Student ID: 11437 Computer Solutions

HNC Business IT
Module 2 Computer Solutions

Student number: STU11437

Resubmission of assignment 2

Tutor: Michal Rutkowski

TASK 1
Information is one of the most vital business components and is increasingly being
recognised by managers and workers as an asset that helps generate competitive advantage(s)

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for their organization. The importance of business information and its role in value addition is
widely researched, understood and accepted by most organizations. According to Matarazzo

“An Information Revolution is sweeping through our economy. No company

can escape its effects. Dramatic reductions in the cost of obtaining,
processing and transmitting information are changing the way we do
business.”
(Matarazzo, J M & Connolly, S D, 1999)

Information is derived from data and only becomes information when it is presented in a
manner that is meaningful for the recipient(s) of that information. All businesses create,
access and utilize information in many ways, with or without the use of Information
Technology or computers, however, use of information technology has empirically been
proven as a more reliable and robust way of managing and analysing data. Analysis of data in
order to extrapolate useful information from it, in particular enjoys significantly greater
productivity in highly reduced times, when Information technology is employed.

Using electronic tools like computers and databases enhances the ability of a business to
record, store and most importantly analyse the information available during its day to day
operations. There are a number of improvements that can be made in the operations of BBS
with the help of a computer system. Information can be stored, accessed and analysed much
quicker with the implementation of an electronic system, which will not only help managers
react much quickly to information, but also provide the opportunity to analyse it from
different perspectives in order to form a basis for their decisions.

It is worth noting that the same data can be the source of different information for different
personnel in an organization. Employees at different levels and different departments have
different job functions and resultantly, different objectives and motives. For example a store
manager at BBS might look at the daily sales report from a performance perspective, whereas
the store accounting personnel would analyse the same report with cash flows and
reconciliations as their objectives. Organizations are generally classified into three functional
levels, i.e. Strategic, Tactical and Operational, often depicted as a pyramid like Fig 1.1.

Fig 1.1

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In order to get a comprehensive perspective on the BBS information systems project, it is

vital to identify the major sources of information that are available to BBS during its day to
day operations, and analyse the possible uses of this data at different management levels.
According to the available information on BBS, the main sources of information and their
possible uses are as follows:

Table 1.1

Examples of probable Uses at

Source of Data

Strategic Level Tactical Level Operational Level

Forecasting Sales, Pricing, Production Management of store
Sales Data Continue/ planning, staffing, stocks, incentives
(Accounting reports, discontinuation promotions
sales reports) product, New product
development, Sales
Trend Analysis
Accounting Data Keep / Sell a store, Budgeting, plan Departmental or store
(Management reports, Overall organizational financing, manage cash performance, budgetary
Statutory accounts, costs & revenues, flows, Tax planning & control & analysis
Financial Systems) compliance

Customer Data Decisions on new & Promotions, Reward To process & track
(Customer Invoicing related products, New Schemes, Resource orders, deliver goods,
Database, C.R.M., stores according to allocations, Stock & process refunds, apply
Transaction processing customer locations, production discounts, Target
systems, Reward card Customer Trends, management according marketing and
database) Forecasting, Going into to customer statistics promotional offers,
related business like (i.e. age groups,

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Examples of probable Uses at

Source of Data

Strategic Level Tactical Level Operational Level

credit cards & purchasing power etc.)
financing etc.)

Employee Data Planning for long term HR cost analysis, Performance appraisals,
(HR Database, Payroll HR needs, succession Staffing level Training &
records & employee planning, decide on the decisions, Store development, Wage,
service records) right mix of capital and management reviews, holiday & benefits
labour for the Organization wide calculations,
organization Salary increments Promotions

Inventory/Stock Data Current assets review, Production planning, Request stock based on
(Inventory database, Plan production Stock holding patterns, availability, sell
production reports, facilities locations Sourcing decisions according to
Accounting & sales according to stock (Raw Material & third availability, update
records) movement trends. party items) stock based on sales.

