Tesco Information System
This paper discusses the implementation process of information system in the company. In addition to this, it includes the explanation of current & past software of the company. It also gives the idea about the system which company may adopt in the future scenario. However, the implementation of the information system is considered as quite important aspects of the company to perform its functions successfully and to retain its position in the market (Xie & Allen, 2013). The reason for widely adopting the IT system is that with the changing business environment, the demand for the digital platform is growing. This practice puts pressure on the companies to install or update the software as per the current technology.
Similarly, Tesco also used different IS software for retaining its position in the market over a longer time. The information system provides support to Tesco in various areas such as statistical, operational and strategic areas which help the company to improve its customers’ services (Lowe et al., 2012). In regards to this paper, Tesco IS implementation process will be determined and studied. The strategic impact on the implementation of different facets such as operational, structural, cultural, economic, legal, etc. will be defined. At the same time, Tesco future software will be also discussed. Thus, this report gives the detailed understanding of the implementation process of IS into the organization.
Tesco is considered as a British company which deals in grocery and general merchandise globally and it is the leader in the grocery segment under the UK market (Tesco 2017). Tesco headquartered in the Welwyn Garden City, Hertfordshire, United Kingdom, etc. At the same time, it has stores in approx 12 countries across Asia and Europe. Basically, Tesco engages in the diversified sectors from its origin including clothing, electronic, furniture, toys, petrol, financial services, telecom and internet services and Software. Furthermore, Tesco was founded by Jack Cohen and he previously sold its products on the stalls. But with the growing trend of the digital platform, Tesco managers have moved towards the IT system. Currently, in Tesco, managers depend more on the information systems tools for managing, evaluating and running its departments (Quelch, 2010). The IS system helps Tesco to identify the monthly statement of expenses and income and this helps the manager to take decisions. Other than that, the system also assists the company to estimate that how many hours’ employees’ actual work and the manager is also able to understand the customers’ changing needs and expectations more in an effective manner. These practices allow for analyzing the pricing and loyalty of the customers. Likewise, Tesco offers its products through its website and apps which shows different product lines and allows the customer to select the suited product. Moreover, Tesco in its initial phase installed the information system “G.O.L.D” that is first software which company installed in its operations. The main purpose of installing G.O.L.D is to manage the warehouse working in order to control the stock levels, quality of products, to figure the locations of the stock and the functions of the warehouse. As well as, Tesco also used the information system like the internet for expanding their business into outside their boundaries.
The impact of IS can be presented with the study of Tesco profits generation trend as below:
Figure 1: Tesco profit showing graph from the year 1997 to 2011
(Sources: Adewuyi, 2016)
This graph clearly indicates that since the year 1997, Tesco is constantly growing in terms of profit due to having high sales. It is found that IS plays a significant role in Tesco growth and revenue generation because IS helps the company to maintain their stock level at the warehouse (Potter & Disney, 2010). IS also allows to smoothly flow of information among different departments which leads to developing the business operations timely. Thus, it can be stated that IS proves to be effective for the company in terms of handling the complex task and catering every need of the customers.
Technology system is the practice which is widely used by the companies since year 2000 as at that time businesses started focusing on the global market which gave rise to the requirement of IS. So in this regards, software and internet trend is generated among the companies for achieving high recognition in different market. Thus, through development of business environment, the technology system trend is also enhanced (Stair & Reynolds, 2013). Likewise, Tesco also adopted the technology system under which various systems is included for operating the multiple functions of company. However, Tesco adopted their first technology in the year 1998 by installing the system which was known as G.O.L.D. Based on this, Tesco improved their warehouse working and maintained their stock level. This helps the company to control its operations of the warehouse. But, due to the changing technology system and increasing competition in the market, Tesco also started to focus on other information systems such as internet. Likewise, Tesco.com was launched by the company in the year 2000 even though Tesco is already operated with the internet since 1997. Through the internet, there are various benefits that Tesco gained related to understanding the customers with changing needs and expectations. At the same time, it also allows the customer to flexibly access the company website at any time. Such practices have direct impact on company sales and profits. According to Hakim & Hakim (2010), Tesco reported that it achieved the growth of approx. 21% sales on the Irish online grocery shopping market. Other than that, it is also estimated that Tesco concentrated on two approaches including technical and behavioral approach while taking decision of installing any software. In the technical approach, Tesco used the mathematical analysis and normative model in order to study the information system and as well as the physical technology and capability of the system. In the behaviour approach, Tesco used non-technical solutions rather than focused on the changes in attitude, management, and organizational policy. These both approaches are used by Tesco while installing the IS into their business operations.
