In this thrilling subject, i would be focusing on the Management Information System of Starbucks. It is no doubt that this firm in question, is one popular and well patronised firm amongst many. That being said, i would be doing justice to the very background of this organization in question and i would elucidate in tangible details their IT systems, schemes and practices and lastly, i would be recommending what i see fit to suite the organisation even in this era of technology. But before i proceed, i would like to briefly define MIS(Management Information System)
MIS (Management Information System)
This may be defined as a general word for computer systems in an enterprise or organisation which provides information or details on firm’s business operations. It’s also refers to the people who manage and maintain these systems. Furthermore, in a large corporation, “MIS” or the “MIS department” refers to a central or centrally-coordinated system of pc expertise and management, and entire network of computer resources in a business organization (firm).
Background study of the organization
Starbucks was first introduced in Seattle’s Pike Place Market in 1971. Back then, the company was called Starbucks Coffee, Tea ans Spices before change into what we have known today, Starbucks Coffee Company. Today, there are approximately 16, 706 Starbucks stores in 50 countries.
The first ever Srabucks store in Malaysia opened on December 1998, located at KL Plaza, Jalan Bukit Bintang, Kuala Lumpur. Later, there are more than 115 Starbacks stores in Malaysia.Basically, their buyers will travel to Africa, Asia and Latin America to choose only the best quality of arabica beans. These high quality beans will be sent for roasting and production. Starbucks experts then only combine the roasted beans with Italian style expresso beverages to produce different type of cold and hot coffee beverages. The famous products introduced by Starbucks company and mainly can be found in all of it’s stores include more than 30 blends single-origin premier arabica coffees.
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As for their own signature of handcrafted beverages such as hot and iced expresso beverage, coffee and non-coffee blended beverages Vivanno smoothies, Frappuccino bottled coffee or blended and premium ice creams with the and brewed coffee and also tea product,Tazo Tea. Merchandises are also offered by Starbucks are coffee mugs and accessories. Customers not only can enjoy sipping their high quality coffee beverage but also indulging on baked pastries, sandwiches and cakes. The company focuses in providing a relax, comfortable atmosphere with modern fittings. It is an ideal place for hanging out with friends and families, with entertainment magazines to read. Most of the Starbucks company offer free wi-fi for their customers, so it is a great advantage to business people discussing on their work or students doing some research for assignments/ projects.
The Point of Sale System (POS) or front of house till system; in addition to regular register functions offers some functions to be accessed only by Store Manager(SM), Assistant Manager(ASM) and Shift Supervisor(SS), with the correct security level.The Point of sale consists in two touch screen tills used by deployed partners that need to insert their username and specific password before to start.
From the Point of sale, managers can access different manager’s functions menu, such as paid in and Paid Out, and Refund to customers.
These manager functions are security measures for cash management and inventory control in the store.
Paid in and paid out occurs when money is taken from the till to buy items necessary for the store operations and/or any kind of emergency.
Other functions such as Cash Skim, Void transactions or refunds occur when money is given back due to complaints or customers are returning faulty merchandise.
The point of sale is used also to record wastage.
In conclusion, most Point of sale functions are related to customer service, sales, refunds, discounts, voids.By ringing items through the tills, data such as time, customer transaction, quantity of food and drinks sold, quantity of wasted items, are transferred to the Management Work Station where data are stored, analysed and produced in form of reports, graphic, charts or diagrams.
MWS (Manager Work System)
The Manager Work Station can be accessed in the office where there is a computer connected to the intranet, a private communication channel for employees to access the organization network that resembles the internet.
To access the system it is required to sign in with a password and the partners ID.
The system recognises security level and allows accessing the function assigned to the security level.
The normal partners can just access the time punching option, which is that function that record staff punches in and out for breaks and shift.
A start of day and end of day is run into the system on a daily base.
Shift managers can access cash management functions that are used to count tills, modify or correct transactions and to prepare daily bank deposit.
