AN EVALUATION OF INFORMATION SYSTEM AT

AARONG

PREPARED FOR

RAFIQUL ISLAM ROWLI

COURSE INSTRUCTOR, MANAGEMENT INFORMATION SYSTEM

Submitted By: Sadia Musarrat Chowdhury (Roll 09) Rowena Afreen (Roll 19) Asifa Zaman (Roll 40) Abhijit Asad (Roll 51) Mahtab Gyas Mehedi (Roll 29) Shahed Ibne Mahbub (Roll 62)

DATE: 4TH JULY 2008

INSTITUTE OF BUSINESS ADMINISTRATION (IBA)

INFORMATION SYSTEM

AT

AARONG

UNIVERSITY OF DHAKA (DU)

July 3, 2008

Mr. Rafiqul Islam Rowli Course Instructor Management Information System Institute of Business Administration University of Dhaka.

Dear Sir:

Subject: Submission of term paper

Please be informed that this report entitled Evaluation Of Information System At Aarong has been presented as a partial requirement for the course, Management Information System. This report is based on the interviews of two key personals at Aarong and secondary data collected from internet and textbooks. This report consists of an overview of the business process at Aarong and the operations of the Marketing and Human Resource Management Departments. The purpose of the report was to analyze the role of Information System in the Marketing and Human Resource management functions of the organization and determine the qualitative and quantitative value generated by IS in these departments We sincerely hope that the work will come up to the level of your expectation and any further query regarding the report will be welcomed.

Sincerely,

________________
MIS REPORT 2

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Table of Contents
Sectio n 1.0 1.1 1.2 1.3 1.4 Title Introduction to the Report Objectives of the Report Scope and Limitations of the Report Methodologies Company Profile: Aarong Page Number 5 6 6 7 7

2.0 2.1 2.2 2.3 2.4 2.5

Current Information System Overview of the Current IS system at Aarong Functional Departments at Aarong Breakdown of the Current Business Processes at Aarong The Role of IS in Operations at Ayesha Abed Foundation What-if Analysis and value generation through IS at Aarong 9 10 11 16 17

3.0 3.1 3.2 3.3

Focus on Departmental IS system The role of IS system at the HRM department of Aarong The role of IS system at the Marketing Department of Aarong Department wise and General recommendations 19 23 27

4.0

Conclusion to the Report Annexure and Bibliography

30 31

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Executive Summary

The report entitled,An evaluation of IS system at Aarong mainly concentrates on the analysis of the information system at Aarong. It focuses particularly on the value generated by the Information System in the two key departments of the organization namely marketing and human resource management.

At first, the report provides a brief background of the organization studied and the role played by information system. This is followed by a description of the overall business process and contribution made by the various functional departments at each level.

The report then provides a comprehensive description of the operations of the marketing and human resource management departments and the use of information system in these departments to maintain high quality work performance. It includes an analysis regarding the value generated by information system in these departments that is the gain in profitability and performance that has resulted from the utilization of customized software and network services.

The report also includes the identification of the key performance indicators and an assessment of the contributions made by the information system components to the key performance indicators.

Finally, the report provides recommendations on an envisioned system that has been developed from the study. The implementation of this system will enable Aarong to improve the performance of these departments, to attract and retain customers and hence prosper in the competitive business environment.

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Chapter I
1.1 Introduction to the Report

Information systems are a major corporate asset, with respect both to the benefits they provide and to their costs savings. Over the last decade, information system have fundamentally altered the economics of organizations and greatly increased the possibilities for organizing works. Information system is an integrated set of components for collecting, storing, processing, and communicating information. Business firms, other organizations, and individuals in contemporary society rely on information systems to manage their operations, compete in the marketplace, supply services, and augment personal lives. Today even the smallest firms, as well as many households, own or lease usually called Large employ computers. personal multiple These are also microcomputers, organizations

computers. typically computer

IS Syste m

systems, from a few powerful mainframe machines (or even more powerful supercomputers) and minicomputers to widely deployed personal computers.

IS in fashion industry: IS is used extensively in fashion industry. The fashion industry is fast-changing and unpredictable. Yet whoever can anticipate changes in fashion trends will be able to seize opportunities for long term growth. To succeed, the ability to consistently acquire up-to-dated information would be a great asset as the right products will reach the market in a timely manner. This not only minimizes risk but it also optimizes profits. The main challenges of the fashion industry are to stay ahead of the market with up-to-date information, Meet customer's

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expectations and more stringent requirements and Delivering finished products to the market on time. A well developed information system can accelerate and simplify workflows throughout the fashion supply chain in a real-world environment. Starting from product designing to sales, IS can be used in every step of the business. Also IS can be used to develop anti-theft systems, a topic that has traditionally been of particular interest in fashion retailing. Information systems bring new options to the way companies interact, the way organizations are structured, and the way workplaces are designed. In general, use of network-based information systems can significantly lower the costs of communication among workers and firms and enhance coordination on collaborative projects. Along with the global transportation infrastructure, network-based information systems have been a factor in the growth of international business and corporations.

