c
 

A waiter takes an order at a table, and then enters it online via one of the six terminals located in
the restaurant dining room. The order is routed to a printer in the appropriate preparation area:
the cold item printer if it is a 
, the hot-item printer if it is a hot  or the bar printer if
it is a  
. A customer¶s meal check-listing (bill) the items ordered and the respective prices
are automatically generated. This ordering system eliminates the old three-carbon-copy guest
check system as well as any problems caused by a waiter¶s handwriting. When the kitchen runs
out of a food item, the cooks send out an µout of stock¶ message, which will be displayed on the
dining room terminals when waiters try to order that item. This gives the waiters faster feedback,
enabling them to give better service to the customers. Other system features aid management in
the planning and control of their restaurant business. The system provides up-to-the-minute
information on the food items ordered and breaks out percentages showing sales of each item
versus total sales. This helps management plan menus according to customers¶ tastes. The
system also compares the weekly sales totals versus food costs, allowing planning for tighter cost
controls. In addition, whenever an order is voided, the reasons for the void are keyed in. This
may help later in management decisions, especially if the voids consistently related to food or
service. Acceptance of the system by the users is exceptionally high since the waiters and
waitresses were involved in the selection and design process. All potential users were asked to
give their impressions and ideas about the various systems available before one was chosen.

¦



1. In the light of the system, describe the decisions to be made in the area of strategic
planning, managerial control and operational control? What information would you
require to make such decisions?
2. What would make the system a more complete MIS rather than just doing transaction
processing?
3. Explain the probable effects that making the system more formal would have on the
customers and the management.




1. A management information system (MIS) is an organized combination of people, hardware,

communication networks and data sources that collects, transforms and distributes information in
an organization. An MIS helps decision making by providing timely, relevant and accurate
information to managers. The physical components of an MIS include hardware, software,
database, personnel and procedures.

Management information is an important input for efficient performance of various managerial

functions at different organization levels. The information system facilitates decision making.
Management functions include planning, controlling and decision making. Decision making is
the core of management and aims at selecting the best alternative to achieve an objective. The
decisions may be strategic, tactical or technical. Strategic decisions are characterized by
uncertainty. They are future oriented and relate directly to planning activity. Tactical decisions
cover both planning and controlling. Technical decisions pertain to implementation of specific
tasks through appropriate technology. Sales region analysis, cost analysis, annual budgeting, and
relocation analysis are examples of decision-support systems and management information
systems.

There are 3 areas in the organization. They are strategic, managerial and operational control.

Strategic decisions are characterized by uncertainty. The decisions to be made in the area of
strategic planning are future oriented and relate directly to planning activity. Here basically
planning for future that is budgets, target markets, policies, objectives etc. is done. This is
basically a top level where up-to-the minute information on the food items ordered and breaks
out percentages showing sales of each item versus total sales is provided. The top level where
strategic planning is done compares the weekly sales totals versus food costs, allowing planning
for tighter cost controls. Executive support systems function at the strategic level, support
unstructured decision making, and use advanced graphics and communications. Examples of
executive support systems include sales trend forecasting, budget forecasting, operating plan
development, budget forecasting, profit planning, and manpower planning.

The decisions to be made in the area of managerial control are largely dependent upon the
information available to the decision makers. It is basically a middle level where planning of
menus is done and whenever an order is voided, the reasons for the void are keyed in which later
helps in management decisions, especially if the voids are related to food or service. The
managerial control that is middle level also gets customer feedback and is responsible for
customer satisfaction.

The decisions to be made in the area of operational control pertain to implementation of specific
tasks through appropriate technology. This is basically a lower level where the waiter takes the
order and enters it online via one of the six terminals located in the restaurant dining room and
the order is routed to a printer in the appropriate preparation area. The item¶s ordered list and the
respective prices are automatically generated. The cooks send µout of stock¶ message when the
kitchen runs out of a food item, which is basically displayed on the dining room terminals when
waiter tries to order that item. This basically gives the waiters faster feedback, enabling them to
give better service to the customers. Transaction processing systems function at the operational
level of the organization. Examples of transaction processing systems include order tracking,
order processing, machine control, plant scheduling, compensation, and securities trading.

The information required to make such decision must be such that it highlights the trouble spots
and shows the interconnections with the other functions. It must summarize all information
relating to the span of control of the manager. The information required to make these decisions
can be strategic, tactical or operational information.

Advantages of an online computer system:

V Eliminates carbon copies

V Waiters¶ handwriting issues
V Out-of-stock message
V èaster feedback, helps waiters to service the customers
Advantages to management:

V Sales figures and percentages item-wise

V Helps in planning the menu
V cost accounting details

2. If the management provides sufficient incentive for efficiency and results to their customers, it
would make the system a more complete MIS and so the MIS should support this culture by
providing such information which will aid the promotion of efficiency in the management
services and operational system. It is also necessary to study the keys to successful Executive
Information System (EIS) development and operation. Decision support systems would also
make the system a complete MIS as it constitutes a class of computer-based information systems
including knowledge-based systems that support decision-making activities. DSSs serve the
management level of the organization and help to take decisions, which may be rapidly changing
and not easily specified in advance.

Improving personal efficiency, expediting problem solving (speed up the progress of problems
solving in an organization), facilitating interpersonal communication, promoting learning and
training, increasing organizational control, generating new evidence in support of a decision,
creating a competitive advantage over competition, encouraging exploration and discovery on
the part of the decision maker, revealing new approaches to thinking about the problem space
and helping automate the managerial processes would make the system a complete MIS rather
than just doing transaction processing.