A menu of available reports is available on a report menu.
The Store manager can access these reports to track sales, find out customer transactions within different hours range, to check sale by product category, to record wastage, to carry a financial audit.
All this information is relevant for Store Managers to identify business requirements and customer needs, to identify peak time in the store, to increase or amend product ordering, to control wastage and track stock and decide whether is necessary to cut labour.
Managers can access staff information and personal details in the work station, they can insert new partners, terminate partners, maintain employee records, track employee’s training and process payroll.
The payroll process transfers information to the support centre in order to pay partners.
Store Manager and the shift supervisors can use the IRIS System to process electronic ordering for food, stationery, packaging.
The IRIS System can also use e-mail set up for communicating with London Support centre and other stores within the district and others.
Hardware components of the computer system used in Starbucks
There are two types of modem: The speed touch cable modem and the ISDN (integrated services digital network) modem.
The speed touch cable modem and the ISDN connect the store computer system to the STARBUCKS retail network.
The Retail Network is the communication access between the store and the internet.
This allows the management work station to send and receive large quantities of data and information.
There is a wireless internet provided by T-mobile, which allows customers to connect to the wireless network.
There are two pieces of equipment; the Cisco Router and the Cisco Wireless access point.
Connected to the computer system there is a Printer used to print reports of any nature, and a cash scale which counts Cash in a faster way and more accurately, mainly it is used to count the tills and at the end of this process all data are send to the system.
At the Point of sale there are two small printers where all receipts come out, and two (chip and pin) credit and debit card machines.
To protect retailers, a new security system has been designed for cards which will use a smart chip.
When customers pay using one of these cards, rather then signing a confidential security number (PIN) is entered.
Further more, the starbucks firm, uses Intel based systems and fast Computers. In terms of functionality, the starbucks firm is bent on getting hardwares(PC) that have great and outstanding specifications to avoid slow down on business.
A sample spec would be:
A PC with 512 Memory or 1GB. And A flat screen monitor and processor speed of 2.40GHZ and a HDD of 150GB to 200GB. The company has a nac for greater heights that why its no surprise that starbucks is doing greatly well in terms of their ability to maintain their standards.
OS (Operating System):
As we all know, the I.T age is springing forth with lots of sotwares and technology all with the focus of improving the lifes of humans in all ramification of life. Having said that, the Starbucks company makes use of Windows based softwares for their computers which is categorized in the hardware section. They run applications that aid their business. Example POS, Excel and others. Excel is often used for their spreadsheet needs. When it comes to system software for driving their hardwares, they run windows xp or 7.
Installing a Point of sale system software into your business can have as dramatic an effect on your retail, bar, concierge, or any other hospitality based business. The right POS system software will enable you to have a more precise level of control over your business operations thus increasing efficiency, boosting profits, and helping you fine-tune your business model. Incorporating the wrong system, however, can be a waste of time, monetary investments and a source of ongoing frustration.
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Switching from a traditional cash register or as we like to say “over sized calculator” to a streamline computerized POS software can be a bit of a headache if you do not research your options before buying a new system. There are many factors to consider and various pitfalls to avoid. However you will definitely be impressed with the “R.O.I” – return on investment and benefits your business cannot do without. Thus implementing a POS system can make it worth your time and effort.
In the most basic sense, a POS system is a cash register with all the bells and whistles of the new fast paced, internet streaming technological speed.
Current themes and practices
This Starbucks new idea of POS is currently available for all 6,800 Starbucks stores and Target locations across the US. The solution is not yet in place in Canada.