Production Data Plan for new fixed Plan & review Plan for stock levels
(Production reports, asset investments, production levels, and price changes,
Machine hour reports, new/related product pricing levels, deliver a more
maintenance reports) development, benchmarking, informed service to the
Change/upgrade Procurement planning customers
existing machinery or & supplier selections,
production processes. Workforce levels,
repair & maintenance

Transaction Forecasts, Company Planning finances, Process sales, orders,

Processing Data (Sales valuations, Product stocks, staffing, refunds, payments;
reports, Accounting Life cycle phase pricing, promotions, update stock based on
reports) identification, customer cash flow management, transactions (if not
trends, policy decision on supplier automatic, like in BBS
adherence. and/or material choice existing system)

Website / Internet Feedback from online Feedback enables Operational staff would
Portal users will be tactical managers to need to process orders
instrumental when make improvements in and make deliveries
evaluating the overall product design & according to the online
organizational, brand features and adjust orders.
and product production levels.
performances.

General Economic Plan organizational Keep products up to Store decorations,

Data direction based on date by adding features colour schemes, service
(Magazines, PEST factors, follow or changing design, levels and sales pitches,
Newspapers, Internet, general practices like determine pricing stock requirement
etc.) Corporate social levels, marketing planning,
responsibility, direction , promotions
environment protection & rewards,

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Examples of probable Uses at

Source of Data

Strategic Level Tactical Level Operational Level

etc., decide to move compensation &
into different market benefits levels
segment.
Industry Specific
Data Help Identify consumer Incorporate latest Enables staff to deal
(DIY Magazines, trends, new / related features and user with customers more
consumer Indexes, product development, requirements into efficiently and increase
Specialized Journals, decisions on level of products, promotions, customer satisfaction
internet, etc.) market presence. production levels, staff and/or sales
selection

Competitor Data Develop competitive Increase production Improve sales pitch and
(Publicly available strategies, introduce efficiency, pricing, better able to explain
data, industry data & substitute or alternative promotions, staffing, product differentiation,
employees switching products, open stores in production processes Improve operational
etc.) geographic proximity and product features, practices by comparing
of competitors, identify Benchmarking etc. it with competitor
takeover/merger practice(s). Headhunt
opportunities employees from
competitors

Internet Statistics Gauge ROI on Decide on website Backup store service

(Specialized third party company’s investment content and theme, with online product
services commonly in its web presence and online promotions, availability and product
used by webmasters for decide on competitive policies, descriptions, ordering
analysis of visitor increasing/decreasing online marketing, facility, support
volume, behaviour & the investment, identify product differentiation services etc.
preferences.) market trends and steer
organization’s direction
accordingly

Credit rating Decide on company Decide on which Open corporate

Agencies Long term investment suppliers to use, accounts and give
(Experian, Equifax, options, Make long arrange financing spending limits
CallCredit etc.) terms financing according to BBS’ according to customer
decisions credit rating credit rating, Offer
payment plans & credit
to customers on
purchases.

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The list above is not exhaustive and most sources mentioned above encompass a number of
smaller individual information sources. Identifying these sources will be crucial at the
planning stage of system development for BBS, and it is evident that one system alone will
not suffice for the needs of all users at all levels of management. A number of different
systems are used at different management levels as is evident from Fig 1.2, which give
different perspectives and different types of access to the same data. A combination of these
systems would be employed at BBS in an organization wide application, to ensure maximum
benefits are enjoyed from use of information technology.

Fig 1.2

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Executive
Support Systems
(ESS)
Management
Information Systems
(MIS)

Decision
Support
Systems (DSS)

Transaction
Processing
Systems (TPS)

A vital consideration regarding the design, development and implementation of the

information system at BBS would be security and access restriction. It is vital to determine
which users will have access to which information during the design phase of the system and
develop accordingly. Not restricting access to most of the information sources listed above
can have legal, operational and competitive repercussions for BBS. Table 1.2 below lists
some examples of why and how the information sources listed above need to be protected.

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Table 1.2

Needs to be secured
Source of Data Security measures required
because

Accounting / Accounting and Financial 1. Database should be encrypted, firewalled.

