Indulgent,

Specialty Mud,
Inc.
Located in Detroit, Michigan

Our Vision: To create and foster a gourmet

specialty coffee faction

Our Mission: Provide our customers with an

unrivaled selection of roasted coffee, expertly
crafted with beans sourced from the most
sustainable farms
 ISM 3-Year Operating Plan
By: Travis Pierce, CIO

Introduction
Indulgent, Specialty Mud (ISM), Incorporated is a coffee bean roaster and wholesaler
located in the heart of Detroit, Michigan. The company’s vision to create and foster a gourmet
specialty coffee faction is passionately lead by a team of Master Roasters. The vast knowledge in
the growing, roasting, and brewing of coffee beans drives ISM’s mission to provide customers
with an unrivaled selection of roasted coffee, expertly crafted with beans sourced from the most
sustainable farms.
At ISM, Inc., we pride ourselves on sourcing the finest coffee beans from the most
sustainable farms. Our team of Roasters work on-site, with farmers in Costa Rica, to ensure only
the highest quality beans fill our customers’ cups. From there, this highly specialized team of
Roasters craft exquisite flavor profiles aimed at showcasing the natural quality and aromatics of
the raw coffee beans. These flavor profiles are then provided as recipes to the production and
manufacturing teams who flawlessly, and efficiently, perform the roasting process. A small sub-
set of the master roasting team is always available in the Detroit production facility to serve as
quality assurance. The final stage of the process involves delivering artistically crafted whole
beans to local coffee shops and retailers.

Information Systems (IS) Strategy

ISM, Inc. has a simple business model, produce high quality product that customers
prefer over competitors. To help execute this plan and increase the profitability, the company
plans to use a strategic IS infrastructure. With the Master Roasters as the integral component of
the model, the main goal of the following IS proposal is to support them in creating an
unbeatable portfolio of roasted coffee beans.
The best way the company can support the roasters is to provide them with the flexibility
and resources to be selective. This means the production, sales, forecasting, and accounting
teams must maximize the profit margin on the inventory (raw and roasted) that it already has, to
maintain company revenues in times when the flow of raw beans may be slow. In order to
facilitate this, the forecasting and accounting teams will work closely together to price each
batch / lot of coffee based on the market price, landed cost, cost to produce, and demand. This is
not a simple task, but the use SAP Hana coupled with SAP Business One will provide the
forecasting team with the power to make highly informed decisions or provide critical data to the
accounting and sales teams.
Coffee currently ranks as the second most commonly traded commodity, in terms of
sheer monetary volume (Kowalksi, 2019). It is also highly volatile as many factors can influence
its price. One of the more obvious contributors is the fact that coffee is a seasonal crop with
climate sensitivities such as temperature and rainfall (Coste, 2018). These factors can directly
affect the coffee supply which, by the principle of supply and demand, directly influences the
price. Kowalksi (2019) notes a less apparent driver of coffee price as being political stability. He
states that since only five countries supply over 65 percent of the world’s coffee, any political
instability those countries may experience, has a direct influence on the price. The current price
of coffee is $1.08 per pound, but over the last ten years has fluctuated down from this point by
11 percent and up by just over 283 percent. Figure 1, of Appendix A, shows a price graph of
coffee over the last 10 years. With extreme swings in price like this, knowing exactly how much
ISM pays for raw coffee by batch, coupled with historical sales and production data, will help the
teams maximize profit margin.
Additionally, the use of a sophisticated business intelligence infrastructure will help the
ISM sales and roaster teams to develop incentive plans for customers. Frequent customers
(wholesale or website based) can join the ISM Bean Club and, based on their order preferences,
receive complementary samples of our Roasters latest creations. The ability to identify customers
through the Bean Club will provide ISM even more leverage in terms of being able to specialize
our portfolio.

