Assignment Task:
For an industry of your choice, describe how a CBIS could be used to reduce costs or increase profits, as well as the security measures of this system.
I expect you to demonstrate the understanding of CBID system and explain how the systems help business "save cost" and "improve profit" in real life practice. Please share the security measures of this system to prevent cyber attack.
Below is an example of CBID used in large retail industry. You do not need to mention all four systems as below but I want to see at least two systems in your essay.
Example:
Information Systems In Large Retail Chains
All major retailers utilize a plethora of information systems to measure and improve their business. In fact, they use so many and collect so much information it becomes just as important to determine what information is the most important to achieving the company's strategic goals. The amount of value added information available could lead to thousands of key metrics that overwhelm key decision makers ultimately leading to mediocre results. For this discussion forum I am going to focus on some key information systems utilized to react quickly and stay ahead of competition by better serving their customers.
Merchandising Sales Statistics: Modern retail has a huge advantage over where they were just 10 years ago. In the past, sales reporting by category and subcategory were monthly if even available at store level. This information was valuable but it handicapped your reaction time as you may have already lost your customer, and seasonality may have already shifted. Today retail managers can walk down the aisle and look up real time sales data on their phone and even drill all the way down to the item level data. They can also compare to the previous year, how they compare to the district and market average and so on, all up to that day. This allows the retail leaders to react to sales trends quickly and increase inventory on top performers while limiting space to low performing products. Retailers that empower their store level teams to react to their specific customer trends have a huge advantage over those who do not decimate this information or only make adjustments at a larger geographic area. The advantage to real time sales data is the ability to increase sales and profitability by ensuring the correct inventory levels and adequate shelf allocation to meet your customer's needs. This data can also lead merchants to expand categories and bring on new product while getting out of others. These moves and the ability to react sooner rather than later, lead to a more productive inventory mix, leading to more sales, and ultimately higher gross margins.
Cost Saving: Ensures that you are not purchasing unproductive inventory which allows you to operate at lower inventory levels.
Profit Improvement: Increased sales and transactions grow sales and profitability.
Scheduling Systems: Retail schedules used to be hand written and determined based on set shifts that often catered towards task. Now thanks to the information that is collected and fed into the scheduling systems, payroll is better spent and customers are better served by ensuring employees are scheduled at the right times. The system collects this information by measuring transactions and identifying by day, and by hour, what is needed based of historical data. These systems take data from current year transaction trends and transaction information from previous years for forward looking dates. The main advantage is your payroll is there when your heaviest customer traffic is, which leads to more help and hopefully more sales. The advantages go further and are harder to measure in areas such as theft deterrent, less exposure to operational shrink due to errors from an overworked staff. It also leads to employee retention by ensuring you staffs moral is not negatively impacted by staffing issues.
Cost Savings: Ensures your payroll expense is productive, lowers turn over, and lowers the need for overtime.
Profit Improvement: assuming you have a staff that performs well and is well trained, you should be able to drive more sales and repeat customers, while limiting non-resalable returns.
Shrink Metrics: One of the most difficult and elusive measures are shrink or inventory shortage. This is when what stores book inventory is higher than what is counted during a physical inventory. Essentially, the difference is loss that no one knows how it happened. Modern retail has a lot of tools and measures to mitigate loss and lower shortage. Some companies utilize reporting that pulls information from various systems to identify trends that are leading to loss. This allows leaders and employees to take corrective actions to avoid further loss. Some of these reports pull form information such as, previous years physical inventory results, markdown trends or lack of, empty packages, Assets Protection stats and investigations, receiving and reverse logistics discrepancies, count updates and POS information. All this information leads leaders to areas to focus on from an operation or theft perspective in order to mitigate further potential loss.
Cost Saving: Helps focus resources and payroll to make the biggest impact.
Profit Improvement: Though companies budget for inventory shrink from historical trends, utilizing this CBIS correctly should help you reduce your shrink, and if you land below your budget, it's all adding to your profit.
Online Information Systems: It is well publicized that over the past decade, internet companies such as Amazon have taken a large amount of market share form brick and mortar retailers. Brick and Mortar retailers who adapted quickly by adopting an interconnected strategy that integrated their web and mobile app sales with their stores have blunted the impact the best. The other advantage these companies have is a lot of purchasing and sales trend data that they can leverage to improve their brick and mortar stores product mix. If you find a widget from your online product mix is selling and shipping to the Miami area, the retailer can now place the widget in those stores and then test them in similar markets. They now not only can grow sales, but cut down the lead time to ship that item since it's in their local store. This information also allows retailers to move inventory around and place it in the correct distribution centers to get them closer to where they are selling to better control shipping cost.
Cost Saving: Allows retailers to strategically place distribution centers as well as use their stores as DC's reducing their logistical expenses.
Profit Improvement: Increase in sales, productive inventories, and customer satisfaction all lead to increased profit.
There are so many information systems, both independent, and intertwined, that are in use in retailers today that business leaders can make some solid decisions that improve sales, reduce cost, increase competitiveness, and ultimately deliver a better customer experience.