Role of Information Technology in Business Operations - Term Paper Example

Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Table of Contents INTRODUCTION 1 1.0 Role of Information Technology in Business Operations 1 2.0 TheWorks.co.uk Data Model 4 Breakdown of TheWorks.co.uk ER Diagram 5 Purchase Sub-System 5 Purchase details 5 Purchase check 5 Purchase 5 Stock Card 5 Purchase return voucher 6 Re-order 6 Sales sub-system 6 Sales order detail 6 Sales order 7 Sales delivery 7 Sales order return 7 3.0 Microsoft Access Database 7 Purchase details 7 Stock Card 8 Sales Order Return 8 Sales Order Details 9 Sales order 9 Re-order 10 Purchase Return Voucher 10 Relationship Database 12 Reference: 14 INTRODUCTION According to Schiller (1999), information technology has gained a lot of acceptance in the modern business both large and small-medium enterprises. The use of information technology comes with huge benefit to the business since most of the clients have embraced online shopping. The report looks at the importance of information technology in business operation, data model and database of TheWorks.co.uk. The company deals with supply of stationery and gifts to both government and private organization. 1.0 Role of Information Technology in Business Operations The use of Information technology in business operations is crucial to every business in this century due to benefits derived from its use. The major role of IT in business operation entails; Improving communication within and outside the organization, communication is essential to success of any given business. The communicated information need to be reliable, fast and credible. These values of information have been enhanced by the improved mode of communication through innovation in IT sector. The common mode of communication within business includes emails, live chat, video conferencing and voice over internet protocol (VOIP) telephone. The use of IT in communication has reduced the inconveniences and high cost incurred by using the traditional mode of communication which includes face to face or letters through courier service providers (Schiller, 1999). The emergence of smart-phones also provides a revolution in communication in the work place since employees and customers can communicate at their convenience. Also, IT enables the business to manage its data in a more economical and secure manner. The storage of files in servers has replaced the traditional storage of files in physical files which occupies large space. The use of IT data management has seen business overcome challenge of space and difficulty in retrieving files (Schiller, 1999). The storage of digital files in serves ensures access in any given location, retrieval since it is indexed and security due to provision of digital signatures. Inventory management is a challenge to any organization using traditional or outdated means in managing inventory. The emergence of IT has simplified the inventory management through use of Point of sale software which updates sales, purchases, keep track of expiry dates and give warnings stock is below re-order level (Schiller, 1999). Manual monitoring of the inventory is tiresome, full of errors and costly since it relies on labour intensive. The IT provides cheap and efficient solution to inventory management thus pushing many organizations to adopt. Consequently, IT enables the business to manage customer relationship with the business. The use of customer relationship management system enables the business to be close and understand the customer better since it keeps information on the interaction between the business and the customer (Rajput, 2000). Customer feedback is important in ensuring that product and services provided by the business meet customer satisfaction. Proper and efficient interaction enables the business to retain its customer base and attract new customers thus boosting its sales and improve profitability level. Lastly, information technology plays a crucial role in management of information within the business. Proper management of information within the business is achieved by use of management information system (MIS). Efficient storage and retrieval of data is crucial in strategic planning of business, IT has enhanced this process by linking different business process and developing categorizing them to be used in accomplishing diverse goals (Rajput, 2000). MIS can link a given strategy to the improvement or decrease in company profitability thus enabling top management to take necessary action. In conclusion, it can be noted that Information technology is essential due to its role in cutting cost, improving efficiency and source of competitive advantage to the business. Therefore, IT adoption by businesses is inevitable. 2.0 TheWorks.co.uk Data Model Breakdown of TheWorks.co.uk ER Diagram According to the ER diagram above, we are able to note that the company system is divided into two parts that is purchase and sales. The two are linked together to ensure that company do not sale what it doesn’t have and make purchase order as soon as the inventory reaches re-order point. The system breakdown is explained below; Purchase Sub-System Purchase details The processes required in this process include details of selling business, quantity to be purchased, purchase Id and stock Id. Purchase check The details checked in this process include purchase Id which links to the purchase details process. The details are then compared with bank details, check date, check number and check amount. This stage is crucial since it links the business system with other system such as business bank provider. Purchase At this stage the system finalize the purchase process after checking all the required details. The major process includes obtaining serial number of the product, issuing receipts, date and purchase form of the transaction. The business then records the units of stock purchased according to its stock Id which is then transferred to Stock card. Stock Card This stage ensures that business get real time information about the availability of the stock in shelves. The processes carried out in this stage include tracking sales and purchase of stock by using stock ID. It records the modification date, user and reason of modification i.e. sales, returns or disposal of expired stock. This information is important in making sales receiving sales orders and re-ordering stock. Purchase return voucher The faulty or wrong stock supplied to the business can be returned to the supplier. Therefore, it affects the stock card and cash purchase. The stock is tracked by its stock ID, quantity and price which are fully adjusted to determine stock available in the business. Re-order The stage receives information from the stock card which automatically sends information to the re-order level stage. This stage is configured in a way that when the stock level falls below a certain level, it communicates with the user to order new inventory to avoid cost incurred due to shortages. At this stage, system has stock ID, re-order quantity and purchase ID which assist in tracking the business supplier. The above functional parts are dependent since one part depends on the communication from the previous stage. Sales sub-system Sales order detail It is initial stage where customer places to make purchase of the product. The process requires the customer enter his/her details to the system which includes stock category, product, amount, mode of