The Overview Of Boots Information Technology Essay

Boots has founded by Mary Boot in 1849, the first store was opened in Nottingham. The company was first selling herbal remedies to the consumers. After years of given service to the customer, they have decided to diversify the business to opened first departmental store in 1892, at Pelham St, Nottingham. The store was having an extensive merchandise ranges for the consumers. Today Boots has 63,000 employees and 1400 stores as well as they are leading UK’s health and beauty products providers. Boots pls. manufacturers and developers of many products and market many worldwide. Health and beauty products are the leading range in their store. Boots plc is not also selling products but also provides complementary advice and services to the consumers for their health and beauty needs.

Moreover, Boots Plc is a retailing business, which consists of – Boots the Chemists, Boots Opticians, Boots Dental care, Boots Hearing care and Boots’ Health and Beauty Experience Stores. Boots plc has extended their business through globalization. Boots Healthcare International continues to grow Boots’ share of the global self-mediation markets (.http://www.boots.com)

What is information?

Information

Knowledge

Data

Figure 1 —Information Concepts (Mike,1994)

Information is data that have been organized so that they have meaning and value to the recipient. The recipient interprets the meaning and draws conclusions and implications. Data processed by an application program represent a more specific use and a higher value added than simple retrieval from database. (Mike, 1994., Avison and Sha.b, 1997))

1.1 Various Department Functions at Boots

The different functional areas at Boots

Boots uses ICT in every functional area of the business.

Finance Department

Finance department is the most important function of the Company because all the incoming and outgoing financial record monitor and track by the department, in which Boots plc can able to find out of the profit and loss being made. Financial result is helping management to make a decision about the business, whether business is heading right direction.

ICT is used for

financial modeling and forecasting using spreadsheet software

presenting reports and financial documents using word processing and spreadsheet software

producing trial balances, profit and loss accounts and balance sheets using an accounting package

communicating internally and externally using email and faxes

paying suppliers for goods and services using financial management software.

Purchasing uses ICT to:

produce and track orders for items they want to buy

send orders and payments to suppliers using EDI

keep records of how long they have had their machines so that they know when to replace or service them.

Sales Department:

Sales department is the vital for any organization. The department is taking care and responsible for marketing and selling boots products. The sales function is generating all the revenue for the Boots plc. Marketing is needed regularly market research to diversify and differentitate the busniness.

Sales use ICT to:

Boots needs to know how many and which products are sold in its stores each day so that they never have empty shelves. ICT is used in Boots stores to record customer sales. Every time a customer buys a product, details of the sale are recorded at the POS terminal. Every product sold has a unique barcode. The POS terminal scans the barcode and looks up the price of the product. It produces a receipt for the customer and records the sale. Sales information from all the stores POS terminals is stored in the main computer.

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Head office also uses the POS system to send information about price changes and promotions to the stores. This ensures that prices do not vary from store to store and all Boots stores have the same promotions running at the same time. It also uses the system to send other important messages/information to the stores.

Operations

Boots is manufacturing over 8000 different products, such as cosmetics, healthcare, toiletry products and also drugs related to minor illness which are sold in Boots and in other shops such as Sainsbury, Tesco, etc. The manufacturing function of the Boots is able to diversified itself and having sustainable business in this channel through good profit.

Manufacturing uses ICT in a number of different ways:

The Laboratory Information Management System (LIMS) tracks products as they are made. This interfaces with MFG PRO (which is a real time integrated system for linking finance, purchasing, production, quality control, stock etc).

ICT is used to weigh products and for quality control testing. More than half a million tests are carried out on products, raw materials and packaging each year. ICT makes it easier to ensure that all the products manufactured are of a consistently high standard. This is very important since they are meant to improve health and wellbeing. If the wrong amounts of ingredient were used by mistake the result could be terrible.

CAD software is used to design packaging which is attractive to look at and environmentally friendly.

The warehouse where goods are stored once they are made is computer- controlled. Robots store the goods on shelves in the warehouse and load the lorries making deliveries to the shops.

Human resources MIS

This is usually a very large functional area within a business with so many tasks. This section of the business would be in charge of the health and safety of all staff and visitors and are required to provide sufficient working conditions in Boots Plc. Human resources are responsible for recruitment, training, development and promotion. This functional area is linked to many others; ICT for example is heavily involved in the workings of human resources. Most of the information will be sent and stored digitally. In HR most of the communication between the departments is done via email meaning a stronger link with the ICT department. There is also a strong link between this and the operations department. In operations there is a heavy involvement with people, equipment and materials so it is important that HR monitor and control health and safety and provide safe working conditions.

Communication methods

Boots uses ICT in many different ways for communication. The company is communicating to all their customers though letters or telephones which are the best way to contact customers. Boots uses all the information of the customers though their loyalty Advantages card which is can not be access by the outsiders. Thus, Boots has its own internal intranet which can only be used by employees. The web sites of the Boots provide all the information such as products, details of job vacancies, healthcare information and finally about the company itself.

How ICT is used in Boots stores

Boots has 1400 stores in UK, which is ranging from small communities to city centre. Boots has optimizing their store activites through IS, which are as follows:

Space Planning: Boots having different size of stores. The biggest one is 4700m2 and smallest one is 1m2. It is very crucial to display, merchandizing products according to Boot’s planned Planogram, which can be very effective way to display products that customers will want to buy.

