Business_Information_System_Assignment_on_Mph_Bookstore

1.0 Introduction The Information Systems (IS) unit within the business is largely responsible for meeting this challenge. Many well-known examples of the use of information technology for competitive advantage involve systems that link an organization to suppliers, distribution channels, or customers. In general, these systems use information or processing capabilities in one organization to improve the performance of another or to improve relationships among organizations. New developments in basic information technology, innovation in its employment among organizations is increasingly crucial to competitive survival and success. Not only large organization needs information systems to help run their business, even medium and small organization needs them too. Organization depends a lot on information system because it can help to calculate accurate information, store a large amount of data, and information provided can support decision making. To be successful in today's competitive marketplace, organizations have to access to a business information system that produces necessary information about the customers, markets and competitors. In order to have a further knowledge on the applications of information systems in business organizations, this report has been created to enhance the understanding about information systems used in MPH book store in Malaysia. This report will begin with the overview of MPH, following by with the use of Information System. A diagram of the internal value chain is included in the report as well as the organization chart of MPH. The purpose of this report is to introduce the information systems used in MPH as well as providing an analysis of effectiveness of these systems. All the information and resources in the report have been collected from an interview with a MPH employee during a site visit and also from the MPH website. MPH has one of the most advanced and reliable information systems within the region due to the nature of their business. 2.0 Findings and discussions 2.1 Overview of MPH Book Store MPH Bookstores has its roots in 1815 when William Milne, a young missionary, established a permanent mission press in Malacca. This establishment moved to Singapore in 1890 with the primary objective of printing literature. In 1906, the organization underwent another name change to the Methodist Publishing House. In 1927, it was incorporated as Malaya Publishing House when it became a public listed company. Following the announcement of the Malaysian nation in 1963, the company changed its name to Malaysia Publishing House and new bookstores were opened in Kuala Lumpur, Penang and Malacca. To the public, Malaysia Publishing House has always been known as MPH. The late Jack Chia, acquired MPH in 1972. MPH then became known as Jack Chia-MPH Ltd. The company changed its name to MPH Ltd in March 2000 to reflect the change in its majority ownership since 1998. MPH Bookstores Sdn Bhd was 100% owned by MPH Group (S) Pte Ltd which in turn was a subsidiary of MPH Ltd, a public company listed on the stock exchange of Singapore. On 20 December 2002, MPH Bookstores (S) Pte Ltd was bought over by a Malaysian company, Jalinan Inspirasi Sdn Bhd, which is part of a large Malaysian conglomerate controlled by Malaysian businessman Tan Sri Syed Mokhtar Al-Bukhary. Jalinan Inspirasi changed its name to MPH Group Malaysia Sdn Bhd to reflect its core businesses and it now owns MPH Bookstores (Malaysia, Singapore and Indonesia), MPH Distributors (Malaysia and Singapore) and MPH Library Services (Singapore). MPH Bookstores' location in Singapore are primarily situated at Raffles City Shopping Mall, PARCO Millenia and Robinson Road which caters to the office crowd and the surrounding vicinity. Its outlet at Novena Square also boasts a major clientele around its area. MPH’s first in East Malaysia and 28th overall in the country is located at The Spring shopping mall, the outlet occupies over 7,000 square feet and offers a wide selection of books ranging from fiction to professional and children’s titles as well as complementary products including stationery, gifts and greeting cards. Facilities available include a self-search terminal, customer service counter and reading area with seats. MPH deputy chief operating officer Donald Kee said the decision to open the outlet here was due to overwhelming requests from East Malaysian customers who travel to MPH stores in Peninsular Malaysia to buy books. MPH - The Spring is open daily from 10am to 10pm. 2.2 Use of information system in MPH Book Store Information system (IS) is a system or process that provides information needed to manage organizations effectively. Information systems are regarded to be a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy. 2.2.1 Point of sales (POS) system “A point-of-sale (POS) terminal is a computerized replacement for a cash register. Much more complex than the cash registers of even just a few years ago, the POS system can include the ability to record and track customer orders, process credit and debit cards, connect to other systems in a network, and manage inventory.” (Bitpipe.com 2007). The POS system is feature widely used in their