Financials Database records have information 2. User level access with different rights and
about the organization’s restrictions should be implemented.
costs, salaries, profits, 3. Policies must be defined regarding access
overall financial health. to financial information, allowing access
This information can be on a need to know basis only.
used for competitive 4. Any changes to records must be logged
purposes, for damaging with reference to the user initiating the
organization’s reputation, change and the time & date of the
creating discontent in change(s).
employees etc. 5. Access logs should be maintained and
regularly reviewed
Sales Records Sales records of an 1. Only relevant personnel should be
organization can be a vital allowed to create, alter and access these
source of information for records.
its competitors. BBS’ 2. User level password protected access
consumer preferences, should be configured for all users.
trends, incentives offered 3. System should be periodically
by BBS etc. are all part of reconciled with TPS and Financial
its own unique sales modules.
strategy which if exposed 4. Any changes to records must be logged
can lead to loss of any with reference to the user initiating the
competitive advantage change and the time & date of the
enjoyed. change(s).
Human Resource Private & confidential data 1. Only relevant personnel should be
Database on employees is stored in allowed to create, alter and access the
this database and any leaks database.
can lead to the employees 2. The database should be firewalled and
being exposed to risk of encrypted.
identity fraud… 3. Users must be granted different levels
Compensation & benefits of access in line with their job functions
details are stored in this and position.
database. Unrestricted 4. Any changes to records must be logged
access to those can lead to with reference to the user initiating the
general discontent among change and the time & date of the
employees. change(s).
5. Access logs should be maintained and
regularly reviewed

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 Student ID: 11437
Needs to be secured
Source of Data
because
Customer Database Private & confidential data
on customers is stored in
this database and any leaks
can lead to the risk of
identity theft/fraud…
Payment details are often
stored with these customer
details, a leak in which can
lead to even bigger
problems.
If customer DB is exposed
to competitors, this can
lead to loss of sales &
market share.
Transaction Most of this data includes
Processing Data customer details as well as
payment medium details,
which exposes BBS to all
the risks mentioned in
Customer DB section
above.
Additionally TPS records
can also give away
information about total
sales, discounts,
promotions etc.
Unauthorized access can
also lead to fraudulent
transactions
Production Data Unauthorized access to
production data can lead to
production delays, loss of
competitive edge,
undesired employee
reaction.
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Computer Solutions
Security measures required
*The database should be firewalled and
encrypted.
*Access to most details on each record
should be restricted to Tactical or Strategic
management, with the operational staff only
able to see basic details necessary for
transaction processing.
*Access logs should be maintained and
regularly reviewed.
*Any changes to records must be logged
with reference to the user initiating the
change and the time & date of the
change(s).
*Access logs should be maintained and
regularly reviewed.
1. The system and database should be
firewalled and encrypted. It should also
use Mac address filtering and certificate
based authentication.
2. Operational level staff should only be
given data entry and basic reporting
features.
3. Regular system checks and audits must
be carried out.
4. Any changes to records must be logged
with reference to the user initiating the
change and the time & date of the
change(s).
5. Access logs should be maintained and
regularly reviewed
1. User level authentication should restrict
and allow access based on rights
assigned by the admin.
2. Periodic reconciliations should be
carried out against tactical plans.
3. Any changes to records must be logged
with reference to the user initiating the
change and the time & date of the
change(s).
 Student ID: 11437 Computer Solutions

Needs to be secured
Source of Data Security measures required
because

1. Carefully planned user level access

Inventory/Stock Unauthorized access can based on groups should allow access
Database mean undetected loss of based on job function.
stock / pilferage, serious 2. All changes to the DB need to be
disruptions to operations logged with the username, time and
and loss of customers. date.
3. Any changes to records must be logged
with reference to the user initiating the
change and the time & date of the
change(s).
4. Periodic reconciliations with hard
copies, TPS and Accounting reports
would be required.
Website / Internet To ensure correct stock 1. A webmaster should regularly secure,
Portal and item details are patch, harden and upgrade webserver
available to customers and and employ Intrusion detection systems
their correct orders and (IDS).
feedback is reaching BBS 2. Certificate and password based user
management. access should be allowed only for
personnel whose job function requires
access to the website & its database.
3. Any changes to records must be logged
with reference to the user initiating the
change and the time & date of the
change(s).
4. Access logs should be maintained and
regularly reviewed

It will not be practically possible for BBS to protect access to external sources of information,
like general economic data or industry specific data. However, external sources like credit
rating agencies and internet statistics services would be secured by the service providers
themselves, with user level access granted to organizations on subscription basis. The
access/login details provided by such external sources should be kept secure and should only
be made available to employees under a clearly defined company policy.

