An analysis of the impact of cloud based technologies on a small retail company Bc. Marek Andreánsky
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MASARYK UNIVERSITY BRNO
FAKULTY OF INFORMATICS
An analysis of the impact of cloud based
technologies on a small retail company
Master’s Thesis
Bc. Marek Andreánsky
Brno, 2013Declaration
I declare that this Master’s thesis is my original work and that I have writ-
ten it independently. All sources and literature that I have used during
elaboration of the thesis are correctly cited with complete reference to the
corresponding sources.
Marek Andre{nsky
Supervisor: RNDr. JUDr. Vladimír Šmíd, CSc.
iAcknowledgement
I would like to thank my supervisor RNDr. JUDr. Vladimír Šmíd, CSc.
iiAbstract
Cloud based technologies are an integral part of any successful retail
company. Without the use of modern technologies no business can stay
afloat in the long term. In the first part of this work a single company is
described. The second part lists the available cloud technologies that can
be used for the benefit of a business. The third part analyses the potential
impact each of these services can have on the business mentioned in the
first part.
iiiKeywords
Cloud, retail, service, software, internet
ivContents
1 Introduction ....................................................................................................... 3
2 The Company .................................................................................................... 4
2.1 Technologies currently in use ................................................................... 4
2.1.1 Content creation .................................................................................. 4
2.1.2 Marketing ............................................................................................. 6
2.1.3 Employee communication ................................................................. 7
2.1.4 Warehouse and accounting................................................................ 8
2.1.5 Sales....................................................................................................... 9
2.1.5.1 Retail stores ....................................................................................... 9
2.1.5.2 Prestashop ......................................................................................... 9
2.2 The methodology - SWOT ...................................................................... 10
2.2.1 Definition ........................................................................................... 10
2.2.2 The analysis ....................................................................................... 12
2.2.3 The SWOT analysis of the company .............................................. 13
3 The technologies.............................................................................................. 20
3.1 Content creation ....................................................................................... 20
3.1.1 Operating systems ............................................................................ 20
3.1.2 Vector editor ...................................................................................... 23
3.2 Marketing .................................................................................................. 24
3.2.1 Word of mouth .................................................................................. 24
3.3 Employee communication ...................................................................... 28
3.3.1 Gsm telephone / Skype ..................................................................... 28
3.3.2 Email ................................................................................................... 28
3.3.3 Data sharing ....................................................................................... 30
3.4 Warehouse and accounting .................................................................... 31
3.4.1 Pohoda ................................................................................................ 32
3.4.2 Winstrom FlexiBee ............................................................................ 32
3.5 Sales ........................................................................................................... 32
3.5.1 Retail stores ........................................................................................ 33
3.5.2 E-commerce ....................................................................................... 33
3.6 Chapter summary .................................................................................... 35
4 Predicted SWOT analysis after changes ...................................................... 36
14.1 Internal ...................................................................................................... 36
4.1.1 Strengths ............................................................................................. 36
4.1.2 Weaknesses ........................................................................................ 37
4.2 External...................................................................................................... 38
4.2.1 Opportunities and threats ................................................................ 38
4.3 Resulting SWOT analysis ........................................................................ 38
5 Conclusion ....................................................................................................... 40
Bibliography ....................................................................................................... 41
21 Introduction
The success of a modern company is based on many factors, one of them
being the technologies that the company uses. There are many technolo-
gies available on the market, but not all of them can be used by a small
retail company.
This thesis has the aim of describing such easy to use and imple-
ment technologies that can benefit a small retailer.
The first part describes the retail company that will be analyzed.
The second part concentrates on listing interesting cloud based
technologies that could have an impact on the company. These technolo-
gies will be briefly described and their general functionality will be ex-
plained.
The third part will describe the potential benefits that the company
can gain by implementing the services described in the second chapter.
In the last chapter a brief summary of the changed company will
be given.
32 The Company
Pečiatky-Vizitky s.r.o. (will be mentioned as PV in the following text from
now on) is a small stamp selling retail company based in Kosice that has
been officially on the market since the year 1996, but its business model is
working since the year 1990. The company started selling stamps shortly
after the fall of communism by using the then modern technology of mak-
ing stamps by polymer.
After two years the technology was surpassed by using a laser engrav-
er1 in the creation of stamps.
This utilization of modern technologies has allowed the company to
steadily grow and hit its small retail limits of east Slovakia in a fairly fast
manner of a half decade. The company was then inhibited by its location
and environment that it was based in.
After several years of growth the company started to lose its edge. The
growth started to slow down and as the company failed to implement
new web-based technologies the gap on the market slowly became larger.
The company can be categorized as a new small (1), a company that
can gain significant benefits from modern technologies combined with the
fact that it has a small amount of employees.
2.1 Technologies currently in use
The company currently operates by using technologies that are mainly
unchanged from those that the company used 10 years ago.
The technologies can be divided by their expected impact on a spe-
cific part of business.
2.1.1 Content creation
The company’s main income comes from the creation of rubber stamps, it
therefore needs software in which the designs can be drawn, saved and
exported to a laser printer where they are engraved into rubber.
1 The device behaves the same way as a printer but uses a laser beam instead of
ink and can print into wood, rubber or steel,
4The company currently uses five Windows XP workstations that
are running Corel Draw, a commonly used commercial vector graphics
editor.
Each workstation uses a different Corel version, as there are some-
times compatibility issues. Sometimes a customer sends a file in an older
format and the legacy file can only be successfully opened in an older ver-
sion of Corel Draw.
