Background To Management Information System Information Technology Essay

Thomas Cook is the world’s best known name in travel. The international travel company began in 1841 by Thomas Cook, with a successful one-day rail journey from Leicester to Loughborough. Thomas Cook today is the second largest leisure travel group in the UK, thanks to the inspiration and dedication of a single man. The firm has around 19,000 employees that operate throughout a network of around 1050 locations in the UK and overseas.

Over the last few years, Thomas Cook has grown by acquisition, mergers, collaborations and it is now part of Thomas Cook plc which was formed on June 19th 2007 by the merger of Thomas Cook AG and My Travel Group plc. Each brand has its own different appeal and has been retained. Thomas Cook UK & Ireland now operates a fleet of 45 aircrafts, has a network of more than 800 high street stores, leading websites, its own television channel and few of the worlds favorite travel brands like the Cruise Thomas Cook, Direct Holidays, Fly Thomas Cook, etc. The company’s airline, Thomas Cook Airlines, flies to destinations worldwide from various regional airports. It also offers a range of financial services, including foreign exchange at competitive rates, the Thomas Cook Credit Card in alignment with Barclaycard, the cash passport and a wide range of travel insurance policies. It is the only major travel company to be FSA regulated for its travel insurance, which is under written by AXA. White Horse Insurance Ireland Ltd is also owned by the company.

The reason for the company’s loneness and the successful continuation is because of its commitment to providing exceptional service. The founder of the company Thomas Cook once described himself as the ‘willing and devoted servant of the travelling public’. These words today suit the company he founded of more than 160 years after his pioneering (Thomas Cook History, 2009).

Nature of Information systems:

According to Laudon and Laudon information systems can be categorized in many ways, including according to their broad function, to the organizational function they serve, to the fundamental technologies, or to the level of organization at which they are used. In the 1950’s firms began to use computers and transaction processing was the first applications to be used. Transaction processing systems are computerized systems that preserve and carry out the daily routine transactions necessary to run of business such as sales order entry, shipping, payroll, order tracking, accounts payable, control of material movement (Laudon and Laudon, 1997). These were the systems made to help data collection and to improve the efficiencies of the organizational transactions. With advances in the programming languages, databases, and storage, systems focusing basically toward providing performance information to managers came in to place (Somogyi and Galliers, 1987). MIS are computer based information systems that give managers with reports and online access to present performance of the organization and historical records. Planning, controlling, and decision making are few of the functions served by MIS at the management level. Generally, they contract data collected form transaction processing systems and deliver it in the form of daily summary and reports to the management (Galliers, R and Leidner, D. 2003).

There is a clear differentiation between data and information. Information can be said to be like the finished product that is produced after processing the raw material. There are certain characteristics to information and they are: information representation of an entity, has a surprise value, reduces uncertainty, aids in decision making, and updates the level of knowledge. Depending on the mix of the characteristics mentioned the quality of information could be judged as good or bad.

The information can be classified in a number of ways to provide a better understanding. John Dearden of Harvard University classifies information in the following manner: action versus no-action information, recurring versus non-recurring information, internal versus external information (Kumar N, V.K)

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Middle Management External Low

Top Mgt MMMMMgt

Source of Inform

Structured Information

Operational Mgt

Internal High

Organisation Sructure

Fig. Organization and Information

DSS, EIS and organizational decision making: Decision support systems (DSS) and executive information systems (EIS) aimed to provide what MIS were unable to: online information in a flexible format that was specific to decision makers. DSS are model oriented interactive systems, and are used by knowledge workers and managers, analyst, and professionals whose primary job is handling information and making decisions. It assist management decision making by joining data, advanced analytical models, and user friendly software in to a single powerful system that can support semi structured or unstructured decision making (Keen and Scott Morton,1982; Sprague and Carlson, 1982). EIS are systems that are computer based which is designed to provide access to information relevant to the managers for their management activities. Originally designed for senior managers, the systems quickly became popular for managers at all levels. It majorly focuses on the retrieval of particular information, specifically to monitor organizational performance on a daily basis and also information such as competitors and the market place (Friend, 1986).

Knowledge management systems and organizational culture: There were a few limitations to the EIS; a new line of system that is based on the web technology which has developed compensates few of the limitations of EIS, namely the difficulty of integrating information across platforms. The method of systematically and actively managing ideas, information, and knowledge of employees is known as Knowledge information systems (KMS). It refers to the modern use of information technologies (e.g. the internet, intranets, extranets, browsers, data warehouses, software filters and agents) to systematize, enhance, and assist intra and inter firm knowledge management (Alavi and Leidner, 1998). Knowledge management systems (KMS) are meant to help organize, interpret, and make widely accessible the expertise of an organizations human capital to help the organization cope with turnover, instant change, and downsizing. Knowledge information systems (KMS) are being built to ease out increased pressure to maintain a well-informed, productive workforce (Galliers, R and Leidner, D. 2003).

Description and analysis of Functional & constituency use of Information systems in Thomas Cook:

Within the day in and out running of such a large business like Thomas Cook Group plc there is a vast amount of technology that is used to supplement the staff in order to allow the total information system to run more productively. In a large company such as this, technology is used at all levels, from the branches where holidays are booked all the way through to the running of the business itself with respect to things like HR, Payroll and Marketing.

The technology that is used within the individual high street branches themselves are well equipped with a number of desktop terminals that can focus on two specific tasks:

-The first and the most important are to interface with the customers. This is where the agents individually connect to the databases where the details of flights, hotels, etc. so that to help the customer to book and choose a holiday. This use of the technology allows for a streamlined process of business where every detail is required to book things that are centralized for every branch, and hence eradicate the chance of double bookings for one customer and the agents gets a concise picture of what is available. The second major use of the technology within the branches is for the management of the branch itself. And this allows the management team for any branch in particular to deal with sales, payroll, etc. for the branch and report back to the regional management teams.