business at MPH book store. At a transaction terminal, the SKU code number of the item is to be keyed in into the system which consists of 6 digits or by the specific button on the screen. Instead the MPH uses the bar code reader to do the transaction because it is a book store which serves their customers efficiently. During business transactions, goods are scanned in into the POS system and a receipt is printed out immediately for customer. The coded inventory data is sent through to updates its database. An analysis can be carried out from the updated database to summarize out what are the best selling items for daily business transaction. Apart from that, amount of stock left in the store can be calculated out easily. These are all the advantages of tracking the information that later may be used for interpretation. Through POS system, the management of the stall can keep track the goods that have been sold and the leftover stock. In other words, MPH can monitor the movement of their stock easily as to ensure the availability of the all products at all times. Besides, it can help to identify all sudden shrinks of certain items that no longer goes undetected (Wuorio, 2009). Furthermore, the system is used in staff administration and human resource management as well. For instance, staff performance and attendance can be maintained through POS system by a “Clock In and Clock Out” button. Moreover, a staff member handling the register machine will have to key in their staff id and password in order to start the opening balance for the cash drawer. Until the end of the day, their closing balance amount must be tallied as the one in POS system and their performance can be traced too. Unlike the conventional register machine, the amount of sales has to be calculated manually by deducting the amount of opening balance where a conventional register does not have the benefit. 2.2.2 Close Circuit Television (CCTV) System There are many benefits to using a CCTV security system. The MPH book store is able to provide a safer environment as well as making the business more efficient and less likely to be robbed. The CCTV security system is a single camera and monitor that can be very elaborate. A more complex system may include hundreds of cameras, digital recorders, and multiple operators. After installing this CCTV security system MPH is able to avoid dealing with many of the thefts that strike their business. This is a great deterrent for potential shop lifters. When they realize that your business is protected by a closed circuit television camera they may choose to go somewhere else. MPH also has fewer problems with shoplifters. People who shoplift often think twice when they find out they may be caught on camera. The shoplifters who are unaware that the business is protected are often apprehended because of the CCTV security system. The CCTV system can be used to monitor the cash registers. This is a good way to keep track of transactions and those using the cash registers. The book store can identify employees and visitors. This is an important factor for many businesses. Meeting insurance requirements is easier when they use a CCTV security system. Further recorded evidence is extremely helpful in the case of accident claims that are not legitimate. The use of a CCTV security system will increase security in the business as the area around the location of the business and any other part of the property is monitored (Example – Parking Lot). The benefits of a CCTV security system far outweighs the financial cost for business owners. 2.2.3 Primary activities of MPH book store The MPH book store consists of five primary activities. These different parts consist of inbound logistics which is inventory storage, operations which are products/packaging and quality control, outbound logistics which consists of sales of products, sales & marketing which is mainly customer management, promotions and market research and finally, Service which consists of customer feedback. Figure 1: Internal Value Chain of MPH book store 2.2.3.1 Inbound logistics Inbound logistics is the movement of materials from suppliers and vendors into production processes or storage facilities. The MPH book store imports books from various publishers around the world. They keep an inventory of all items received thereafter storing them in their main storage for distribution purposes. It ensures that the customers will obtain a chance of experiencing books published the world. 2.2.3.2 Operations Operations are financial transactions at a brokerage; having to do with the execution of trades and keeping customer records. The book store is very conscious about the quality of the books. They always sell what’s best to the customer. The handling process of the book store is very well organized. The items which the book store imports as bulks are divided into small quantities which are then offered to the customers for commercial purposes. 2.2.3.3 Outbound logistics Outbound logistics can be described as the processes and network used to pick, ship, track and store if necessary items ordered by customers, distribution centers and other supply chains. Outbound logistics are the activities required to get the finished product to the customer, including warehousing, order fulfillment, etc (Value Chain N.D.). All the business transactions are accomplished by using a POS system, which can effectively record and offer information as to the amount of goods remaining at the ware house or under storage. 