Mastering Financial Health: Accounting Management Systems For Success

Functional Business Units and Data Types

You have been engaged as a MIS consultant for the following organization.

“Book Nation” knows that lots of people like to read, but many never get around to doing it. Why is that? They lack time? They lack money? They lack motivation to search or travel? Traditional local bookstores have good ranges but are often expensive; discount high street outlets are cheap but have limited ranges – and you have to travel to both to inspect the books. Even with on-line book selling giants like Amazon, although convenient and price- sensitive, this assumes that the end-user has access to, and is a confident user of, the web. For many adults this is a false assumption. Many older and even very young readers prefer not to engage with this e-commerce world. Plus, no amount of customer reviews can replace physically examining the book yourself.

There is something inherently satisfying about sitting down in a relaxed space and thumbing through a real physical book, feeling the pages between your fingers, all the while surrounded by walls full of tempting reading. This is where Book Nation comes in…

They solve the price issue by only offering quality-checked used books – no book costs more than £2.00, many less than half that figure. They solve the convenience issue by having ‘pop- up’ stores in local neighbourhoods in the type of places people go already

– supermarkets, petrol stations, banks, village halls etc. They also have permanent retail stores in town centres. Both the permanent and the ‘pop-up’ stores open for the convenience of their clients
– not themselves. So, the permanent stores are open from 7AM to 10PM seven days a week, while the ‘pop-up’ stores are advertised a week in advance and remain open for 24 hours before moving on. Customers love this convenience, cheapness and ability to actually touch the book they plan to buy. Business is exploding!

The company is based in Reading, United Kingdom where the CEO, board and all central business functions are located. They also have over fifteen warehouses dotted all over the country, with each site comprising a manager, admin support, warehouse staff and drivers. The in-town permanent stores are re-stocked twice a week by one or more warehouses using a list sent by the local store manager. The company owns its own fleet of vans. The pop-up stores carry a smaller selection of the more popular titles and genres and are stocked just once – when the store ‘pops up’! Once the store closes down, the books are returned to the nearest warehouse until needed again.

Permanent stores have between six to ten staff, plus a manager. Pop-up stores typically have three or four staff on site at any one time. Because of the long opening times, shifts and rotas are used.

In remote and very sparsely populated rural areas, even a well-advertised pop-up store right on the doorstep will not generate enough interest to justify setting it up for 24 hours. In such a situation, a mobile store will be run. This is in reality a converted removal van stocked with books and operated by a driver and assistant. It will follow a pre-announced (and regular) circuit through the countryside, stopping for around one hour in up to a dozen different villages. It does a surprising amount of business.

Task 1

Where do the books come from? Many sources, including donations from individuals, spare stock from charity shops, bulk end-of-line titles from publishing houses, old stock from libraries and so on. The company has a policy of either getting the books for free or at least never paying more than 25p per copy. This means they can sell a book for £1.00 and still make substantial profits.

With over 3,000 different physical stores operating at any given time – mobile, permanent and pop-up - the company are very concerned about the safety and security of ‘on-premise’ data storage, backup and recovery and business continuity in the case of a catastrophic data loss at one of the permanent stores – or even at a pop-up store. This is a major concern at board level.

Related to this issue of massively dispersed ‘on-premise’ local data storage, another major weakness – as seen from board level – is the complete failure to use data more strategically to plan the future growth of the business. For example, the board would like to know which permanent stores are least/most profitable? Which types of location for pop-up stores are most popular and so are most/least profitable? Which mobile routes are doing the best? Are there any patterns or trends hidden in the vast amount of data they store?

Lastly, with the new GDPR data protection legislation coming into effect, the company are very sensitive to data leaks and reputational damage, as they obviously harvest, store and process huge volumes of data.

In summary, in order to grow the business, they need help on scalability, security, efficiency, strategic data analysis and staying within the law. As an MIS consultant, they are looking to you for sound, practical advice.

Final Point

The above is simply an outline of the company and you will need to make your own assumptions and interpret or even extend the scenario as you go. Use your imagination as you see fit, but you must clearly document all assumptions and extensions.

This assessment is worth 100% of the total marks for the module.

For the specified case study, use the information provided, plus your own research into similar organizations, to list and describe the various functional business units that you deem necessary for it to carry out its business. Take care to describe not only the primary purpose and function of each unit, but also the in-going and out-going types of data to that functional unit. To what end is that data used within each business unit?

It is recommended that you support your discussion with a fully annotated structure chart and one or more data flow diagrams to represent how these various business units relate to each other and how data flows in, out and around the organization.

