Lbs Case Study

In: Business and Management

Submitted By mabass05
Words 528
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LBS is a textile firm that designs fabrics for the wholesale market in the Northeast. The company over the last three years has experienced modest growth, but is now encountering significant competition from Asia. More and more weaving plants in the U.S. have closed, and price discounts from the East are forcing many firms to consider importing fabrics from abroad and to go directly to the weavers, as opposed to LBS.

LBS needs to consider a number of ways to expand its operation, but will need to invest in technology expansion. It has little experience with technology and currently has a 300-node network system running Windows (they have 400 people). The firm has a homegrown wholesale distribution and accounting system using a very old legacy system. LBS is thinking of replacing the system to help support a proposal of expansion to the West coast. The expansion requires a 25% increase in personnel. There is also a need to consider more e-business systems to operate with weaving plants in China. The current network infrastructure is outdated, machines need to be replaced, telephone systems need to be updated, and delivery/import systems need to be constructed.

LBS has an operating budget of $50 million and a capital budget of $5 million. After careful analysis, you as the Technology executive have determined that the following cost investments are required:

Capital investments in equipment and operating systems $8 M
Personnel additions in IT $1 M
Application Software (accounting, fulfillment, etc.) $2 M
E-business systems $4 M
R&D in textile design and new advanced products $3 M
Telephone and wireless technology $.5 M
Travel, training and misc $1 M
Total Funding $19.5 M

Thus, the investment in relation to the budgets is enormous. You have been asked to issue a report to management on your proposal; no one knows these numbers. Obviously LBS will need…...

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