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A study on Information management system in Tesco Plc
Author: Bisnu Kumar Chongbang, Dhankuta Nepal, Now in London
This study is mainly about an analysis of strategic information management and its impact on decision making in organization and ultimately on organizational performance. Initially this work analyzes impact of management information on decision making of Tesco of which I want to analyze the management information system in this study. Next it discusses about significance of sharing information within organization and how information support strategic decision making. It finally explains about the way to monitor and evaluate information management in organization.
1.1 Characteristics of data and information
Data is a combination of figures, facts and statistics concerned to an object obtained by observation, counting, measuring, reading etc. Data are frequently called raw or basic data and often day to day transaction of the organization that are processed with a view to bring about useful information. These are used by senior executive or managers to perform effective and successful management operation in organization and data enables managers to make better decisions for future. Data provides picture of past activities related to ups and down of organization. Data is equally useful for generating graphs, statistics and reports. This is the reason why data is key asset for the organization. Information is known as the refined and processed form of data which can be interpreted and understood by the recipient of the message. Information is more meaningful than data and is used for making strategic decision in organization. For example the facts like number of educated people, male and female etc gathered in Census are data and which are used by government to generate information such as literacy rate or development level of country (Blazey, 2008). It is thus data for Tesco PlC refers the figures of sales and income, expenditure, number of people working and leaving etc. which are very important and useful for making strategic decision in the organization. For example, if there is high expenditure than income in business or there is decreasing profit and increasing expenditure then the information for organization is decreasing efficiency and performance of organization which means organization is not doing better rather losing its market share and having some problem within management system. So, now managers have to use the data information for taking further decision about business strategy and human resource management.
IMS 1.2 Criteria of data and information to be applied to support decision making Data and information are most important assets to support decision making process of organization. Without data and information about the activities of organization, it can not take any right decision because it doesn’t know what to correct, what to learn and avoid in existing organization policies and plans. The criteria of data and information includes validity, consistency, accuracy and completeness these criteria should be met while data and information are sourced and used for supporting decision making .validity refers to reliable sourcing and verified data and information, data should be accurate, consistent and complete in its form so that it leads an organization to take right action against weakness and for strengths as well. Data and information are circulated through front liners, middle management and top managers in organization. Front liners basically make entry of data of every activities and middle managers process and refine the data into information and it flows to top managers. Then top managers receive the information and they analyze the information and use the information of further decision making in an organization.
1.3 Impact of MIS to an organization
MIS is a system of information flow between the functional areas of managements such as HR, finance, production, marketing etc and flow at different layers of organization top management, middle and lower. It is a process of applying formalized procedure to offer appropriate information at all levels of management in all functions, on the basis internal and external sources of data, with a view to support the management to take effective and timely decisions for further organizational planning, controlling and directing the activities in organization. Thus MIS is conceptualized to better manage the information and by which to support decision making needs of managers or executives by allowing access to information relevant to satisfying the strategic goals of the organization (Lucey, 2005). The key components of MIS are Decision support systems, Knowledge work systems, Office automation system, Transaction processing system and executive support system. In Tesco, information flows bottom up and top down means it comes through front liner – middle to top managers or departments to managing Director, and based on the data and information of the each components or departments of MIS, decision takes place at the top level. Then it flows down wards for its implementation. This is why every department is responsible for diverting or making correct decision in organization and implementing decisions. For example, if financial department of Tesco keeps records of 2billion sales revenue while in fact it was just 1billion which is big mistake and gives wrong information 3
IMS and finally it could lead organization to failure. Because, every assumption is made on the basis of data recorded in different departments, and on the basis of which, business planning and strategy are formulated so as to compete and make profit in the market. Thus, information should be shared on time from one department to another and it should be finest and clear then only organization can make a right decision at right time.
2.1 Legal responsibility in sourcing, sharing and storing information
As data and information are important assets for organization that which ever play vital role in failure and success of organization. It is not only concerned with organization but also with people, society and country as well according to nature of organizations whether they are government or private. So while sourcing, sharing and storing information, one should need to consider legal issues, security, ethical issues. Information system security is all about managing risks and considering the causes and effects and costs of a breach in security. The principle legal responsibilities to be taken in to account while sourcing, sharing and storing information are: Confidentiality and privacy including compliance with data protection Act. Copyright and software protection Contractual obligations IS and crime Confidentiality is related to secrecy or used to prevent the disclosure of information to unauthorized systems, organization, individuals etc. In case of Tesco, as it is the biggest company in UK ever needs to be innovative and comes up with new strategy. So all process of innovation and strategic decisions takes place within organization and it is confined within organizational system. This is why, people who are involved in the system are not supposed to disclose the information to its rivals and so on. Copyright and software protection- data protection Act ensures the company’s right of copyright and software protection of its own official records or data or information is known as its patent. And one is not supposed to copy other company’s brand and product etc. The major ethical issues to be taken into consideration during sourcing, storing and sharing information are privacy, accuracy, property, access. Privacy focuses on the way by which one or a member of organization should reveal only the relevant information to others through the course of employment or so on. As per Accuracy one who is responsible for sharing information is supposed to make sure the validity and reliability of information (Rochelaeau, 2006).