From the technology system of Tesco, it is interpreted that technological system contributes major advantage to the company in terms of management and control of different operations of various departments (Velcu, 2010). The technology system helps Tesco to address the queries and issues of the different stakeholders such as customers, suppliers, and shareholders. These practices added value to the Tesco customer services.
Tesco implemented various IS in their business operations in a successful manner. Likewise, in the retrospective Jung & Joo (2011), Tesco previously used the CRM system through providing the coupons to customers. Moreover, the loyalty card scheme was also offered to them. These initiatives develop the healthy relationship with the customer with the organization. In a similar manner, Melville (2010) mentioned that currently, Tesco used the ERP system as this system helps Tesco to control the cloud computing. The reason for following ERP is to systematically perform the multiple activities. It is identified that ERP is the IS which integrates the important areas of business such as planning, purchasing, inventory, marketing & sales, marketing, and finances etc. So that’s why Tesco incorporated the system of ERP. It is fact that growing competition gives a challenge to the company in regards to expanding their portfolio. To manage that portfolio, ERP is best suited for the company and it also provides benefit to Tesco in maintain their right stock level or improve customer services with inventory management. Besides that, it also helps in continuously flowing of information in the organization which allows to systematically performingof activities.
In support to this, Gorla et al., (2010) stated that Tesco uses the formal organized way to implement the information system into its functional areas as company implement any system through analyzing the company capability, scenario, hierarchy and work culture. Therefore, Tesco used more of a friendly way to execute the system. In the same way, a manager also focused more on creating the learning environment with the installation of IS. The manager has adopted the system by conducting the training program for the employees so that they could develop their sufficient knowledge about the working/ practice of particular system. However, Tesco includes various steps in the implementation process and SDLC phases that allows the company to perfectly execute its system.
Tesco to implement their software such as ERP used the SDLC phases. It includes system investigation, system analysis, system design, system implementation and system maintenances etc.
Investigation phase: Tesco under the system investigation phase used preliminary study by identifying how much the particular system is suitable for company’s e-business opportunities. Moreover, IT department of Tesco identified ERP features and its significances then compare its features with the e-business priorities so that company could install that system which addresses its maximum issues and develop smooth functioning. Besides that, the feasibility study is also conducted by Tesco in the investigation phase in order to identify the system effectiveness for the company. In this, firstly Tesco checked the organization feasibility through focused on the proposed IS and found out that how much it will be suited to the company objective. After that, Tesco concentrated on the economic feasibility through determined that whether the system allows for saving the maximum cost and support towards revenue generation. Technical feasibility is also used by the company in regards to the identified the hardware and software capabilities based on the needs of the proposed system. Other than that, operational feasibility is undertaken in which management, staff, customers, and suppliers ability to use the system is analyzed. Thus, through followed these areas, Tesco investigate the proposed IS system.
System analysis: Tesco used the depth study to analyze the system. For this, it used the organizational analysis by evaluating the company structure and environmental system. Furthermore, it also analyzed the present system of the company such as hardware, software, human resources and the products etc (Hingley et al., 2011). At the same time, functional requirements are also analyzed with the aim to study the system information processing capability for meeting different stakeholders’ requirements. Tesco in this manner analyses the system design so that company could take the right decision.
System Design: Tesco used the User Interface Design in order to support the interaction between the end user with the system applications. It is done by the company through used the displays screen, interactive user and audio response etc. Other than that, the company also focused on the physical, logical view and process design of the IS. Similarly, in the ERP system implementation also, it used the LAN, WAN and display screens etc.
System Implementation: Tesco to implement the system used different types of conversion methods. However, Tesco to implement the ERP system into the business operations followed the parallel conversion method (Dezdar & Ainin, 2011). As per this, Tesco installed the ERP system with the old system (CRM). This allows the project development team to make other employees comfortable towards adopting the new system. Such practice motivates the staff to accept and understand the system effectively and efficiently.
System Maintenance: After implementation of the system, Tesco project manager focused on the maintenances of IS through bringing the modification in the operation of E-business system. Similarly, Tesco also maintained its ERP system through timely checked system effectiveness such as estimate how many systems relevantly provides the information related to the changing market trends.
