Management of Information systems Unit 5 - Essay Example

From Ideas to Application: Real Cases – When Attack Pure-play companies – companies that sell only via the web, such as Overstock.com – have a certain advantage over other retailers in terms of data collection. How so?In terms of data collection, pure play companies have an advantage over brick-and-mortar retailers in that it affords a faster and more direct link to consumer data than the latter. Detailed information could be gathered from the customer directly, and faster responses could be made to managerial queries on a real time basis.

Verification is also faster for the retail company concerning authenticated payment systems that now operate on highly secure platforms. Likewise, enhanced data collection works both ways, as the consumer is benefited by greater ease in price comparisons and facility in obtaining data about products and services.Pure play companies are able to focus their investments on their on-line storefronts than brick-and-mortar companies, and positive shopping experience is a come-on for the generation of repeat business.

These online retailers enjoy reduced unit operating costs, and lower levels of customer acquisition costs. 2. Overstock.com used a transactional database for their monitoring and analysis. What were the results? Why is this unadvisable?A transactional database is a transaction-based, relational database with a normalised table. It is highly volatile and designed to maintain transactions of the business with immediate updates. Transactional databases also allow for online transaction processing, and thus maintains functional data.

In the case of Overstock, the overload on their systems has forced them to suspend internal applications and use their capacity to accommodate the main sales transaction function. For this reason, managers could not make real-time inquiries. This is not advisable because in an online sales business such as Overstock, management must be informed at all times about the volume and nature of transactions in real time, so that they may make informed decisions as soon as possible. Transactions occurring over the internet are still legally binding contracts, and Overstock might commit itself in sales transactions that it might not be able to fulfil.

In pure play businesses, close monitoring in real time is essential.3. What can executives do now that they could not do in 2004 in terms of data analysis?With the increased investment in hardware, software and database technology, and with the additional complement in skilled labor, management is able to do faster real-time analysis of sales transactions, monitor volume movement of products, and check current inventory levels. Managers can thus make spot decisions concerning critical issues that require immediate resolution.

Furthermore, the inclusion of warehoused data capability could provide invaluable collated data over a period of time, for the purpose of managerial decision making.4. What information can proper analysis of the warehoused data teach executives?According to the facts of the case, Overstock provided for a data warehouse system. Essentially, warehoused databases are built on denormalised tables that are non-volatile and, since they are not transaction based, must be periodically updated. They are essentially historical data stored and organized by subjects, for later retrieval for analysis.

Because of this inclusion, managers can keep track of consumer tastes and preferences over a long period of time, create useful customer profiles and detect slow-moving trends that would have evaded a short-term monitoring of transaction data. Such attention to customer information over the long term could help the company place follow up customer calls to inform them of new products and services within their sphere of interest, reply to returns and warranty calls on transactions consummated some time ago, and in end improve customer retention levels.

ReferencesAnderson, B. (2001) “Clicks & Bricks: Pure-play Internet Companies Get Physical.” Retrieved 3 August 2009 from “Marketing Strategy: Marketing tactics for pure-play eRetailers” Retrieved 3 August 2009 from Korenfeld, B. & Medina, M. (2006) “Transactional Memory”. Retrieved 3 August 2009 from