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Above all the technology used by head office both for management of the business and also supporting the booking system that is used to book holidays for the customers works hand in hand with the technology used in the branches in order to manage the individual branches. The branches can connect to the centralized databases and this vast system of databases allows flights, hotels, cruises and other various holiday related bookings/trips to be distributed, booked and organized. This system allows the company to offer reliable services across the entire market and also prevents overbooking and other problems that could be caused by having non centralized systems.

Human Activity System (HAS) in Thomas Cook: This human activity system within the organization that the IS support is a logical collection of activities performed by some group of people. It has a distinct goal to fulfill. In a business or organization the information system will support the data created, captured and distributed. In Thomas cook this information system will support the entire collection of staff. Branch workers will use the IS to assist them in booking holidays and travel, managers will use it to analyze sales figures, payroll workers will use it to assist in paying the employees. The company actually gathers many different types of information.

– This includes customer information, staff information, flight times, available accommodation, cost of services.

– The system performs some simple tasks to turn the gathered data to information, these include: filtering services with best value for money, booking of correct flights and accommodation, calculating net profit and so on.

Although a functional position is very useful for understanding how business systems deliver various functions, the systems from a constituency perspective guides the various levels of management and types of decisions that they support (Laudon & Laudon, 2007).

In Thomas cook all levels has different information needs according to their various responsibilities. The information system distributes data it has captured or created, it distributes dates, times, prices, place, deals from any Thomas Cook branch to another. Distributing information like email to customers about flight details or cheap packages is an example. The information that is produced is then used by various individuals such as:

The Customers: for their own personal reminder or if they wish to indulge themselves on further deals.

Operational level: Order processing

Middle management: the managers of the individual branches will require some of the information to calculate wages, and associate all this data to be passed on to the payroll department and other relevant head office departments.

Senior management: the directors/CEO and shareholders need the information to identify annual goals, overall performance of the firm, gross sales, revenues, sales by product group and region, also the overall profitability.

Thomas Cook’s information system functionality also majorly interests with: Advertising and promotion, pricing of products/services, new products/services, customer identification, market research, Sales management, customer services (call centre’s). The IS system in short supports the entire organization (Thomas Cook: information System 2009).

Assessment & Critique of Current use of information system:

Customer Communication Management (CCM): creates, distributes and manage multi- channel communications for greater customer satisfaction, improved operational activity and lower costs. This system connects with the customers for more productive and profitable relationships. It manages communications across all branches for greater consistency, efficiency and impact. Automates document generation for quicker responses and delivered in virtually any media- print, fax, web, e-mail or SMS. It also gives customer service representatives to deliver fast, efficient and personal customer contacts, and make a longing impression to keep customers (Pitney Bowes, Customer Communication Management 2009).

Over the last few years, Thomas Cook has grown by acquisition, now broadening itself to seven major travel brands. Every brand has its own distinct appeal and has been retained. Furthermore, Thomas cook brands sell through several channels like- high street outlets, call centres, Thomas Cook TV. Also the Thomas Cook belongs to T4, a co-operative association of the country’s largest travel agents, which processes orders for one another. In terms of systems, the Thomas Cook group of companies runs a legacy of many order processing systems, billing formats, and so on.

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The current system is unable to meet few requirements:

-taking in data from many sources, making it available through different systems, creating and standardizing documentation for more efficient and effective production and distribution, storing an archive of customer communications that can be automatically updated and retrieved to help answer customer queries, unable to access real time price information online for complex holiday packages making the travel agents t take the bookings and then look up multiple hotels and transfer arrangements, system inefficient for e-com in its multi-channel approach.

Recommendations for future developments in use of information systems:

The company should go for the system that could offer co-ordinate Customer Communications Management (CCM) with four thorough objectives: taking in customer data form different sources, making it available through different systems, creating and standardizing documentation for more efficient and effective production and distribution and recording customer communications that can be updated automatically and recalled to help resolve customer queries.

-The tour operator should build a brand new reservation system, Blue Sky iTour in order to deliver consistent and efficient customer service and to enable all of Thomas Cook’s high street outlets and businesses to access real time price information online for complex holiday packages, making it faster to generate a final quote for the customers. This new platform has the ability to communicate in real time with innumerable reservation systems used in the travel market, including those of partners with Thomas Cook. This will allow the travel agents to have real time prices and availability across the partners and can make the full reservation while the customer is present, instead of having to phone the customer back with the final price and arrangements.

-The Thomas Cook should transform its classical tour operator website. As the online travel sector is changing ever faster and to increase its share of e-commerce in its multi-channel approach the company should upgrade its online presence into a more useful travel portal, uniquely combining an online travel agency with updated content, an interactive community and targeted advertising. So that the customers could be able to find all the necessary information at one place, instead of having to look extensively on multiple and inconsistent sites.

These recommendations should be implemented with keeping in mind that the company should not go through major expense, disruption and risk of replacing tried and tested operational systems.

Conclusion:

After analyzing and understanding the role of management information systems in Thomas Cook and how it has come a long way we can conclude that it is nearly impossible for an organization to run without appropriate use of Information Systems in the current business environment and to be a market leader and sustain the extensive competition. We even studied the nature of the information systems, various functions of the systems in different departments and the constituency use of the systems in various levels of management that is very essential for the smooth running of the organization.

Thomas Cook will continuously have to update its Information Systems according to the needs of the management and the firm should also identify and overcome any challenges it faces for its use of the Information System and always keeping in mind the cost it will incur for the implementation.

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