System evaluation: Tesco used to evaluate the system just after its implementation into the business operations by monitored the flow of information among the stakeholders or checked the customer satisfaction level towards the company.
Therefore, these are the stages that are Tesco followed in its implementation of the system into their business operations. These stages also assist in systematically functioning of the system over the longer duration.
According to Baron et al. (2011), the implementation of IS has strong influences over the business of the Tesco in the form of smoothly managing of warehouse activities such as a balance of ordering level, address the customer complaints, data mining and so on. It mainly provides support in regards to taking appropriate decisions under the organization. Such practices influence positively towards the cultural aspect of Tesco retail operations. Likewise, if the company easily address the customer requirement on a regular basis then it helps the company to retain its maximum customer towards their brand. It also contributes to maintaining the positive work environment and allows for achieving the competitive advantage over its competitors. Other than that, the implementation process has directly impacted the business economic, social, legal aspects of Tesco which assist in systematically performing of the retail stores in different areas. So, the impact of IS implementation on the different facets of Tesco is mentioned below:-
Structural facets: Implementation of IS provides high support to the Structural aspects of the Tesco as it is identified that its structure is quite complex as it includes various segments so managing these is considered as a tedious task for the company (Bebchuk & Jackson, 2012). In regards to this, implementation of IS proved to be effective for the company in terms to manage organization structure. In short, IS influences the Tesco in a positively way as over the years, the information systems architecture and Tesco structure have evolved from the centralized to decentralized form. Likewise, there is various system like self-check system also contributes high to the organizational structure as it is found that there is a huge problem is occurring in the UK stores to address each customer payments and complaints. In this situation, the implementation of the self-check-out system helps the store manager to quickly tackle the customer problems. At the same time, this system also reduces the need for maximum employees which also reduce the maximum conflict among the management. This helps in developing the healthy organization structure. It indicates clearly that implementation of IS carries optimistic effect on the company organization structure.
Cultural facet: It is found that cultural plays a significant role in the organization in terms to successfully implement the system. It is because culture is the internal element which impacts the success and failure of the IS execution. If the positive cultural exist in the organization then it becomes easy for the organization to get the acceptances of management in regards to executing the new information system (Guiso et al., 2015). However, Tesco culture is also considered as a healthy workplace which encourages the management to work efficiently towards the implementation process of IS. So it can be stated that cultural contributes a crucial role in the successful execution of IS.
Similarly, it is estimated that Tesco has a cooperative and mutual environment in regards to implement the technology system for the purpose of storing, retrieving and distributing of information. Basically, it is observed that through the IS, the proper flow of information network is created that results in timely producing of product and deliver to the final customers. The reason behind of the positive culture environment of Tesco is timely organizing the training programs which encourage the management to actively participant in the new system implementation (Sørensen et al., 2010). This leads to set up the resource that minimizes the challenges and issues in the implementation process. At the same time, the adaptation of IS assisting in gaining the recognition in the society that’s proving to be reliable for the company future perspective. Thus, Tesco shows the democratic culture which develops the learning environment and this provides support to the IS.
Operational facet: An Operational aspect of the Tesco has indicated that the ERP system helps its to easily function the operations such as handling manual work, bookkeeping, processing of large & complex work into the simplified form. Thus, this brings clarity in its processing of information.
Economic facet: In case of economic perspective, the current ERP system of Tesco contributes high in bringing the economic feasibility into the business operations. In addition to this, implementation of IS provides support regards to save the cost of market research or large paper work. At the same time, IS helps in enhancing the revenue of the company. Likewise, CRM, ERP and MIS system allows the company to control the stock level at warehouses or reduce the maximum errors of recording, storing information which creates the authentic result to the company. Moreover, IS reduces the maximum requirement of high workforces and resources. This led to less waste or cost saving which directly generates revenue for the company. Besides that, Tesco through the ERP system reduces the requirement of maximum investment of company that associated with the coordination costs, data storage and cost related to recruitment and administration. Therefore, the implementation of information system proved to be effective in the area of cost saving in the perspective of the company.