Corel Draw is not a cloud based technology but it will be analyzed
more in this work as it is an important part of the business.
2.1.1.1 Windows XP
Windows XP is a legacy operating system with soon to be discontinued
customer support from Microsoft (2) that many smaller retail companies
still use even today.
The main reasons for its use are its ease of use, reliability and rela-
tively low hardware requirements and the fact that many companies
simply don’t need to upgrade an older system.
The company is still using this system for most of its computers
due to the above mentioned facts, the fact that some hardware is older and
also the fact that the drivers of the laser engraver currently in use are not
compatible with newer versions of Windows.
One of these issues can be solved by upgrading the hardware to a
newer laser model that has newer drivers available.
Windows XP is sadly a necessary evil for the company and even
after all of the hardware is upgraded a single workstation using this sys-
tem must remain.
2.1.1.2 Corel Draw
Corel Draw is a vector graphics2 editing software that is locally installed
on every workstation. It is not a cloud based technology but for the sake of
the initial company analysis a brief description of it will be given.
It is mainly used for the design of stamps or marketing materials. It
is a reliable piece of software that the company started using in 1993 and it
is using it until today (with incremental software upgrades).
2A graphic file is stored as a database of coordinates and the resulting image can
be enlarged indefinitely without losing any quality.
5The software is indispensable and cannot be replaced as most laser
engraving machines are optimized for it. There’s also the fact that the em-
ployees are used to this software and changing it would therefore induce
additional costs for training if a switch to another software was made.
For these reasons, the software will not be changed. There may be
similar applications that are cloud based but being in the cloud is not such
a significant benefit that warrants a change in core software.
2.1.2 Marketing
The company uses fairly old technologies, if any, for marketing. When the
company started, its marketing was primarily based on word of mouth
and this is partially true even today.
This was combined with email and telephone marketing. The compa-
ny uses these tools until today.
These methods may still be effective and are probably used by most
retail companies but they are not efficient – starting to use modern cloud
based technologies should have a positive impact on marketing.
The company could also implement a form of permission marketing
(3) by allowing free access to some of their designs and knowledge about
stamps on their website.
2.1.2.1 Word of mouth
A integral part of any successful business, word of mouth is always pre-
sent and companies should use tools that improve its efficiency.
In the past, reviews and customer feedback were relayed mostly by
word of mouth. If a customer was satisfied, he informed others or the
company and the business steadily grew.
Today, there are cloud based technologies that have a similar effect
– social media and e-commerce review portals. They can be used to en-
hance the impact of word of mouth and will therefore be mentioned in the
next chapters.
2.1.2.2 Email
The most commonly used cloud based technology today. No company can
survive without using it for communication and information sharing.
There are alternatives, but the legacy system must always remain
as customers are used to this form of communication.
6Newer technologies may be working in the background, but the
front interface must remain the same, as most customers can only use this
form of communication and this will probably remain true for a few next
generations.
2.1.2.3 Telephone
Another legacy system, telephone communication is still used if real-time
interaction between the customer and the company is needed.
Email is good when sending files or communicating simple orders
or tasks, but whenever there is a pressing problem with an order the only
real option is to use the telephone and call the customer directly.
This not only helps solve the problem quickly but also increases
customer satisfaction – the customer is usually happier when talking di-
rectly to a human instead of typing messages into a machine.
Voice communication can be enhanced by using cloud based tech-
nologies and will be analyzed more in the next chapters.
2.1.3 Employee communication
The company is also using standard technologies for intra-company
communications that are used in small retail companies – gsm phone with
an unlimited European Union call tariff, Skype and Email.
It can be debated whether a gsm internet phone is a cloud based
technology, but for the purposes of this work it will not be classified as
such.
Skype and Email, however, are cloud based technologies and will
be classified as such.
2.1.3.1 Gsm telephone / Skype
As mentioned in the previous chapter, the telephone is indispensable for
most businesses. This chapter expands on the options of the telephone by
also mentioning Skype, a cloud based technology.
Skype is not used for communicating with the customer, as most
customers are not used to it and therefore do not know how to use it.
But inside the company, every employee knows how to work with
this tool and it is commonly used for communicating critical problems or
sending files.
7Its main benefit is the price, which is free if only used for Skype-to-
Skype calls. This helps keep the costs down, as it is significantly cheaper
for each employee to use Skype instead of paying a significant monthly
fee for an unlimited gsm phone tariff.
The company uses both of these approaches and combines them so
that problems can be solved relatively swiftly and in case one system fails,
a spare can be used.
2.1.3.2 Email
The same benefits from the previous chapter apply. Is mainly used to col-
lect orders, mark them as finished and send files inside the company.
2.1.4 Warehouse and accounting
Every retail business needs to write down, log and manage its accounting
data.
The company is currently using Stormware Pohoda, an accounting
software that is use for keeping the money and warehouse records.
The software is installed on a client machine and can only be ac-
cessed locally. This is a large drawback and cloud access has to be added
so that the data is accessible from anywhere.
The technical options and possible implementations will be men-
tioned in the next chapters.
There are other non-technical problems, however, as migrating to a
new economical software is a large step for any business. There are many
new problems such and upgrade would bring. Some of them were men-
tioned in the Corel Draw chapter – retraining the employees being the
most problematic.
Due to the fact that changing accounting software would be one of
the most significant ones, the topic will be returned to and expanded in
the next chapters.
2.1.4.1 Stormware Pohoda
The company is currently using Stormware Pohoda for all of it accounting.
It is a commonly used solution that a significant amount of Slovak
and Czech companies use (4).