1.2

Objectives of the Report

The key objectives of this report were:

To provide an overview of the business process at Aarong and the operations of the Marketing and Human Resource Management Departments.

To analyze the role of Information System in the Marketing and Human Resource management functions of the organization.

To determine the qualitative and quantitative value generated by IS in these departments

To demonstrate our ability to apply concepts learnt in class by developing an envisioned system that optimizes the value generated by IS.

1.3

Scope and Limitations of the Report

Scope of the Report At first the report provides an overall idea about the operational steps involved, from developing a product to bringing it to the consumer. Although Aarong offers a wide array of products, our report focuses mainly on the textile product lines.
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Due to time constraints and lack of information, the analysis would only be based on the operations of the Marketing and HRM departments of Aarong. Limitations of the Report Some of the data used in the analysis are ballpark figures as the organization was reluctant to disclose exact figures. As some of the data have been obtained from secondary sources, their reliability and validity cannot be guaranteed. The analysis would be confined to the application of concepts learnt during the Management Information System Course.

1.4

Methodologies

Both Secondary and Primary Data have been obtained for the report For Primary Data, two interviews were conducted at the Head office of Aarong located at Tejgaon Industrial Area. One was held with the head of the IT Department and the other with a Marketing Executive. A detailed description of the respondents have been included in the acknowledgements page of the report. Secondary Sources of data were- The Website of Aarong (www.brac-aarong.com), BRAC Annual Report 2008 and our Management Information System Textbook

1.4

Company Profile of Aarong

Aarong Aarong is an established fashion and home dcor brand in Bangladesh. . It has grown into a thriving international enterprise showcasing ethnic wear to beautiful crafts from silks, handloom cotton, endi to terracotta, bamboo, jute and much more. As a fair trade organization set up by BRAC- a Bangladeshi NGO dedicated to alleviating poverty and empowering the poor, in 1978, Aarong plays a crucial role of the promoter of Bangladeshi handcrafts and crafts producers. Reaching out to
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weavers, potters, brass workers, jewelers, jute workers, basket weavers, wood carvers, leather workers and more, Aarong embraces and nurtures a diverse representation of 65,000 artisans, 85% of whom are women. Today, Aarong has become the foundation upon which independent cooperative groups and family-based artisans market their craft, in an effort to position the nations handicraft industry on a world platform of appreciation and acknowledgement. From a single shop, Aarong has grown into one of Bangladesh's biggest retail chains, with eight stores spread across the major metropolitan areas of the country - in Dhaka, Chittagong, Khulna and Sylhet and one in London, UK. In 2006, Aarong successfully achieved a sales growth of 38.42% resulting in Tk. 1.7 billion in annual sales.

The Ayesha Abed Foundation

The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for employment and income generation for underprivileged rural women. It is an enclave for women, formed to uplift them economically, through their work as producers, and also socially, through their development into entrepreneurs. The Foundation provides an appropriate working environment, financial and technical assistance, and training to develop the womens skills in various crafts. The Foundation was established to commemorate the memory and work of late Mrs. Ayesha Abed, a co-worker and wife of the Founder and Chairperson of BRAC. AAF is closely interrelated with other programs, especially BRAC Development Programs (BDP) and Aarong. The women workers of the AAF come from the BDP organized Village Organizations. Working at the AAF thus gives the women access to other BRAC programs. All of AAFs finished products are sold through Aarong, which additionally provides designs, raw materials and financial support to AAF. Since AAF supplies exclusively to Aarong, it is treated as Aarongs Production Center.

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Chapter II
2.1 The Current Information System at Aarong

Although Aarong started its operations in 1978, Information System was not implemented in the organization before 1985. Initially Aarong set up only 3 computers and a server with SQL Software to support its operations. However, currently, Aarong provides Hardware Support (more than 300 computers), InHouse Software and a company-wide Intranet network to ensure superior performance and information management. These are connected to the various outlets of Aarong via optic fiber using Central Services (CS). This enables the employees located at the head office to obtain real-time information on Inventory levels, Sales transactions etc. Aarong is a support entity of BRAC. Initially it implemented software developed for BRAC. Then Aarong purchased Software from Southtech limited and Documenta Ltd. Now, however, Aarong uses customized in-house software developed by its IT department. Aarong mainly uses customized software developed for carrying out the specific functions involved in the various functional departments. The Key In-House Software used by Aarong is as follows:

1. Central Office Management System (COMS): COMS also used by the export
department for handling export orders. The retailing department uses COMS to check inventory levels and maintain re-order levels by analyzing data such as amount sent to outlet, amount in display and amount in the warehouse.

2. Point of Sale (POS): Point of sales software is used in all the outlets of
Aarong. When a sales staff scans the barcode of any product, the software records the transaction. This database enables the organization to identify the demand of the product and adjust their inventory level accordingly.

