Bradley Clarke – Student Number 21782989

BIS15 – Information Technology in Organisations

Study Period 1

Assignment 1

Lecturer: Ray Smith

Due Date : Monday 19th April 2010.

Contents

Introduction.................................................................................1

Organisational Purpose,Function and Structure....................................1

Business Processes and Information Systems........................................5

Information Technology............................................................10

References: .............................................................................11
 Introduction.

This report is prepared for UniMon Ltd as a summary of the business

processes and organisational structure of winemaker Killeen Estates Pty
Ltd. Its purpose is to provide an overview of the company with a particular
focus on its information requirements, information systems, and
organisational structure.

Organisational Purpose, Function and Structure.

Killeens Estates’ stated goals include being the most successful wine
maker in Australia, achieving and maintaining a strong presence in
international markets, and producing quality wines across a range of wine
classes.

In support of these goals, Killeen aims to increase sales both locally and
internationally, increase the company’s online presence, and enhance the
reputation of its labels.

Killeen Estates business is divided into three functional divisions.

Operations – responsible for production and distribution; Corporate
Services – manages marketing, finance, human resources and
administration; and Regional Affairs – in charge of regional sales staff, call
centres, cellars and deliveries.

Three of the major business functions carried out by Killeen Estates include
Production, Finance, and Marketing.

Production and Sales are sub-divisions of the Killeen Estate operations

division under the control of the operations director. Production is
responsible for all of the wine making and viticulture activities, grape
production and bottling. Sales is primarily responsible for ensuring the
availability of stock, and co-ordinating its movement.

As these two functional sub-divisions form such a large part of the supply
chain, information technology should play a vital role in their function.
“The notion of virtually seamless information links with and between
organisations is an essential element of integrated supply chains”
(Business Driven Technology)

Information technology systems could be used to link all the steps from the
growing of the grapes through bottling and distribution. IT systems can
provide increased visibility, giving managers an accurate picture of both
inventories and works-in-progress, allowing superior supply chain
capabilities and profits.

The central finance department is a part of the Killeen Estates corporate

services division, and is responsible for Killeens global financial
management and strategic decisions.

Finance makes such decisions as what to invest in, where and how to raise
capital, and whether to pay shareholders a dividend. Another of Finances
important roles is the production of financial reports such as profit and loss
statements and balance sheets for shareholders and other stakeholders,
and management reports to allow analysis of the financial health and
performance of the business.

Information technology plays a critical role in the activities of the Finance

department. Data from Killeens network of regional call centres and sales
staff must be collected and presented in a format that all stakeholders are
able to use. Information technology facilitates this by offering increased
speed of information delivery and processing through email and
spreadsheet software such as Microsoft’s Excel program.

Also falling under the Corporate Services banner is Killeens central

Marketing department. Marketing is the delivery of customer satisfaction
and value at a profit by presenting the right product to the consumer at
the right place at the right time, and at the right price. Marketing is
concerned with supporting the sales function by attracting new customers,
and retaining current ones.

A key aspect of marketing is communication. Information technology has

had an enormous impact on the marketing activities of companies in the
past decades, and allowed organisations. Traditional advertising media
such as print, radio and television has been augmented by the addition of
the Internet into society. The Internet brings with it interactivity that the
more traditional media cannot provide. This greater interaction gives
marketers more information than ever about the products that customers
want, allowing them to customise current offerings and to develop new
products in line with customer demands.

Figure 1- Killeen Estate Pty Ltd Organisational Structure

Killeen Estates’ business structure could best be described as a functional

organisational structure.

This structure separates the business into divisions based on their function
allowing greater efficiency through specialisation of labour. This structure
also helps to avoid duplication of processes, further increasing efficiency.
Another advantage of the functional structure is the consistency of
processes the business enjoys through the centralisation of its marketing
HR, administration and finance functions.
There can be considerable pressure put on management in this type of
structure as decisions tend to be pushed upwards through the hierarchy. A
further possible disadvantage of this structure is that it can be slow to
respond to changes because of the difficulty in co-ordinating a change of
direction through all of the functional departments of the organisation.

Killeen Estates Pty Ltd is an Australian, family owned company that

produces, distributes, and markets a range of table wines both within
Australia and overseas. Killeen is a large private company, employing
hundreds of people in its Corporate Services division alone with thousands
more employed in the production, distribution and sales of its products
around the world.

