IS applied

Information systems used:

Using information system in your company will facilities transactions and gathering information much easily than the traditional system. Information system can be defined as “system that gather, disseminates and analysis the information to serve a practical goal.. It also contains more concepts than Information Technology such as: Hardware, Software, Data, Network, Procedures and People. 

The real purpose from Information system in to transfer data to knowledge. In Wal-Mart the information system helps them to reach their goals and plans, which was managing all their data and translate it to knowledge. Regarding the Organization level on information system in Wal-Mart can span to different levels such as: Personal, Departmental, Enterprise-wide and Inter-organization range. We will firstly start with the Personal Information system.

Personal IS:  
   

This system will allow individuals and customers to be able to use the information system. At Wal-Mart, the company installs RFID system which is a chip that can find on products that have radio waves. This system “RFID” allows customers to buy whatever they want and don’t have to wait in queue to pay for their purchases. Also Wal-Mart has their own website that allows customers to shopping form their houses “Walmart.co”. So, Wal-Mart satisfied their customers by implementing a RFID tags to their product that will allow users and create their own website that will make shopping be more peaceful ways than traditional.

Departmental IS:

According to Departmental scope, Wal-Mart has the RFID system that link to other department in organization. For example, if the stock of inventory has be below the average that will sand to purchases department and warehouse areas in order to meet shortage of inventory with less errors and loss. At Wal-Mart, department information system is very varied it’s containing form: Business Analyst, Senior Business Analyst, Manager, Senior Manager and levels below them. It’s varying because of their wants to reduce amount of time that spent on projects. As Darin Brazile said “It is so structured that they follow the period of time that spent on projects down to fifteen minute increments” 

Therefore, departmental information system helps Wal-Mart to be notice by any change that happen in organization form lack of inventory end to managing the budget and finish projects on time.

Enterprise-wide IS:

At this range, the company looks as a whole as a one unit. Enterprise system has different aspects in organization such as: enterprise resource planning (ERP) systems, enterprise planning systems, customer relationship management software and data storehouse.

 “The organization structure decides which will hold more authority and responsibilities and provide company with reports and how information flow between departments”.  In Wal-Mart making decision is hold and role of top manager only and structure of organization depend on the mission and strategic goals of Wal-Mart. They add POS system which is Point Of Sale system that helps them to know their warehouse data and trucking their inventory frequently. 
  

Inter-Organizational IS:

In this section, we mainly talks about how the organization deal with their suppliers, distributers other parties, what kind of relationship between them and how to link between them efficiency. That all can be summarizing in “Supply Chain” which mean the all activities that start with collection of raw materials and end with customer service.

In Wal-Mart’s store they use RFID as a Supply Chain Management system (SCM) that helps suppliers, purchasing firms, distributors, and logistic companies share information systems about orders, production, inventory levels, and delivery of product and services so that they can source, produce, and deliver goods and services efficiently. Wal-Mart wants to install a new system which known as “Inventory System” to manage and organize inventory cost, stock and levels. This system will increase profitability of Wal-Mart.

Therefore, Wal-Mart has good supply chain management system that will make them sure that they will receive the right amount of inventory and deliver their orders on time. Also by implementing this system at Wal-Mart that will allow them to see which products and goods are mostly consume by customers “Marketing reason”. 

Type of different information system(s): TPS, MIS, DSS, EIS:

There are different types of information system which are: 

Transaction Processing System (TPS):

This system is the bottom line of Management information system, which concern about how routine transactions process, modified and about day-by-day activities and collecting data. The benefits from this system are as the following: Payroll and Personal, POS, Finance, Sales, Production and Inventory management. There are three types of input TPS: Manual input, Semi automated and fully automated. 

At Wal-Mart, they use fully automated system which means that data automatically enter into the system, no need for humanity skills. The RFID system helps Wal-Mart in purchasing row materials from suppliers and manages inventory level.  Also they have bar code scanning POS which was introduced in 1983. In 2002, Wal-Mart has combine their system Retail Link with Exchange Data Interchange (EDI) which allows all their suppliers to have a look to their data and try to use these data in order to meet objectives and goals with maximum profit they can. 

Management Information System (MIS):

This type of system focus mainly on data that collect from TPS and try to organize them to transfer them to information that will be useful to use in future. The output from MIS can be reports such as:

expenses reports and list of employees. Also it use to simulation purpose and system support. 

At Wal-Mart, by utilizing data from TPS point of sale data they figure out what kind of stock they need, atwhich time and quantity. They have immediate access for sales such as: product type, price etc. That allows Wal-Mart to meet expectations of customers and appoint them and reduce threat of shortage of inventory levels. So, by using advance communication system Wal-Mart as EDI they were able to meet their goals and forecast for the future demand. 

Decision Support System (DSS):

At this level, we try to make a decision about certain issue that related to our business. It’s the same as MIS, but the main different that in this level we explore the solutions and alternatives and compared it with information we have. The functions of this level are: Pricing and cost analysis, Annual budget and sales management. In 1990’s, Wal-Mart’s stores was collecting data that about warehouse and sales and distributed to supplies this information at electronic form to show what Wal-Marts needs, that has created competitive advantages among competitors. 

