Bob Travica MIS 2000 Class 9 Operations and Information Systems Updated Jan. 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 2 of 17

Bob Travica 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. 3 of 17

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) 4 of 17

Bob Travica 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 MIS Track & carry Reflect past business Operational processes 5 of 17

Bob Travica 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) Queries Queries on daily, weekly business Database TPS 6 of 17

Bob Travica 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. TPS 7 of 17

Bob Travica 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) 8 of 17

Bob Travica Case of Telco: Marketing Campaign Process As-Is 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

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. Customer Campaign Offer creates given to Call Order makes places 10 of 17

Bob Travica Marketing Process at Telco – Evaluation of Design Process design IssuesFinding CompositionIs this a marketing or sales process? Mixed domains, Two start points. CoordinationUnclear process deliverable as the assessment basis. CRMS black hole ComplexityThree IS resources involved (CRMS, e- bulletin, customer order system). CRMS as part of process designNegligible footprint. 11 of 17

Bob Travica Process performance Losses TimeCycle time (promote-sell) unpredictable. Slowness due to multiple data sources and sinks. CostInflated 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 12 of 17

Bob Travica Marketing Process at Telco – To-Be Process - 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). 13 of 17

Bob Travica Market Campaign Process Optimization – Data Diagram OrderDetail entity/table records what is offered to whom and the offer outcome. CustomerCampaignOffer promotes given to OfferDetail OfferID CustomerID Date Accepted (yes/no) contains 14 of 17

Bob Travica 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.: Bureaucracy culture Marketing Dept.: Person culture 15 of 17

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 quarter, with a breakdown of totals per product/store, & variance figures. »More… 16 of 17

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. 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. 17 of 17