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Information systems are an integral part of any business. This report provides a consultative guideline to Star Supermarket Ltd in the application of a modern information system in its operation. The system will be integrated after the Supermarket establishes outlets in Fgura, Hamrun, and Rabat. The contemporary information system will allow the attainment of the following three objectives, i.e., improvement of customer experience, improving the employee experience and to adequately support and improve decision making.
a) Distinguish between data and information, and explain three (3) uses of business information. Provide examples which are pertinent to the supermarket business.
Is the raw numbers and figures that require processing so that it can be meaningful. Conventionally in business systems data includes numbers, words, and symbols. This raw information in a business such as in the supermarket is collected in relation to transactions, facts, and events. In the case of a supermarket data when selling a product then data will include the time and date of the transaction, facts of the product bought, the transaction value, mode of payment i.e. credit card, cash or debit, the employee that recorded the sale and any promotional discount applied (Hardcastle, 2011).
In the case of Star Supermarket Ltd, the data will be collected and processed at the point of sale. Once the data is processed, the customer will be able to receive a receipt (Hardcastle, 2011). The data will also be useful to the supermarket management.
This is the processed data that is meaningful to the person receiving it. Once data has been processed it has to be meaningful to the target audience to be termed as information.
Use of business information
The key requirement for a business to plan properly is information especially regarding the resources at its disposal, e.g., cash, human resource, customers, machinery and equipment, property, etc. (Hardcastle, 2011). The business will also require vital information about the markets in which it serves, in case of the Star Supermarket the location and the demographics will be useful. Information with regards to the competitors with increase the supermarket's competitive advantage. Information is a key ingredient in decision-making at the planning stage.
The monitoring and control of resources against the plan created require business information. Information, in this case, will be used to measure the progress of Star Supermarket Ltd against the created plan (Hardcastle, 2011). The information will provide the progress of those activities and products that are doing well and those that are performing dismally as per the company plans.
The information about every transaction in the Supermarket requires to be collected. The details of the financial transactions, deliveries, and inventory in the Supermarket will require to be collected and the recorded for processing or future use (Hardcastle, 2011). The recorded data will provide a point of reference in the future.
b) Describe five (5) qualities of ‘good’ information. Provide examples which are pertinent to the supermarket business.
Quality information is one that is free from errors where the facts and figures add up. In case assumptions or estimates have been utilized in the information then it will be prudent that the intended user is informed. The accurate information is due to accurate data collection (Hardcastle, 2011). In case of the Star Supermarket Ltd, the data should be up-to-date rather than being perfect. Outdated perfect data will not be useful in the fast moving supermarket business (Hardcastle, 2011).
It is important for information to be complete so as to provide a clear, concise picture of the situation. Partial information will provide a selected part of the whole picture which might not be a representative of the situation on the ground. The demand for a given brand or product is vital information especially in decision making in the supermarket business but if not completely put and described it would be difficult to make meaning of it (Hardcastle, 2011).
Information, however, vital should be evaluated for its benefits and the cost used in obtaining it. In the supermarket business, it is not justifiable to spend a lot of resources to acquire information that does not recover its cost. This will be wasteful and would lead to losses each time the information is collected (Hardcastle, 2011).
Every user has different needs in terms of information hence the information presented any time should be conveyed in the style, format, detail and complexity that addresses the needs of the user. Consider the senior management at Star Supermarket require a report highlighting the position and the performance of the business which will be different to the information required by the operations manager for the daily decision making.
The information collected should be required by the user. For instance, the information provided to the management should be required for decision making. The business produces a lot of information in their information system (Mai, 2013). For information to be relevant, there is need to define the objectives of the information to be provided. The information should be produced so as to focus on the exceptions such as the problems, low or high values that have been exceeded (Hardcastle, 2011).
a) Describe 2 internal sources of information normally used by organizations in the supermarket business.
This organizational information is related to the performance of Star Supermarket Ltd. The information includes the profit and loss company. This information will be vital for major decision making by the management (Lindblom, 2008). The other financial information that can be accessed as an internal source of information is the salaries and wages of the employees, the cost of rates and the taxes accrued to the Supermarket. The generation of the financial information originates from the finance department under the financial controller or the accountant. The financial controller will ensure that the company continues to operate at a profit (Pedersen et al., 2002).
