Electronic Data Interchange Information Technology Essay

Management of information in an organization is of utmost importance, because without it there could be an overload of information that would not have been put to good use. To tackle this companies make use of the tools of management information systems (MIS) to provide managers with information relevant to the organization. This computer related data allows managers to organize, evaluate and run their departments efficiently. Some large organizations even have dedicated MIS departments that deal the management of the computer systems based information.

Intranet

The intranet of a company is one of the most basic tools of MIS. It is the local area network that runs within an organization connecting each computer system together. A company’s intranet is a private network that gives main access to authorized company personnel and some limited access to outsiders to share information electronically. The intranet acts as a backbone allowing large organizations like Starbucks to operate as a real time enterprise ensuring organizational responsiveness.

Starbucks made use of their intranet to gain competitive advantage over other independent coffee shops. One might think how this would even be possible in the first place since there was no evident relationship between coffee and computer systems. At a time when the internet was fast growing popular, Starbucks saw this as an opportunity to exploit and became the first of their kind to offer Wi-Fi to their customers back in 2001. Starbucks linked their intranet to the internet and gave access for customers to open up browsers to surf the net for 2 hours maximum at a fee, at their coffee outlets where the Wi-Fi was available. This proved pretty popular for Starbucks as it did attract more customers once it was implemented. But there were certain drawbacks that started appearing later, with smaller independent coffee shops also offering Wi-Fi in their outlets. Starbucks did not want to lose out to the independent coffee shops, so they announced they would be offering free Wi-Fi with unlimited usage as of July 1st 2010(Darrin,2010).

In addition to the Wi-Fi, Starbucks also came out with an application for the mobile called myStarbucks in September of 2009 (Starbucks, 2010). The application was introduced to bring the customers closer to Starbucks via an electronic channel. With technological innovations such as the developments of smart phones and PDA’s and the growing popularity among customers, Starbucks saw introducing this application as ease of access for customers to their core services. The main feature of the application enables the user to make their own drinks and customize it to their liking, and at the touch of a button send the customized drink as an order to any one of the Starbucks branches. Other features also include calorie count of the drinks and food available at each branch, and also a store locator giving directions to the nearest store. As of current Starbucks has only come out with this initiative in the United States, but that did not stop it from being popular as was mentioned earlier.

EDI

Electronic Data Interchange (EDI) is the transaction of data between terminals via electronic channels. It is done in a structured way through exchange of data from one computer system to another, without the requirement of human intervention.

The proposed action for Starbucks to go electronic with its transactions was to piggyback their corporate Virtual Private Network (VPN) onto the global network, thus allowing access to their database. Through the use of the internet, customers were able to submit application for job vacancies directly to the Starbucks website, allowing HR recruiters to cut down on hiring costs and save time by recruiting online. Access to the database allowed Starbucks district managers to sit together with store managers and call up sales figures accessible online and compare current store sales with past sales or with the performance of others stores. This kind of access again allows Starbucks to cut down on costs by avoiding wasting printing paper and going electronic.

Now, with Starbucks having a large and complex distribution channel there had to be a requirement for a possible solution that would enable them to streamline their services. They solved the issue by hiring Blue Martini Inc. a software firm that provides electronic applications for profitable marketing and distribution through different channels (crm2day,2008). Starbucks implemented the use of the Blue Martini Software in 2002 to streamline its business to business operations and distribution channels. How the system works can be a bit complex to comprehend, so a basic breakdown of the operations would help understand how the system works. Firstly Starbucks makes sure that its suppliers and vendors have the order management system. After confirming this, operations are then able to take place with Starbucks sending orders from sales channels that go through the Blue Martini order management system from multiple touch points (e.g.POS) that place orders and shipments through web based user interface. The software’s catalogue and account management provide Starbucks with the ability to centrally manage and deliver contract based products and pricing in multiple languages. In a way the Blue Martini Software serves as a mediator between Starbucks and their suppliers and vendors allowing for effective and efficient business transactions.

ECR

Efficient Consumer Response (ECR) refers to the initiative taken by the members of a supply chain in working towards improving and optimizing the aspects of the supply chain to benefit customers. Reflects on the EDI mentioned earlier, with the Blue Martini Software allowing Starbucks to keep constant stock on inventory by working closely with the retailers and vendors. And in turn responding to customer demands with inventory that is continuously replenished. ECR is also brought out by the mobile application myStarbucks, which offers many benefits to the customers. Since orders can be placed before-hand, customers are able to avoid queues and their service delivered in a timely manner. The calorie count on the mobile application also helps customers, especially those that are generally health conscious.

Starbucks took advantage of the fact that plastic money was fasting becoming a trend, and adopted it by offering the Starbucks stored value cards (SVC)(Starbucks,2010). This type of credit card comes as a convenience to the customers as they do not need to carry cash with them.

CRM

Customer relationship management is a widely implemented marketing strategy that philosophies values for two way communication between firms and its customers. Starbucks values customer relationship, because it is important for a firm that is in the service industry. Starbucks offers value to the customers by a loyalty program where frequent customers who are also termed as ‘Valuable Customer’, are given free dollars ten worth of credit on their Starbucks card. Baristas at Starbucks are given training to take an active role by remembering frequent customers and being able to customize drinks to the customer’s tastes. With technological innovations that allow Starbucks to go high tech, they are able to reach out to customers more easily so as to maintain good relationships with them.

Data Warehouse

As the title suggests, it is a storage unit or more appropriately termed as server that holds the data obtained as useful information. Starbucks acquired the services of digiMine eBusiness Analytics and Campaign Response Analytics to maintain the data stored in the Starbucks servers (Kurt,2002). The firm allows Starbucks to measure, interpret and act on data generated by usage of their Web properties and offline customer touch-points, providing customers with the same great experience on the Web as they have in stores. Powerful data mining provides the business intelligence that would be presented as useful information to help maximize ecommerce sales, increase customer satisfaction and brand loyalty in both the Starbucks stores and on the web.