2.2.3.4 Sales & marketing Marketing & Sales are those activities associated with getting buyers to purchase the product, including channel selection, advertising, pricing etc. The book store holds many promotions throughout the year. The stock clearance sale, the year end promotions, the value buy promotion are just some of the main promotions and advertising done by them. All the information is to be standardized. In this case, an email from marketing department will be sent out to the book store to carry out the sales. 2.2.3.5 Service Here the company actively solicits expressed customer needs or feedback to improve its service. The feedback given by the customer is taken in to higher consideration and used to improve the quality of the business process to offer a better service. 2.2.4 Secondary activities The primary value chain activities described above are facilitated by support activities below. 2.2.4.1 Infrastructure and Administration Infrastructure an Administration of MPH serves the book store’s needs and consist of functions which include management, legal, finance and accounting. For example, Close Circuit Television (CCTV) Cameras are used in MPH book stores to monitor the book store’s environment. The reason for using the system is to protect the store from theft. The cameras record the movement of customers and staff and stores data in the system. Data can be viewed at any time by the administration. Further, MPH employs anti-virus software to ensure protection from viruses and other malicious programs which would disrupt the proper functioning of its IT systems. 2.2.4.2 Human Resource Management The function of Human Resources departments is generally administrative and not common to all organizations. MPH has a formalized selection, evaluation, and payroll processes. Efficient and effective management of "Human Capital" has progressed to an increasingly imperative and complex process. The HR function consists of tracking existing employee data which traditionally includes personal histories, skills, capabilities, accomplishments and salary. To reduce the manual workload of these administrative activities, MPH began to electronically automate many of these processes by introducing specialized Human Resource Management Systems. Currently the Human Resource Management Systems of MPH encompasses: 1. Payroll. 2. Work Time. 3. Benefits Administration. 4. HR management Information system. 5. Recruiting. 6. Training/Learning Management System. 7. Performance Record. 8. Employee Self-Service. 2.2.4.3 Technology Technology is the usage and knowledge of tools, techniques, crafts, systems or methods of organization or the material product of these things. MPH uses antivirus software such as malware antivirus to protect and prevent loss of information in the database. Some information is confidential for the book store. Therefore, only authorized staff in the book store can access the confidential data. 2.2.4.4 Procurement Procurement is the acquisition of appropriate goods and/or services at the best possible total cost of ownership to meet the needs of the purchaser in terms of quality and quantity, time, and location. MPH often defines its process as a process that intended to promote fair and open competition for their business while minimizing exposure to fraud and collusion. They also manage an inventory system as well as a system to track their goods. 2.3 Organization Model Figure 2: Organization Chart The above figure provides MPH’s flow in handling its organization. * Chairman The chairman is the highest office of MPH book store who handles all the work and approvals * Executive Manager The executive manager is responsible for overseeing the whole book store and typically engages in more strategic and conceptual matters, with less attention to day-to-day detail. Top managers have middle managers working for them and who are in charge of a major function at the book store. * Store Manager Store managers are responsible for supervising employees and running the store at a profit. To attract a clientele and move merchandise, managers make sure that their store offers products and services that satisfy the needs and desires of their customers in the book store. * Supervisor Supervisor will be the one on duty of every shift if any that guides partner and assigned task for shop assistant. * Shop Assistant The shop assistant basically is the one who will be assisting customers and providing information. Shop assistants will be given allocated task that they will need to fulfill on a daily basis at the book store depending on what they are assigned to do. 2.4 Category of Information Systems Used After analyzing the information provided by MPH Book store it is clear that the type of Information System used at the store is a Transaction Processing System which is used to carry out their daily transactions. 