delivery and credit card details or any other form of payment. The details provided are checked both in the internal system and external system i.e. customers’ bank system. If the details provided match all the criteria the process is shifted to sales order. Sales order The stock is removed from the stock card to avoid selling stock more than twice which brings inconvenience to the customer. This process contains sales ID, amount, and quantity, date of payment and mode of delivery. The stock will then be packaged ready for delivery. Sales delivery The customer details provided on sales order detail transferred to sales order delivery. The details required in this stage include sales order ID, Delivery ID, Delivery date, Check by, Delivery no, delivered by, Terms, date added and date modified. The information provided is essential in ensuring that the product is tracked well to ensure that it reaches the client and in case of complains, it can be easily traced and addressed to avoid inconveniencing the customer. Sales order return When the customer receives faulty product or wrong product, he/she places a return request. This links to the sales delivery and sales details which then traces back to sales order and stock card. The process in the sales sub-system is linked together since one stage depends on another. This ensures that the information updated reflects in all the stages. The purchase and sales sub-system are linked together to ensure that customer don’t purchase stock that is not available or business does not incur shortage cost due to poor inventory planning. 3.0 Microsoft Access Database Purchase details The purchase details contain ID, Product names, quantity, price and category. According to the relationship database it is linked to purchase check, re-order and purchase return voucher. The quantity show amount of dresses, tops, skirts and T-shirts that the company needs to purchase from the vendor. The products are categorized according to gender. Stock Card The database contains stock card which is continuously updated to provide real time information on availability of the inventory in company shelves. The table is linked to purchase check since authorized purchase is transferred to the business stock card or removed from stock card when stock purchased is returned to the vendor. It is also linked to sales order since sales reduces the amount of stock or sales return which increases the stock in the stock card. Sales Order Return Sales Order Return table records the products returned by the client to the business due to either wrong delivery, faulty products or quantity delivered is in excess. The table contains ID, Sales ID, Voucher No, Quantity and reason for sales return. The Sales order return table is linked to the sales order and traced through sales order details using sales ID. The products returned are accessed before it is removed from the system or added back to the stock card. Sales Order Details The table records the details of the customer making purchase. It contains four columns that is ID, Client Name, Region and Mode of Delivery. The table is linked to the sale order, sales order delivery and sales return table. The changes in respective tables affect sales order details table directly or indirectly. Sales order The business database contains sales order table with columns which contains ID, Sales ID, Product, quantity and price. The table is linked to stock card since sales reduces stock. Consequently, it is linked to sales order details and sales order return table since they are directly linked to each other. When customer orders a product, database relay the information to stock card to avoid double selling and customer details to avoid wrong delivery. Re-order The re-order table entails ID, product, Re-order level and purchase amount. The table is linked to the stock card and purchase details table. When the stock in the stock card is below re-order level, the re-order table triggers alert for the business to make new purchase order. The re-order table gives the quantity of the product that need to be purchased. The table is important in inventory management since it reduces the cost that result from storage cost due to overstock or shortage cost. Purchase Return Voucher The purchase return voucher table records the products returned to the vendor by the business. The company might return the products due to product faultiness, wrong delivery or excess products. The purchase return voucher contains four columns that is ID, purchase ID, quantity and voucher number. The table is linked stock card and purchase details tables since return of purchases affects the stock levels and it is traced back by retrieving purchase details. Sales Order delivery The sales order delivery table enables the business receives customers’ information to be able to make right delivery within the designated time. This improves company’s reliability in customer delivery service which is measured by time and correctness of delivery. The table contains ID, Sales ID, Client name, region, quantity and mode of transport. The sales order delivery table is linked to sales order, sales order return and sales details which enables the database track the sales records. Relationship Database The processes in the company are dependent of each other and action in a table is transferred or supported by another table. The linkage enables the departments of the business to access real time data which enables them to get up to date information on the business inventory (Johnson, 2002). The use of database by TheWorks.co.uk reduces data redundancy since data entered in one stage for example after authorization at purchase check stage the stock card updates automatically and re-order extracts data from stock card automatically too. The figure below shows the relationship of the tables forming TheWorks.co.uk e-commerce database; Conclusion In conclusion, the report draws attention to adoption of information technology in the modern business environment. The change from the file system to database system has improved business operations due to benefit derived from its use. The benefit businesses receive from use of database system in e-commerce includes improved data security since administrator sets privileges available to each user. Secondly, eliminates data redundancy since data is stored once in the system (Bagui and Earp, 2003). Thirdly, data in the system cannot be easily altered or the changes can be tracked this result to improved data integrity which is key to any business operation. Consequently, the use of database system by the company in e-commerce business has eased auditing and efficient utilization of business resources. TheWorks.co.uk therefore, receives immense advantage by adoption of IT in its business operation. This is translated by the growth in its profitability level each year despite the reduction in sales by retail shops in United Kingdom. Though, use of IT comes with its challenges for example high cost of maintenance and loss of important data to hackers, advantages still outweighs the challenges. Reference: Bagui, S. and Earp, R. (2003). Database design using entity-relationship diagrams. Boca Raton: Auerbach. Johnson, T. (2002). Export/import procedures and documentation. New York: AMACOM. Rajput, W. (2000). E-Commerce systems architecture and applications. Boston, Mass.: Artech House. Schiller, D. (1999). Digital capitalism. Cambridge, Mass.: MIT Press. Read More