From its vineyards in Australia, New Zealand, and Chile, it produces a

range of wines sold both locally and internationally. Its offerings include
lower quality table wines sold in bulk through hotels, liquor retailers,
catering firms, and supermarkets, mid-range labels sold mainly to
restaurants, and prestige labels sold at a premium price. Whilst its core
business is viticulture and winemaking, Killeen markets and distributes its
products online through its wine information website, and through its
regional sales networks.

Killeen interacts with stakeholders through all three of its functional

divisions.

The operations division interacts with suppliers of input products such as

grapes, labels, cork, and bottles. It must also buy and main the machinery
required to plant, grow, harvest and produce its wines.

Interactions with customers take place through the network of regional

offices, as well as directly via the wine information website. Killeens
regional networks have been strategically located to service the markets of
the worlds wine consuming regions, allowing regional managers and sales
staff to develop relationships with the local food and wine communities.
This local contact provides opportunities to both market Killeen products in
a more effective, targeted manner, and to receive feedback from its
customers.

Despite the wide spread regions in which Killeen operates, their

organisational decision making structure is quite centralised. The
Corporate Services Division handles all finance and marketing activities, as
well as taking responsibility for hiring all managerial staff. The chief wine
maker, and chief viticulturist control general standards and practises in the
production of wines for every label.

Each of the five regions may have several other sales offices as well as its
own marketing, HR, finance and admin departments, but these staff report
jointly to their regional manager, and to the group manager for their
relevant function.

Business Processes and Information Systems

Killeens call centre order entry system is an information system known as

a transaction processing system. These systems are typically customer
facing, and are concerned with the support of core operations such as
order processing, payroll, billing etc. The Killeen Estates order entry
system is in direct contact with customers and is designed to capture and
process detailed information about the customer and their order. The
processing of such detailed information is also a common feature of
transaction processing systems.

The flow chart used in Figure 2 (next page) to represent the “as-is”
business process model of Killeen Estates is useful as a simple overview of
the process initiated by a customers call, but is limited in that flows of data
 are not visible between the customer, the call centre, Central Finance, and
Central Sales. The flow chart oversimplifies the interactions and assumes
the process is completed in the duration of single phone call. Checking for
stock availability could conceivably require that the call centre ring a
customer back if information is not immediately available, adding another
step to the process.

Killeens call centre order system is dependent upon the quality of the
information it uses. Customer contact and delivery details, stock
availability, order numbers, receipt numbers, credit card details etc must
all be correct in order to facilitate the needs of Killen and its’ customers.
The quality of this information is determined not only by its accuracy, but
also by its completeness, timeliness, uniqueness and its consistency.
Quality information includes all relevant facts, is delivered at the time at
which it is required, does not contain duplicated information, and is
consistent in that summary information matches with detailed information.

The correctness of the information in Killeens call centre order system is

mainly dependant upon the ability of the call centre operator to accurately
input client details, and the ability of Central Sales to keep stock
availability reports up-to-date.

Figure 2. An “as-is model of business processes relating to customer

call centre

Customer Enquiry

Client provides name and

phone number

Existing
Client? Obtain customer
details
No
Yes

Take order and check stock

availability
 No

Is Stock
Available? Offer alternatives

Yes

Enter order information and

calculate price

Arrange payment and issue Order sent to cellar for

receipt delivery

The case study seems to indicate that the stock availability report is not
always accurate, and that the accents of its customers can create
challenges for call centre staff when entering client details. These issues
bring the accuracy of the information in the Call Centre Order System in to
doubt.

Timeliness in obtaining customer details such as delivery addresses and

contact numbers is not a concern, as these details are recorded at the
point of inquiry, but the timeliness of stock availability information is
critical in delivery high quality service to customers. Call centre staff
should have immediate access to up-to-date information regarding the
availability of stock.

Customers expect purchases to be transacted promptly. Delays in

accessing stock availability information are negatively impacting the
customers experience, and reducing the efficiency and effectiveness of call
centre staff.

Killeens order entry system ensures to some extent that the order is
complete in detail, as the operator must enter all required fields in order to
finalise a customers’ order.

Killeens call centre order entry system is an information system that

facilitates the physical operations of the business by performing five core
activities.

Input: The capture of information used to enable the functions

that the information system supports.

Callers name and phone number are entered into the system. If the
enquiry is from a new customer, further details including delivery and
contact information will be requested and keyed by the operator. Details of
the customers order are entered as well as payment information.

