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INFOSYS.110 BUSINESS SYSTEMS:
DELIVERABLE 2: BUSINESS SECTION
2014

Name Christopher Paul Kolston
NetID ckol846
Group Number: 57
Website Link: http://infosys1102014fcgroup57.blogspot.co.nz/p/d1.html
Tutorial Details
Tutor: Day: Time:
Kayur Monday 2pm
Time Spent on
Assignment:
15 hours Word Count: 1649

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CHARITY INDUSTRY ANALYSIS
INTRODUCTION
The problem that we addressed in deliverable 1 was the homelessness problem in Auckland
city; in that there are approximately 300 people sleeping on the streets every night
(Auckland City Mission annual report: 2012). The solution to this issue is the implementation
of a donation system whereby customers at supermarkets can opt to add an extra dollar to
their shopping cart which will be donated to Auckland City Mission. The advantage of this
sytem over existing donation systems is that a) incentives are provided to donate and b) the
cost of donating will appear less to the consumer (compared to the overall cost of their
shop). Consumers will, if having chosen to donate, receive a code on their receipt that they
can send via text or online to send their donation to the service, which will then be passed
on to Auckland City Mission after it is sorted and data is collected from it.
3. BUSINESS SECTION
3.1 Vision
To provide those in need with reliable and sufficient funding to live in a safe environment.
3.2 Industry Analysis: Donation collection industry
Industry: Donation collection Industry. Businesses that collect donations for those in need
(i.e. salvation army)
Force: High/Low: Justification:
Buyer power: High There are multiple agencies in Auckland city that
provide donation collection services – 86 charities
support accomodation/ housing alone (Auckland
Charity Statistics: 2014).

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Supplier power: Low The amount of charities in Auckland city alone
displays the options that buyers have, meaning
that suppliers have relatively low power over the
buyers (donators). This is an example of an
assymetric relationship between buyers and
suppliers (Marjolein C.J. Canie¨ls*, Cees J.
Gelderman: 2005).
Threat of new entrants: Low It is difficult to set up a charity as it is a
rquirement that they are non-financially
motivated (Internal Affairs, legal structures for
social enterprise: 2013), and so the CEO must
collect people who are motivated to worth
without a financial incentive.
Threat of substitutes: Low Donators cannot donate effectively to those in
need without going through a donation collection
providor (or charity). Also, charities use media to
make people want to donate, and so they have a
higher power over the individual who is collecting
donations. (Robbins, 2010).
Rivalry among existing
competitors:
High There are over 25,000 charities registered in New
Zealand (as of 2011), with almost 5,000 of these
being in Auckland alone. The sheer number of
charities creates huge rivalry as charities will have
to compete in order to get the donator to donate
through their service. (NZ Charities Commission,
2011).

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Overall attractiveness of the industry: Overall, the industry attractiveness is low due to the
high rivalry among existing competitors, and also the high buyer power. Although the threat
of substitutes is low, the high rivalry negates this as well as the low threat of new entrants.
3.3 Customers and Thei r Needs
Statistics show that people over the age of 50 are more likely to donate than any other age
demographic. However, since overall 66% of people in New Zealand donate, approximately
50% of these are over 50 and so the other 50% (under 50) should not be ignored (Charities
Aid Foundation: World Giving Index, 2012). This signifies that all who are over 18 are
potential customers – specifically those who are financially stable so they are more likely to
spend that extra money to donate.
One of the main needs of donators is the awareness of tax advantages, as one can claim tax
deductions after donating to charity. Also, donators want to know where their money is
going and also how it is going to contribute to those in need/ the organisation (Vesterlund,
2006:569,571).
3.4 The Product and Service
This service will meet the needs of the customer as regular updates about their donations/
the organisation will be sent to them via the ‘service automation system’ mentioned below
(see 3.10: systems). Information provided will include how their donations have helped
those in need directly and also they will be sent reports updating them on the progress of
the organisation, providing them with incentive to donate again (as the organisation creates
value and is successful).
3.5 Suppliers and Partners
Suppliers:
1. Public (shoppers at New World/ Pak n Save)
The public will supply the donations which will go to Auckland City Mission through
this service. They are the original source of donations.
2. Foodstuffs

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Foodstuffs owns the supermarkets New World and Pak n Save. They will be offered
the opportunity to increase their sales by giving their customers the option to
donate at the end of their shop, giving them a better brand image and supplying this
organisation with the donations through a customer base.
Partners:
1. Auckland City Mission
The donations collected will go to Auckland City Mission, who will use the money to
support those in need by increasing their shelter facilities, providing food/ clothes
etc.
2. NZ government – Charity sector
The government would support this service by providing funds if necessary as it
helps the homeless people of Auckland have a better living quality. They would also
help to advertise this service as it gives New Zealand a better image (no/ less
homeless people = more attractive country)
3.6 Strategy: Focused l ow cost
The porter’s generic strategy would have a wide competitive scope as it essential to
maximise donations, which can be done by attracting the widest demographic/s possible.
The low cost strategy would be used as this service would be a non-profit organisation as it
is both the law and so that donators know that their donations aren’t going towards
creating a profit for the business, but rather directly towards those in need.
The overall strategy is therefore Focused low cost
3.7 Value Chain Activity: Technology Development (R&D)
The most important value chain activity for this business is Technology Development (R&D)
This product involves the use of technologies such as the internet and barcode input
systems. In order for the product to be successful, these systems must work together
efficienty and effectively so that donations are managed without discrepancies. Also, since

