Would you recommend that Steven and Tom consider an investment in IT?


Tom O’Neal always wanted to own his own business. When he was in high school, he worked evenings and most weekends at a neighborhood bicycle shop. When Tom went to college at the nearby State University, he still came home in the summers and worked at the bike shop. On graduation from college, with his accounting degree in hand, the sole proprietor (Steven Judson) of the bike shop invited Tom to become a full partner in the bike shop. Steven told Tom that he really wanted to grow the business and thought that Tom was just the person to help him do this. Tom decided to join Steven. Over time, the business grew, and they opened two more bike shops in neighboring cities. Sales increased to more than $3.5 million during the past year, and the 3 bike shops now employ 14 full-time workers and another 6 part-time employees. Although Steven and Tom hired an accountant who was keeping their books for them and producing the financial statements each year, the partners thought they needed much more information to really run their business efficiently. They thought that they might need to make an investment in information technology to take their business to the next level.

a. Would you recommend that Steven and Tom consider an investment in IT?

b. Visit the Web sites of the vendors that offer the appropriate-size software packages for this business. What are some of the features of possible software packages that Steven and Tom should consider?

c. Would you advise Steven and Tom to hire a consultant? Support your recommendation with appropriate research citations (e.g., business articles that offer this type of advice—what rationale do they give?)

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