Purchasing and Sales information
This information is the most vital information as it consists the lifeline of the supermarket. This information consists most of the inventory in Star Supermarket. The purchasing information is collected by the purchasing department (Lindblom, 2008). The department collects information with regard to the products that have been bought. The products will be significant in running the business ranging from stock, stationery, computers, machinery and property. Star supermarket will spend more on buying the stock as it is the lifeline of the business (Pedersen et al., 2002). The purchasing department will be monitoring the cost and quality of the goods bought.
The sales information is also an integral part of the supermarket inventory. The sales information is collected and monitored by the sales department. The sales department will monitor the products and services offered by the Star Supermarket. This source of information will entail will be vital in the computation of the revenue of the supermarket. The financial controller will use this information to ensure that the cost of the good or service less the sale price. This information will be used to gauge the performance of a given product and if it is deemed to be performing dismally the information will be relayed to the marketing department to increase campaign for the sale of the product or service.
b) Describe 3 external sources of information normally used by organizations in the supermarket business.
The government is a reliable source of external information to the company as it the overall overseeing body to the various business regulatory arms (Pedersen et al., 2002). Star supermarket a company is advised to utilize every bit of legal information that emanates from the government so as to operate successfully and legally (Lindblom, 2008). For instance in remuneration of the employees, then Star supermarket will need to adhere to the minimum hourly wage as stipulated by the government.
These are businesses operating in the same sector as the Star Supermarket. The supermarket may be a member of a retailer’s trade association. The membership to this group provides companies with access to information (Lindblom, 2008). This information is vital in the smooth running of the business. The supermarket will have access to latest laws and an umbrella protection against manipulation and intimidation by the government (Pedersen et al., 2002).
Databases and Research
Star supermarket can gather vital information through research. This information might be vital in the increasing of the sales level and the profitability of the business (Pedersen et al., 2002). The information gathered must be reliable and accurate. Star supermarket can also pay to access the commercial databases. These databases are directly linked to their business sector (Pedersen et al., 2002).
Distinguish and explain five (5) differences between strategic, tactical and operational information used by organizations in the supermarket business.
This is the information that states what Star Supermarket wants to achieve in the short or long run, e.g., Its eminent expansion to Fgura, Hamrun and Rabat.
This is information that defines the short term planning with the emphasis on the current operations of Star supermarket
This information entails the connection of the strategic goals and tactical goals and objectives with the daily functioning of the Star Supermarket
The strategic information covers the whole organization as opposed to a specific unit in the organization. For instance, this information will provide what is expected to be achieved by Star Supermarket as an organization rather than individual outlets.
This information outline what each unit in the organization will be expected to achieve. For instance, the sales that are supposed to be achieved by the Sales department of Star Supermarket for a certain quarter. The plans are usually aimed at the personnel, marketing, and finance departments (Riskope, 2014).
This information is vital in the description of the milestones conditions for success and illustrates how. It also portrays what portion and provides the strategic plan to be implemented during the operating period. In this case, this information will define what the Star supermarket will be expected to accomplish daily.
The strategic information contains the objectives of the organization for a period of 3 to 5 year. For instance, as part of Star supermarket expansion plan, it may decide to acquire a competing retailer.
The tactical information in an organization entails short terms goal less than 3 years. Mostly the information contains the main activities within a year. The Star supermarket may decide to expand by opening outlets within a fiscal year which is tactical (Riskope, 2014).
This is information is short-lived accounting for the daily operation of the organization. This information defines what the organization will accomplish for a given day or quarter.
The strategic information of an organization contain answers to the following questions:
How do we excel?
What do we do?
For whom do we do it?
The tactical information contains answers to similar questions as those in strategic information but for a shorter period
The questions answered by the operation information in any organization include but are not limited to
Where are we now?
How do we get there?
Where do we prospect to be?
How do we measure our progress?
The strategic information also points at the various uncertainties and mishaps that define that occur in the strategic planning exercise. The mishaps are called strategic risks that also define the potential consequences for the untapped opportunities in an organization.
