MIS 2000 Class 8 Operations and Information Systems

1. MIS 2000 Class 8 Operations and Information Systems Updated September 2012

2. Outline • Operation concept • TPS and MIS (expansion of class 5) • Case: • Marketing and sales processes at Telco • Telco’s TPS & MIS (Customer System) • Design & performance matrix of Telco Customer System • Concepts of As-Is and To-Be process • Impact of organizational culture • Summary Proc & roll

3. Operations • Basis of business, recurring activities that generate ongoing income and increase value of organizational assets. • Best understood as business processes serving organizational functions (production, HR, purchasing, marketing, sales). • Can also be understood as daily transactions – recurring atomic events in organizations (buy, sell, bill, pay, hire, etc.)

4. Operational Processes • Operational processes are “bread & butter” of organizational life because they: • employ most of work • create income (C) incur most of costs (savings in operations directly reflects in financial results) • Contrast operations with strategies*. Ideally, operations should be in function of strategies.

5. Operational Processes and TPS/MIS • TPS is part of operational processes, as they track and carry operations in all segments of organization. Characteristics of TPS determine performance of operational processes (e.g., timing). • MIS create summary evidence on operations executed, or reflect the business transpired. Supply  Production  Delivery Marketing  Sales  Customer Support Human Resources  Accounting Operational processes Reflect past business TPS TPS TPS Track & carry MIS MIS MIS

6. Transaction Processing System (TPS) • TPS is a type of IS that stores & processes data created in operational processes (‘transactions’). • Technically, TPS is a database with stored queries. • Outputs are results of querying (stored and hoc*). • Output examples: sorted lists of parts expended, summaries of sales (per product, per store), totals on purchases, sales, inventory, work hours. Daily, weekly periods. • Serves supervisory level of management Queries Queries on daily, weekly business Database

7. Management Information Systems (MIS) • MIS uses outputs from TPS to create reports on transpired operations in an organization. Used by mid-level managers. • Example outputs: A summary of sales in last month or quarter, with a breakdown of totals per product/store, and with variances from the corresponding monthly sales plan. • Reports further transform outputs from TPS (four arithmetic operations, statistics). • Reports are formatted into sections, breakdowns, tables, text boxes, etc.* Report contains different charts to ease and speed up data interpreting by managers. Paper Complex Query & Report Module T P S Reports Computer Screen

8. Management Information Systems (MIS) • Reports kinds are: • 1. Scheduled report - regularly created (e.g., on the end of month or quarter). MIS creates scheduled reports automatically at the push of button by MIS user. • 2. Exception reports - created when something exceptionally happens (e.g., a peak or drop in revenues, too many faulty parts in production, unusually high number of sick hours). MIS is programmed to create this report when variance from a plan is significant.

9. Case: Marketing Process at Telco – As-Is Process The term “As-is” refers to the factual state of a process. • CRMS (Customer Relationship Management System) is • Telco’s MIS. It is supposed to serve marketing campaigns. • Design of this process is problematic.

10. Data Diagram for Telco’s As-Is Marketing Process creates given to • Data diagram represents entities included in the process as-is. • The process problems replicated (mixing marketing with sales - ordering). Offer Customer Campaign places makes Call Order

11. Marketing Process at Telco – Evaluation

12. Marketing Process at Telco – To-Be Process The term “To-be” signifies a process as it should be (improved). • - Components in red belong to As-is process (deleted). • Process improvement involves eliminating customer ordering from the marketing campaign process (red part). • System more fully supports campaigning process.

13. Process Separation – Data Diagrams Marketing Campaign Process creates given to Offer Customer Campaign CustomerOffer (CampaignResult) Date, Response Customer Ordering Process Order OrderNo PromotionCode places Customer • Marketing Campaign Process is separated from Customer • Ordering Process (COP). COP traces orders to campaigns via • attribute PromotionCode.

14. Organizational Culture Impact • Department boundaries between Sales and Marketing departments at Telco are rigid (“there are silos”). • Sales reps are rules-driven, supervised. They must use CRMS. Bureaucratic culture. • Marketers have freedom of choice in performing work and using IS; they can choose to use CRMS or some other system. Professional culture.

15. Organizational Culture Impact • Part of culture is a very liberal executive management that does not align operations between Marketing and Sales departments: • Sales staff not actively promoting campaigns and not entering campaign responses into CRMS • Marketers not encouraged to measure real results of marketing campaigns or use CRMS for more than data storage.

16. Summary • Operations (transactions) are basic business processes that generate most of income and costs. • TPS track and carry operational processes. TPS outputs result from querying, and examples are daily/weekly sorted lists of parts expended, and summaries of sales or work hours. • MIS reflect the business transpired, and use outputs from TPS to create reports for mid-level mgmt. • Example of MIS output is a summary of sales in last month or quarter, with a breakdown of totals per product/store, variance figures. • More…

17. MIS reports transform TPS outputs, contain formatting features, graphs, and can be regular or exceptional. • Case of the marketing campaign process at Telco shows process and data diagram in as-is form. The process has sub-optimal design and does not perform well. • Telco’s marketing campaign process is shaped by Telco’s culture. • The to-be process separates marketing from customer order management and makes fuller use of CRMS.