged to go after business objectives and key results such as how many leads they generate or how many prospect-to-customer conversions they deliver. It's up to them to determine the best solution for each customer to meet their goals. Every two weeks, the product teams con- duct open houses that anyone can attend. A team member presents what the product team has accomplished against its business objectives. CarMax senior managers, including an occasional board of directors' member, regularly attend these open houses. Critical Thinking Questions 1. Would you classify the new auto appraisal system as operating in the personal, workgroup, enterprise, or interorganizational sphere of influence? Why? Identify key organizational complements CarMax needed to put in place to ensure that the new system would be successful. 2. How do you think the CarMax IS organization is per- ceived by the rest of the organization? Support your opinion. 3. Based on their use of multi-functional product teams, what personal traits, technical skills, and non-technical skills do you think CarMax looks for in its information systems new hires? SOURCES "CarMax Investor Relations," http://investors.carmax.com/ bome/default.asp"CarMax Fiscal 2017 Annual Report," butp://s21 .qacdn.com/483767183/files/doc_financials/Annual%20Report/2017/ FY17-ARS-FINAL-Printed-Report.pdf, Martha Heller, "Why CarMax's "Shock The System Digital Strategy Is Working," CIO, April 26, 2017, http://www.cio.com/article/3191884/careers-staffing/uby-carmax- s-shock-the-system-digital-strategy-is-working.html; Shareen Pathak, "We're Not Google': How CarMax is trying to attract tech talent," Digiday, October 30, 2015, https://digiday.com/marketing/not-google- carmax-trying-attrad-tech-talent; Shamin Mohammad, "CarMax, the Automobile Business with IT at the Core, CIO Review, http://automotive cioreview.com/cicieupoint/carmax-the-automobile-business-with-it-at- the-core--nid-12777-cid-4.html, accessed June 12, 2017; and "IT Software Developer," CarMax, Inc., http://webcore.cs.ut.edu/files/css/CarMax%20- %201%20Software%20Deweloper.pdf. Copyright 3021 Cangage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Das to electronic rights, so third party content may be supposed than the clock ander Chapter Edicial review bas deed that any apprum cont do not mierially affect the overall learning experience Cengage Learning reserve the right to move additional con any was voquent rights requirit
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Understanding Business
Management
ISBN:9781259929434
Author:William Nickels
Publisher:McGraw-Hill Education
Text book image
Management (14th Edition)
Management
ISBN:9780134527604
Author:Stephen P. Robbins, Mary A. Coulter
Publisher:PEARSON
Text book image
Spreadsheet Modeling & Decision Analysis: A Pract...
Management
ISBN:9781305947412
Author:Cliff Ragsdale
Publisher:Cengage Learning
Text book image
Management Information Systems: Managing The Digi...
Management
ISBN:9780135191798
Author:Kenneth C. Laudon, Jane P. Laudon
Publisher:PEARSON
Text book image
Business Essentials (12th Edition) (What's New in...
Management
ISBN:9780134728391
Author:Ronald J. Ebert, Ricky W. Griffin
Publisher:PEARSON
Text book image
Fundamentals of Management (10th Edition)
Management
ISBN:9780134237473
Author:Stephen P. Robbins, Mary A. Coulter, David A. De Cenzo
Publisher:PEARSON