Learnings

Framework for Information Requirements

Group 007

An organization comprises of management at different levels of hierarchy. At each level, the manager is responsible for the decisions he/she makes and the implementation of those decisions. As such, he/she requires the right information at the right time in order to be effective in this regard. Management Information Systems (MIS) main objective should be to facilitate this right information at every level of the organization. It is thus useful in monitoring and controlling a stores performance. The design of the MIS is very critical in achieving the above mentioned objective. The important parameters to be considered are 1. Relevance 2. Accuracy 3. Frequency Let us consider the example of Food World and have a look at different reports which are generated S.No Report name Level Frequency Report name Level Frequency Report name Level Frequency Inventory Inventory Turnover SKU Twice a week Sales Sales Report SKU Daily Customers Purchase SKU Foot falls Performance demographic SKU hourly Monthly

Slow Moving items Sales trend Category/SKU SKU Depends Daily Promotional Effects SKU Weekly

Shrinkage SKU Monthly

For monitoring the store performance, the decision-makers at each level have to get access to information which is important for them. The different stakeholders of information are 1. President 2. VP Retail 3. Suppliers 4. Warehouse Manager 5. Merchandising Manager 6. Store Manager

As can be seen from the table, a plethora of data is available for each stakeholder. So in providing and processing information, where should we start from? This question can be answered by looking at the level where the information flux is at a maximum. In this example, the POS (point of sale) at the store manager level is where we start from. It is the starting point from which patterns of demand and consumer behaviour are identified at the store level. Then the information increases as the data aggregates. Reports for the President may be given once in a quarter as he/she will be looking at the overall performance of all stores with respect to the industry. Also the President will be concerned with the macro decisions of staying in or exiting the business. Aggregation of information is easier in bottom-up approach in this case. Information is controlled and designed for decision makers only within the organisation.

Once we have identified the store manager as the point to start from, we need to decide on those facets of information which need to be captured. Out of the many possible reports which can be generated, only a few of them are actionable as far as the store manager is concerned. These actionable reports provide information on those aspects of the store over which the store manager has control and can thus influence the performance of the store on those aspects. Those aspects represent the critical success factors (CSFs) for the store manager. They represent the key areas which can be the key measures of the successful performance of the store manager. For example, customer satisfaction, shrinkage, maintenance costs and employee costs are certain aspects which can be classified as a store managers responsibility. Another example in identifying the right kind of data points to facilitate the store manager in achieving the CSFs has been described below.

Accurately identifying consumer behaviour: In a retail store, the retailer does not have any visibility before the point of sales. Hence consumer behaviour before the point of sale (like how the customer is picking/searching/dropping each brand) gives a clear picture as to what brand to display and what not to display. The way in which an item is picked and put back in the shelf will give valuable information about the customer preference for a product.

The CSFs can be specified at each level of hierarchy in the organization. For example, the warehouse managers responsibility is inventory management. Inventory turnover would thus become a CSF for him/her. As such, we can construct a CSF tree for every organization. The CSFs may also vary across organizations based on the industry as well as the specific strategies adopted by the organization. For example, the CSFs of an Apollo hospital would be different from those of AIIMS because of the difference in strategies adopted as well as the mandates.