For the uninitiated, the solution works as follows. Consumers download the Starbucks Card Mobile App to their mobile phone; be itiPhone or BlackBerry. Customers with a Starbucks stored value card (effectively a gift card) that is registered on the Starbucks website, enter the card number into their phone when the obtain the app, and that card number is stored. When consumers visit a store, they place their coffee order as usual, and indicate their desire to tender with their mobile. Consumers start the Starbucks Card Mobile App on their mobile and navigate to the payment screen so that a 2d barcode representing the consumers’ Starbucks card is displayed. The Starbucks associate, selects mobile as the tender in the POS, and prompts the consumer to use the customer facing imager (the same as those used in airports to read boarding passes). The consumer places their mobile device under the imager, the 2d barcode is read, and the POS treats the tender like a gift card, following the usual payment verification procedure. Once tender is complete, the customer obtains their coffee as usual.
The discussion on electronic wallet is an industry favourite, and this development will certainly encourage more discussion on the subject and provide some much need experience. I’m fully behind this initiative, but at present, this solution is very much a Starbucks specific solution, and it is not easily translatable to other retailers. While retailers can learn a great deal from the obvious careful thought that has gone into the solution, and we can look forward to others moving down this road as well. To clarify for consumers (and non-technical retail executives) who ask why other retailers don’t have mobile payment schemes as yet, consider the following unique characteristics of the Starbucks situation that make a solution like this pay off.
Use of Stored Value Card – Very few retailers have a stored value card with the massive following and ongoing usage that Starbucks have. Effectively consumers are giving Starbucks their funds in advance in exchange for some very small benefits (free drink on your birthday, free pump of flavouring in your drink). Starbucks gets loyalty data on customers, and a nice balance of cash on hand. More relevant to the mobile payment solution, the Starbucks mobile phone application allows consumers to make a payment onto their stored value card, and the application’s 2d barcode payment system is connected to that card. Connecting the mobile payment system to the stored value card means that Starbucks can take the risk of a payment system internally. Stored value are not subject to the same roadblocks, legislation, and scrutiny that building a mobile payment system that would access a credit card or a debit card would have. Using the stored value card simplifies implementation and sidesteps many complexities of payment systems like EMV and PCI.
Cross Platform – While Starbucks are very keen on the iPhone, they have not limited themselves to an iPhone app, but also provided an app for the other key smart phone users via the Blackberry App. Considering the corporate core of Blackberry users and how often meetings now take place in Starbucks stores, this is a wise move to maximize potential users. Given the number of Android Users and the recent release and growing use of Windows 7 Phone platforms, it would not be surprising to see the Starbucks Card App ported to those platforms as well, ensuring maximum potential usage.
Valuable App – With over 400,000 apps on iTunes, retailers need to make their app unique and useful. Ideally it pulls together the mobile and in store experience in some way. Starbucks has managed both. Any successful retailer’s mobile app needs something unique to it to encourage download, and having it on a consumers screen on a permanent basis.
Customer Demographic – Based on my experience, and what I have read in the media over the past few years, the average Starbucks consumer is more likely than average to be a tech-savvy iPhone or Blackberry user, and beyond that, the kind of user who would be comfortable with technology and placing a payment with their mobile. It is important that any solution put in front of a consumer by a retailer fit their target market. A savvy comfortable customer is more likely to use the app, and use it well, to speed transactions and drive convenience for them, and speed throughput for the retailer.
Infrastructure – Most Starbucks locations have 2 terminals. In order to leverage 2d barcodes, special imagers are required, and this means hardware investment. 2 lanes means only a $300-$400 investment per store for imaging hardware. Considering the potential value of transactions per store, this is a very low cost. The ROI would be far less attractive for a lower margin retailer with dozens of lanes in a store to deploy, as it would be key to have the imagers in every lane to simplify the process for consumers.
Transaction Type – The slowest portion of any retail transaction, and the most difficult to trim time from, is the tendering process. Given that in Starbucks transactions generally include a small basket size and the ordering time is relatively short, the value of an alternative payment is increased, as it is a greater proportion of the transaction. This value is increased further by the incredible traffic at Starbucks sites. Having many small transactions provides a boost to the ROI of the solution.