2.4.1 Transaction Processing System Transaction processing systems is a computerized system which is capable of collecting, storing, modifying and retrieving data transactions of an enterprise. Considering the MPH book store TPS is the livewire of the organization. The system helps the top level management to easily monitor and view needed data at any time. 2.4.2 Characteristics of TPS Mentioned below are the characteristics TPS at MPH Book store. Internal Sources of Data – The inputs for TPS usually come from internal sources usually from the management of the book store. The POS terminal at the MPH book store basically consists of the name and price of the product which is decided by the management. Output for Internal Public – All details with regard to transactions taken place are generated by the system and are mostly used by the management in order to calculate profit. Large Database – Since there are several transactions happening daily, TPS is utilized as it has the capability of storing large amounts of data. All information is stored in one small server which could be accessed to retrieve data for later use. Rapid Processing – Since MPH book store entertains many customers daily it is important to have transactions done as instantly as possible. Therefore with TPS, the transactions could be done in a quick and efficient manner as customer will appreciate a fast action with a rapid response time. Reliability – Reliability is a crucial area when it comes to a busy book store like MPH, therefore the TPS system at MPH is designed to remain operational without any problems. For TPS to effectively work the failure rate must be very low. If it fails, then quick and accurate recovery must be possible. This makes well–designed backup and recovery procedures essential. MPH has installed back- up devices to prevent a cease of operation during a blackout. Databases are used to store the data and require a safe and effective plan for backups and recovery if anything goes haywire. A periodic backup on transactions and database changes are usually made by the cashier once a day. UBS software helps the organization go through back-up and recovery procedure when the system fails. It will only recover to the check point being generated by the TPS. Figure 3: Data Flow Diagram Above is the Dataflow Diagram of backup and recovery procedures. It shows how the data are being back-up and recovered. Inflexibility– Transactions must be processed in the same way each time to maximize efficiency. To ensure this, MPH book store has TPS interfaces which are designed to acquire identical data for each transaction, regardless of the customer. Controlled processing – Since TPS systems can be such a powerful business tool, access must be restricted to only those employees who require its use. Restricted access to the system ensures that employees who lack the skills and ability to control it cannot influence the transaction process. Thus the book store restricts access to the lower hierarchy employees; however the lower level employees could access the system by providing a valid username and password in order to perform a task, nothing further. Restricted access to the system ensures only the person with power (e.g. supervisor, manger etc) can be in control of the transaction process. 2.4.3 Types of Transactions Every transaction process that takes place at MPH must be standardized to maximize the efficiency. Mainly there are two broad types of transactions involved in this process. i. Batch Processing Batch processing is the execution of a series of programs ("jobs") on a computer without manual intervention. These batch jobs are set up so they can be run to completion without manual intervention, so all input data is preselected through scripts or command-line parameters. MPH uses this technique which is in contrast to "online" or interactive programs which prompt the user for such input. A program takes a set of data files as input, process the data, and produces a set of output data files. This operating environment is termed as "batch processing" because the input data are collected into batches on files and are processed in batches by the program. This enables the user to effectively manage his or her time and results in less disruption. Invoice issued is not done immediately but as a group. In the face of advance technology, this type of transaction is usually done at brick-and-mortar businesses, not online. Despite their long history, batch applications are still critical in most organizations including MPH. ii. Real Time Processing A real time system is one which satisfies explicit bounded response time constraints to avoid failure. Equivalently, a real-time system is one whose logical precision is based both on the accuracy of the outputs and their timeliness. When goods are purchased, the transaction occurs on the spot. For example, when a transaction takes place, goods are scanned from barcodes or details are typed in, any required credit card checks are made, a receipt is sent to the customer, coded inventory data is sent to update the database and the inventory. MPH uses a special electronic device which is connected to the information system for credit card payment. Cashier will insert customer’s credit card into the device. Next, a merchant copy and customer copy receipts will be printed out and the transaction is complete. 