For the specified case study, explain to the company board, in your role as an MIS consultant, the key concepts and differences between:

Operational data
Tactical data
Strategic data

You should clarify how these three levels relate to the hierarchy of business units you described in Task 1 and identify and compare information systems within different functional areas of this organisation. It is recommended, for ease of comparison, that you present this analysis as a table or matrix. Well-annotated diagrams are also a good idea.

Most organizations have different functional units that control the different parts of the business. The reason for dividing the business activities into different functional areas is that it implements expertise in all operations for each functional unit (O'Brien, 2009). The organization thus develops effectiveness and efficiency for the entire business. Book Nation has different operations within its business. From delivering books to their stores to purchasing and acquiring books for stocking up their warehouses. Having many stores set up in different parts of the country plus hiring several employees to manage their operations means that the company has to have well defined functional units for their business.  Several business units could be implemented by the management of Book Nation including; Management, Operations, Marketing, Accounting, Research and development and finance.

Management involves supervising the performance of others in the business (McLeod, 2010). The management activities are grouped into categories including; planning by coming up with long-term objectives for the business and short term goals necessary for the execution against the long term goals. Book Nation’s objective is to offer quality books to their consumers at an affordable price. They do so while observing the accessibility of their books to their customers. Setting up pop-up stores and mobile stores assists in boosting the accessibility of their products while acquiring books for free or at a very cheap price ensures their prices are fair to their customers. The type of data that will assist in planning for the managers to boost their goals includes inventory records, customer preference to certain books and product seasonality, in that particular books may shift on demand depending on the period of the year. Another category involved in management is organizing. Managers are charged with the responsibility to efficiently organize the activities of a business ensuring resources are used effectively. Controlling is also a role in management. It is the function of monitoring the business activities and ensuring they are on track to meet the objectives of the organization. Managers will need data on deliveries, staff duties plus sales and purchases that will help them in organizing and controlling.

Operations as a functional unit refers to converting inputs into outputs (O'Brien, 2009). Inputs are defined as the factors of production while an output is the final good and service. For Book Nation, the factors of production are acquiring books at a cheap price and ensuring the books are easily accessible to their customers. The output is selling the books cheaply and distributing them to multiple stores countrywide. The operations unit forms the main part of the business by regulating the daily business operations hence ensure the services of the organization meet the customer needs in the best quantity and quality.

Marketing refers to the actions done by a company to identify the needs of a customer and develop services and products that will meet those needs. The function also incorporates promotion of goods and services, finding out how the goods and services will be delivered and coming up with a strategy for pricing the products in a manner that will capture the market and still remain competitive. Emerging technologies are creating a business driven environment that allows marketing to develop and oversee an organization’s internet presence through social media campaigns and company websites. For Book Nation the marketing function is mainly involved with improving the sales of their books in their stores and ensuring their prices are always lower compared to their competitors. Therefore the types of data involved in their marketing functions include; different prices of books from different suppliers and the prices set by competing book stores in the country.

Task 1

Accounting is another functional unit for a business (McLeod, 2010). It involves providing relevant information to the managers that helps them in making decisions about the allocation of company resources. This unit is charged with the responsibility of presenting accurate financial transactions of an organization to external and internal parties, investors and government bodies. The type of data provided by managerial accountants in the case of Book nation includes; asset allocation, budgets, information on costs and performance appraisal that will guide while making decisions by management.

Finance is another functional business unit that closely relates to accounting. The finance department looks at how funds shall be raised, the implications of borrowing funds and the impacts of the financial decisions made to the long term well-being of the organization (Haag, 2009). The main role of this unit is to plan, obtain and manage the funds of the business. The management of Book Nation needs to establish a finance unit that will help the business in managing the funds for purchasing books and other relevant resources such as vans, maintaining the warehouses and stores plus paying their employees.

Research and development could be stated as a separate functional unit involved in inventive activities undertaken by businesses to develop new products and services and innovative techniques to improve their existing operations that will boost the product and service (McLeod, 2010). For Book Nation, the R&D team roles may involve coming up with ways that customers will easily access their stores plus motivating means of boosting reading culture in their outlets.