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3. Ayesha Abed Foundation Software (AAFS): Ayesha Abed Foundation, which is

the primary manufacturing unit of Aarong, uses this Software to check production levels.

4. Customer Relationship Management: This software enables Aarong to identify

the most loyal customer and to retain them. Customer databases are maintained with the help of this software. It also enables Aarong to provide special services, such as My Aarong Rewards, to loyal customers. With the buying and contact information of all loyal customers, Aarong is able to notify them whenever products that suit their taste are available.

2.2 The

The Functional Departments at Aarong Functional of Aarong are as

Departments business follows:

playing a key role in the process

1. Designing Department: This is located at the Head Office of Aarong and consists of about 40 designers. 2. Merchandise Procurement Department: This places orders to the in-house production unit of Aarong, Ayesha Abed Foundation or AAF and to Private Producers. These Private Producers are individuals working for Aarong. Approximately, 80% of all orders are placed to AAF and the remaining 20% to these individuals 3. Quality Control Department: QC department is also located at the head office of Aarong. The quality check process at Aarong is completely manual. 4. Marketing Department: At present, the marketing department has nine employees. Of these four are permanent and the rest are part-time employees
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hired for specific jobs such as performing audit, competitor surveys or for assisting marketing executives when new projects are undertaken. 5. IT Department: This is responsible for building in-house softwares for the functional departments and for maintaining them. 6. Human Resource Management: All functions in this department are conducted manually. E.g. evaluating performance of employees. 7. Accounts Department: The basic financial procedures are conducted manually, such as preparing financial reports. For other purposes, IS is used. For example, customized softwares are used for determining Market Share. 8. Retail Department: This department is responsible for monitoring inventory levels and maintaining re-order point. 9. Export Department: handles all export related documentations and formalities. Maintains foreign buyers contacts and carries out market intelligence research in prospective countries.

2.3

A Detailed Breakdown of the Current Business Processes at Aarong

Overview

Product Design Aarong currently has about 40-45 employees working as designers at the head office. These designers develop product designs for various textile and other product lines. Designs are created using software such as Adobe Photoshop. The
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designs are then presented to the head designers. Finally the designs are approved by the director herself.

After the screening process, designs that are approved are provided to suitable producers for development of prototype. These producers are either members of Ayesha Abed Foundation (AAF) or Private Producers. Ayesha Abed Foundation is an in-house production unit of Aarong. A deadline is set for the producers regarding the submission of the prototype (this usually ranges from about 5-10 days). The marketing department then conducts another selection procedure during which the prototypes are examined and their unit costs are computed. The samples that meet certain requirements are then approved. Order Processing

Order Processing: Order quantity is determined based on Sales and Marketing reports. Order is then placed to either private producers or to Ayesha Abed Foundation. A date is specified for the submission of the products. After completion, orders are shipped to the warehouse at the head office. Quality Assurance

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The Quality Check process at Aarong is completely manual. At the quality control department, the QC officers check every product piece-by-piece at the. The products that do not meet the minimum requirement standards are rejected and returned to the producers. Aarong uses the customized cross-functional software COMS-Central Office Management System, to record the transactions involved in the Quality Assurance process. After quality assurance, tagging and billing of products take place simultaneously. Tagging and packaging Products that pass the quality check procedures are shipped to the Central Storage. There the products are tagged using bar codes. Tagged products are then packaged and stored. Inventory tracking of goods starts from this step onwards. Payment Calculation Based on the quantity purchased and adjusting for any return outwards, payment amount is calculated. Invoices are then prepared and payments made to the respective producers. Demand Analysis and Distribution of goods

Every outlet maintains record of all product lines and related product information. Based on information obtained from the sales managers of the various outlets, regarding demand, goods are then delivered to the respective outlets. A hard copy of data is sent along with the deliveries.

Sales

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At the outlets, during a sales transaction, the sales staff scans the bar code on each product to determine their price. If customers are members of My Aarong Rewards, they are offered special services such as discounts and gifts. Invoices are then prepared and payment collected. All relevant information involved in the transactions such as item code, item quantity, discount provided (if any), cash collected and return inwards (if any), are recorded in the Product and Sales databases.

Inventory Tracking

After the tagging and packaging of goods, inventory levels are recorded in a database using IS. The database is then adjusted and updated to take into account changes in the inventory level that take place due to distribution and sales transactions. Information on inventory levels is obtained via COMS and POS.