8The main benefit is its localization and age – it is custom made for
the local market while also being present for more than 10 years. It used to
be a solid base to build a company on but it slowly lost its technological
edge and now there are other solutions present that are more technologi-
cal advanced.
One of the technological advances of other solutions is the utiliza-
tion of the cloud – being able to access the company’s economical data
from anywhere with the right password is great benefit that Stormware
Pohoda currently does not possess.
More will be said to this topic in the next chapters.
2.1.5 Sales
The company currently primarily sells its products by a single channel,
two physical stores located in the Slovak cities of Kosice and Roznava.
The company is also using Prestashop, an online e-commerce
sotware that is enabled on the www.peciatky.sk domain. This eshop is
currently not used by many customers and the revenue it generates is
marginal compared to the revenue of the physical retail stores.
This is one of the main areas that a correctly chosen cloud based
technology can help improve, as by upgrading the eshop with additional
modules or switching to new solution, the revenue of the company could
grow.
2.1.5.1 Retail stores
The impact a retail store has on a customer can not be greatly influenced
by a cloud based technology. The stores will therefore not be analyzed any
more in this chapter.
2.1.5.2 Prestashop
Prestashop is a French e-commerce open-source3 solution that the compa-
ny currently uses to help further the sales of stamps online.
The eshop is configured to sell stamps locally inside Slovakia,
which is a fairly large market of five million people.
The solution is not optimal, as it was created for a different (French
and global) market and there are issues, one of them being not able to
3 Source code of the software is freely available for download and sharing
9generate pdf invoices with special Slovak characters, another being that
the store is no naturally connected to online marketing services that are
provided only in Slovakia.
E-commerce is one of the areas that can greatly benefit by upgrad-
ing or changing the current cloud based solution. It will therefore be ana-
lyzed in more detail in the2 following chapters.
2.2 The methodology - SWOT
The company will be analyzed using the SWOT4 method. Weaknesses will
be analyzed further and a cloud based solution to them will be consid-
ered.
If viable, the solution will then be expanded and theoretically ana-
lyzed in greater detail.
It is also imperative to mention that a simplified version of SWOT
from the online publication eshopkniha.cz will be used (5).
2.2.1 Definition
“A SWOT analysis (alternatively called the SWOT Matrix) is a struc-
tured planning method used to evaluate the Strengths, Weaknesses, Op-
portunities, and Threats involved in a project or in a business venture.
A SWOT analysis can be carried out for a product, place, industry
or person. It involves specifying the objective of the business venture or
project and identifying the internal and external factors that are favorable
and unfavorable to achieving that objective. The technique is credited
to Albert Humphrey, who led a convention at the Stanford Research Insti-
tute (now SRI International) in the 1960s2 and 1970s using data
from Fortune 500 companies. „ (6)
4 SWOT stands for Strengths, Weaknesses, Opportunities and Threats
10The main division of SWOT (6)
SWOT can be used to identify the obvious but hard to notice problems
that a company has in a short amount of time, usually in less than 2 hours
for small companies.
This result is achieved by looking at a business from four points of
view, namely looking at the specific Strengths, Weaknesses, Opportunities
and Threats.
2.2.1.1 Strengths
The strengths are the advantages that a business has when compared to
their competition.
Examples of the advantages of a small retail company are fast de-
livery, good customer support or a good price.
112.2.1.2 Weaknesses
The weaknesses are the disadvantages a business had when
compared to their competition. It is the opposite of strengths.
Examples are slow shipping, bad products, complex business pro-
cesses or old technology.
This part of the model is interesting an all weaknesses will be ana-
lyzed in later chapters and a cloud based solution will be sought.
2.2.1.3 Opportunities
The opportunities are the chances a business can use to improve their
place on the market.
An example is discovering a hole in the market at a business can
fill such as finding a new and useful product that is being sold abroad but
has not yet arrived home.
2.2.1.4 Threats
Threats are elements in the environment that could cause problems in the
future for the company but are outside the area control and can therefore
not be changed, only prepared against to reduce the negative impact.
A perfect example of this is the economical depression that hap-
pened a few years ago – it was and still is a threat to most companies but
it cannot be influenced or prevented by any single company.
The only possible solution is preparation, the more a company is
prepared for a reduction in cash flow the better are its chances of survival.
2.2.2 The analysis
After finding each Strength, Weakness, Opportunity and Threat, every
single advantage or disadvantage is assigned two numerical values –
weight and rating. These values then help determine the result, a third
variable that explains the severity of every advantage or disadvantage.
By combining these results two additional variables are determined
– the external and internal summary. The absolute value of these two vari-
ables quantifies the amount of risk a company has from inside and outside
of the company.
A final variable, called the summary, is the sum of the external and
internal summaries and determines the overall risk a company is currently
at.
A low negative number means the company is in a large risk and
needs to improve, a high positive number means the company is working
fine and there aren’t any visible risks presents.
12An more in-depth explanation is provided in the attached
swotExample.xls file – it contains an example table that is pre-filled with
data and the workings of this model can best be grasped from it.
2.2.3 The SWOT analysis of the company
This chapter will provide a SWOT analysis of the company, as it will be
necessary for determining the need for and impact of each cloud based
technology.
As mentioned earlier, the analysis will be done according to the
methods mentioned in eshopkniha.cz (7) (the publication is a paid digital
download only and has not been released as a book, therefore it has no
ISBN number nor a paper form).
A finished SWOT analysis xls file will be provided at the end of the
chapter that will contain the finalized analysis with all the relevant data.