The data flow for Book Nation’s functional units may appear as follows;

   Customer relationship management refers to the techniques, technologies and practices employed by companies to handle and analyze the interactions of customers and data all through the customer lifecycle (Olson, 2011). The purpose of doing so is to boost the customer service relationship and help in retaining customers and improve the sales for the organization. The CRM systems collect customer information over different channels for the organization through live chats, direct mail, company’s website, social media and telephone. CRM systems consists of many functions making them useful they include ; storing different customer interactions over phone, email or social media, automating several workflow repetitive processes including; tasks, alerts and calendars. Several technologies are available that can assist Book Nation to implement CRM system they include; VoIP. VoIP is a leading technology that creates huge differences in the contact centers. The technology is a core driver in the call center space. It allows for an organization to incorporate traditional contact center together with remote, home-based and outsourced agents. Moreover, the technology could assist in extending the channels of the contact center by adding email, Web chat and voice. The Contact center management for Book Nation could handle all these types of interactions over one network. VoIP is a beneficial CRM system that minimizes expenses and removes location barriers while boosting customer service.

Operational database refers to a database used to handle and store data in real time. It is the database that keeps data inside the organization. They store data on payroll records, customer information and employee information (McLeod, 2010). They are important for business analytics operations and data warehousing. Their main feature includes coordinating real time operations as opposed to conventional databases that use batch processing to process data. An example of an operational database that Book Nation can use includes; MongoDB. It is an open source software that is composed of interactive workloads that record and store data. It runs on a NoSQL DBMS created for operating modern applications that depend on unstructured and structured data. The application documents data model allowing developers to store and combine data of any structure easily. The software comes in two versions; one is open source, falling below the GNU Affero General Public License and the other is commercial falling under the application’s advanced subscription. The commercial version is better as it offers administrative features, advanced security, plus on-demand training and support.

Task 2

Data mining on the other hand refers to the set of techniques applied to analyze data from different perspectives and dimensions, discovering unknown hidden patterns, grouping and classifying the data plus creating a summary of the defined relationships (McLeod, 2010). Data mining includes several elements such as; extracting, transforming and loading data onto the warehouse system, creating access to the analysts and experts of IT, scrutinizing the data by tools and developing a presentable useful format of the data  like tables and graphs. Various tools are available that can be used by the management of Book Nation to carry out data mining. One of the leading tools is the Python based Orange. The application is quite popular as it is easy to use and has powerful features. It is an open source software coded in Python and contains beneficial data analytics, machine-learning features, text analysis all incorporated in a visual programming interface.

Cloud based data management platforms refers to a unified platform that collects, organizes and activates first, second and third party data of the consumers from several sources that include mobile, online, offline and beyond (O'Brien, 2009). The data is then made accessible to various platforms including; SSps, DSps and advertising exchanges to be implemented in targeted advertising, content customization and personalization. The platforms allows one to profile the current audience and customers, gain meaning from the data and improve the campaigns for better marketing performance. A good example of a cloud based data management platform is the oracle golden gate. The platform allows for quick replication of transactions through a technique that maintains the integrity of transactions and provides an end user replica that is similar to the one developed by the application. The platform also implements transformation of data as it replicates. This creates an organization of the data in a specific manner which is crucial while preparing reports.

While using information systems to collect and analyze customer data, organizations have to be ethical with the methods they implement in collecting customer information plus the ways they handle the data. Book Nation needs to observe the set rules and directives of data protection established in their area of operation. European countries have strict rules on the way businesses apply personally identifiable information without the prior knowledge of the customer. Book Nation will have to develop mechanisms of creating informed consent hence users of their systems are aware of all the facts necessary while making decisions of sharing their data on the system’s platform

 The management of Book Nation could implement copyright restrictions as a legal way to protect its data. This involves a statutory grant that will protect the developers of intellectual property from having their work duplicated by others. This way, the data collected on consumer information on behalf of Book Nation cannot be printed or presented by any other party without the permit of Book Nation’s management.

Book Nation also needs to regulate the usage of cookies on its web services and other information systems platforms (McLeod, 2010). Cookies refer to small files containing text that are stored in the hard drive of a computer when a user visits a website. They identify the web browser accessed by the visitor and monitor their activities on the website. This way the organization identifies what best suits the visitors to their websites based on their browser history, visited web links and their preference on the advertisements they like viewing. Users sometimes find the cookies annoying if they keep popping up on the user interface repeatedly plus if they are incorrect in guiding the visitor to their preferred browsing choices. It would be professional for Book Nation to implement a cookie policy that creates minimal user interference while they are browsing through their website and which serves the needs of the visitor’s effectively.

Conclusion

The management of Book Nation needs to incorporate a system that will not only offer data insights on their consumers, but also one that suits the consumers in their usage of the system. Various business units for the organization will determine the kind of system they will implement. The management also needs to consider the varying operational, strategic and tactical data while setting up a management information system and any other IT resources to run its operations.

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