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Figure 1 The Entire Business Operations Process

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2.4

Operations and IS at the Ayesha Abed Foundation

The Aisha-Abed Foundation is responsible for all of Aarongs garments production under normal circumstances. It is Aarongs primary garments manufacturing plant. However, at times, when very high levels of production are required, for instance, peak selling seasons, the Aisha-Abed Foundation alone cannot meet up with the production demands. In such cases, the plants of thirdparty garments manufacturers are hired in order to carry out production. Much of the manufacturing process of Aarongs garments division is completely automated, and the entire manufacturing is thoroughly monitored from Aarongs central headquarters by means of a COMS (Complete Office Management System) which is installed at the Aisha-Abed Foundation. The COMS is a vital and essential component of the entire operations system of Aarong, without which it could not have performed efficiently. Through extensive use of process control, data is collected at various points during the entire manufacturing process at the Aisha-Abed foundation, and transmitted to the central headquarters of Aarong over the company intranet. At the headquarters, this data is routinely analyzed by process control experts, who check for any inconsistencies in the incoming data. If any malfunctions or inconsistencies occur, technicians are alerted accordingly to fix the problem(s). The importance of a proper information system is demonstrated only too clearly by the manufacturing process of Aarongs garments production section. The high level of focus it puts on the automation of the process ensures efficiency and proper execution of programmed instructions, and saves the company a lot of time and money which would otherwise have been spent hiring human workers. Human workers do have their advantages regarding certain matters, but when it comes to mass production-based manufacturing plants, they can often be detrimental to the achievement of the goal of the organization. Human workers are affected by various factors such as illness, boredom, strikes, hunger, regular payment, speed, efficiency etc., which machines do not have to face. Thus, automation of the process is much profitable and efficient for Aarong. Since this automation also leaves room for human intervention where and when required by allowing human experts to monitor the process whenever they want through Aarongs COMS and intranet, this means that most of the possible errors can be detected and manually worked out of the system easily during the first few

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weeks of implementation and monitoring. In fact, the system can even be programmed to notify experts automatically if something goes out of order. The installation of the information system is not cheap, but compared to the accumulating prices of hiring and paying human laborers, and dealing with human problems, it is a small price to pay. After the payment and implementation of the information system, many of those problems are done away with permanently, and the rest are either dealt with gradually or absolutely minimized. As it can be seen from financial calculations that in the long run, costs are greatly reduced upon installation of the information system, something that would not have been possible otherwise. Thus, it can be safely and justly said that the operations of the garments division of Aarong have been greatly benefited by the automation of the processes and the installation of a capable information system. 2.5 What-if Analysis and value generation through IS at Aarong

In this analysis, we attempted to compare the time, cost and overall efficiency of Aarong in producing 10000 units of a new product without the IS, with current IS and with envisioned IS. The Current IS systems time and monthly cost records have been given below:
Steps Current Time (hour) Cost (BDT) 1 3 4 5 6 7 8 9 10 Prototy Product Screeni Sample Order Shipm pe Approval ion QC Design ng Evaluati Placem ent Tagging Manufa Record Quantit Piece Ideas on ent to HQ ct y 5 2 2.5 1 0.3 2 1.5 7.5 5 5.25 2500 10000 2000 3500 10000 2000 12000 2500 1200 5000 0 2

What-IF-

1 Analysis Time (hour) 8.5 Cost (BDT) 17000

2 2 2000

3 3 4200

3 1

4 0.5

5 5

6 3

7 7.5 1200

10000 3333

30000 5000

5 7 2500 6667 0

Recommendations 1 Designin Steps g & Screenin g MIS REPORT 2

2 Prototy pe

3 Sample Ev & Approva l

4 Product Q & Order Plc -

5 Shipm ent

6 QC & Taggi ng

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Time (hour) Cost (BDT)

6 10286

2.5 3500

1 9231

3 12429

7.5 1200

5 1463 4

11 Data Entr y 0.75 1200 0

12 Produ ct Invoic e 1.5 1000

13 Payme nt 0.5 1000

14 Centra l e 4.5 1200

15 Demand

16 Delivery to outlets 1.5 6000

17 Bar Code 0.5 4500

18 r Data 0.5 1000

19 er Invoice 0.5 500

20

21

Consume Custom Payment Sales ReceptioReturn n 1 3000 s 1.5 1500

StoragQuantity 2.5 10000

What-If-Analysis 1.5 2400 0 3 2000 1 2000 4.5 1200 5 20000 1.5 6000 1 9000 1 2000 1 1000 1 3000 2 2000

Recommendation 7 Data Entr y 0.75 1200 0 8 Produ ct Invoic e 1.5 1000 9 Payme nt 0.5 1000 10 Centra l e 4.5 1200 11 Demand 12 Delivery to outlets 1.5 6000 13 Bar Code 0.5 4500 14 15 16 17

Consume Custom Payment Sales r Data 0.5 1000 er Invoice 0.5 500 ReceptioReturn n 1 3000 s 1.5 1500

StoragQuantity 2.5 10000

One look at the comparison between current scenario and before scenario will show how significantly IS at Aarong help to it to improve its efficiency while saving a lump sum amount of money. Cost and Time Comparison Current What-if analysis Recommendation Time (in hours) 47.3 65 40.25 Costs (monthly) $114,900 $176,600 $92,979