The security measures discussed above are in addition to the general requirement of physical
security, by only allowing physical access to authorized personnel. Periodic system testing,
reconciliations and system audits are also highly recommended to ensure system security &
functionality.

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TASK 2

It is becoming increasingly vital for today’s businesses to utilize information technology in

order to stay ahead of competition and respond to rapidly changing consumer requirements,
in a timely manner. In the case of BBS, there are a number of IT tools and applications it can
adopt to improve its services, productivity and profitability in addition to protecting and
expanding its market share. Some of them are briefly discussed below:

1. Fully operational e-commerce website:

Internet is a very big market, and it is expanding constantly. BBS does have a website
at the moment, but it does not seem like they have any e-commerce facilities. A fully
operational e-commerce website would allow customers to see “real time stock data”
as opposed to the stock data available at the moment, which doesn’t account for sales
of the day when responding to stock queries. It will also allow customers to make
purchases online, from the comfort of their home, and regardless of their distance to
BBS stores.

Salient benefits of having an e-commerce site for BBS would be:

• Increased outreach. Can sell to the whole world, not limited by location factor
anymore.

• There is an increasing trend towards purchasing on the internet. Having an e-

commerce site will allow BBS access to this market segment.

• Selling on a website would result in significantly lower costs for BBS, as there
will be no store to maintain, no store staff and no related insurances etc., costs
of maintaining the website are minimal comparatively.

• The site can be a good tool for building customer loyalty by offering online
membership related advantages.

• An e-commerce site will most definitely result in increases sales and revenues

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2. Enterprise Resource Planning Systems

Enterprise wide integrated software that is used to manage all internal as well as
external resources of the organization. ERP’s usually rely on a single database which
is updated in real time, and gives access to different information based on access
rights. Potential benefits of an ERP for BBS are:

• Real time updates in records at all levels, ensuring all information is up to date
and accurate, i.e. stock data is updated at the end of the day, which essentially
means that anyone at a regional store could be misled into selling items that
the system says are there, which might have actually been sold the same day.

• Deliveries at the moment take 2 days from initial order, if regional stores need
to get the required items from the central store’s stock, due to inter-store stock
movement being based on disjointed systems. An ERP can significantly
reduce the time involved for such orders.

3. Customer Relationship Management Systems

Customer relationship management is a widely accepted and adopted strategy for

increasing the returns on customers, by storing information on customers individually
and the adding and updating their accounts with information learned on them like,
buying preferences, spending patterns, general interests etc. This helps organizations
better target their marketing and deliver improved service from the perception of each
customer as they are treated as individuals rather than groups. BBS could reap the
following benefits by employing a CRM

• A CRM can help BBS adjust the level of service to each customer based on
their profiles, ensuring better utilization of resources.

• Targeted marketing based on customer preferences usually leads to increased

revenues.

• Increase customer loyalty with individual treatment, increasing customer

retention.

• Get continuous feedback, helping BBS improve products and services.

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• Analysis of CRM profiles can help identify new potential customers.

• Based on locational analysis of customers better inventory management can be

employed at regional stores, leading to lower holding costs as well as lower
inter-store stock movement costs.

• Cost saving on “blind” marketing campaigns, and a higher return on marketing

investment as a direct result of basing marketing on customer preferences and
demographics.

4. Retail Management / Electronic Point of Sale Systems

Retail management systems are specialized software, specially targeted at

organizations in the retail business. It usually includes Electronic Point of Sales
(Epos) system, which generally consists of barcode scanners, electronic tills etc.,
which is linked to a central database. This database allows access and modification of
its data through the retail management system, which in addition to data manipulation,
also allows reporting and analysis. An RMS would be of particular utility to BBS,
helping it:

• Significantly decrease checkout times, and thus increase customer satisfaction

and service delivery.

• Increase sales through availability of increased sales time.

• Identify customer trends, and manage stock accordingly potentially lowering

stock holding costs & inter-store stock movement costs.

• Increase management efficiency through reducing their record keeping

workload.

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5. Business Intelligence Systems

Business Intelligence systems are used to perform predictive analyses of specific data
after data-mining and benchmarking it. These systems are used to support better
decision making and is also known as competitive intelligence systems. A number of
benefits could be reaped from such a system at BBS like:

• Better strategic and tactical decision making based on a more comprehensive

predictive analysis.