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the money will be distributed to Auckland City Mission online, account management must
be accurate and up to date to ensure statistics are not false.
3.8 Business Processes
3.8.1. FINANCE MANAGEMENT PROCESS – Finances will be managed online by an automated
system, and so a finance management process is essential. This will include from the
collection of the donations from the various supermarkets to the distribution of the finances
to Auckland City Mission. For this process to run smoothly, steps will be created to keep the
process in full, on time, and in spec (IFOTIS).
FINANCE MANAGEMENT PROCESS


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3.8.2. DATA ANALYSI S PROCESS – This process involves the collection and analysis of data
collected from various sources. It will be beneficial to the technology development value
chain as the information produced from this process will provide helpful feedback on what
to work on/ improve in order to maintain a functioning system
DATA ANALYSIS PROCESS



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3.9 Functionalities
3.9.1. FINANCE MANAGEMENT PROCESS
 Collect donations from customer
 Keep customer up to date with their donation status
3.9.2. DATA ANALYSIS PROCESS
 Filter/ separate data to create relevance pools
 To send reports to departments for analysis
3.10 Systems

To provide those in need with reliable and sufficient funding to live in a safe environment.

3.10. 1. SERVICE AUTOMATI ON SYSTEM – This system includes the organisation of emails
being sent to donators in order to let them track what is happening with their money and
also to keep them up to date on the running of the service. This contributes to the
functionality of the finance management process, which in turn supports the vision of the
organisation by making customers want to donate more (one of their needs), meaning it is
more likely to reach ‘sufficient funding to live in a safe environment’.
3.10. 2. DATA FILTRATION SYSTEM – The data filtration system adds frameworks/ filters to
data to sort relevance and to group it according to these filters. This system adds to the
functionality of the data analysis process which also contributes to achieving the vision, as it
sorts information which allows the organisation to more efficiently gain information which
can be used to improve the effectiveness of the organisation as a whole.
3.10. 3. ACCOUNT MANAGEMENT SYSTEM – Account Management System involves controlling
the accounts of donators. This includes the amount they have donated and recording where
their money is going towards, creating profiles based on this information. This contributes
to the functionality of both the data analysis process and the finance management process
as it helps to keep customers up to date and also uses the reports sent to departments. In
terms of the vision, this system helps as it makes donators more motivated to donate as it

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fulfills their need to know what is happening with their money, therefore generating the
initial funding.

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3.11. Summary Table: Value Chain to Systems

Value Chain
Activity
Processes Functionalities Specific Information
System(s)
Broad Information
System(s)

Technology
Development
(R&D)
1. Finance
Manageme
nt Process
1. Collect donation from customer

2. Keep customer up to date with their
donation status
Service Automation System

Account Management
System
Customer Relationship
Management

Transaction Processing
System
2. Data
Analysis
process
1. Filter/ separate data to create relevance
pools

2. To send reports to departments for analysis
(inter-departmental relationship
establishment)
Data Filtration System

Account Management
System
Decision Support System

Transaction Processing
System

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CONCLUSION
The service that has been suggested to tackle the homelessness problem in Auckland city is
a new donations system that works in collaboration with supermarkets (Foodstuffs) and
Auckland City Mission to gain another source of funding. This service makes use of
information systems and information technology to achieve this goal, including an SMS
system, data filtration, service automation, and account management system etc. All of
these systems contribute to the effectiveness of the solution stated as they add value by
automating steps and sorting through data without any manual effort needed.
REFERENCES

1. Charities. (n.d.). Auckland « Live statistics « The Register. Retrieved May 24, 2014,
from http://www.charities.govt.nz/the-register/statistics/auckland/
2. Caniels, M. C., & Gelderman, C. J. (2005). Power and interdependence in buyer
supplier relationships:A purchasing portfolio approach. Industrial Marketing
Management, 36, 219-229. Retrieved May 25, 2014, from
http://www.academia.edu/884015/Power_a
nd_interdependence_in_buyer_supplier_relationships_A_purchasing_portfolio_ap
proach
3. N.g.. (2013). Legal Structures for Social Enterprises. Wellington: Department of
Internal Affairs.
4. Robbins, M. (2010, September 20). One for all or all for one?. The Guardian.
Retrieved May 24, 2014, from http://www.theguardian.com/science/the-lay-
scientist/2010/sep/20/charitable-giving-identifiable-victim-effect
5. Charities Commision. (2011, February 28). A Snapshot of New Zealand's Charitable
Sector. Retrieved May 24, 2014, from http://www.charities.govt.nz/assets/docs/key-
statistics/2011/sector.pdf
6. A Global View of Giving Trends. (n.d.).World Giving Index 2012. Retrieved May 24,
2014, from http://www.cafonline.org/PDF/WorldGivingIndex2012WEB.pdf
7. Vesterlund, L. (2006). Why do people give?. The Nonprofit Sector, 2, 568-587.