CASE 3: Aviall Inc.: From Failure to Success with Information Technology

Case Study Questions and Answers:

1. Why do you think that Aviall failed in their implementation of an airplane parts and components inventory control system?
What could they have done differently?

Reasons why Aviall failed would include:

• The ERP system did not support adequately Aviall’s business strategies.
• The ERP implemented did not improve the basic operational support system needed by Aviall to provide timely supply chain management.
• The ERP system project did not adequately address the issue of systems integration between applications.
• The implementation of the ERP failed due to inadequate consideration of the magnitude of the project.

What Aviall could have done differently would include the following:

• Project planning through the use of some form of a systematic development process.

• Analysis of the business requirements prior to making decisions about the software to acquire for the ERP system.

Project management should have been a higher consideration of Aviall.

2. How has information technology brought new business success to Aviall? How did IT change Aviall’s business model?

How IT brought new business success for Aviall would include:

• System integrated by using common business databases managed by database software from Sybase, Inc.
• Designing the new combined system to properly access and deal with customized pricing charts for 17,000 customers who receive various types of discounts, and with an inventory of 380,000 different aerospace parts.
• Developing Aviall.com to reduce the cost per order from $9 per transaction to 39 cents.
• Customers are able to transfer their orders from an Excel spreadsheet directly to the web site.
• Customers have access to price and availability information in less than five seconds – a real time feature.
• Sales force spends more time developing customer relationships than processing routine orders.
• Aviall can better match production to demand from the IT improvements.

How IT changed Aviall’s business model would include:

• Changed Aviall from a catalog business to full-scale logistics business.

• Aviall became a provider of supply chain management services through the integration of a range of Web-enabled e-business software systems.

3. How could other companies use Aviall’s approach to the use of IT to improve their business success? Give several examples.

Examples would include:

• Reposition a firm as a supply chain management services provider through Web-enabled e-business software systems.
• Redesign the customer relationship management system to minimize the routine order processing and permit the sales force to focus on product and service development efforts that will grow revenue.