Case Study: Management Information System at Dell

Management information system involves the information system and the organization. MIS begins
where computer science ends. Computer scientists deserve accolades for developing and delivering
even more advanced forms of information technology: hardware technology; software technology;
and network technology. Yet because no technology implements itself, there is more to MIS than just
information technology. MIS has dimensions. The four interrelated dimensions of MIS are as follows:
First, MIS involves not just information technology, but also its instantiation; second, MIS involves, as
reactive and inextricable elements, both an information system and its organizational context; third,
MIS involves information technology as a form of intellectual technology; and fourth, MIS involves
the activities of a profession or corporate function which are integral to the essence of what MIS is
(Currie & Galliers, 1999).

Dell Computer Corporation: Company Background

Dell Computer Corporation is a major manufacturer of personal computers, computer peripherals,

and software. Among the leading producers of computers in the world, Dell sells its products directly
to customers through the Internet and mail-order catalogs rather than through retail outlets. The
company is based in Round Rock, Texas. At Dell Computers, customers are brought into the product
planning and manufacturing processes, with all employees encouraged having contact with
customers. Through effective collaboration across boundaries, ideas can be shared about product
designs and value propositions. The result is faster and more customer-focused product and service
innovation. To produce the capacity for this, considerable attention must be placed on organizational
structures, processes, skills and culture. Such elements may need a radical overhaul in established
companies (Dennis & Harris, 2002). Dell was founded in 1984 by Michael Dell. In 1983, during his
freshman year at the University of Texas, he bought excess inventory of RAM chips and disk drives
for IBM personal computers from local dealers. He resold the components through newspaper
advertisements at prices far below retail cost. By 1984, his sales totaled about $80,000 a month. In
April 1984, Dell dropped out of school to launch his company (Ford, Honeycutt, & Simintiras, 2003).

The new company soon began manufacturing its own IBM-compatible computers under the name
PCs Limited. Because Dell sold computers directly to users through advertisements in magazines
and catalogs, the company could price its machines lower than those sold through retail stores.
Sales reached nearly $6 million during the company’s first year, climbing to $34 million the following
year. By 1987, Dell was the leading mail-order computer company in the United States. In that year,
it created a sales force to target large corporations and began adding international offices to capture
the direct-mail market outside the United States (Ford, Honeycutt, & Simintiras, 2003). While the
company continued to grow rapidly; Dell experienced a series of setbacks that hurt profits. In 1990,
the company began selling computers through retail stores, an effort it abandoned in 1994. In 1991,
Dell launched a line of notebook computers, but quality problems and inadequate production
planning forced the company to stop selling for a year. In 1994, Dell launched a new line of
notebook computers and expanded efforts to increase overseas sales. Dell also began focusing on
the market for servers, which used the computers to run local area networks. By the late 1990s,
Dell was firmly in place as the world’s number one direct seller of computers. More than 50 percent
of the company’s computer sales transactions took place via its website, which generated worldwide
sales in excess of $40 million a day (Ford, Honeycutt, & Simintiras, 2003).

Information Processing Tools

Information processing or Data processing is the analysis and organization of data. It is used
extensively in business, engineering, and science and an increasing extent in nearly all areas in
which computers are used. Businesses use data processing for such tasks as payroll preparation,
accounting, record keeping, inventory control, sales analysis, and the processing of bank and credit
card account statements. Engineers and scientists use data processing for a wide variety of
applications, including the processing of seismic data for oil and mineral exploration, the analysis of
new product designs, the processing of satellite imagery, and the analysis of data from scientific
experiments (Thierauf, 1978).

Data processing is used extensively in business, engineering, and science and to an increasing
extent in nearly all areas in which computers are used. Data processing is divided into two kinds of
processing: database processing and transaction processing. A database is a collection of common
records that can be searched, accessed, and modified, such as bank account records, school
transcripts, and income tax data. In database processing, a computerized database is used as the
central source of reference data for the computations. Transaction processing refers to interaction
between two computers in which one computer initiates a transaction and another computer
provides the first with the data or computation required for that function. Most modern data
processing uses one or more databases at one or more central sites (Thierauf, 1978).

Transaction processing is used to access and update the databases when users need to
immediately view or add information; other data processing programs are used at regular intervals to
provide summary reports of activity and database status. Examples of systems that involve all of
these functions are automated teller machines, credit sales terminals, and airline reservation
systems (Thierauf, 1978).

