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Report on the role and acquisition of Information System

Business Wear Ltd (BWL) started about 11 years ago as a small menswear store in a small British city. About 5 years ago, it grew to employ 10 employees and today it employs 50 employees. It has its retail points in 8 major British cities. Operations are controlled centrally at BWL from 5 different departments namely Accounting, Sales and Marketing, HRM, Logistics and Warehousing. At BWL store the need is being felt for a good EPOS (Electronic Point of Sale) system to record sales and is easy to use. The development of the system needs to be clear and transparent and needs to have good network capability.

BWL also needs to connect it legacy system to this new EPOS system. This report is on the role and acquisition of Information System for its senior management and line management. This report will analyze and explain the current systems involved at BWL. It will also highlight the information flow in the current setup. Then this report will discuss the development of the new EPOS system with focus on how it can be developed. Also, the report will discuss a recommended methodology for the development of the system.

The different levels of access and confidentiality requirements will also be discussed. This will be followed by a discussion on the advantages and disadvantages of internet shopping. CURRENT OPERATIONS AT BWL STORE Application of key systems theory principles Thinking on systems theory principles (Skyttner, Lars, 2006), the BWL store comprises of a hierarchical system that entails smaller interdependent departments (subsystems) namely Accounting, Sales & Marketing, HRM, Logistics, Warehousing and Retail. These subsystems perform specialized functions.

A systematic interaction among these departments is necessary in order to serve the customer in an efficient manner. Moreover, as per the systems thinking concept, regulation of the different departments is required in order to have predictable outcomes from this one system. For this, feedback is necessary to be provided at different levels of operations. Analysis of Information flow The information in the BWL store flows from the retail department. The retail department has the data about the amount of inventory in stock in the retail stores.

This information flows to the Sales and Marketing department. The Sales and Marketing department processes this information and decides the amount and type of material required in order to meet the customer demands at the retail stores located in 8 major cities. The material to be ordered is kept in buffer (inventory) in order to meet for the future uncertain demands. Once, the order is generated from the Sales and Marketing department, the data then passes to the Accounting department that generates the order for the material requirements. This order is then put up before the suppliers.

The Suppliers then provides the ordered material and this material is then brought to different Warehouses through the logistics department. The Warehouses then stores these materials for any future demand. In case of any demands from the retail stress, the material in stock in the warehouses is taken to the retail stores through the Logistics department. The HRM department looks into any kind of human resource requirements. This again is derived from the demand from the retail stores as this demand only forecast the future manpower requirements. Link between Systems thinking and Information flow

As observed from the system thinking perspective, all the subsystems (departments) of the BWL store needs to operate in complete harmonization. Also from the Information flow analysis, it’s observed that the information flow originates from the point of sale i. e. the retail stores located in different cities. The demand information originating from these retail stores only triggers any downstream activity for the whole system. Hence, the accuracy and timely demand forecast from the retail stores is the key factor in order for the whole system to operate effectively and efficiently.

Any uncertainty in the demand data from the retail points can lead to decline in profits. In case the demand data from the retail stores forecasts less demand, then this could lead to loss of sale as the material being supplied in the warehouses will also be less and it will not be able to meet the future demands. This will lead to loss of customers and goodwill in the market. On the other hand, in case the demand forecast from the retail stores is in surplus as compared to the actual demand, then this will lead to more inventory stock in the warehouses.

These inventory stocks will not be consumed in the future due to less actual demand and hence this will turn into blocked capital and ultimately less profit. DEVELOPMENT OF RETAIL ELECTRONIC POINT OF SALE (EPOS) Working of EPOS EPOS provides a universal interface which allows the interface to all the departments. This allows the data to be retrieved from the EPOS such as customer master data, personnel master data, process etc. It also enables data to be returned to the retail stores such as money transactions, goods movement, statistical data etc. Other functions such as payment handling, pricing are also provided (Jorg Becker et al, 2007).

No permanent connection is required to be maintained to the central offices, hence, retail stores gets a large degree of independence. The changes to customer and other master databases are done overnight. Also, the whole day’s sale and purchase data is also updated overnight. These updated data are then sent to the central departments such as Accounting, Sales and Marketing etc. The updated requirements planning and other activities like order building are then performed at the central offices. Three different components exist for EPOS interface system (Jorg Becker et al, 2007).

These are as described below: 1. OUTPUT: This is used to supply the retail stores the download for the master data. The format of data be provided is also controlled here. 2. INPUT: This is to provide the input data to the POS interface. Various different types of data dealt with in this interface are payment lists, goods movements, receipts, statistics for cashier, inventory data, transaction details, updates to master data etc. This interface is used for those data that are not produced at the POS terminal directly. 3. MONITOR: This is used to monitor the output and input to POS interface.

All the input and output data is logged and classified as per the requirements. All processed messages can be represented and messages from point of sale are also displayed. In case of a problem, errors and exceptions are also handled. IS development process The Information System development for EPOS will consists of assessment and planning for the whole lifecycle of the EPOS product. This will consist of the following steps: 1. The direct purchase of an EPOS system is envisaged. This is because the in house development of an EPOS system requires in-house technology expertise and time for development.