The uncertainties that are associated with tactical information are closely knit with the operation of the management. They entail the loss of control by the management leading to risks of losses in a fiscal year.
The operation risks are as a result of the various element that integrates to ensure the smooth daily operation of the organization (Riskope, 2014). For instance, in the case of Star Supermarket, the risks lie with the people, systems and the processes.
Illustrate how lean methods may be applied by Star Supermarkets Ltd to one of the primary activities of its value chain of your choice, outlining, in particular, the process of gathering, analyzing and using the information to enable a continuous improvement approach.
Figure 1: The Porter’s Generic Value Chain for Star Supermarket
The value chain provides a collection of activities that will be performed by Star Supermarket in creating value to its customers. The value created in this activities will increase the company’s competitive advantage.
The Value Chain Activities
The value chain analysis for the Star Supermarket will entail the selection of a variety of primary activities and support activities (Ensign, 2001). The principal activities in this value chin will have an immediate effect on the productivity of the supermarket, maintenance, sales and support of the products and services offered by the supermarket. The primary activities selected for the Star Supermarket are
These activities entail the receiving, storing and internally distributing raw materials or the basic essential ingredients for the products of service offered by Star Supermarket (Ouma & Oloko, 2015). This activity depends heavily on the relation between the supermarket and the suppliers.
These are the activities that entail the conversion of inputs to semi-finished and finished goods that the Star Supermarket can sale (Ensign, 2001). The operational information developed by the company will provide guidelines for the creation of value.
These activities are key in the delivery of the product and services to the customer by the Supermarket (Gummesson, 2008). The main activities that are carried out in this case by the supermarket in delivering the products are the storage of the goods, distribution, and transportations like for the bulky goods like a refrigerator. Cookers etc.
Marketing and sales
These are the activities that the supermarket will use to put the product and the service in the market. The supermarket offers a variety of products and service that will be vital in creating awareness and achieving a lot of sales to the organization (Ouma & Oloko, 2015). The marketing strategies are vital in managing and generating customer relationships. When well applied in the Supermarket business the activities will increase the company’s competitive advantage.
In the supermarket business, it is crucial to instigate activities that will maintain the value of the product or services to the respective customers.
These are activities that Star Supermarket that will complement the primary activities. These activities are basic to any organization (Gummesson, 2008). They are used to ensure that the primary activities are accomplished within the required metrics
These activities within the Supermarket framework that ensure that there is the maintenance of the daily operations (Ouma & Oloko, 2015). The key activities that are considered in the supermarket are administrative, handling, financial management, and line management.
Human resource management
The development of the workforce is an essential element in support of the activities of the supermarket. The main activities in resource management are recruiting, training and compensation of the staff.
These are activities significant to the procurement of services by the organization (Ensign, 2001). The key activities entail the entering into and managing relationships with suppliers so as to ensure a constant supply of goods. The main activities entail the making of the purchase agreements with suppliers and outsourcing agreements (Ensign, 2001).
a) Define a business information system
Business information systems are the sets of related activities and processes that utilize IT infrastructure in a business enterprise to generate and consequently to disseminate the information.
These systems are desired in support of the decision making the process by the management in the achievement of the company objectives.
b) Identify and briefly explain two (2) types of business information systems that could be used at Star Supermarket Ltd.
Transaction processing system (TPS)
This is a business system that is conventionally utilized in the collection, processing, storing, displaying, modifying and canceling transaction in an organization. These systems are capable of multiple transactions simultaneously (Karim, 2011). The data collected is stored in data warehouses and databases. The databases are used in the generation of reports such as the billing, inventories, account summaries, wages, check registers and manufacturing schedules (Gibson et al., 2014).
The transaction processing process will be vital to the operations of the Star Supermarket due to the handling of the huge inventories (Ensign, 2001). The transaction processing systems used in the Star Supermarket is the point of sale. The POS is usable in the generation of the reports and the performance of the organization (Gibson et al., 2014).
Management Information System (MIS)
This system is concerned with the internal sources of information in an organization. The MIS collects vital information from the TPS and converts it into a series of management reports. The MIS reports are used by the middle and operational management (Rahmatian, 1999). The key reports generated in this system will be summaries, exceptions and hoc reports.
