Question

1. Explain what MIS systems do and give an example of IKEA (a global furniture manufacturer) MIS document for the month of May about marketing/sales for the London region, UK.
2. Explain what DSS systems do and give an example of IKEA (a global furniture manufacturer) DSS decision for the month of May about marketing/sales for the London, UK. region.

Answer 1

ANS. A management information system (MIS) is a computer system consisting of hardware and software that serves as the backbone of an organization’s operations. An MIS gathers data from multiple online systems, analyzes the information, and reports data to aid in management decision-making.

Objectives of MIS

The goals of an MIS are to implement the organizational structure and dynamics of the enterprise for the purpose of managing the organization in a better way and capturing the potential of the information system for competitive advantage.Following are the basic objectives of an MIS −

• Capturing Data − Capturing contextual data, or operational information that will contribute in decision making from various internal and external sources of organization.

• Processing Data − The captured data is processed into information needed for planning, organizing, coordinating, directing and controlling functionalities at strategic, tactical and operational level. Processing data means −

  • making calculations with the data

  • sorting data

  • classifying data and

  • summarizing data

• Information Storage − Information or processed data need to be stored for future use.

• Information Retrieval − The system should be able to retrieve this information from the storage as and when required by various users.

• Information Propagation − Information or the finished product of the MIS should be circulated to its users periodically using the organizational network.

  Characteristics of MIS

  Following are the characteristics of an MIS −

• It should be based on a long-term planning.

• It should provide a holistic view of the dynamics and the structure of the organization.

• It should work as a complete and comprehensive system covering all interconnecting sub-systems within the organization.

  Retail Business Model of IKEA

  All trading of IKEA is through its outlets as well as internet, called as Clicks and Mortar or Bricks & Clicks or Bricks, Clicks & Flips (Catalogues).

  The usability of both of the ways for sales proved advantageous for the IKEA and for consumers as well:

• Developers Perspective Profitability of IKEA
• Management Perspective Increased / better productivity

• Establishment of e-business is still advantageous for IKEA as counter mediation made payment available to them before goods are delivered, goods are supplied in time further reducing inventory cost, space for storage, direct delivery to customer’s home further reduces their cost.

• User Perspective Accuracy/ satisfaction/ cost effective
• To fulfill the above described criteria products have be efficient, effective as well as user friendly.
• Flaws of this system include Security problems, staff retraining or new technical staff, more employees loosing jobs and redundancies.

• It should be planned in a top-down way, as the decision makers or the management should actively take part and provide clear direction at the development stage of the MIS.

It should be based on need of strategic, operational and tactical information of managers of an organization.All scattered branches of IKEA (Franchisees) are connected to a common system networking “inter IKEA system” at national as well as at international level (monitoring all the sales, stocks, cash, inventory, demand and supply balances). The basic unit of information is provided by managers at local stores (shift / branch/ area/ territory managers), all collaborating to disseminate information from local up to international level. This propagation of information is carried out through internet using wide area networks (ultimately spreading information from end user to main supplier).

A decision support system (DSS) is a computerized program used to support determinations, judgments, and courses of action in an organization or a business. A DSS sifts through and analyzes massive amounts of data, compiling comprehensive information that can be used to solve problems and in decision-making.

Typical information used by a DSS includes target or projected revenue, sales figures or past ones from different time periods, and other inventory- or operations-related data.

A decision support system gathers and analyzes data, synthesizing it to produce comprehensive information reports. In this way, as an informational application, a DSS differs from an ordinary operations application, whose function is just to collect data.

The DSS can either be completely computerized or powered by humans. In some cases, it may combine both. The ideal systems analyze information and actually make decisions for the user. At the very least, they allow human users to make more informed decisions at a quicker pace.For example, a DSS may be used to project a company's revenue over the upcoming six months based on new assumptions about product sales. Due to a large number of factors that surround projected revenue figures, this is not a straightforward calculation that can be done manually. However, a DSS can integrate all the multiple variables and generate an outcome and alternate outcomes, all based on the company's past product sales data and current variables.

Characteristics of a Decision Support System

The primary purpose of using a DSS is to present information to the customer in an easy-to-understand way. A DSS system is beneficial because it can be programmed to generate many types of reports, all based on user specifications. For example, the DSS can generate information and output its information graphically, as in a bar chart that represents projected revenue or as a written report.

As technology continues to advance, data analysis is no longer limited to large, bulky mainframe computers. Since a DSS is essentially an application, it can be loaded on most computer systems, whether on desktops or laptops. Certain DSS applications are also available through mobile devices.

The flexibility of the DSS is extremely beneficial for users who travel frequently. This gives them the opportunity to be well-informed at all times, providing the ability to make the best decisions for their company and customers on the go or even on the spot.

The vision of the furniture store IKEA, for example, is to create “a better everyday life for the many people.” The business idea that supports this vision is to offer good-quality furniture at affordable prices. IKEA has become a global brand because all aspects of their business support this idea, from the unique layout of the shopping environment—such as family-oriented restaurants and children’s play areas—to advertising. Today IKEA is the world’s largest furniture retailer.