Previously, the entire process of production, delivery and sales took nearly 65 hours with an aggregate cost of about TK 176600, whereas the current IS brings down the time by 17.7 hrs ( to 47.3 hrs) and cut the cost by TK 32600. Integration of IS, have significantly boosted performance in almost every sections, particularly in design section, Production quantity verification, data
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entry and invoicing section. It made process more efficient, less prone to error and more cost effective. However, we believe that there is still some room for improvement, which is why we propose an envisioned IS which will give further boost in performance. In the envisioned system, we propose to combine several sections in to one single section to speed up the entire process and cut the costs further. For example, we propose to combine the design and sampling section in to a single section and calculation shows that it resulted in further cost savings and requires less time to complete the process. Under the envisioned system, the overall time taken is 40.25 hrs and the total cost is TK 92,979 which significantly less than that of current system.

Chapter III
3.1 Focus on Departmental IS System HRM Department

Employe e Databas e
.

The

Human for

Resource the and

Department of Aarong is solely responsible management,

Performa nce Tracking

control

Prespecif ied Reports

HRIS at Aaron g
Company Intranet

employment of a total of 1100 employees, staff and managers. While the firm maintains some integral IS functions within its HRM department, the system lacks any real Management or Executive Information system. Thus limiting any significant

value additions to its decision making processes. The listing and explanations of the major components of Aarongs Human Resource Information System (HRIS) have been aggregated in the following table. Majority of the quantitative analysis such as workforce planning and compensation analysis is carried out manually by HR managers, without any contribution from OLAP since the latter have not been implemented at Aarong.
IS Function Employee MIS REPORT 2 Elaboration Maintained at Hardware and Software roles Essentially, all data are stored in 21

Aarongs

central

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headquarters

for

all

sales

staff

optical drives at the central office of the company an of data at tejgaon, softcopy are also however, backups off-site

working at various branches, along Database with workers from different branches in multidimensional databases, created and maintained by microsoft access. Based on the database maintained at the central office, and connected by Prespecified reports COMS, managers are allowed to access prespecified reports on the companys employees and they Key performance indicators.

maintained. Client server PCs have been

installed in the workstations of middle and top level managers. These PCs are connected via COMs, allowing the managers to access secure data on employee and product performances.

Sales representatives are given a commission pay apart from regular Performance Tracking salaries. Thus sales per day is an important KPI that is tracked using bar code readers and time punch cards. The Company Intranet intranet provides an online

TPS records the name of the sales assistant who records the sale and collects payment using bar code readers and customized POS software. Time punch cards at all Aarong offices record employee arrival and departure times. Almost all client terminals managers connected to workstations Aarongs at are central

resource for managers to extract data on employees personal records and professional qualifiactions, sales performance, and past reports on sales and mangerial activities.

network via COMs allowing their users to log-in to the company intranet to access secure data.

Key Performance Indicators of Human Resource Management at Aarong The firm employs only a handful of Key Performance Indicators in its HRM department, and even fewer are actually monitored by its HRIS. However, company executives agree, that its in-house developed HRIS system is a key contributor to keeping the company administration costs significantly lower than many of its competitors. Although the firm does not maintain any explicit measures of HRM efficiency such as cost per hire, human capital ROI or workers compensation cost per employee, the firm does maintain a number of conventional HR related KPIs which have been listed below: Employee Turnover Rate: (Total no. of separations per year / Total no. of staff). The firm has an employee turnover rate of 2.8% per year, and the management stresses the fact that the rate has been declining gradually over the last ten years. A high turnover rate can indicate lack of commitment from the workforce, demotivation or managerial problems. However, in light of the
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industry standards, 2.8% might be considered quite satisfactory. The HRIS system maintains the records of all employees as well as the number of terminations, lay-offs and resignations, along with the costs associated with the separation. It calculates turnover twice a year, based on these data and provides reports to the relevant decision makers. Cost Per employee: This includes both financial (salary and bonus) and nonfinancial expense (healthcare and training) factors. The HRIS takes inputs from all relevant departments, especially Accounts, to prepare reports on employee costs, usually twice a year. Essentially, the total cost of all Human resource factors of the company is divided by the total number of full time workers to determine this value. The recent trend has been a significant rise in the cost per employee for Aarong, although the respondents were reluctant to divulge the magnitude of this rise. Absenteeism Rate: Monitored via time punch cards and manual attendance registers. This is an important KPI which managers want reports on most frequently at Aarong. The measure features quite prominently in department efficiency as well as individual employee performance appraisals (PA). Revenue Factor (Sales revenue / cost of total full time employees): although specific details were not available, respondents confirmed that the revenue factor for Aarong is roughly 3 to 5 times its cost of full time employees. This rate has been improving in recent years. The accounts department provides the necessary data via COMs to HRM department, where the analysis is carried out manually for the entire company, as well as individual departments. Apart from these the firm also has a number of sales staff training programs based on assessments carried out by the HRM department at different times throughout the year. The company Intranet provides employees with the opportunity of suggesting training in specific areas, where they believe they lack the required skills, as well as providing suggestions on general work improvements through the online suggestions box. However, there is a lack of any quantitative measures of productivity, making it difficult for the firm to quantitatively evaluate its management efficiency. Value Generation through IS at the HRM Department

The HRIS system at Aarong generates values in a number of ways for the firm. The HRIS system is responsible for recording and monitoring employee activities and performance. These reports are made available at those times of the year when employee performance appraisals are carried out. The employee database
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provides detailed information on each employee of the firm, the duration of their service with the firm, and the various skills and qualification they possess. This helps management in carrying out succession planning, and planning for promotions.