The MIS is vital for the Star Supermarket for the making of the daily operation decisions. The summaries will provide the progress and the attainment of the operation goals and objectives.
c) Discuss and explain four (4) tangible and three (3) intangible benefits of business information systems at Star Supermarkets Ltd. Provide examples of each benefit.
Tangible benefits are benefits that can be quantified and measured in monetary terms. The savings include immediate cost reductions and long-term cost savings. Tangible benefits can also include quasi-tangible benefits that cannot be quantified but directly felt (Gibson et al., 2014).
These benefits take time to be realized as the expenses would not reduce within a short time. The cost-saving benefits will be realized over time (Gibson et al., 2014). The cost-saving benefits are sequential for instance in Star Supermarket the information system applied will increase the productivity reducing the cost of the workforce, reduce the operation costs and also improve the inventory handling efficiencies (Gibson et al., 2014). The importance of the information system is associated with the lead-time reducing the inventory handling costs.
Better Internal Control
The business information systems are vital in the improvement of preventive and detective internal control for instance in the case of the Star Supermarket a centralized information system would allow for access control (Rahmatian, 1999). This system will lead to faster reporting that is often associated with real-time feedback, increased accountability and reduces the chance of the misuse of company assets. The centralized systems curb all form of fraud and internal theft in Star Supermarket. The automatic tracking in the business information system will be vital in the retrieval of current and historical documents and creation of review audits for transactions.
The business information system in Star Supermarket would improve response time that would culminate in the increase in sales revenues. The system will be associated with tangible benefits such as data availability and reduced inventory management bottlenecks (Rahmatian, 1999). The reduction of the inventory bottlenecks will result in the increase in sales through the reduction of stock-outs and back orders. The CRM will provide customer information that can be used in the promotion of products increasing sales. The CRM also allows for the monitoring of the customer service with regards to purchasing history (Gummesson, 2008).
The information system incorporates flexibility to the operation of Star Supermarket. The Business information system may be tuned in the way that it allows the growth of the supermarket. The individual system can be upgraded and updates installed in isolation without the disruption of the whole system (Rahmatian, 1999).
The intangible benefits of a business information system are important as it evaluates the significant aspects of the system in terms of information access.
Increase customer satisfaction
The quality management of information in Star Supermarket is vital in the speeding processes that are involved in the serving of the clients. The system will ensure that clients are served faster, and the quality of service improves.
Improved quantity and quality of information
Information forms a vital component of the Star Supermarket; therefore, the management of the information will be important in the response of the company to the changes and trends that will be encountered in the future (Pedersen et al., 2002). The application of quality information will be vital in the generation of reports from databases that will be vital in the decision-making process.
As point earlier, planning is an essential process in the Star Supermarket model. Thus the planning process requires to be backed by adequate information. The planning process will be set on course when enough information is used for the attainment of the objective.
d) Explain the importance of the two (2) different computer-based information systems mentioned in part b.
The transaction process system is vital in the tracing of the vital information with regards to different transactions such credit card frauds and abuse of service (Karim, 2011).
The management information system is significant in the efficient decision-making process in the organization (Karim, 2011).
Analyze the structure and behavior of one of the primary activities of the value chain of Star Supermarkets Ltd. using systems concepts learned. Your response should include the following elements:
a) For the chosen activity, describe one example of each of the following information flows inputs, processes, outputs, feedback, and control.
The primary activity selected for the Star Supermarket will be the marketing and sales. The marketing and sales process will be specific to the Star Supermarket (Ensign, 2001). The process will involve the direct activities involved in marketing and sales. The key process in this activity can be online sales and promotion (Gibson et al., 2014). The indirect processes such as the CRM ensure that the marketing and sales processes are up to date. The last component of the activity will be quality assurance which will entail the process of proofreading and the editing of the advertisement from the marketing and sales activities (Vliet, 2010).
b) For the chosen activity, describe two decisions that may be taken at the strategic, tactical and/or operational levels of the organization.
There is the need to optimize the investment in the marketing and sales, especially for the supermarket business. The increasing of the value addition activities in marketing and sales will ensure that information reaches the intended audience (Ensign, 2001).
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