Production and Operations
Sephora operates in the sphere of beauty for almost 50 years already, which allowed it to work with both classic and emerging brands, focusing on various products, including perfume and cosmetics. It owns stores in France and other countries around the world and is highly valued for its prestige products, unbiased and interactive service, and innovation. In order to attract customers and reach benefit, Sephora referred to enterprise information system (EIS) that is used in all departments, and that is its loyalty program.
EIS ensures that the organization operates on the robust foundation (Olson and Kesharwani 14). It offers a technology platform that coordinates business processes maintained by different departments at various levels. Its utilization provides Sephora with the opportunity to automatize business operations. EIS presupposes the use of a single system by customer relationship management and supply chain management. As a result, they can easily share critical data, which is significant for effective connection with other departments.
The operations and supply chain management deal with the way Sephora purchases raw materials, turns them into beauty products and distributes to the shops where they are sold. EIS offers a standard data structure that is used by all departments, which prevents the appearance of problems connected with information fragmentation. So using the same software and formatting data in the same way, the operations and supply chain can share information (Moller and Chaudhry 161). For example, a list of new products in one format can be transferred to marketing department for it to define targeted market segment; to human resources (HR) to define who will work with it; to management information system (MIS) to provide a feedback on their operations and evaluate success of the initiative; and to accounting departments to distribute funding. Adding information to this form, Sephora will gather all data about the operation.
Unfortunately, currently used Sephora’s EIS prevents the company from reaching its maximum potential. Of course, it copes with the main goal and allows the company to calculate customer equity so that the highest paying consumers can be identified without affecting their privacy. However, data sharing operations face a range of obstacles. When Sephora started serving its clients in stores, the personnel could hardly provide required information to the analytical environment. It turned out that the EIS used in them is just a simplified version of the EIS used in headquarters, which means that it was not created for such purposes. Thus, the main problem is that the EIS prevents the personnel from providing better service to loyal clients.
For a new EIS to fix this situation, Sephora should remember that its card program should benefit both the company and its consumers. By providing consumers rewards and incentives, it should attract new customers and maintain their loyalty. As a result, they are expected to buy Sephora’s products over and over, spending more money for better services and privileges that are available only for loyal clients.
Thus, the new EIS is expected to improve the existing loyalty card program as well as the way it is shared and used to reach business needs. It will provide the managers and other employees with the opportunity to be a unity. They will share a unified common view developed on the basis of the same vital data. Gathering the information about the best practices and customer feedback and characteristics, Sephora will easily develop personalized customer relationships. As a result, it will be easier for the company to attract new clients and retain them. An improved competitive advantage will be reached, as the information about the client needs and similar products and services provided by other companies will be shared.
Management Information System
In order to support EIS, Sephora should also implement MIS because this system will provide the company with the opportunity to distribute the tasks efficiently. This system will be used by middle-level managers so that they can obtain all information needed to evaluate company performance and define whether it meets weekly, monthly, and yearly goals (Gupta 54). MIS will be used to gather the data about organizational operations so that it can be organized and used to create reports on the current situation. In this way, it will give Sephora an opportunity to control and monitor business, considering future changes. Being organized, this information can be then spread with the help of EIS for different departments to know what is expected of them. Even though simple summaries and comparisons are not enough to make sophisticated decisions that are expected to affect the whole organization, those presented by each department are a good basis when they are used together.
Information systems vary depending on the function of the department that utilizes them, but MIS can connect them through EIS, as it obtains data from all units. MIS gathers simple reports from HR department to obtain information about HR planning, recruiting, training, compensation, and assessment. Focusing on accounting, it receives financial reports, budgeting, accounts, treasury, and cash management. Marketing presupposes customer and product management, including some forecasts. Operations focus on orders, product inventory, and customer service while manufacturing deals with raw material inventory, operation planning and scheduling and manufacturing processes. All these departments affect one another that is why it is critical for them to share information. In the framework of EIS, it is organized in a particular format and can be easily distributed.
As a result, personnel from different departments can tell how many clients will be likely to obtain new product and how many items should be manufactured. On this basis, other departments will define expenses and ensure that the workers can cope with the task. If management team fails to obtain one of the reports and share significant information, the company will be likely to face a range of problems, such as a lack of funding or an excess of products, which will affect its performance adversely, lead to losses, and undermine competitive advantage. Thus, the implementation of MIS and its ability to improve the interaction between departments is critical. It will also be easier to manage EIS, as all information will be already gathered by MIS (Oke 6.14).
In this framework, MIS plays the role of the overall lead. It urges all departments to focus on the organizational goals and their achievement. Under its influence, they prepare reports in a fixed from on a regular basis so that every department can understand it when the data is shared among them. When working on them, managers receive an opportunity to identify semi-structured decision issues that can be overlooked in other circumstances. MIS and EIS prevent the information from being isolated in one department, which is critical for any organization, and Sephora is not an exception. Such approach improves personnel understanding of the current organizational situation and helps them to make efficient decisions. MIS and EIS ensure the possibility to define existing problems and fix them. As a result, Sephora will be likely to improve its performance when implementing them.
Gupta, Hitesh. Management Information System. International Book House, 2011.
Moller, Charles, and Sohail Chaudhry. Advances in Enterprise Information Systems II. CRC Press, 2012.
Oke, Jayant. Management Information Systems. Narali Prakashan, 2009.
Olson, David and Subodh Kesharwani. Enterprise Information Systems: Contemporary Trends and Issues. World Scientific, 2010.