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Learnings

Framework for Information Requirements

- Group 007An 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 are1. Relevance2. Accuracy3. Frequency

Let us consider the example of Food World and have a look at different reports which are generated

S.No Inventory Sales Customers Purchase

Report

name

Inventory

Turnover Sales Report Foot falls

SKU

Performance

Level SKU SKU demographic SKU

Frequency Twice a week Daily hourly Monthly

Report

name

Slow Moving

items Sales trend

Level Category/SKU SKU

Frequency Depends Daily

Report

name Shrinkage

Promotional

Effects

Level SKU SKU

Frequency Monthly Weekly

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. President2. VP Retail3. Suppliers4. Warehouse Manager5. Merchandising Manager6. Store Manager

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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.