Knowledge management is a key part of any business, be it enterprise resource planning, customer relationship management or supply chain management, and the HRIS system plays an active role in the process. The HRIS system provides reports to decision makers in Prespecified formats on employee performance and past performance appraisals. These reports, although lack any sensitivity or what if analysis, are still very comprehensive and are provided in an accurate and timely manner. The HRIS system also provides information on companys HR related processes and policies to all employees, having access to the companys intranet through any of the client server terminals around in the headquarters of Aarong. The HRIS also provides aggregated reports on employee suggestion and sentiments to the top management of the firm. The HRIS system also plays an important role in the companys intranet solutions. Announcing job opportunities within the firm allows for effective internal recruitments, encouraging existing employees to apply for the current position. In addition, the Intranet provides announcements on changes in company policies, and provides the mechanism for employees to give their feedback on effectiveness and appropriateness of the training programs organized by the company throughout the year.

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3.2

Focus on Departmental IS System Marketing Department

Marketing department at Aarong basically has two major functions Customer Relationship Management (CRM) and Market Research. CRM section focuses on creating two-way exchanges with customers so that firms have an intimate knowledge of their needs, wants, and buying patterns. In this way, CRM is intended to help companies understand, as well as anticipate, the needs of current and potential customers. Market Research section carries out market survey and formulates marketing campaign for new products Current Scenario: Compared to other departments, Aarong has a fairly well developed Marketing Information System, which is used to maintain and process its plethora of marketing data. Aarong has over 16000 listed customers and it uses Customer Relationship Management (CRM) software to track and capture relevant data about customers including contacts, personal information, monthly incomes, average monthly spending on Aarong products etc. Information is collected from various customer touch-points such as retail outlets, telephones, fax, Aarong websites and personal contacts. Aarongs CRM program is dubbed My Aarong Rewards which is a scheme to recognize its loyal and regular customers. Customers who spend a certain amount of money on Aarong products are eligible for applying for its membership. Members earn points 1 point for each TK 100 they spend on Aarong and these points may be used to receive various benefits later. This program enables Aaron in the fulfillment of responses and requests of customers by providing appropriate information on products and services to them, while capturing relevant information for the CRM database. In essence, My Aarong Rewards is an integrated customer service that helps Aarong to acquire, enhance and retain its prospect and customers. Aarong acquires new loyal customers through My Aarong Rewards by doing a superior job of contact management, sales prospecting, selling, direct marketing
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and fulfillment. As a customer joins the membership of My Aarong Rewards, he or she receives regular updates about new outlets, new products, and sales discounts through e-mails. For Example, if a retail outlet at Dhanmondi has new stock of punjabis and sharees, all the members (particularly the ones living in or near Dhanmondi) are notify via email or SMS. My Aarong Rewards helps Aarong to cross-sell and up-sell to its customers and increase profitability of the business. Furthermore, it enables Aarong to project a positive supportive image to its customers and create a value perceived by the customers as the convenient one stop shopping for Desi fashion. My Aarong Rewards is also Aarongs prime customer retention and loyalty program. Through this program, Aarong identifies and rewards its most loyal and profitable customers. For example, as a customer buys Aarong products, he or she accumulates points for each TK 100 worth of Aarong products. These points can be cashed in later for receiving discounts and other gifts. It is a simple yet effective tool that allows Aarong to build and maintain long-term relationships with its customers. Aside from CRM, Aarong uses its Information System for Market Research and Forecasting. Data acquired from My Aarong Rewards and Point Of Sales (POS) are processed to obtain valuable information for making and evaluating new marketing campaigns, analyzing current market trends and coming up with new product designs. POS, customized software developed by Aarongs in-house developers, is used to maintain a database of all products at each outlet and monitor and record all the sales transactions taking place. POS allows Aarong to perform accurate demand-checking, evaluate the impact of marketing campaigns and more. Being a fashion house, Aarong always has to be aware of changes in taste and fashion of the people. By monitoring sales of its products via POS, Aarong can perform trend analysis to predict the demand of the customers in the upcoming season. Whenever a new marketing campaign is launched, POS is used to monitor the changes in sales of products at different outlets and evaluate the success of the marketing campaign. Furthermore, during special occasions like Mothers Day, data acquired from POS over the past years are used to perform trend analysis, indentify what types of products are bought. Based on these analyses, products are designed and orders are placed to its manufacturers. POS is also integrated with My Aarong Rewards as it is used to decide what price ranges are to be set to offer special gifts to it members.
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Aarong also uses MS Access to maintain its model database. This database contains all the necessary information like contact, personal info, agencies of the models that Aarong hired to do advertisements.