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Recording Sales Information: IS is the much convenient and accurate way to find out what products needs to be display, which products are fast moving and demand of the customers. IS is assisting management to forecast and decide which products will be fit for particular store. the Using ICT to create store layouts and mark the position of products.

Therefore, it can be summarized that it is very essential for the Boots to combine effectively to meet the targets and objectives. Boots plc is translating down into function objectives through MIS to optimized, so organization functions are run by a set of goals and objectives.

Part 2

Decision Making

Management functions can be grouped into: Motivating, Planning, control which takes place at all levels and management in which all involves for decision making (Loudon and Loudon, 1994).

Information is a one of vital methods in any organization and every organization is using information systems in some way. Information is involved and support in whole systems of the business process. Information systems should be managed effectively to get result from which will guided though to success. Managers need to understand the importance of the information. For many management information systems, the focus is on the measure being monitored and reported upon. In organizational terms these are not always outputs, but can be divided into three categories:

Inputs: – all the resources uses by the organizations

Processes: – Involving tasks performed by employees, computers etc.

Outputs: – The direct services (or products) produced by the organization

In managing information systems the environment should always be taken into account there are limited systems which are closed (isolated from its environment) and the majority are open which means that there is some kind of interaction with the environment. Feedback is also important part of managing information. It is part of the output of a system, which can then become the input of a system. The purpose of feedback is to help management and other employees to make decisions.

Figure 2 : Porter’s Value Chain

(Source: http://www.themanager.org/models/ValueChain-Dateien/image002)

The above diagram shows that The Michael Porter provides a value chain structural framework to analyze on the internet applications and strategy and the internet in his 1985 book ‘competitive advantages’.

The frame work shown as above is a basic tool to understanding the product or service which creates value to the customers. The value chain is frame work for identify and analyzing all activities which effect both cost and its buyers (Clarke, 2001). Information system is a create a value of the organisation. So therefore information system can improve customer relationship, supply chain management and enterprise resource planning. Internet technology can do many useful things to the modern world and its has limitation with threat of security (Porter, M.E, 2001)

The value chain begins with:

Firm infrastructure: Online investor can improve security

Human Resource Management: Web based training

Technology Development: Knowledge transfer can improve Total Quality management

Procurement: Direct or indirect procurement, buyer-seller relationship

So therefore, the value chain in information systems are able to help management to make a crucial decision in various sectors.

An example of this process in the Retail industry would be that its inputs would include financial expenditure and hours of staff time worked. Its processes could include the number of customers served, or number and size of credit business and other services provided. The outputs could be number of new accounts created and average income per employee.

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There are several information systems that a Boots can use to help its management of information, as it is unlikely that a business will use one system for several functions and levels.

The Boot’s management functions -marketing and sales; finance and accounting; human resources; and manufacturing and production- are related to IS from a functional perspective, according to Laudon and Laudon (2004), If these systems work at the different organizational levels -strategic, tactical and operational-, the performance of the business could improve and, subsequently, the organization could succeed. The organizational decision-making hierarchy, in conjunction with IS should be present in all the management functions. Consequently, all the decisions made at any level or at any of the major business functions are interrelated. In this way, the information could automatically be exchanged and decision-making flows harmoniously within the organization.

Information Systems, Value and Risk Assessments

Laudon and Laudon (2004) stated that the value of IS can be determined through their contribution in their functions of the organizations. There are three areas: business efficiency, decision making and profitability. Hence, it has been obvious that if Information System could able to improve these areas, the organization could be able to invest in new and more modernized Information Systems. According to John Willey (1990) pointed out that the value of IS is related to their contribution to the performance of the business.

The value of the information is normally related to the outcome of the decision-making process based on the information accessed. According to Robson (1994) “the expected value of information is defined by the business gain possible with the information minus the business gain possible without the information”.

Value for money derived from IS could be assessed by different methods according to Trevor Bentley (1998). Decision pay back is one of the main method, which is established when a decision is made by a manager. All the information, related to the descision make should be recorded in the decision log. Another method, it is very important and vital of the information to run and start the organization (Robson, 1994). This information is very vital, because business is depend on this decision, whether to invest or not. Boot plc is not a different from this concept.

The information system plays a big role of decision making for Boots, which are below:

1) Strategic 2) Tactical 3) Operational Strategic involves in decision making relating to product development, product, product life cycle and etc, tactical decision involves including discounts, setting short term prices, promotion campaigns, distributions, advertising, customers service level, products service level, packaging and etc. Operational decision involves includes competitor tracking, principle, sales, customers research and marketing budges and sub-budgets e.g advertising/promotions.

Figure: 3 Information for Decision Making

Strategic

Long-Term

Tactical

Short-Term

Operational

Day-to-Day

Operational Data Processing Systems

Information!

Information!

Information?

Data

Information?

Data

Information?

Data

Information!

Data

http://itsy.co.uk/ac/0405/Sem1/44222_ISD/Lec/5_OpsInfo.ppt)

        

MIS as a business management function are very effective, when designed correctly with the organization in mind. So therefore, it can be obvious that Boots plc is using Managing Information effectively to make decision because they implemented MIS in their all functions.

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