2.2.3.1 Strengths
Each company must have at least a single strength to be able to survive
on the market.
In the case of PV, these strength are its own physical store with a
warehouse, a good company name, a long existence on the market and
personal contacts with most of the stamp makers.
2.2.3.1.1 Own physical store with a warehouse
PV has a physical store from the year 1992. The store also has it’s own
small warehouse for storing stamps.
The physical store cannot be outsourced, but a part of the ware-
house could be outsourced to an external warehouse that can distribute
products worldwide. Such warehouses exist and most of them provide a
software module that can be used for connecting an e-commerce solution
with the warehouse for better order management.
A few such warehouse and ecommerce solutions will be analyzed
in the next chapters.
2.2.3.1.2 Good company name
PV is present on the market for a long time and it therefore managed to
gain a lot of customer recognition and a good company name.
In terms of cloud based solutions, this attribute is relayed in the
form of several company records in free and commercial Slovak company
databases.
13It also means that PV has more than 20 years of records of com-
munication with other companies which means that there are several
communications channels that are and can be used to get more revenue.
2.2.3.1.2 A long existence on the market
As mentioned in the previous chapter, PV has a good company name and
one of the reasons is that it is a solid company that has survived until now.
As it has been mentioned before, this point will not be analyzed
more.
2.2.3.1.4 Personal contacts with stamp makers
There were many stamp makers when PV was founded and some of them
are still active on the market. PV can therefore use these contacts to scan
the market for opportunities or gain new stamp making knowledge.
It may also help in getting better deals from distributors and there-
fore provide a competitive edge to the company.
2.2.3.1.5 Experienced team
More than half of its employees are in the company for more than ten
years. These employees have good experience about the stamp market
and are therefore a great asset to the company.
They can not be directly influenced by cloud based technologies
but improving the existing tools that are currently in use can help these
experienced employees work more efficiently, which will have an impact
on the company revenue (1).
More thought to existing cloud based solutions that can benefit the
employees will be given in the following chapters.
2.2.3.2 Weaknesses
The weaknesses are critical problems that PV has to solve in the short
term to remain competitive.
The main weaknesses are the weak e-commerce that the company
is using, the lack of customer feedback management, the accessibility of
email from the cloud, webpage accessibility and the use of old hardware
and software.
2.2.3.2.1 Weak e-commerce
As mentioned in the previous chapters, PV is currently using Prestashop
as its e-commerce platform.
14Prestashop in configured and installed in its default settings and
the solution works – a customer can finish an order by using the system
but the conversion rates5 of the store are low and PV is therefore not us-
ing the full potential of the market.
This is one of the key problems of the company and this specific
weakness will be analyzed in more detail after alternative cloud based
technological solutions are mentioned in the following chapters.
This weakness must be solved, as it is the key blocker for the fu-
ture growth of the company.
2.2.3.2.2 No customer feedback management
Collecting customer feedback is important – without it problems can not be
discovered and solved in a timely manner. These problems will then re-
main and hinder the growth of the company.
PV is currently not using any automatic cloud-based system that
allows customers to provide feedback. This is a significant problem as
there is no way for the employees to troubleshoot problems.
And even if an employee gets customer feedback by another
channel such as an email or phone, the knowledge is not stored anywhere
expect for the employees head.
This means that the owner of the company may not get the cus-
tomer feedback or the knowledge may be lost if the employee leaves the
company.
There also isn’t a way to measure or promote customer satisfac-
tion, which means the company may have significant problems but does
not know about them.
There are simple cloud-based solutions available that can help in
solving this problem and the company is currently in the process of im-
plementing them.
These solutions will have their own chapter in which their analysis
and implementation will be described.
2.2.3.2.3 Email accessible only locally
Email communication is being handled by downloading all email locally to
Outlook.
This is not an optimal solution as all of the sensitive data is located
locally and in case of computer fault the data may be lost. There is a
backup available but restoring full functionality will take time, and this de-
lay may influence the business operation and may even lead to a loss of
revenue.
5 The number of visitors that become paying customers
15There is also the problem of accessing the emails from outside of
the company – email can not currently be read from any other work-
stations than those inside of the company.
If a critical email is received during a longer holiday, it may remain
unnoticed for several days.
There is a solution that is currently being implemented and the
cloud based technology that the solution uses will be analyzed in the next
chapters.
2.2.3.2.4 Webpages not accessible from local network
The current company website is not accessible from inside the company
network.
The server that the website is stored on is in the local network and
the configuration of the DNS server does not enable any other local com-
puters access to the server via a domain name. The website can only be
accessed by using an IP address.
PV is in the process of migrating it’s hosting to another provider
and this problem is expected to be solved after this work is published.
The reasons, analysis and explanation for the selection of a new
hosting provider will be mentioned in it’s own chapter.
2.2.3.2.5 Old hardware and software
The company is using older hardware that mostly runs Windows XP oper-
ating systems. The reason for this is hardware compatibility and the cost
and risks of upgrading - some hardware may cease to function properly.
The solution for this is a sequential upgrade – computers will be
upgraded one by one and any faults will be discovered and solved on the
spot.
The main laser engraving machine is dependent on Windows XP,
as it is an older machine and no new drivers exist. This can be solved by
ordering new hardware that is compatible – this was previously not a via-
ble option as the cost was too high but the hardware has fallen in price
significantly and the upgrade is now worth it financially.
2.2.3.3 Opportunities
Opportunities are the possibilities that can improve the business but can
not be influenced by the company.