Organization & Data Structure

As mentioned, the company’s Roasters are at the heart of the organization, driving it
through their innovation and creativity. These Roasters report directly to the COO. Also, within
that department, ISM has engineers, manufacturing personnel, a production team, and human
resource personnel. It is worth noting that two of the four manufacturing personnel support the
engineers in development work while the other two support production. The sales and marketing
team falls under the oversight of the CFO. This group also consists of accounts, forecasters, and
buyers. For a complete organization chart, see Figure 2 in Appendix A.
In terms of the company’s data structure, as alluded to above, SAP software and cloud
services are crucial to operations. Though ISM will utilize a centralized cloud-based storage
system for most of its data, the administrative information (i.e., employee personally identifiable
information, payroll…etc.) will be stored on a local server for heightened security. Data in the
database is accessible by casual users in the form of queriers, reports, and dashboards. However,
any on-line analytical processing is only accessible by forecasters or members of the IS
organization. For a detailed data management structure diagram see Figure 3 in Appendix A. For
additional clarity refer to Appendix B which shows a list of entities and attributes along with
how each department / user interfaces with that data. Adding to what ISM uses in analyzing
optimum sales prices, Table 1 below shows a list of major entities within the database along with
one of the major attributes associated with that entity.

Major Entities Major Attributes

Customers Bean Club Member
Roasted Bean Recipes Roasting Parameters
Roasted Beans Flavor Profiles
Raw Beans Landed Cost
Orders Roasted Bean Flavor
Sales Roasted Bean Flavor
Employees Job Title
Training Course Description
Table 1: Major Entities and Attributes of ISM Database

Computer Systems (Hardware, Software, & Services)

With ISM’s IS strategy, the major component of the system is the SAP software and
cloud service. Table 2, below, shows a detailed breakdown of the capital investment needed to
support the company through the first three years; as expected, the SAP software makes up a
large chunk of those costs. Along with this software, several different computers are needed to
 allow each team member the capabilities required to perform their duties effectively. Engineers
will get Dell Mobile Workstations to support their design work along with licenses for CATIA
v5 modeling software. The production team will get three Dell desktop computers to support
equipment and production planning. Roasters and manufacturing personal get the Dell Latitude
Rugged laptops given their primarily mobile / away from desk responsibilities. The rest of the
team gets the Dell Latitude 2-in-1 laptop for flexibility and versatility in the office. All the desk
workers, and executives, will get additional monitors and keyboards to facilitate collaborative
workspaces and improve overall efficiency above what a 13-inch laptop can provide.
Employees will also get Apple iPhone 8 cell phones on a Verizon Wireless plan. Roasters
will get additional support with a Verizon Hotspot (for Wi-Fi in remote locations), NordVPN
subscription (for additional security when accessing company data), and Verizon Travel Pass
(for international calling when needed). The quantity of Travel Passes in the table assumes
shared use with buyers, as they too may need to make calls to suppliers (farmers) internationally.
The Detroit facility will be equipped with AT&T Business internet with outage protection to
ensure uninterrupted flow of information.