Therefore, Wal-Mart consider as most successful Markets because the good Decision Support System they have. Nowadays they are using web technologies to support collaborative decision making with their supplier.

Executive Information System (EIS):

At this stage, information that been collecting in previous levels transfer to knowledge in this part which will provide companies with new and creative ideas in order to achieve strategic goals. It also known as Knowledge Management Systems (KMSs) that is responsible for generating knowledge. The outcomes from this level are: long-term sales trend and budget predicting, profit planning and product development. 

 At Wal-Mart, Executives or top managers who are responsible for making decisions and deicide to implement plans or not. 

 They done a study that shows their competitors and they figure out that they are: Carrefour, Costco and Target corporations. The yearly profit for Carrefour around $121.26 billion, and Costco around $88.92 billion while Target has around $68.44 billion. On the other hand Wal-Mart has the highest revenues by $440.14 billion. The Price/Earnings to Growth ratio (PEG) analysis help Wal-Mart to forecasting their growth for the next 5 years.

 Comparing with competitors, Wal-Mart will have 1.33% growth rate, Costco will get 1.59% and Target will have 1.11% growth rate. So, EIS help Wal-Mart to forecasting their future demands and supply, in order to reduce risk that may happen in future.

Type of data:   

Data can be defined as” elementary description of events, transactions and objects that recorded, classified not don’t have meaningful mean.  Data can be quantitative deal with numbers or qualitative which deals with facts and results. 


In Wal-Mart’s stores, they have five types of data. First one, that concern about store level and sales data. This data was collecting by unit whom known as “ACNielsen”, this data will show size of Wal-Mart market share and retailers industrial data. For example this type of data shows average numbers of workers which is 255 employees and average annual sales which is $70 million. The second type of data is opening dates for stores and distribution centers that type shows time of opening stores and what time closed. Also it provides details about where to distribute their goods and products.  Wal-Mart divided to two type of store one is general merchandise (GDC) and ones are food (FDC) Third data which about demographic information about customers. In Wal-Mart they have segment people to different group base on: income, ages and geographic region. They use Consumer Price Index (CPI) as deflator to know that average income for person is $2000 dollars.

“In 2000, there were 206,960 block groups with an average population of 1,350.” 

Data four was about wages and local rents, this data focus on payroll and salaries of employees and also concern about rent of building and equipments. Wal-Mart has been growth in states that offer lower taxes on building and other things. We can see that average per capita income (thousands of 2000 dollars) was increase from 14.73 1980’s to 18.56 in 1990’s to 21.27 at year 2000’s.  Last data in Wal-Mart that is about annual reports that gathered from pervious sales. That show what the annuals sales for last years and if there any plans for launching a new brand on states. 

Therefore, Wal-Mart has a lot of data that they collect, but the questions here which data to collect? For what? What challenges that may happen?  Answering these questions will decide if collecting this type of data is useful or not.

 Type of information:

Information is a concept that mean” data that have been organized and have a meaning and value that can be used for different purposes. As we mention before that information can be for: Transaction Processing, Management, making decisions and develop new knowledge.

For the transaction processing purpose, Wal-Mart record and analysis data that obtain from any transaction process such as: Query on cashier, POS issues and serving customer and delight them. In Wal-Mart bar code that they use allows them to have information about quantity and quality of products wants from suppliers. Also by linking the front door (market) with back door (warehouse) that helps to control inventory level and make their warehouse more efficiency.

In Management purposes, Wal-Mart stores by collecting information such as: lack of certain products that will be notice before the stock end and meet shortage for this particular product. While in making decisions, we know now that top management who are responsible for decision making about any certain issues such as: Cost and Pricing analysis. While in executive level, that show how can information turn to knowledge and how it’s depend on each other’s. So, Wal-Mart has an efficient information system that all levels of this system are Consistent which each other levels.

Type of knowledge:

Knowledge means data that been transfer to information and it’s able to turn to knowledge, that will help in solving problems. The reason why that will Wal-Mart has competitive advantages between competitors that they know how to transfer row data to information then to knowledge that implementing properly. Knowledge has to have these four characteristics: Characteristics: consistence, completeness, perspective and congruency. 

In Wal-Mart their strategic goals are: improve business performance, innovation and hold competitive advantages.  They have installed new programs like: experts system, knowledge bases, group decision support systems, intranets, knowledge repositories and computer supported cooperative work.  All of these systems will create knowledge from data they collect. Wal-Mart has created good reputation over years even while financial crisis. Because of keep trying to meet their strategic goals and never give up.

For that reason Wal-Mart known nowadays all over the world and consider one of the most successful companies in the planet. Knowledge can be classified to three parts: Public knowledge that can get from public domains such as: Journals, websites and information system books. Shared knowledge that employees have and exchange different ideas and thought. Personal knowledge is lower available knowledge and is used in work and daily life.  Also because of effective knowledge system that Wal-Mart has helps company to make huge profits and reduce their annual cost. 

As a result from implementing RFID system and EDI system that makes company work effectively with fewer errors. Therefore, Wal-Mart has be success in achieving their goals and objectives by using well proper information system that link all suppliers’ together and sharing information, not just sharing, but can create information also.