An example can be a sale from the distributor – PV can not influ-
ence if the distributor temporary reduces the price but it if happens it will
have a positive impact on the business.
162.2.3.3.1 Lower price of shipping
This opportunity can benefit any business that sends their products via
mail.
It will however benefit all the companies that are present in the
market, and the benefit that it brings is therefore not significant.
2.2.3.3.2 A sale from the product distributor
Most business have this opportunity – when the distributor has a one time
sale it can benefit the business by providing cheap products to sell to cus-
tomers or to use as a price bait.
There is little assistance that a cloud based technology can bring,
this opportunity will therefore not be mentioned in the text any more.
2.2.3.4 Threats
There are three main threats that can negatively impact PV – a hardware
failure, employee problems and a change in the costs in running the busi-
ness.
2.2.3.4.1 Hardware failure
One of the biggest threats for PV is the hardware failure of one of its laser
engraving machines.
There are spares available but not all of the bugs have been fixed
yet. In case of a failure the company will have problems with keeping up
with the production.
The problem can only be solved by communicating with the Chi-
nese laser distributor and working out the bugs. Communications is prob-
lematic, as the Chinese level of English is usually not the best for an effi-
cient technical communication.
There are cloud-based tools, however, that can help improve the
communication and therefore help in solving this problem.
These tools will be mentioned later in more detail in its own chap-
ter.
2.2.3.4.2 Employee problems
A company is dependent on the well being of its employees. Problems
might arise if an employee quits or leaves due to health problems.
This problem can not be solved by any technological solution as
they are mostly natural, and will therefore not be mentioned again.
172.2.3.4.3 Change in the costs of running a business
Another threat that can not be averted by any technology is the rising
costs of running a business, be it a change in law or an increase in the
costs of renting a physical store. This threat will therefore not be men-
tioned again.
2.2.3.5. The result
After theoretical consideration, every Strength, Weakness, Opportunity
and Threat is written down and two numerical values are assigned to each
one.
The result is attached in the SWOT1.xls file. It is important to note
that the summary of the weights in each of the four tables must be equal
to 1. A positive rating is attached to every Strength and Opportunity and is
in the range from 1 to 5, a higher number meaning a more valuable attrib-
ute.
A negative rating is attached to every Weakness and Threat and is
from the range of -1 to -5, a lower number signifying a more problematic
attribute.
Each S,W,O,T has a summary, a number that defines how positive
or problematic an attribute is for the business.
The final, fifth, table lists the sum of external (Opportunities and
Threats) and internal (Strengths and Weaknesses) summaries. This num-
ber signifies how dependant a company is on variables that it can influ-
ence (internal) and on those that it can not influence (external).
These two values are then combined to return a single and final
variable, a number that defines the risk the business is currently in. The
higher the number is, the better is a business prepared to face problems.
The summary of the current state of PV can be seen in the follow-
ing table:
18Own physical store with a warehouse Lower price of shipping
Good company name A sale from the product distributor
Long existence on the market
Personal contacts with other stamp makers
Experienced team
Summary – strengthts 3,8 Summary - opportunities 3
Weak e-commerce Hardware failure
No customer feedback management Employee problems
Email accessible only locally Change in costs
Webpages not accessible from local net-
work
Old hardware and software
Summary – weaknesses -4,2 Summary - threats -4,6
Internal -0,4 External -1,6
Summary -2
.
This table is a summary from the SWOT1.xls file.
The internal summary is negative (-0,4), which means that that PV
is currently in a small risk from internal problems. Some of these problems
can be solved changing some of the technologies that PV can use.
The external summary is also negative (-1,6), but is four times as
large as the internal value. This poses a large problem for PV and signifi-
cant improvements have to be made for the company to be able to with-
stand any of those problems.
Due to the fact that both internal and external summaries are nega-
tive, the overall summary is also negative (-2).
The number signifies the fact that there could be problems in the
future if the issues are not solved. The next chapter will list technologies
(some of2 them cloud-based and some not) that could help improve the
results of this analysis and therefore better prepare PV for the future.
193 The technologies
This chapter will list possible technologies that are currently available on
the global market and that can be used to benefit the business.
A cloud-based solution in this text is expected to provide access to
the data stored inside it from anywhere in the world. It does not matter if
it is working only in a web browser or client software is needed to be in-
stalled, only the data availability is important.
This chapter will be divided in the same manner the first part of
the fir chapter was. Cloud-based technologies that can benefit each part of
the business - content creation, marketing, employee communication and Ware-
house, economy and payments management will be mentioned and their price
and potential business impact will be analyzed.
3.1 Content creation
PV mainly uses CorelDraw, a vector graphics editor, to design stamps.
This software is only compatible with the Windows operating system and
is therefore not the optimal solution – if an employee wants to work from
home another software license must be bought.
Another issue is with data sharing – any CoreDraw file that is
saved on a home computer is only stored locally and must be imported
into an external data storage service for it to be accessible from a work
computer.
There are several solutions on the market that are aimed at cloud
data storage, the most significant being Dropbox. They will be compared
and an optimal solution for PV will be suggested.
3.1.1 Operating systems
There are three dominant operating systems available –Windows, MacOS
and Linux.
203.1.1.1 Windows
Windows is the most dominant operating system in the world (7) that is
maintained and distributed by Microsoft. As mentioned earlier, PV is us-
ing workstations that have Windows XP installed.
As the most dominant system, Windows provides a stable plat-
form that most applications can run on.
Most older hardware can only work with Windows XP as there are
no divers available for other platforms, so having at least a single work-
station running this operating system in the company is required.