Item # Line Item Description Price / Unit Unit Basis Quantity 3-year's Supply Sub-Total
Software
1 NordVPN $ 3.49 Monthly / 6 Users 2 36 $ 251.28
2 SAP Business One Professional $ 94.00 Monthly / User 42 36 $ 142,128.00
3 SAP Cloud Platform $ 25.00 Monthly / User 42 36 $ 37,800.00
4 SAP Hana $ 280.00 Monthly / App 5 36 $ 50,400.00
5 McAfee firewall $ 75.00 Yearly / 5 Users 9 1 $ 675.00
6 Office 365 Business Premium $ 12.50 Monthly / User 42 1 $ 525.00
7 CATIA V5 3D Modeling Software (one-time cost) $ 11,200.00 Each 1 1 $ 11,200.00
8 CATIA V5 3D Modeling Software (maintenance cost) $ 10,100.00 Yearly 1 2 $ 20,200.00
Hardware (Laptops / Desktops / Servers / Equipment)
9 Dell Latitude 14" 5420 Rugged Business Laptop $ 1,379.00 Each 14 1 $ 19,306.00
10 Dell Latitude 13" 5300 2-in-1 Business Laptop $ 949.00 Each 17 1 $ 16,133.00
11 Dell Vostro 15" 5590 Small Business Laptop $ 599.00 Each 8 1 $ 4,792.00
12 Dell Precision 17" 7740 Mobile Workstation $ 1,609.00 Each 3 1 $ 4,827.00
13 Dell Precision 3431 Small Form Factor Workstation $ 1,109.00 Each 3 1 $ 3,327.00
14 Dell PowerEdge T330 Tower Server $ 712.72 Each 1 1 $ 712.72
15 Dell 24 Monitor: P2419H $ 189.99 Each 30 1 $ 5,699.70
16 Dell Docking Station – USB 3.0 (D3100) $ 134.99 Each 39 1 $ 5,264.61
17 Dell Wireless Keyboard and Mouse- KM636 $ 39.99 Each 39 1 $ 1,559.61
18 Dell Urban Backpack-15 $ 24.99 Each 46 1 $ 1,149.54
Phones & Internet
19 Apple iPhone 8 $ 18.70 Each / Month 42 36 $ 28,274.40
20 Verizon Wireless Plan $ 245.00 Monthly / 25 Users 2 36 $ 17,640.00
21 Verizon Hotspot $ 10.00 Monthly / User 10 36 $ 3,600.00
22 Verizon Travel Pass $ 10.00 Daily / User 1 120 $ 1,200.00
23 AT&T Business Fiber 100 Internet $ 125.00 Monthly 1 36 $ 4,500.00
Total $ 381,164.86
Table 2: IT Cost Breakdown. Costs to support first 3 years of operations.
E-Commerce Strategy
As mentioned briefly above, ISM will have a Bean Club that customers can join. This
club is available to both online customer and those supported by the sales team. In the case of
larger customers that tend to have recurring orders, they will be entered into the program by sales
team members and their recurring orders will be handled by the system going forward. The ISM
website will allow smaller businesses and personal coffee drinkers to order bulk or individually
sized bags of coffee beans. ISM will not have a store front, so the only place to purchase
 individual sized coffee bags will be on the website. The website will be linked to the company’s
data warehouse and display all available roasted coffee flavors with an image and description of
the flavor profiles (all things provided by the Master Roasters).
The information gathered through the Bean Club and the insights gained will allow the
SAP Hana system to profile customers and recommend coffee flavors that it determines may be
of interest them. It will also have the autonomy to send free samples to ISM’s most loyal
customers based on these learnings. The company may expand to other merchandise provided by
other vendors and branded with the ISM logo. This may include coffee brewing equipment,
coffee mugs, T-shirts, but these items will not be included at the launch of the website.

End User Development (EUD)

ISM, as a new company with a talented employee base, will start out with a low level of
control on EUD. The future IS team will be initially focused on getting production and
operations running and not have the resources to develop any unique software / tools (outside of
what SAP provides). Within the first three years, employees will have the freedom to develop
any system or process they feel supports their work. At the end of these three years, the
production system should be running sufficiently to provide the IS team with time to formalize
any of the key systems proven to enhance performance within the organization.

Future IS Department
To support ISM’s information systems infrastructure, there is a need to hire seven IS
Engineers. Three of these engineers will support the ISM website and SAP Hana managerial
system. These engineers will work closely with forecasters to ensure data integrity and efficiency
are maintained. Two additional engineers will support the SAP Business One and Production
intense information. These duties mainly include transactional data between ISM, their suppliers,
and customers. A final set of two engineers will support the facilities with any hardware or other
non-production focused requests. Each of these engineers will get a yearly salary of $80k. Table
3 below shows this cost and the total cost over the first three years of operations.

Item # Line Item Description Price / Unit Unit Basis Quantity 3-year's Supply Sub-Total
1 IS Engineer (Website & Managerial System Support) $ 80,000.00 Yearly Salary 3 3 $ 720,000.00
2 IS Engineer (SAP & Production Support) $ 80,000.00 Yearly Salary 2 3 $ 480,000.00
3 IS Engineer (Hardware & Non-Production Support) $ 80,000.00 Yearly Salary 2 3 $ 480,000.00
Total $ 1,680,000.00
Table 3: Future IS Team 3-year Cost. Cost to support ISM for three years.
Conclusion
In conclusion, the IS strategy proposed here directly supports ISM’s vision and mission
statements. Providing roasters with the flexibility and room to create new and exciting roasted
coffee flavors is exactly what will set ISM apart from others. The SAP Hana based IS database
will also enhance the roasters ability to pinpoint end user preferences and capitalize on gaps in
the market. The total cost to implement and maintain this strategy for three years is about $2.1M.
Table 4 below shows the high-level costs by major category.