The information processing tools that Dell uses include computers, the internet, maps,
spreadsheets, models, and databases. For the operational level of Dell, the most appropriate tool for
information processing is maps. Through the said information processing tool, decisions on how to
operate the organization can be initialized and made. Maps can be used to determine which
country/place information will be acquired from, it can also assist in determining the demographic
level of people and information will be gathered . Maps can be in the form of charts that can also
provide necessary information. The information gathered in turn can assist in helping to decide how
an organization will be operated. For the tactical level of Dell, the most appropriate tool for
information processing is databases. Through the said information processing tool, the records that
can assist in finding out the strength and weakness of the company can be used to determine the
tactic that will be used by the organization. For the strategic level of Dell, the most appropriate
information processing tool is the internet or World Wide Web. Through the internet, trends and
strategies by other companies can be known. After analyzing the trends and strategies used by other
companies, an appropriate strategy can be formulated to use by the organization.

Inventory control systems

Individual businesses need, first and foremost, an efficient inventory control system. This implies the
minimum amount of inventory that will provide the consumers with what they need whenever and
wherever they need it. Effectiveness of the inventory system means basically having an inventory
mix that is most likely successful in satisfying consumer needs (Samli & Sirgy, 1995). The inventory
control systems used by Dell is up to date and reliable to prevent problems to arise. The inventory
system of Dell makes sure that anything the consumer need will be available to them at any given
time. It is also what the company uses to know if certain products are still available or misuse of the
inventory system may cost problems to the company.

Conclusion

Management information system involves the information system and the organization. Dell benefits
a lot from the management information system. The system helps the company create strategies
that will help the company conquer any problems and threats from competitors. The system also
assists the company in processing the needed information. Management Information Systems also
helps a company to create or update its inventory control system.

Recommendations

Since the MIS of a company is a vital part of its operations and its survival in the modern world, it
must be well updated and it must compete well with MIS’s competitors. The MIS of a company
should be created from high standards so that it can be of stiff competition against its counterparts.
The MIS system should help the company to achieve its goals and assist the company in reaching
its potential.

Questions:

1. Comment on the MIS in Dell and suggest the positives and negatives of MIS in Dell?

2. The dell directly sells its computers to the customer whether it will give them good and reliable
information or they are lacking in information system due to this move?

3. Develop the information flow diagram for dell and suggest some improvement in the same.

4. MIS is a combination of Management, Information and System otr of the three parts of the
information system in which area does the Dell lacking?

Case Study on MIS: Information System in Restaurant

Case Summary:

A waiter takes an order at a table, and then enters it online via one of the six terminals located in the
restaurant dining room. The order is routed to a printer in the appropriate preparation area: the cold
item printer if it is a salad, the hot-item printer if it is a hot sandwich or the bar printer if it is a drink. A
customer’s meal check-listing (bill) the items ordered and the respective prices are automatically
generated. This ordering system eliminates the old three-carbon-copy guest check system as well as
any problems caused by a waiter’s handwriting. When the kitchen runs out of a food item, the cooks
send out an ‘out of stock’ message, which will be displayed on the dining room terminals when
waiters try to order that item. This gives the waiters faster feedback, enabling them to give better
service to the customers. Other system features aid management in the planning and control of their
restaurant business. The system provides up-to-the-minute information on the food items ordered
and breaks out percentages showing sales of each item versus total sales. This helps management
plan menus according to customers’ tastes. The system also compares the weekly sales totals
versus food costs, allowing planning for tighter cost controls. In addition, whenever an order is
voided, the reasons for the void are keyed in. This may help later in management decisions,
especially if the voids consistently related to food or service. Acceptance of the system by the users
is exceptionally high since the waiters and waitresses were involved in the selection and design
process. All potential users were asked to give their impressions and ideas about the various
systems available before one was chosen.
 Questions:

1. In the light of the system, describe the decisions to be made in the area of strategic planning,
managerial control and operational control? What information would you require to make such
decisions?
2. What would make the system a more complete MIS rather than just doing transaction
processing?

3. Explain the probable effects that making the system more formal would have on the
customers and the management.

Solution of Management Information System in Restaurant

Case Study:
1. A management information system (MIS) is an organized combination of people, hardware,
communication networks and data sources that collects, transforms and distributes information in an
organization. An MIS helps decision making by providing timely, relevant and accurate information to
managers. The physical components of an MIS include hardware, software, database, personnel
and procedures.