All but one workstation can be upgraded to a newer version of the
operating system and this upgrade should not impact normal working
conditions.
The current hardware could not run efficiently with the newer ver-
sions however, as their hardware requirements are above the average
computer that is currently available at the company.
The software upgrade would therefore warrant a hardware up-
grade, which may end being a significant cost for the small company if
upgrade costs for IT specialists are included.
3.1.1.2 MacOS
MacOS is an operating system that is being developed by Apple.
The price of Apple hardware is above the average prices of com-
puters on the market. The higher price does not warrant the upgrade.
Even if the pricing was lower, there are still issues with compatibil-
ity.
The company gets most of its hardware from Chinese distributors
and the mandatory system is Windows. If the company would migrate to
MacOS and Apple computers there would be a high risk of some new
hardware not working properly on an unsupported system.
As it is currently problematic to gain reliable information from the
distributors (due to problematic communication) migrating to this operat-
ing system is not advised.
3.1.1.3 Linux
The third upgrade option is Linux, a free and open-source operating sys-
tem.
21The system is technologically advanced but suffers from a frac-
tured community, problematic support and the same compatibility issues
that MacOS has with older laser engraving hardware.
As a new and relatively complex system to administer, the price of
support for the system would be higher than that of Windows, which is
more used and therefore more competition exists on the market for IT
specialists and the price is therefore lower.
The fractured community makes working with the system harder,
as there are several versions of the operating system available, each hav-
ing small differences that are usually insignificant for the user but make
troubleshooting problems harder as each distribution is configured differ-
ently – a solution that works for one distribution may end up breaking
another.
This makes the initial benefit of a lower price (Linux is free to
download and use) less significant, as the variable costs for upgrading the
system may end up costing more in the long term than buying Windows
or MacOS.
There is also the problem of a slightly different interface, which
also adds costs as the employees need to be trained in the proper use of
the system.
For a data server, however, this operating system is a good choice,
as its advanced technology can benefit the company.
PV is currently not using any Linux workstations but it is using
and unspecified number of Synology6 network attached storages that are
running a modified Linux to back up an synchronize data. The number of
servers will not be disclosed in this work as it may compromise data secu-
rity.
3.1.1.4 Recommendations
The current architecture of Windows workstations combined with several
Linux based data servers is currently an optimal and cost effective solu-
tion.
The Windows XP workstations should be replaced with newer
hardware that is running at least Windows 7, but the old computers
6 A company that is a dedicated Network Attached Storage Provider
22should pre preserved in case of an emergency or the need to use older
hardware.
3.1.2 Vector editor
The company currently uses CorelDraw, a Windows only vector editor.
There are other options for vector editing software on the market –
Inkscape and Adobe Illustrator.
3.1.2.1 CorelDraw
CorelDraw is the vector editor that PV is currently using. It is designed to
work on the Windows operating system only.
This single platform is its main limitation. It can be run on other
operating systems using virtualization (8) but the effect is not optimal –
the software performs slower and printing may prove problematic.
The software is still one of the best on the market, as it is easy to
use, the software is not expensive and it is compatible with most laser en-
gravers.
Chinese distributors also provide specialized engraving modules
that integrate into CorelDraw.
These advantages make this software the optimal solutions, but
two other alternatives will be mentioned and the reasoning behind not
using them will be explained.
3.1.2.2 Adobe Illustrator
This software is similar to CorelDraw but it is available on two operating
systems – Windows and MacOS.
The software has similar functionality as CorelDraw, the main ben-
efit being Adobe Creative Cloud7. Using the cloud requires a monthly fee
per employee, which means the software is significantly more expensive
than CorelDraw.
The higher price does not currently bring any benefits to the busi-
ness, therefore PV will not use this software.
7A subscription cloud-based services that allows access to Adobe software for a
monthly fee.
233.1.2.3 Inkscape
The third available option is to use open-source software which is free to
use.
The main benefit of this solution is seemingly the price, but the
costs if implementing and using this software would be higher than buy-
ing a commercial solution.
Inkscape has a problematic PDF export function – creating docu-
ments with printing marks is too complicated and the result is not always
usable.
There is also the problem of opening Inkscape vector files in other
software – the vectors don’t keep their positions and the graphics are
therefore damaged.
Repairing this damage manually requires human resources which
means this software wastes money and time.
Support is also problematic, there may exist a community that can
help solve problems but commercial support is usually faster.
Until the critical problems are fixed, using this software is not an
option for PV.
3.2 Marketing
The company uses telephone and email marketing. As telephone market-
ing is heavily dependent on human resources and technologies can not
currently solve this problem (there are not yet any sophisticated voice
emulators that can do telephone marketing that I am aware of) it will not
be analyzed in this work.
Neither will sms marketing be considered, as it is a form of spam
marketing and may end up damaging the name.
3.2.1 Word of mouth
Word of mouth ratings about a company can be extended to cloud-based
applications by gathering and promoting customer reviews.
If a company has an eshop it can combine it with Heureka.sk to get
and publish customer feedback.
A company can also use Nicereply.com to gain feedback on email
communication. This feedback can then be published on the company’s
website.
243.2.1.1 Heureka.sk
Heureka.sk is Slovak an e-commerce product and search aggregator that
also includes reviews of Slovak e-commerce websites.
It can be classified as word of mouth as any satisfied or unsatisfied
customer can post a review of the e-commerce website that he has just
used.