No Mobile Device Handling – In order for any sort of mobile payment solution to increase throughput and minimize operational complications, it is key to streamline the process of scanning the mobile device. Starbucks has done this via a customer facing scanner with very simple signage. This allows the consumer to place their phone in the scanning area with no need to pass the mobile device to a cashier. This simplifies the process by providing a consistent process, not only increasing the scan speed, but also avoiding the potential of store staff dropping or otherwise damaging a customer’s mobile device. Consumers are also more likely to use the mobile payment solution if they do not have to pass their mobile phone to a cashier, given how consumers increasingly consider the mobile device as a personal item.
As with all solutions implemented by consumer facing organizations, ROI is key. Looking at the Starbucks solution, the costs of entry are probably not that high. A mobile app is relatively inexpensive and standalone compared to other point of sale solution implementations. Using the stored value card leverages electronic processes and databases already in place. The crucial part is operationalizing the solution, and that can be put in place for hundreds or low thousands per site. All in all, this is a relatively low cost solution with the potential for a high ROI in both funds, and in good will from consumers. Other retailers looking to implement such a solution would do well to observe what Starbucks have done, but note well that this is not a one size fits all solution. Any future implementers should be sure that the app suits their customer demographic, their transaction model, and has a way of dealing with the complexities of payment. Other solutions will arise, and it will be fascinating to see what comes next.
4).Starbucks also runs a high scale of management in handling their I.T related issues. They are I.T aware such that, they have good network services. An example would be, Starbucks offers free WIFI Zone. An attraction for a customer on the move. The firm has VOIP services for communication with other chains around the globe. As we live in a net centric age, starbucks has made it a perfect fit, to incorporate most I.T business related schemes into their business.
A good analyses on this comoany, would however show us that starbucks uses the I.T based things to builkd their customer range. It is however no secret that most competitors have based their examples on comoanys in the likes of Starbucks.
Some practices in starbucks, include some discount sales issued by the management. A customer however sees this as a grand oppurtuinty to have a 50%(Percent) discount on whatever he buys and also enjoys free internet. This indeed is a wise practice. The Mgt Informaion system has in many ways, made things easy for staffs. Most messages to staffs are communicated via the network. As fore mentioned, starbucks uses intranets and internet(Voip). This helps in forwarding swift messages to workers in the company.
This comoany also makes judicious use of their MIS by running web based adverts and all. The firm keeps its customers continuesly aware of products and new recipes that might be tried in a given time. Thus, their market base increases undoubtedly.
In my opinion having pratronised starbucks from time to time, i would suggest the following:
Starbucks should try in purchasing a reasonably fast internet with low traffic.
They should try to maintain their hardwares and try upgrades from time to time, to avoid being left out in the dark age of slow computing.
They should employ staffs that are more I.T learned to avoid diffulty in system operations.
They should embrace more of touch screen services. And what i mean is, buying gadgets(hardwares) that provide self service for each customer.
The MIS should continually see to it that customers are intrigued by the brilliant I.T based services that Starbucks provide thus leaving the customers spell bound to return and purchase more items .
They could also provide on screen advertisements for new generation hardwares this in itself, could be an avenue for starbucks to get paid for advertising for I.T firms in the cities and wherever .
They could also make a web based system, that would enable customers to order online to ease driving out of the office at lunch.
At this juncture, i would like to reiterate that it is of immense importance that the MIS in starbucks embraces more heightened technology hardwares to ease the work load and the number of staffs. We all in the world are aware of the generation of computers. This promises to be huge and phenomenal turn in every industry especially industries like starbucks.
As we see Managements improve their information systems, it would be an important part for starbucks to play in their MIS. With an improved and well balanced MIS, starbucks has what it takes to battle up for the future even competitors. Time is of the essence for firms like starbucks this is because each day slips away and more upgrades are made to databases.
To this end, i would beseech starbucks, to keep up the very good work and embrace a new era of improved management systems. Thus increasing their profit base and client base.
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