Many EPOS solutions are available in the market as SAP which even allows for customization of the solution as per the client’s demand. 2. Assessment of direct and indirect costs needs to be undertaken. 3. Vendor management activity needs to be undertaken in order to identify appropriate vendor for the purchase of the solution. Among various factors involved for choosing the right vendor, service quality and cost involved are the major factors involved. 4. Capital purchase assessment activity also needs to be undertaken. In the initial stages of purchase, direct infrastructure purchases as wires and network platforms needs to be made.

5. This will be followed by a planning a central configuration and testing of all the delivered technology. By doing this, all the initial hiccups for deployment can be centrally monitored and hence only the distribution of technology to the retail stores remains. This enables hassle free delivery of all the technology at the point of sales. 6. This is followed by system management and operations management. This is an iterative process. Various costs such as power consumption, service management for system and field and cost involved in support required in field will be captured here. 7.

Then the impact of central management of operational performance will be assessed. This will include efficiency of the transaction, asset tracking, investments in training, and performance of system during uptime and labor costs involved. 8. The last phase of the life cycle of the EPOS solution will also be planned. The impact of asset disposition will be analyzed. This will include any costs related to reinstallation, resale of assets, recycling costs (if available) which are subject to regulation. Moreover, factors influencing the EPOS system development and ownership will also be analyzed.

These factors are discussed as below: 1. Like any other retail store, BWL also has its unique operating conditions. Hence, the BWL store’s unique operating conditions have to be taken into account while developing the EPOS system. Due to the increasing labor costs and high turnover rates for the cashier, the system needs to be designed to lower the training cost involved after the EPOS system gets implemented. Also the cost of service for the EPOS system needs to be lower as this is one of the major costs involved during the lifecycle of an EPOS system.

Hence, longest possible operational life possible should be considered. The training costs involved are of critical business value as customized solutions offer speedy training and adaptation to the new technology (Scott Langdoc, 2008). 2. EPOS system needs to be Tough and rugged. Although vendor investments in endurance testing and component selection will be involved. However, the real system performance will be tested by frequency of system failures. 3. The EPOS system will require to be easily integrated into the legacy systems already available in the BWL Store.

This will require hardware as well as software integration. This will enable extending the life of existing legacy systems as well (Scott Langdoc, 2008). 4. The serviceability of the EPOS system needs to be high. This will result in monthly hardware maintenance rates to be lower as the system matures. Solution needs to have customized and service oriented design elements. This will help in improving efficiency on different types of service calls, unit up gradation and maintenance. 5. The EPOS system needs to incorporate integrated logic to automatically dial in case of component failures.

This will require fewer service visits from the vendor. Flexible connectivity in order to support advanced new peripherals and also legacy system components needs to be incorporated. 6. The EPOS system needs to have a more centralized oversight and control system. This is because in the decentralized operations (8 retail stores in different cities), such a centralized system will lead to lower installation and support costs. Moreover, the EPOS capital assets will require more detailed monitoring and POS Installed at the retail stores will also require frequent software upgrades.

Hence, centralized monitoring of the EPOS will be required (Scott Langdoc, 2008). 7. The EPOS system should be able to streamline legacy installations and also should be more responsive and predictive to alert generating mechanism issues. This will enable online updates to softwares with minimal involvement of the staff on duty. Moreover, in case of early alarm for a potential failure is raised, then breakdown of the system will be avoided. 8. Moreover, other design characteristics of the EPSO systems should be such as more eco-friendly technology is used.

Materials that can be recycled need to be used. Field upgradable designs, recycling potential of the components and energy efficiency should also be addressed. . Computer Network For the EPOS system, the scale of the network will have a WAN (Wide Area Network) designed to cover all the retail stores in 8 big cities (Pountain, Dick, 2001). The network will be utilizing wire technology as mobility in the system is not desired. He topology designed will be STAR topology as different retail points will be centrally connected to the central departments. TYPES AND LEVELS OF SYSTEMS

Types and levels of systems used in BWL As an Information Security policy of the BWL store, the EPOS at BWL will comprise of different access levels according to the access requirements for each department and the intended user. For example, the system deployment in accounting department will have full access to all Order booking and building modules. It will also have read access to all the customer master data such as purchase data, inventory data from the warehouses, and stock data from the retail stores etc. Moreover, the data in one department will not be available to all employees.

For example, in accounting department, the access to approve any order will only be available to the manager and above. The employees lower in the organization structure will only have the Read access to these orders. Use of different levels of systems and link between EPOS and other BWL systems It’s very vital to protect the confidentiality of the data in the EPOS system, as this data can be very critical for the success or failure of the BWL store (Allen, Julia H. , 2001). Hence, information security policies of the BWL store will entail measures for ensuring confidentiality of the data.