Key Performance Indicators of Marketing Department at Aarong Aarong employs relatively much more Key Performance Indicators in its Marketing department, but not all of them are actually monitored by its MIS. Company executives unanimously agree, the success of its CRM and Marketing Research is largely due to implementation of successful IS. The following are some of the significant KPI of marketing department: Sales Monitoring for new products: When a new product is launched, POS is used to monitor its sales over a certain period at different outlets. Actual sales are compared with the targeted sales and marketing manager takes decision whether to keep it on shelves or not. Competitor Database: Aarong uses a customized version of SPSS for competition analysis. Aarong collects various data regarding its competitors and maintains a competitor database by using Microsoft Access. These software enables Aarong to constantly monitor activities and performance of it competitors and formulate effective marketing plan to stay ahead of the competition. Demand Checking: POS constantly monitors sales of different products at its various outlets. MIS is used to generate sales report on regular basis which allows the managers to be informed about the performance its various products and to perform trend analysis. As such, they can predict more accurately what amount of which product is to be manufactured. Market Share: Although Aarong is a non profit-making organization, yet it needs to keep a sharp eye on its performance to ensure its survival. Based on the data accumulated via POS and Competition database, Aarong can calculate market share with a fair degree of accuracy. It can compare how well it is performing against its competitors. Aarongs IS allows it monitor changes in its market share on regular basis and measure the impact of marketing campaign or launch of new products on its market share. Customer Retention Rate: From the data acquired via My Aarong Rewards, Aarong keep track of how many new customers it has gained over a certain period and how much of them it manages to retain.
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Value Generation through IS at the Marketing Department Aarongs marketing department is actually a recent addition, having been formed only three years earlier. Thus, the marketing department received all the benefits of an established Information System. So it is really hard to say how this department would have performed without an Information System, since the all the most of the function of marketing department are carried out through Information System. However, Ms. Sadia Haque, an Executive at the Marketing Department whom we interviewed, was kind enough to give some rough estimation, which helped us to evaluate the value generation of Information System in marketing department. Since it was not possible to obtain numeric data on the grounds of business secrets, most of the analysis here will be qualitative. Firstly, implementing Information System in marketing department saved Aarong huge cost in term of employee salary, time and error-avoidance. From analysis of the current scenario, it is evident the plethora of activities that need to be performed for CRM and Market Research. As mentioned above, Aarong has over 16000 listed customers and manually maintaining such huge database for these customers and providing services to them would have been both more expensive (as it would require more employees) and far more time consuming. For example, earlier, it would require I hour for an Aarong employee to manually fill a table for adding to database, but now thanks to several advanced features of Information System like autofill, it takes only 5 minutes. Addition, implementing Information System also reduced the possibility of human error greatly. Implementation of POS has made sales monitoring at Aarong an unbelievably simplified job. Thanks to POS and barcode-system all the sales transactions are recorded instantly and it requires comparatively fewer employees at each retail outlets. Moreover, Information System makes other functions of marketing research such as trend analysis, demand-checking, competitor monitoring, evaluation of new product, analysis of marketing campaign much simpler as well as more cost-effective and less time-consuming.

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3.3

General and Specific Recommendations for the IS at Aarong

Specific Recommendations Human Resource Department

It is of pivotal importance to recognize Aarong as a growing and expanding business unit. While the current number of staff stands at 1,100 employees, these numbers are set to reach record highs, due to the companys rapid growth in sales and market share, along with its ever growing line and range of products. With this volatile environment, ensuring proper workforce planning is extremely important to catalyze rapid growth while ensuring a steady supply of suitable and highly qualified candidates for the ever growing number of position being created in this high growth firm. Internet technology can provide a virtual base of stability rather than volatility for the employees of Aarong while ensuring greater goal oriented behavior through mass Enterprise collaboration systems (ECS) in this time of rapid change, and the recommendations set forth are based on this sound belief.
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Status updates to encourage goal oriented behavior: The HRIS can provide frequent updates on corporate and strategic objectives on the firm on the companys intranet to ensure that all the employees are aware of the corporate and strategic goals of the organization. Furthermore, the HRIS department can provide frequent updates on the activities of the 9 departments of the company, to create a greater understanding and awareness among all the employees of the firm. This will foster greater cooperation while avoiding any potential miscommunications between the departments. Personnel Planning analysis: The HRM department needs to play a more integrated role in the companys personnel planning and recruitment and selection efforts. It should make full use of the COMs network to carry out personnel requirement analysis, along with the costs and potential sources of employment, and provide these reports to the relevant decision makers. The HRM department can carry out sensitivity analysis as well as trend analysis to provide Decision Support System and Executive support system reports to middle and top management of the company on potential staff requirements and the associated costs. This analysis can be

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a key part of the companys Management information system and aid in Enterprise Resource Planning.
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Compensation Analysis reports: While these reports are carried out manually, at the behest of the top management of the different departments, the company should make full use of Internet Technology, and the databases of its strategic partners and market research partners to automate compensation package analysis reports. This will provide the decision makers with an insight into the industry standards on wages and other benefits, allowing Aarong to attract qualified candidates in the best financial terms.