Heureka.sk can also be integrated directly in an eshop – 10 days
after a product is ordered and mail is sent to the customer which allows
him or her to review the eshop. This can be the source of cloud-based
word of mouth marketing, as the review is then publically available to all
potential customers.
The tool can also be used for pay-per-click marketing. The prod-
ucts list of an eshop can be imported into Heureka.sk. The cloud tool then
analyzes the products, categorizes them and allows searching through the
product stock of the store. Money can be added to a company’s
Heureka.sk store account, which is then used as credit and is subtracted
each time a customer is redirected to the store.
As each click costs 0.02 Euro in average, it is a cost effective option
of promoting a company while also helping get new customers and reve-
nue.
PV is already registered on Heureka.sk but as of writing this text
there are not enough reviews publicly available, therefore it is not yet a
good marketing channel. This will change as more reviews are added.
3.2.1.2 Nicereply
Nicereply is a customer satisfaction collection cloud-based tool. It can be
used to gather feedback from existing customers and then share it to pro-
mote the services of a company.
The cloud-based services is subscription based – there are three
different tiers – the cheapest costing 19 dollars per month. The pricing is
relatively high for a small company but as PV is also a customer of
Websupport 8 it gets the first tier for free.
PV is currently in the process of implementing Nicreply.
8 A Slovak web hosting provider
25A simple Nicereply.com customer feedback form
3.2.1.3 Email
Email is still a valid marketing channel (9) for approaching existing cus-
tomers.
3.2.1.4 MailChimp
MailChimp is a cloud-based email marketing and customer engagement
tool.
The tool can be accessed from a web browser and can be used to
create every aspect of a marketing campaign.
The tool has its own email designer that can be used to create mar-
keting emails. A design can be either selected from a gallery of prepared
templates or a custom design can be created from the grounds up.
Every template available is optimized for mobile devices, tablets
and personal computers, therefore it is best to use an existing template.
26MailChimp Tempate editor
MailChimp also provides tools for A/B testing9 (10).
Sending two sets of emails and measuring their conversion rate
allows a business to slowly improve their marketing campaign.
Mailchimp also provides case studies that provide research on
email marketing which should help with the reach of a campaign (11).
The main disadvantage of the cloud-based solution is its language
– it is currently not translated into the Slovak language which means that
the employees of PV can not use it, as they can not speak English.
This can, however, be solved by using the automatic translator in-
side Google Chrome to machine translate the tool.
The pricing of the tool is also affordable – it has a monthly sub-
scription model that starts at a free price for up to 12000 mails and 2000
subscribers per month.
MailChimp is a great solution for email marketing and PV should
thereof re start using this tool to improve its marketing.
9A form of testing where two different versions of marketing email are sent to
two different groups of customers and their performance is measured and com-
pared.
273.2.1.5 Telephones
Telephone marketing does not scale well and can not gain much benefit
from any cloud based apps, it will therefore not be considered.
3.2.1.6 Facebook
Facebook can be used as another marketing channel. PV currently has a
fan page with a few followers. The page is used for posting pictures of
graphical designs and special sales.
Facebook could be used to promote the company and help gain
customer feedback.
3.3 Employee communication
Employees can use voice or written word to communicate. There are sev-
eral possibilities for communication, the ones PV is using now is Skype, a
gsm phone and email.
There is currently no efficient way to exchange data implemented
in PV, as files are usually shared using email.
The alternatives for sharing files are using Windows compatible
cloud-based data storage such as SkyDrive or Dropbox.
3.3.1 Gsm telephone / Skype
As PV is using a combination of a phone with unlimited calls and Skype,
and Skype is a cloud-based solution that currently suffices for the needs of
the company this aspect of the business will not be analyzed.
It is also interesting to note however that Skype is being also some-
times used for data sharing.
3.3.2 Email
The company is currently using Outlook for most email communication.
This solution is not optimal as email can not be accessed outside of work.
There are several cloud-based solutions available, such as migrat-
ing to Google Apps for Business or migrating to a different hosting com-
pany such as Websupport.
283.3.2.1 Google Apps for Business
This cloud-based service is provided by Google and is hosted on their
servers. The pricing of the services was changed two years ago – it used to
be free for up to 10 user accounts but now it is only available if a monthly
subscription of 5 dollars per user is paid.
The service also includes 30 GB of Google Drive storage including
access to their cloud-based office tools.
Choosing this service is a valid option for PV, as the interface of the
service, the ease of use and the extra benefits of cloud-based storage
would be a boon to the company.
There are, however, similar, solutions available on the Slovak mar-
ket that can provide comparable email hosting capabilities with the added
benefit of web hosting, which Google does not provide.
3.3.2.2 Websupport
Websupport is a company that provides web and email hosting. PV is cur-
rently moving its domain to this new hosting as part of improving cloud
access to email and its website.
Websupport provides an email cloud-based application that is us-
ing Roundcube10. This alternative may not have all the capabilities of
Google Apps for Business such as labels and dividing messages by type in
tabs, but it is a valid solution as it provides easy to use cloud access to
email.
The pricing of the service is 3 Euro per month, but the price also
includes 4 GB of web hosting. It also includes free access to the first sub-
scription tier of Nicereply.com that is worth 19 dollars.
This is the most cost efficient solution currently available, as PV
has access to a solid cloud-based email tool from a large Slovak company
for little monthly investment.
The support and technical assistance that the company provides
for its services is an improvement from the previous hosting company that
PV has used, as a reply is received in under an hour and problems are
solved swiftly.
10 An open-source web client for email
29The replies are also more specific and a solution to a problem can
be achieved in a short amount of time as the support personnel has more
technical knowledge then the previous host.