Management information is an important input for efficient performance of various managerial

functions at different organization levels. The information system facilitates decision
making. Management functions include planning, controlling and decision making. Decision making
is the core of management and aims at selecting the best alternative to achieve an objective. The
decisions may be strategic, tactical or technical. Strategic decisions are characterized by uncertainty.
They are future oriented and relate directly to planning activity. Tactical decisions cover both
planning and controlling. Technical decisions pertain to implementation of specific tasks through
appropriate technology. Sales region analysis, cost analysis, annual budgeting, and relocation
analysis are examples of decision-support systems and management information systems.
 There are 3 areas in the organization. They are strategic, managerial and operational control.

Strategic decisions are characterized by uncertainty. The decisions to be made in the area of
strategic planning are future oriented and relate directly to planning activity. Here basically planning
for future that is budgets, target markets, policies, objectives etc. is done. This is basically a top level
where up-to-the minute information on the food items ordered and breaks out percentages showing
sales of each item versus total sales is provided. The top level where strategic planning is done
compares the weekly sales totals versus food costs, allowing planning for tighter cost controls.
Executive support systems function at the strategic level, support unstructured decision making, and
use advanced graphics and communications. Examples of executive support systems include sales
trend forecasting, operating plan development, budget forecasting, profit planning, and manpower
planning.

The decisions to be made in the area of managerial control are largely dependent upon the
information available to the decision makers. It is basically a middle level where planning of menus is
done and whenever an order is voided, the reasons for the void are keyed in which later helps in
management decisions, especially if the voids are related to food or service. The managerial control
that is middle level also gets customer feedback and is responsible for customer satisfaction.

The decisions to be made in the area of operational control pertain to implementation of specific
tasks through appropriate technology. This is basically a lower level where the waiter takes the order
and enters it online via one of the six terminals located in the restaurant dining room and the order is
routed to a printer in the appropriate preparation area. The item’s ordered list and the respective
prices are automatically generated. The cooks send ‘out of stock’ message when the kitchen runs
out of a food item, which is basically displayed on the dining room terminals when waiter tries to
order that item. This basically gives the waiters faster feedback, enabling them to give better service
to the customers. Transaction processing systems function at the operational level of the
organization. Examples of transaction processing systems include order tracking, order processing,
machine control, plant scheduling, compensation, and securities trading.

The information required to make such decision must be such that it highlights the trouble spots and
shows the interconnections with the other functions. It must summarize all information relating to the
span of control of the manager. The information required to make these decisions can be strategic,
tactical or operational information.

Advantages of an online computer system:

 Eliminates carbon copies

 Waiters’ handwriting issues

 Out-of-stock message

 Faster feedback, helps waiters to service the customers

Advantages to management:

 Sales figures and percentages item-wise

 Helps in planning the menu

 Cost accounting details

2. If the management provides sufficient incentive for efficiency and results to their customers, it
would make the system a more complete MIS and so the MIS should support this culture by
providing such information which will aid the promotion of efficiency in the management services and
operational system. It is also necessary to study the keys to successful Executive Information
System (EIS) development and operation. Decision support systems would also make the system a
complete MIS as it constitutes a class of computer-based information systems including knowledge-
based systems that support decision-making activities. DSSs serve the management level of the
organization and help to take decisions, which may be rapidly changing and not easily specified in
advance.

Improving personal efficiency, expediting problem solving (speed up the progress of problems
solving in an organization), facilitating interpersonal communication, promoting learning and training,
increasing organizational control, generating new evidence in support of a decision, creating a
competitive advantage over competition, encouraging exploration and discovery on the part of the
decision maker, revealing new approaches to thinking about the problem space and helping
automate the managerial processes would make the system a complete MIS rather than just doing
transaction processing.

3. The management system should be an open system and MIS should be so designed that it
highlights the critical business, operational, technological and environmental changes to the
concerned level in the management, so that the action can be taken to correct the situation. To make
the system a success, knowledge will have to be formalized so that machines worldwide have a
shared and common understanding of the information provided. The systems developed will have to
be able to handle enormous amounts of information very fast.

An organization operates in an ever-increasing competitive, global environment. Operating in a

global environment requires an organization to focus on the efficient execution of its processes,
customer service, and speed to market. To accomplish these goals, the organization must exchange
valuable information across different functions, levels, and business units. By making the system
more formal, the organization can more efficiently exchange information among its functional areas,
business units, suppliers, and customers.

As the transactions are taking place every day, the system stores all the data which can be used
later on when the hotel is in need of some financial help from financial institutes or banks. As the
inventory is always entered into the system, any frauds can be easily taken care of and if anything
goes missing then it can be detected through the system.