2.5 Business process Figure 4: Business Process ‘Business process is a collection of activities designed to produce a specific output for a particular customer or market’ (Sparx System, 2004). Customers can easily purchase books, magazines and stationeries within a short period of time just by walking in MPH Bookstore (Sparx System, 2004). With MPH’s business process, it is made easy for both internal and external environment as it speeds up the process of sales and purchase. Internal management can share information with other departments as well. From the information shared among departments, each department such as human resource, finance, sales and even the top management knows the latest information about the company’s growth. These are the following steps involved in a business process: 1. Customer brings item(s) to the cashier counter for further payment for the items. 2. Cashier scans the item(s) by scanning the product’s barcode through their scanning system which will immediately detect information of the item. 3. Information of item(s) such as the title of the book and price is then displayed on the cash register or computer used by the cashier. The information given will then be transmitted to sales and finance department for recording sales and accounts. 4. Cashier informs customer of the total amount to be paid, customer then makes payment by cash or credit card. 5. The item(s) purchased are checked out and customer receives proof in the form of a receipt and walks through the Electronic Article Surveillance (EAS) which will detect whether the items has been paid. 6. As for the Sales department, they collect all data regarding sales of goods and manages stock inventory. This has to be done to ensure that stock is sufficient in the warehouse. Special orders made by customers must also be checked as well. Stocks from the warehouse will then be transferred to the bookstore to be placed on the shelves for customers. 7. Finance department calculates the total amount received from cash inflows and credit sales every end of the month and prepares financial statement. 3.0 Conclusion Businesses improve the efficiency of their operations in order to achieve higher profitability. Information systems are important tools available for managers to achieve higher levels of efficiency and productivity in business operations. Information system is a major tool for firms to create new products and services, and also an entirely new business model. A business model describes how a company produces, delivers, and sells a product or service to generate revenue. MPH book store uses an up-to-date information system to gather, assimilates, and evaluate internal as well as external information resulting in a gain of competitive advantage over other firms. Also Management is quicker to cater to customer’s needs and complaints at MPH, a sophisticated computer information system enables the company to monitor employees, to keep managers and employees informed, to coordinate activities among divisions, or even to sell their products to customers via the internet. The process model of purchasing an item from MPH is similar with other book stores. The cash flows from the customer to MPH and finally the bank. In the process, the cashier employs the barcode scanner, User Business System and computer to complete the transaction. Hence, the whole system is described as transaction processing system (TPS). MPH also adopts the management information system (MIS) when they are sharing and processing information. Furthermore, a good information system can facilitate direct communication between firm and suppliers, manufacturers, dealers, and marketers. Together, they can create a value chain though they were in one organization. In the meantime, the widespread use of information freeway is inviting unwelcomed threats. Today, companies are plagued by hackers; competitors, theft, spies, hired agents, or even from disgruntled employees. Therefore, firms have taken measures to safeguard their system such as installing complex computer firewalls to detect hackers and purchasing expensive and advance encryption software. In conclusion, information system enables companies to react, respond, cater, store, retrieve, disseminate, and control their valuable asset which is information. In the years to come, a good information system within a company will be no longer an option; as it will become a mandatory requirement in determining success. 4.0 References 1. Introduction to Information Systems: supporting and transforming business Rainer, Turban & Potter; John Wiley and Sons, 2007 2. Value Chain N.D. http://university-essays.tripod.com/value_chain.html. 3. My privilege book, http://myprivilegebook.com/kuching/merchants/2010/02/08/MPH-book store/.html. 4. POS, Bitpipe.com, http://www.bitpipe.com/tlist/POS.html. 5. MPH, http://MPHonline.com.my 6. Wuorio, J 2009, 7 reasons to switch to a point-of-sales system, Microsoft Corporation, http://www.microsoft.com/smallbusiness/resources/technology/business-software/7-reasonsto-Switch-to-a-point-of-sale-system.aspx#reasonstoswitchtoapointofsalesystem. 7. Mind Tools Ltd, 2009, Porter's Five Forces, http://www.mindtools.com/pages/article/newTMC_08.htm