IMS Thus, legal considerations and ethical consideration are most important for organization in order to make its information system finest and information more accurate, valid, reliable, and useful. If organization are not responsible and don not consider the ethical and legal issues then that leads to breach of security which finally do harm organization.
2.2 Discuss when information should be offered and access allowed Information is a key basis for every single decision making in organization this is why when decision making of body of organization performs evaluation and monitoring of organizational activities at that time all levels and departments are supposed to provide information and records or details of the activities performed by the concerned department. After conducting the evaluation and monitoring of organizational activities, then managerial level comes to decide whether or not to take further any new decision. And when top level managers come to a point to make strategic decision for further improvement and while setting organizational goals and objectives. In this way, information should be made available in the period while organization is going to take further business move with new plan and policy in order to gear up its market growth and share in the market along with the target of achieving competitive advantage in the market. Because information are the main basis based on which organization takes new business steps with the new decisions.
2.3 Evaluate the formats in which information can be offered
Format is a particular way of storing, transferring information through many ways in to easy and understandable form to users. Different organizations use different kinds of format for arranging, controlling, protecting and transferring information. Thus, the major formats of information which are widely used today are: Electric/manual List of individuals Libraries Folders Documents (Boddy, et al., 2002)
Electric format is a way of managing information with the use of electronic means and information technology/ software in organization which can quickly store protect and transfer the information and make available and accessible to concerned users of organization. Libraries, folders, documents are also equally important for keeping records and providing information regarding organizational activities. However, of many, one format used by Tesco PLC is discussed and evaluated in this study. Tesco uses one format Called RTI (real time link) with BizTalk and SQL server to provide management team of its head office a single view of supermarket sales data from all its more than 12000 stores. It provides managers a view of individual store performance, a strong base for other real time applications including inventory management and lab our monitoring. Tesco has also used the process of data mining by analyzing the information directly through the Electronic Point of Sale (EPOS) (Tesco, 2010).
3.1 Information to identify patterns and trends
Information, in a term of organizational sense, is knowledge and understanding that is usable by recipient. It has great surprise value and reduces uncertainty in organization which always plays pivotal role in decision making. It often tells the recipient something new which cannot be predicted and is not already known. Organizations do use different types of management information pattern and are practicing and developing new trends in their system with a view to have as far as easy and fast access to information both internal and external. So that which could help management of organization to get reliable and accurate information for decision making. Organizations use various types of information in order to indentify such patterns and trends, of which major two types are discussed and analyzed under. Competitive intelligence Early indicators (Bagad, 2009). Competitive intelligence As per competitive intelligence, organizations are supposed to identify their competitors in a sense that how they are managing information and adopting trends in their system so that they are improving their efficiency. They check their home pages of competitors for changes in
positioning evaluate the business or organizational exhibition they participate in, look in to who they are acquiring and firing and create intelligence database of white papers and webinars etc. Early indicators Organization can use different measures of performance such as effectiveness, efficiency, quality, punctuality, productivity, safety etc which could help identify and predict trends and patterns as well as add great value to forecasting. Performance measures are to measure results that organization has achieved and from which one comes to recognize success and failure so that it can learn or correct and manage or improve in coming days for better outcome. Thus early indicators often give true figures to traditional forecasting relying on data of external via reliable source. However sometime it is hard to predict early indicators for a particular forecast.
3.2 Decision making techniques and tools to support a strategic decision
An effective and successful implementation of asset management needs a range of supporting decision making techniques and tools to assist in the risk management and strategic decision making process. Organization do use types of tools and techniques to have a quick access to huge data and information related to the areas of concern so that it gives an idea to take intelligent strategic decision in organization. Some of them are analyzed as below. Data warehouse Data mining Decision support systems Expert system (Marc, 2007). Data warehouse – it is as specialized database system which stores data in a clear format that is easy to understand, evaluate and analyze. This tool extracts data from external sources then transforms the data in to fit functional needs and load it into the finest form. Data warehousing is a single vendor system which provides new intelligence for business users and strategic decision makers based on reliable information, delivers intelligent cost reduction etc. Data mining – it consists of techniques which automatically search, finds and retrieve data for information and clusters the items having similar values. So it makes easier for decision makers to get relevant information quickly.