Employee Bulletin Boards and communications mechanism to encourage greater Enterprise collaborations: This will provide the virtual world of stability for the employees. Providing an employee bulletin board is the first step to encourage the staff to make use of Internet technologies to stay in touch with each other while creating greater collaboration and coordination between departments. The management of Aarong needs to encourage its employees to frequently access the companys intranet and bulletin boards, and instill the notion that IT will provide a base of stability and communication for the staff rather than creating uncertainties and unwanted challenges. Online Training on key skills development and evaluation systems: Aarong needs to determine the key skills that affect employee performance, and provide training both online and on-site to ensure the highest level of efficiency and productivity. The companys intranet system can provide the mechanism for self-learning, and online quizzes to judge the effectiveness of the training programs. Productivity Reports and skills database: The HRIS system needs to take a more comprehensive approach to its employee database system. It should not limit itself to recording just the employees personal and academic details, but try to maintain a full skills database for employees of each department. This will allow the mangers to make effective decisions on internal promotions and gauge training needs of the current employees.

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Wider usage of KPIs and publishing reports on employee and departmental performance / efficiency: The company needs to adopt a wider number of specific Key Performance indicators and reengineer its Information System to allow it to monitor these indicators real time. This will allow the top management to gain quantitative, accurate and current information on the performance and effectiveness of the different departments of the company. The HRM department also needs to publish annual or semi-annual reports on the performance of the staff of different departments along these indicators to provide motivation and feedback to the employees on their efforts.

Specific Recommendations Marketing Departments

Interactive Marketing: Aarong can develop a web-forum dedicated to fashion-enthusiasts of this country. It can invite all of its registered customers to join the forum and keep it open for non-members as well. The forum will allow marketing executives of Aarong to interact with their customers more closely and form much valued focused discussion groups. The forum will also allow Aarong to perform various online surveys via web-forms and questionnaire and reply to problems/complains of its customers via instant messaging and e-mail correspondence. The outcome the interactive marketing is a slew of vital marketing data, new product ideas, volume sales and most importantly stronger customer relationship.

General Recommendations

Greater use of MIS, DSS and ESS for effective decision making. Adoption of fully automated Supply Chain Management System to ensure greater quality and flexibility.

Streamlining the Designing and Approval Process into one workstation. Automation of the Demand Projection and Trend analysis tasks. Greater use of networking to carry out financial transactions with partners and suppliers

A comprehensive online cataloguing service for the consumer and company corporate websites

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Chapter IV
4.0 Conclusion to the Report

Aarong is a rapidly growing, customer-oriented organization. To keep up with the high demand and to maximize customer value, the organization relies greatly on the operations of its two vital of departments of Marketing and Human Resource Management. Aarongs focus is to ensure that its workforce is being utilized efficiently and effectively to anticipate the future needs of the customers, to respond to their concerns, and to provide top-quality services. A thorough study of the organization reveals various ways in which IS helps the company to operate competently in todays ever-changing business environment. the company. By implementing the Proposed System, the company would be able to attain its goals better through better decision making, greater speed of operations and reduced errors. The Envisioned System would enable Aarong to manage its most valuable assets, Human Resources, to optimize customer value, the key success factor for a customer-focused organization. However, an analysis of the Key Performance Indicators shows

that there are still some areas that can be modified to generate further value for

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Annexure:1

ACKNOWLEDGEMENTS

This report has enabled us to meet a number of cooperative and friendly people in the corporate world. We would like to thank Mr. Proshanto Kumar Raha, an executive of the Information Technology department at Aarong. He was the first person we interviewed for this report and he took an immense amount of time off his work and guided us through the general and specific procedures followed by the various departments of the organization. He also enlightened us about the Information System at Aarong and the use of IT to maintain superior performance and remain competitive. He provided us with knowledge, which greatly helped us while working for the report.

We are also obliged to Ms. Sadia Haque, an Executive at the Marketing Department, Department. for familiarizing us with the operations of the Marketing

Last but not the least, our Course Instructor, Mr. Rafiqul Islam Rowli, gave us a subject of much gravity and initially it was completely an unknown arena. But with time, and through his supervision and assistance, we managed to capture the level of required understanding and fulfilled the prerequisites of the report. Without his support, this report would not have been possible and we are extremely grateful for his valuable time.

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Annexure: 2 Peer Evaluation

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