PV currently migrated only a single domain to Websupport but
more domains will be migrated in the future as the business will grow.
3.3.3 Data sharing
Exchanging data inside a company can be regarded as part of employee
communication.
There are several options for data sharing available, but this chap-
ter will only analyze the two most dominant cloud-based solutions for the
Windows operating system – Dropbox 11 and SkyDrive12.
3.3.3.1 Dropbox
Dropbox is a cross-platform13 cloud-based data sharing service. It can be
used to store, back up and share stamp design files and other company
documents.
The Dropbox client software can be installed both on work and
home computers to keep the important project files accessible from both
places.
Dropbox can not be used for large backups however, as the free
version is limited up to 2 GB of storage (12). Each additional 100 GB cost
10 dollars per month which is too expensive, as PV has already invested
into NAS14 that can do large backups for a low variable cost.
PV is currently using Dropbox on some computers but it is mainly
used for small backups instead of sharing work files.
3.3.3.2 SkyDrive
SkyDrive is a similar cloud-based service as Dropbox, the main difference
being that it provides 7 GB in its free plan.
11 http://www.dropbox.co
12 http://skydrive.live.com
13 Can be installed on Windows, MacOS, Linux, Anroid, iPhone and Windows
phone
14 Network Attached Storage
30SkyDrive is also installed on every Windows 7 operating system by
default as it is a service provided by Microsoft. An additional 100 GB of
storage cost 50 dollars per year (13), which is cheaper than Dropbox.
But as mentioned in the previous chapter, PV is using NAS to back
up large files, therefore the lower price or large free account is not a large
benefit.
3.3.3.3 Synology NAS
For large backups and data sharing, PV is using several Synology NAS
units.
Each unit serves as a network drive where all data is stored. This
data is synchronized to other physical locations during the night to pre-
vent any data loss that could cripple the company.
Synology is based on Linux and software upgrades are free, the
only investment into the system was its initial cost.
The storage can be attached to any operating system as a network
drive.
Each unit cost 350 Euro but this was a single fixed cost – when cal-
culating the long term variable costs the system is cheaper than Dropbox
or SkyDrive when storing large amounts of data.
3.4 Warehouse and accounting
Both the warehouse and accounting are being managed in Stormware
Pohoda.
One version that manages the warehouse and sales is installed in
the retail store while another copy is installed in the accounting depart-
ment.
There are several problems with this solution, the main being the
sharing of data which has to be achieved by physically copying and send-
ing the data on an external dive.
Another problem is with data access – accounting can only be
checked locally. This poses a problem when information is immediately
needed.
31There is another competitor on the Slovak market – WinStrom
Flexibee15 that could solve these problems.
3.4.1 Pohoda
Both the warehouse and accounting are being managed in Stormware
Pohoda, a Slovak and Czech software.
It is officially compatible with Windows only, but can be used on
MacOS using virtualization (14).
The software was chosen by the company more than 10 years ago
because it was the dominant solution for accounting on the market and
therefore most accountants could work with the software.
But the software did not date well and currently is not using ad-
vanced technologies that would allow remove access to the software.
The benefits are that due to the fact that it is commonly used in
Slovakia, it can be connected with most e-commerce solutions.
Exchanging the software would require retraining or replacing the
accountant, which would prove problematic.
Migration to a different accounting software is therefore not viable.
3.4.2 Winstrom FlexiBee
This accounting software can be used locally or in a cloud. It is both
younger than Pohoda and more expensive.
The pricing of Winstrom FlexiBee is per company, meaning that if a
single company is divided into smaller ones the software becomes more
expensive than Pohoda.
It provides a better interface and is available on all platforms, oth-
erwise it performs exactly the same as Pohoda .
When calculating the costs of retraining the accountant and the
higher price of software, the upgrade currently does not make financial
sense for PV.
3.5 Sales
Sales are the area that could benefit the most from a cloud-based solution
as the company currently mostly sells its products by a physical store on-
ly.
15 http://www.flexibee.eu/
323.5.1 Retail stores
Cloud-based technologies cannot directly affect the sales of a retail store,
and indirect effects such as marketing have already been mentioned.
3.5.2 E-commerce
As mentioned earlier, PV is using Prestashop 16as its e-commerce solution.
The eshop is not performing as well as it should and an alternative solu-
tion is to use a subscription cloud-based service called ShopTet17.
3.5.2.1 Prestashop
PV is using this open-source eshop for over 2 years but the sales are not
comparable to the sales of the physical store.
Prestashop is an open-source eshop that is freely available for
download. Unofficial support for it can be gained free of charge from the
official forums.
The eshop can be extended by adding modules, which are availa-
ble for free or can be bought.
Prestashop natively supports multiple language, which means that
PV can easily extend its services abroad.
Prestashop may initially seem as a cheap solution, but selecting
this solution can limit future growth as the costs for upgrading and servic-
ing the system raise in time and it may end up being more expensive as
custom made solution (15).
The price of commercial extensions for the system varies between
ten to a few hundred Euro, therefore creating a highly customized eshop
will be expensive.
The system is also not optimized for the Slovak market as it does
not include modules that can connect to Heureka.sk – PV had to buy the
module from a Czech company. PV also had to buy a module for 100 Euro
that would allow customers to attach files (stamp designs and logos) to
their orders. Prestashop had this functionality by default but it was se-
verely limited as it did not allow uploading pdf and cdr files.
16 http://www.prestashop.com/
17 http://www.shoptet.sk/
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