Decision support system – it is a system based on interactive software designed to support decision making body which brings together information from business models or a combination of personal knowledge, raw data and documents to identify and solve problems and finally make decision. This tool consists of three components are: Data retrieval – warehouse is used for data retrieval Model evaluation – spread sheet is used in model evaluation. Visualization of the results – charts and graphs are used These components are specially used in two business areas: marketing forecasting and human resource management. Expert system - According to the concept of this system, knowledge are captured from experts and those are processed to others in the organization through the use of information technology. It is useful and valuable more importantly for training employees. However it is effective while decisions are unconstructed and tasks are complex. 3.3 Sources to assist in analyzing data and information Organizations receive data and information from multiple sources, basically from many areas of both internal and external sources. However the main challenge for organization is to capture and use data and information which are reliable and relevant. So the sources that organization uses, need to be authentic and proven so that it positively assist in analyzing information to be used in decision making. The main sources described are as under: Internal sources Accounting records are a key source of internal source of information. The records provide the details of business transaction in the past that can be used as the main basis for future planning and preparing a financial forecast and budget. Accounting records shows about the current positioning of financial resources of organization for instance how profit and losses are made on the business activities.
However accounting records also provide detail of products, personal details of employee, data from department of production etc.
It implies the information which is obtained from outside of the organizational activities. Government’s policy, records, published documents, journals, Medias, competitors etc are main external sources of information from where organization can obtain useful information and that can be used for future purposes. Government sources provide information about taxation system, employment law, environmental legislation and safety regulation etc. published document such as research, journals helps to understand current position of rivals, needs of customers and so on. All of these sources finally help organization in analyzing the data and information to be used for making future decisions or building strategic plan and policies for organization. The sources assist to know details of needs and wants of consumers help to deduce the business risk and product failure, and forecast trends for future use etc.
4.1 Methods of evaluating management information within an organization
The primary concern in evaluating management information’ effectiveness is that information system should be evaluated and analyzed on the basis of criteria of importance to the end user. Evaluation often emphasizes on the importance of the user or key informant viewpoint when evaluating effectiveness. It looks at the satisfaction of users with management information as a link between objectives related to information provided my IS and objectives concerning improved organizational processes(Symons, 1994) . This integrates and provides most useful assessment of system effectiveness in organization. Of many methods of evaluating management information system, Tesco has applied participatory approach under which it applies observation and workshop methods to evaluate the usability, function ability of information system in organization. Observation method According to this method, top managers or evaluation team participate in the activities where their employees are working with clients or delivering services using information system within organization during office period. They do check their systems how good the system is
functioning that they look at whether the system is helping a person to do a job quicker or more efficiently. Workshop methods Under this method, Tesco organizes workshop with representative of different layers of organization, communities or customers and key team and external advisor regarding information system used in organization. In the workshop, persons who mainly responsible to manage and use the systems are supposed to present their report on the strengths and weaknesses of information system applied. In this way by means of this, managers come to know the usability and function ability of software system of their organization. 4.2 process for analyzing and monitoring the impact of information on strategic decisions Monitoring is a process of systematic collection of data in order to provide information to all stakeholders regarding progress of implementation and achievement of desired outcome. Major functions of monitoring include gathering feedback from participants, analyze new changes and provide early signal of warning of potential risks. So monitoring impact of information on strategic decisions made by organization is critical function because it also has to look in to reliability of information sources and relationship of decision with the information used. Information has direct impact on strategic decisions of organization this is why monitoring here includes collecting feedback from users, looking and analyzing progress and achievement of intended results in organization. Process of monitoring encompasses planning for monitoring, designing monitoring, collecting information, analyzing information and taking action (Epstein, 1977). Planning for monitoring impact of information on strategic decision includes setting indicators of strategic decision, types of information on implementation of decision, participants who are responsible to implement decisions. Designing entails key ways to collect information so by using the methods information are collected. Then the gathered information will be analyzed which tells positive and negative impact of information on strategic decision of organization. This finally gives a way to take action against pitfalls and to more encourage positive impact of information on decisions. Such as if monitoring finds the use of club card system is not effective then
organization should take action against strategy and it has to either improve or develop new option. 4.3 Methods of information capture to support strategic decision making Information capture is the way of gathering documents, e – documents and forms, refine them into retrieval, accurate and digital form of information, and transferring the information in to business database and application for direct use. Thus methods of information capture also plays crucial role to support decision making because the way to access data depends upon the methods of information capture used in organization. Information is captured in many ways however some of the major methods are: Handwriting Direct user input Ascent capture Multiple networking methods (Wei choo, 2002). Handwriting – It is a popular method of information capture because it ensures the greatest ease of use, offers a high degree of timeliness which is still not found with desktop computing, and is known as most cost effective recording method as well. Direct user input – it is electronic record capturing method, consists of capturing information through pointing, typing, clicking, pointing or touching at a screen. Ascent capture – this method uses the powerful validation and indexing process to capture information such as electronic documents, email and even XML feeds, multimedia files. So it delivers strong, production lever data and document capture.
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