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
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.
Operational
processes
Supply
Marketing
Track &
carry


Production
Sales
Human Resources



Delivery
Customer Support
Accounting
MIS
MIS
MIS
TPS
TPS
TPS
Reflect past
business
Bob Travica
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 on
Queries
daily, weekly
business
Database
Bob Travica
Management Information Systems (MIS)
Paper
TPS
Complex
Query &
Report
Module
Reports
Computer
Screen
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.
Bob Travica
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.
Bob Travica
Case: Marketing Process at Telco – As-Is Process
The term “As-is” refers to the factual state of a process.
Marketing
Professional
CRMS
Store
campaign
Enter campaign
Enter campaign
in electronic bulletin
Sales Clerk
Mobtel
Vendor
Customer (any)
Place order
Read offers
Find customer
Display
customer record
Update
customer
history
Record order
in system X
• 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
Campaign
creates
Offer
given to
makes
Call
Customer
places
Order
• Data diagram represents entities included in the process as-is.
• The process problems replicated (mixing marketing with sales ordering).
Bob Travica
Marketing Process at Telco – Evaluation
Marketing
Professional
CRMS
Store
campaign
Enter campaign
Enter campaign
in electronic bulletin
Sales Clerk
Mobtel
Vendor
Customer (any)
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.
Place order
Read offers
Find customer
Display
customer record
Update
customer
history
Record order
in system X
Process performance
Issues
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
The term “To-be” signifies a process as it should be (improved).
Marketing
Professional
CRMS
Sales Clerk
Store
campaign
Retreive
campaign
Enter campaign
Display customer
address & offers
Enter campaign
in electronic bulletin
Call
customer
Mobtel
Vendor
Customer (any)
Respond to
offer
Place order
Read offers
Display
Customer Record
Update
customer
history
Find customer
Record order
- 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.
Bob Travica
Process Separation – Data Diagrams
Marketing Campaign Process
Campaign
creates
Offer
given to
Customer
CustomerOffer
(CampaignResult)
Date,
Response
Customer Ordering Process
Customer
places
Order
OrderNo
PromotionCode
• 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.