Sensitive data will not be granted access to employees below manager Level. Sensitive information can be detrimental in case it passes into wrong hands. Hence, this factor has to be given due care in the BWL store’s policy statement. Integrity of data will also be crucial for the success of the EPOS system because all the sale and purchase decisions will be backed by the information available in the system. Also system availability will be required during the working hours at the POS. In case of internet selling, downtime of the EPOS system has to be kept to a minimum and that during night hours.

INTERNET SHOPPING E-commerce E-commerce, which stands for Electronic Commerce, entails buying and selling of products using electronic systems such as internet or other computer networks. The volume of trade conducted through electronic means has shown extraordinary growth with widespread usage of internet. E-commerce is considered as the sales aspect of the e-business but it also entails data exchange to facilitate other aspects of business transactions such as financing and payments. E-commerce can be used for both business to consumer (B2C) and business to business (B2B) transactions.

One of the prominent applications of e-commerce is Internet shopping besides others as online banking, Teleconferencing, Electronic ticketing and many more. Internet shopping and its advantages and disadvantages Internet shopping is the process of purchasing products or services using internet. The online shop brings to mind the resemblance of purchasing product or services at a physical shop. Online shopping offers a myriad of advantages. The consumers have a wider choice and easy access to lot of product or service options available. Internet shopping enables easy entry of new products into the market that also with less over head costs.

Moreover, it enables easier introduction of new products and services to newer markets. As a result, internet shopping increases commoditization. Internet shopping is available twenty four hours a day. Also is enables a lot of customers to have access both at home and in the office. Time consumed in browsing any online catalogue is much less than moving around the aisles of any physical store. Through internet shopping, the online stores can leverage the usage of multimedia for displaying their products and services and hence present a better and comprehensive view of their products to their prospective customers.

Supplemental information such as safety procedures, product specifications, how-to guides etc. are also provided to the customers thus enriching their experiences of shopping. Another advantage for the customers is the price comparison feature for any product. The customer can very easily compare prices among different brands for the same product before making their choice for the best buy. Also, online shopping aids in optimizing inventory levels and shipping costs. Internet shopping deployment for a retail store has its advantages.

An EPOS system deployed enables the retail store to quickly respond to the changing market conditions. This is because, real time data collection happens at the retail counters. Hence, any growth or reduction in demand can be easily traced and in real time. Hence, accordingly, purchase and sale decisions can also be modified. Hence, by deploying EPOS system, “speed to market” is enhanced. An EPOS system deployed improves buying decision and use of cash (Aberdeen Group, 2004). A DSET framework has been applied to represent Drivers, Strategies, Enablers and Technologies prevalent in retail industry in the study by Aberdeen Group.

The study concludes that the new technologies which entail Point Of Sale applications facilitate independent retailers to enhance customer service. This is established by keeping a track of customer purchase information. The retailers also become more efficient at ordering products. The vendor management practice also becomes better due to good predictability of the forthcoming demand which in turn is enabled through the POS system (Aberdeen Group, 2004). However, internet shopping has some disadvantages as well. Lack of the ability to inspect products before purchase puts the customers at a higher risk of fraud.

On the other hand, merchants also are at a risk of fraudulent denial of online purchase or fraudulent purchases using stolen credit cards. Another danger through online shopping is Phishing. The customers are befooled by pretending that they are dealing with a genuine merchant, when they actually have been made to feed private information into another system of a malicious party. System and network outages are also a challenge sometimes for both the merchants and the customers. In addition, leakage of private information is a significant issue for the customers. This can lead to identity thefts and spy ware accumulation.

Differences between Traditional vs. Internet means of selling Internet selling is all together a different experience compared to the traditional way. Using the online selling technology the store can showcase its products in the most appealing way to the customers. Usage of various features as multimedia, interactive shopping features, online tour of the store, music, animations etc. can enable a more attractive approach to reach out to the customers. While traditional shopping doesn’t enable all these media rich promotional materials, it also doesn’t allow the reach to the customers on a twenty four hour basis.

Moreover, the time spent on travelling to the store by the customers is also saved and hence, more productive time is available for shopping. Through online shopping, the store can manage optimized levels of inventory and on demand supply of products. This brings down the over head costs involved in traditional shopping. Online shopping also opens new avenues for customer relationship management wherein the store can easily track and keep a record of the customer expectations and trend. Hence, the store can distinguish between high valued customers from others and can manage long term relationship with customers.

Organizational environments and their relation to the organisation Being situated in a major city, the store experiences market forces that points to the adoption of newer technologies for a better customer experience. The local shoppers have a high average annual income and more exposure to online technologies. The customer visiting the store finds it difficult to find time to travel to the store due to their busy lifestyles. Also, majority of the stores in the city offer online shopping capability.

Hence, it becomes a compelling business case for BWL to offer online shopping experience to its customers for their delight. Retaining customers is a challenge being faced by retail stores due to large number of alternatives available in the market. This can be enabled through the use of Point of Sale system that will help in maintaining a database of all customers visiting the store. Through this customer database, the shopping temperament of a customer can be identified. This can lead to the identification of high worth customers and a more focused approach can be followed to retain such customers.

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