Bob Travica

MIS 2000

Class 10

Operations and Information Systems

Updated May 2015

Bob Travica

Outline

• Operation concept

• Transaction Processing System (TPS)

• Management Information System (MIS)

• Case on Customer Support MIS

– Marketing campaign process at Telco

– Problems and solutions

– Impact of organizational culture

• Summary

Proc & roll

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Operations

• Basis of business, recurring activities that generate ongoing income and increase value of organizational assets.

• Also called business transactions – repeating atomic events in organizations (buy, sell, bill, pay, hire, etc.)

• Best understood as business processes serving organizational functions (production, HR, purchasing, marketing, sales) – previous lecture.

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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)

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Operational Processes and TPS/MIS

• TPS is part of operational processes, as they carry and track (record) everyday operations in all segments of organization. TPS determine design and performance of operational processes.

• 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

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TPS Serves supervisory management and has present & past time focus.

TPS is a type of IS that stores & processes data created in operational processes (‘transactions’).

TPS is a database with stored queries and reports.

Outputs reflect shorter periods of time, present and recent past.

Output examples: sorted lists of parts expended, basic summaries of sales and purchases, etc.

Transaction Processing System (TPS)

QueriesQueries on daily, weekly

business

Database

TPS

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Management Information Systems (MIS)

MIS uses outputs from TPS (queries, reports) and additional code and to create reports for mid-level managers.

MIS outputs reflect longer periods than the TPS outputs and more elaborate numerical figures. Charts complement reports.

Example outputs: A summary of sales in last quarter or quarter, with breakdowns and variance figures, and graphics.

Complex Query & ReportModule Paper

ComputerScreen

Reports

Queries

Database

Queries on daily,

weekly business

TPS

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Kinds of reports:

1. Scheduled report - regularly created (e.g., on the end of month or quarter)

2. Exception reports - created when something exceptionally happens (e.g., a peak or drop in revenues).

Management Information Systems (MIS)

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Case of Telco: Marketing Campaign Process As-Is

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/TPS. It is supposed to serve marketing campaigns.

• As-is process is sub-optimal.9 of 17

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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

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Marketing Process at Telco – Evaluation of Design

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

Process design Issues Finding

Composition Is this a marketing or sales process? Mixed domains, Two start points.

Coordination Unclear process deliverable as the assessment basis. CRMS is a black hole.

Complexity Three IS resources involved (CRMS, e-bulletin, customer order system).

CRMS as part of process design Negligible footprint.

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Process performance

Losses

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 of market response.

- Supporting process confusion – campaigning mixed with customer ordering (see next slides)

Customer Value - Marketing Professional: Process doesn’t help inform on results of market campaigns.

- Consumer: Poorly served.

Marketing Process at Telco – Evaluation Of Performance

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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 optimized by focusing on marketing campaign steps and eliminating customer ordering (red part), plus promoting CRMS.

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

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Market Campaign Process Optimization– Data Diagram

• OrderDetail entity/table records what is offered to whom and the offer outcome.

CustomerCampaign Offerpromotes

given to

OfferDetailOfferIDCustomerIDDateAccepted (yes/no)

contains

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Organizational Culture Impact

Department boundaries between Sales and Marketing departments at Telco are rigid (“there are silos”).

Marketing process can’t involve sales people.

“Silos” have different cultures and don’t understand each other.

Organizational processes and ultimately performance suffer. Wasted investments in CRMS.

Sales Dept.:Bureaucracyculture

Marketing Dept.:Person culture

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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 quarter, with a breakdown of totals per product/store, & variance figures.

» More…

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• 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.

• The to-be process separates marketing from customer order management and makes fuller use of CRMS.

• Telco’s silo culture is responsible for sub-optimal process design and performance.

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