3. The management system should be an open system and MIS should be so designed that it
highlights the critical business, operational, technological and environmental changes to the
concerned level in the management, so that the action can be taken to correct the situation. To
make the system a success, knowledge will have to be formalized so that machines worldwide
have a shared and common understanding of the information provided. The systems developed
will have to be able to handle enormous amounts of information very fast.

An organization operates in an ever-increasing competitive, global environment. Operating in a

global environment requires an organization to focus on the efficient execution of its processes,
customer service, and speed to market. To accomplish these goals, the organization must
exchange valuable information across different functions, levels, and business units. By making
the system more formal, the organization can more efficiently exchange information among its
functional areas, business units, suppliers, and customers.

As the transactions are taking place every day, the system stores all the data which can be used
later on when the hotel is in need of some financial help from financial institutes or banks. As the
inventory is always entered into the system, any frauds can be easily taken care of and if
anything goes missing then it can be detected through the system.

 
case Study on E-Business Transformation: cisco Systems

cisco Systems is the network vendor for many institutions ± yet they now also provide products
and services for home networking. At the beginning history of cisco Systems, the corporation¶s
goals were to build-up easiness in accessing the information using various electronic information
channels, especially computer, inside the Stanford campus. Along with the growth of the firm,
the management hired many talented employees. They formalized their business plan covering
four strategic goals (provide complete solution for businesses, make acquisitions a structured
process, define the industry-wide networking protocols, and form the right strategic alliances).
Based on that strategy, they want to become ³e-business´ leaders in their industry.

cisco use several distribution channels to deliver its products and services such as personal
selling, third-party distributors, resellers, service providers, and system integrators. Since cisco
plays in the networking products, they try to provide customers with a great possible flexibility
of product or service development when designing customer¶s networks. Therefore, customers
can save time and money when they want to change their existing networks.

cisco differentiate its customers into four major segments i.e. enterprises, service providers,
small/medium-sized businesses, and home consumers. cisco has been rendering networking
solutions for its customers. Moreover, it also use internet and internet-related technologies to
handle business activities. cisco build several internet initiatives for its e-business functionality
such as cisco connection Online (ccO), cisco Employee connection (cEc), and
Manufacturing connection Online (McO). As an addition to those initiatives, the result is an
increase in automated functions within several cisco¶s operation departments. These e-business
initiatives has brought the company to benefit a considerable flexibility in managing the dynamic
of the organization.

0  


1. can other corporations benefit from investing in e-business functionality to the same extent
that cisco has?

2. What can other corporations learn from cisco¶s approach to guiding the e-business
transformation?

› 


In corporate-level strategy, cisco totally committed to one industry which is computer

networking industry. cisco¶s key core competence is computer networking know-how. It used
this competency to produce simple bridges and routers. Since then, the company has used this
competency to provide variety product (such as optical switches, software and even service) that
enable the sharing of information across disparate network. èor instance, cisco manages
complete information technology solution for business. cisco also adopting innovative
techniques and technology to service customer and streamline its own business process with
efficiently and effectively. Because that, cisco achieved average growth rate over 40 percent a
year, acquired more than 70 companies to further develop and expand its market presence.
Another thing is cisco save more than $800 million a year from re-inventing in e-business.

Based on Boston consulting Group (BcG)¶s the portfolio matrix model, cisco fall in Winners
category with high level industry attractiveness and string business strength. IT industry now on
is attractive industry. Especially with the boost widespread of internet make the demand of
networking hardware and software increasing rapidly. cisco also has strong business strength. It
looks on cisco achievement that mention above.

According to Porter¶s èive èorces Model, in cisco condition, the forces are weak. cisco is main
player that witch one initiate the standard of hardware and software. It causes higher entry
barrier, limited number of competitor and substituted product. Because there are limited number
of player, the power of supplier and customer are weak too.

The purposes of E-business initiative by cisco are to maximizing customer satisfaction and
minimizing the cost. In early stage, the information just only about company and product
information. Later on, when it was integrated into sophisticated and costly ERP system,
customers were able to access more information like manual, èAQ and up-to-date information. It
brings more customer satisfaction to achieve customer loyalty. To minimize the cost, integrating
system between cisco and its supplier is a perfect move. It allows cisco implemented Just-In-
Time process that saves cost and time.

Employee of cisco will do everything possible to support the customer. With delegated authority
for IT expenditures to individual business unit, would support customers and directly increase
sale. cisco has long history with maximizing customer satisfaction. It¶s begun with extended
telephone support hours, using information technology to provide much information to customer
and provided customer-training programs.
cisco realize that with its large market share, have large burden to support large number of
customer. With electronic dissemination of knowledge could ease that burden. It is significant
move from cisco to educated customer and builds customer loyalty.

c
c 


Related with problem statement, other company can gain benefit from investing e-business
functionality same extent with cisco. The infrastructure and program is in the market right now.
The company just chooses the right ones are match with the requirement. However, the
implementation and the execution may not same. Every company have own strategy and the
infrastructure and the program must design based on that strategy.

èlexibility was as critical as functionality to cisco e-business system. There are no system are
adequate with the situation over time. There are must be some revision, adaptation and change.
The flexibility also comes from decision making process. The business units have independent
position to relate with cost and strategy. Because the business unit face own unit unique
environment and the business unit itself know to deal with it.

Human resource was critical factor to. Other company can learn how cisco treats the employee.
With help from technology, cisco can develop system that ease the employee works each other
and made simpler the business process.

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