Processing: - Transforming and organising data

Staff check the availability of the customers requested product by using

the stock availability report generated each day by Central Sales. If the
product is in stock, the payment total is calculated and payment is
processed. Order and payment information is the sent to the Regional
Finance department, and once receipted the order is sent to the closest
cellar for delivery to be arranged.

Storage: - Storing data for later use

Once captured, client details are stored in a customer data base, allowing
for faster processing of future transactions and providing a useful resource
for both Regional and Central marketing departments.

Output: - Data is made available to the end users

. Details of existing customers are displayed to call centre operators when

callers name and phone number are entered. Receipts for payment are
generated for the customer and the regional finance department, and
orders are generated for the closest cellar to arrange delivery for the
client.

Control: - Monitoring performance to ensure the efficient operation

of the system and managing the system to remedy
problems.

Performance can be measured against key indicators such as customer

waiting times and percentage of order entered correctly. Killeen Estates
use an on-line survey to provide feedback from its’ customers. This
feedback is used to identify and resolve problems, and improve customer
service.

There are five resources that support the call centre order entry system.

People:

Information systems exist to support the needs of end users, but also
require input from them as well as maintenance from I.T specialists. End
users of the Killeen cal centre order system include call centre staff,
Central Sales, and Regional Finance departments.

Data resources:

Data is an essential input for information systems. Once collected, data is

transformed, organised, and manipulated in support of the various
functions of the business. Killeen uses customer details, stock availability
information, and other information in its order entry system.

Hardware resources:

Information systems require hardware resources such as computeer

systems to process and store information as well as peripherals such as
keyboards and printers to allow users to interact with the system.

Network resources:

The hardware and media needed to enable data to be transferred between

computers are known as network resources. This includes connective
elements like optical fibre, and microwaves that transport the data known
as communications media, and the hardware and software that enables
the network to function.

The production planning strategy system.

Killeens production strategy planning system is an executive information

system that supports senior level executives in their decision making. The
executive information system differs from other decision support systems
in that it includes information from external sources such as the
International Wine Association in addition to information from internal
systems.

The main problem addressed by the implementation of this system is

Killeens past inability to observe and react to market trends in the wine
industry, This inability led to production of wines that the market either
didn’t want, or wines which were not in great demand.

The wine production planning strategy system has allowed the executive
production team to incorporate viticulture information such as the physical
and climactic characteristics of its vineyards and their regions with
information from outside the company on market trends, upcoming events,
and other considerations such as legal and transportation issues. This
more complete picture allows Killeen to produce the right wines to meet
expectation in the various markets around the world, adding value to the
organisation. This clearer picture of the fit between demand and
production has also allowed management to better co-ordinate its sales
and marketing activities in order to maximise profits.

Information Technology

Killeens wine information website allows customers to select a Killeen wine

based on factors such as the customers budget, the style of wine desired,
or even matches wines to styles of food. Measuring the success of the
website must take into account not only the number of visits (or “hits”) to
a website, also the overall profitability of the website and the quality of the
interactions with the customer. In order to evaluate the websites success,
Killeen must be able to measure its performance in general sales, and in
impact of the website on the companys image. Performance is measured
in both the efficiency and the effectiveness of the website.

Efficiency measures are concerned with such things as the speed of the
website, its availability to customers (lack of downtime), and the number
of visitors to the site.

Effectiveness is concerned with the impact of the website on the business

in areas such as sales generated, customer satisfaction, and website
usability.

One of the ways Killeen can evaluate the websites success in generating
sales is to measure conversion rates. This metric shows the percentage of
visits to the website that result in a purchase being made. Financial
metrics such as cost-benefit analysis provide management with a
comparison of the costs associated with building and running the site
against the financial benefits that it brings.

Effective websites need to be user friendly in order to encourage repeat

visits from customers. Customers service surveys can be used to ensure
that customers are easily able to navigate the website, and find what they
are looking for. The websites speed and availability are also key factors for
an efficient site, and will impact both sales and company image. Killeen
could keep track of the time it takes to complete a purchase online, and
ensure the website is available as close to 100% of the time as possible.
 References

Baltzan, P. Phillips, A. Haah, S. Business Driven Technology 3e (2008). New

York USA: McGraw-Hill Irwin

Gonsalvez, C. & Styles, K. (nd). Case study: Killeen Estate Pty Ltd.
Retrieved from BIS15/T1/2010, Monash University Studies Online:
http://muso.monash.edu.au

Gonsalvez, C. & Styles, K. Unit Study Guide – Information Technology in

Organisations, Faculty of Information Technology, Monash University.