• Will help BBS management improve customer focus.

• Can help identify possible areas of business for streamlining, expansion or

consolidation.

• Can help improve focus of strategic and tactical objectives based on analysis
of the relationship between market specifications and critical success factors
(CSFs).

6. Artificial Intelligence Marketing Systems

A.I. marketing is a relatively new form of direct marketing system, which combines
the benefits of database driven marketing with the concepts of computer based
artificial intelligence, in order to automate the reasoning behind the analysis of
database records, as well as delivery marketing payloads i.e. e-mails, SMS messages,
offer coupons etc. A.I. marketing has a vast potential for almost all businesses and
BBS can similarly benefit by:

• Increased marketing efficiency and return due to targeted marketing.

• Improve customer perception of the level of service offered by BBS.

• Significantly reduce HR costs by replacing the human element.

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TASK 3
In order to evaluate whether the steps taken to improve the information system at BBS have
been successful, we would need to identify the main objectives of these steps and the
expected outcomes. This will help us develop a working document that can be used to solicit
feedback from concerned users, which in turn can be benchmarked against the expectations in
order to form an opinion about the success of these system changes.

According to the information available on BBS, the business has the following main
deficiencies in its existing system:

1. No utilization of e-commerce opportunities. Online querying is possible but no

options to order online, register as customer etc...

2. No utilization of contemporary IT tools available today. These tools are employed

commonly and become the source of competitive advantage for many businesses.

3. The existing system, in case of stock being unavailable at the order taking store, takes
an additional two days before stock becomes available.

4. The central store maintains the stock files by updating them at the end of the day for
stock that has been sold during the day or needs to be sent to regional stores next day.
This means stock availability figures are only accurate at the start and end of the day.
Anyone querying the stock control system would get wrong figures.

5. There is no mention of any security or access restrictions on the multi-access stock

control system, or the customer database, which is not only dangerous but also in
violation of customer data privacy act in UK.

Hence the main objectives of the system improvements at BBS are to tackle the above
issues and mitigate the inefficiencies presented by these factors.

• Implement a fully operational Web 2.0 e-commerce site for BBS.

• Implement an ERP at BBS that also incorporates a CRM and RMS/EPOS.

• The ERP would tackle issues surrounding movement and availability of stock by
updating records in real time, instead of batch processing.

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• Implement security measures like firewalls, policy based user access, data
encryption and Intrusion detection systems.

Please see the attached Excel sheet for a sample working document, which can be used to
evaluate the impact of implementing the new information system at BBS.

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Bibliography

• Matarazo, J M; Connolly, S D.,(1999), Knowledge and Special Libraries,

Butterworth-Heinmann, 1999.
• Data Mining, 2002, ‘Data Mining’, [Online] Available at:
http://www.webopedia.com/TERM/D/data_mining.html

• Data Mining, 2005, ‘Data Mining’, Encyclopedia Britannica Premium Service

[Online] Available at: http://www.britannica.com/ebc/article?tocId=9362293

• IBM Institute for Business Value, 2006, ‘Service Oriented Architecture: A Practical
Guide to Measuring Return on that Investment’, IBM Global Business Services. IBM
Corporation.

• IBM, 2005, ‘Bionorica extracts business benefits from DB2 Universal Database on
IBM eServer iSeries’, IBM [Online} Available at:
http://www.ibm.com/software/success/cssdb.nsf/cs/dnsd-632lw4

• IBM, 2005, ‘DB2 Intelligent Miner for Data’, IBM [Online] Available at:
http://www-
306.ibm.com/software/info/ecatalog/en_US/products/F105974W98124U09.html

• IBM, 2005, ‘DB2 Product Family’, IBM, [Online] Available at: http://www-
306.ibm.com/software/data/db2/

• IBM, 2005, ‘IBM Global Services’, IBM [Online] Available at: http://www-
5.ibm.com/services/dk/

• IBM, 2005, ‘IBM Introduces New Advanced BI Capabilities for Commerce’, DSstar
[Online] Available at:
http://www.taborcommunications.com/dsstar/01/0821/103407.html

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