Bob Travica

MIS 2000

Class 8

Operations and Information Systems

Updated September 2012

Bob Travica

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

Bob Travica

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.)

Bob Travica

Operational Processes

• Operational processes are “bread & butter” of organizational life because they:

(A) employ most of work

(B) 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.

Bob Travica

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

TPS TPS TPS

MIS MIS MISTrack & carry

Reflect pastbusiness

Operationalprocesses

Bob Travica

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

Transaction Processing System (TPS)

Queries

Database

Queries on daily, weekly

business

Bob Travica

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.

T P S

Complex Query & ReportModule

Paper

ComputerScreen

Reports

Bob Travica

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.

Management Information Systems (MIS)

Bob Travica

Case: Marketing Process at Telco – As-Is Process

Sales Clerk Customer (any)CRMSMarketing Professional

Mobtel Vendor

Enter campaignin electronic bulletin

Read offersPlace order

Record order in system XUpdate

customerhistory

Store campaign

Enter campaign

Display customer record

Find customer

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.

Bob Travica

Data Diagram for Telco’s As-Is Marketing Process

• Data diagram represents entities included in the process as-is.

• The process problems replicated (mixing marketing with sales - ordering).

CustomerCampaign Offercreates given to

Call Order

makes places

Bob Travica

Marketing Process at Telco – Evaluation Sales Clerk Customer (any)CRMSMarketing

ProfessionalMobtel Vendor

Enter campaignin electronic bulletin

Read offersPlace order

Record order in system XUpdate

customerhistory

Store campaign

Enter campaign

Display customer record

Find customer

Process design Issues

Finding

Coordination CRMS black hole. Two start points (Mkt. Pro. & Customer). All just mkt. process (ordering involved)?

Complexity Three IS resources involved.

Process performanceIssues

Finding

Purpose Intended: Market telecomm services except cell phone. Really: Marketing process not supported by Sales Dept. – no promotion, but passive call centre.

Time Cycle time (promote-sell) unpredictable. Slowness due to multiple data sources and sinks.

Cost Inflated by deployment of 3 IS resources and time losses.

IS Support CRMS used just as storage of marketing campaigns; no tracking/ reporting on market response. Supporting process confusion – campaigning mixed with customer ordering (see next slides)

Customer Value Marketing: Process doesn’t help enact & grasp market.Sales: Making a sale labor-intensive (operate 3 IS resources).Consumer: making a purchase takes initiative to call. Wait time.

Bob Travica

Marketing Process at Telco – To-Be Process

Sales Clerk Customer (any)CRMSMarketing Professional

Mobtel Vendor

Enter campaignin electronic bulletin Read offers

Place order

Record orderUpdate customer

history

Store campaign

Enter campaign

Retreivecampaign

Display customer address & offers

Callcustomer

Respond tooffer

Find customerDisplay

Customer Record

- 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.

The term “To-be” signifies a process as it should be (improved).

Bob Travica

CustomerCampaign Offercreates given to

CustomerOffer (CampaignResult)Date,Response

Marketing Campaign Process

CustomerOrderOrderNoPromotionCode

places

Customer Ordering Process

Process Separation – Data Diagrams

• Marketing Campaign Process is separated from Customer Ordering Process (COP). COP traces orders to campaigns via attribute PromotionCode.

Bob Travica

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.

Bob Travica

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.

Bob Travica

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…

Bob Travica

• 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.