Item # Line Item Description Sub-Total

1 Software $ 263,179.28
2 Hardware $ 62,771.18
3 Phones & Internet Services $ 55,214.40
4 IS Engineers $ 1,680,000.00
Total $ 2,061,164.86
Table 4: CIO IS Proposal - 3-year Costs
Appendix A

Figure 1: 10-year historical price of coffee per pound – 10-year historical

Figure 2: ISM, Inc. Organizational Chart. Chart showing the organization of ISM, Inc.
Figure 3: ISM, Inc. Business intelligence structure. Diagram showing how data is managed and
analyzed at ISM.
Appendix B

Entity / Attribute Information Creater / Provider Primary Consumer Secondary Consumer Tertiary Consumer
pricing info for roasted beans Accounting Salesman Accounting System
pricing for online roasted beans Accounting Website Accounting System
bean crop production forecast Forecasters Accounting Managerial System
pricing info for raw beans Forecasters Buyers Accounting System
inventory of future raw beans Forecasters Roasters Production System
employee information HR Administrative System
payroll HR Administrative System
training courses HR Administrative System
production employee training HR Production Administrative System
labor / overhead cost for roasted beans Industial Accounting Managerial System
roaster line layout / design Industial Manufacturing Managerial System
production order quantities Managerial System Production
total roasted bean orders (online & salesman) Managerial System Roasters
bean club orders (automatic) Managerial System Warehouse Production System
roaster line equipment orders Manufacturing Buyers Accounting System
roaster equipment details (availability / capability) Manufacturing Industrial Managerial System
roasted bean production rates Production Industrial Accounting System
plant floor space Production Industrial Managerial System
roaster line equipment conditions Production Manufacturing Production System
color for lot of roasted beans Production Roasters Production System
machine parameters for lot of roasted beans Production Roasters Production System
roasted bean production Production Warehouse Production System
samples of future roasted beans Production Warehouse Production System
bean farm information Roasters Accounting System
raw bean orders Roasters Buyers Accounting System
current bean crop conditions Roasters Forecasters Managerial System
roast recipes and mixes Roasters Production Production System Website
images of roasted beans Roasters Production System Website
flavor profile for lot of roasted beans Roasters Salesman Production System
sales info for roasted coffee beans Salesman Accounting System Managerial System
request for future roasted beans Salesman Roasters
roasted bean orders Salesman Warehouse Production System Managerial System
customer information (non-bean club members) Salesman / Website Accounting System
roaster line equipment spare inventory Warehouse Manufacturing Production System
inventory of raw beans Warehouse Production Production System
inventory of roasted beans Warehouse Production System
sales info for roasted coffee beans online Website Accounting System Managerial System
bean club member information Website Managerial System
online roasted bean orders Website Warehouse Managerial System
online sample orders Website Warehouse Production System
 References

Coste, R. (2018, November 23). Coffee production In Encyclopædia Britannica online.

Retrieved from https://www.britannica.com/plant/coffee-plant-genus

Kowalksi, C. (2019, June 25). How to trade coffee futures. Retrieved from
https://www.thebalance.com/trading-coffee-futures-809346

Macrotrends. (n.d.). [Graph illustration Coffee Prices - 10 Year Historical November 11, 2019].
Coffee price per pound. Retrieved from https://www.macrotrends.net/2535/coffee-prices-
historical-chart-data

Cost for SAP Business One - https://www.pcmag.com/roundup/346016/the-best-erp-software

Cost for NordVPN - https://join.nordvpn.com/order/?_ga=2.113496837.349151528.1573164739-

992563275.1573164739

Cost for McAfee firewall - https://www.mcafee.com/consumer/en-

us/store/m0/catalog/msbs_480/mcafee-small-business-security.html

Cost for Verizon Services - https://www.verizonwireless.com/business/plans/verizon-plan-

business/

Cost for Internet Service - att.com/smallbusiness/explore/quickflow/checkout/build-your-

own/review

Cost for all Computers - https://www.dell.com/en-us/work/shop?~ck=mn

Salary of IS Engineers - https://www.glassdoor.com/Salaries/detroit-information-technology-

salary-SRCH_IL.0,7_IM236_KO8,30.htm

Opening page photo - http://eatitandlikeit.com/best-coffee-roaster-coffee-shop-savannah-coffee-

roasters/#prettyPhoto/0/

Cost for SAP Hana - https://fitsmallbusiness.com/sap-hana-reviews-pricing/

Cost for CATIA v5 Software - https://3dsman.com/catia-pricing/