Legal facet: In legal aspects, the implementation of IS gives rise positive effect to the organization in relation to make clear the employees about the code of conduct and ethical consideration (Baron et al., 2011). Tesco has also achieved the advantage in relation to making the management clear about the company policy and employees roles that’s bring the clarity in the performances by avoiding any type of misunderstanding. But at the same time, legal aspect also creates issues and challenge to the company such as customer personal information accessibility, lack of business confidentiality, false practices by the employee etc. Thus, such type of unethical issues is also created in an organisation which effects adversely to the company. It is because any false practice could ruin the goodwill of the company negatively. There are various guidelines which are stated under the IT laws. Legislations are considered to be quite essential for the retailer to focus upon. There is Guideline related to the copy write and patent of software. On the other hand, to save from this problem, Tesco is also making patent their software and this helps the company to protect there IS from any unauthorized access of company and its employee’s private information. Therefore, Legal consideration influences the company to perform as per the stated code of conduct by protecting the interest of general public.
The assessment is the essential part of the organization that is conducted post implementation. It is organized by the IT internal assessment team (Hislop, 2013). Likewise, Tesco has also focused on the assessment criteria in regards to the IS implementation process. In this, Tesco includes evaluation of standards result with the actual result then identify “is there any deviation exist”. If it is then company takes necessary steps to achieving the standard. Other than that, Profits and performances of employees are considered as a factor within which IS system is judged. This is done through concentrating on the employee’s performances and calculating & comparing company yearly profits. Thus, in this manner, Tesco assess its system capability in terms to coordinate different stakeholders, manage the complex task.
In accordance’s to Spears & Barki (2010), the future Information system strategy would be based on the current technology system so that company gets the opportunity to successfully explore its operations into the international market. This is possible because IS not only allows to manage internal functions of an organization but it also contributes to identifies the changing factors of the external environment (Ajmal et al., 2010). Likewise, the system determines the social needs of people and legal guidelines. Based on that, it implements its actions and functions. In spite of having an IS unique features, it may not prove to be so effective for the Tesco in terms to understand the customer’s behavior and attitude towards their product line. So in this, IS strategy requires concentrating on future technology innovation, green practices, quickly address customer complaints and exchange of information. At the same time, it also needs to install the relevant security system for protecting the data from unauthorized access.
In regards to this study, it is recommended that Tesco should update their existing system with the MIS in order to gain the future advantages. The use of MIS technology builds in developing the strong network with their different stakeholders such as investors, suppliers, customers, and employees etc. This will support Tesco for bringing improvement in their operational process from the procurement of resources to deliver the final customers.
From the above discussion, it is concluded that Tesco has used enough information system from its existences and it keeps updating their system as per the technology changes. It also used the systematic implementation process which includes investigation, system analysis, system design, system implementation and system maintenances etc. Moreover, with the implementation of IS, there are various benefits that gained by the Tesco in the areas of operation, structure, economic and legal etc. Lastly, Tesco needs to update their current IS with the MIS for the future context with the aim to bring more improvements and explore the new market.
Adewuyi, A. W. (2016) Ratio Analysis of Tesco Plc Financial Performance between 2010 and 2014 in Comparison to Both Sainsbury and Morrisons. Open Journal of Accounting, 5(03), pp. 45.
Ajmal, M., Helo, P., & Kekäle, T. (2010) Critical factors for knowledge management in project business. Journal of knowledge management, 14(1), pp. 156-168.
Baron, D. P., Harjoto, M. A., & Jo, H. (2011) The economics and politics of corporate social performance. Business and Politics, 13(2), pp. 1-46.
Bebchuk, L. A., & Jackson Jr, R. J. (2012) The law and economics of blockholder disclosure. Harv. Bus. L. Rev., 2, pp. 39.
Dezdar, S., & Ainin, S. (2011) The influence of organizational factors on successful ERP implementation. Management Decision, 49(6), pp. 911-926.
Gorla, N., Somers, T. M., & Wong, B. (2010) Organizational impact of system quality, information quality, and service quality. The Journal of Strategic Information Systems, 19(3), pp. 207-228.
Guiso, L., Sapienza, P., & Zingales, L. (2015) The value of corporate culture. Journal of Financial Economics, 117(1), pp. 60-76.
Hakim, A., & Hakim, H. (2010) A practical model on controlling the ERP implementation risks. Information systems, 35(2), pp. 204-214.
Hingley, M., Lindgreen, A., Grant, D. B., & Kane, C. (2011) Using fourth-party logistics management to improve horizontal collaboration among grocery retailers. Supply Chain Management: An International Journal, 16(5), pp. 316-327.
Hislop, D. (2013) Knowledge management in organizations: A critical introduction. USA: Oxford University Press.
Jung, Y., & Joo, M. (2011) Building information modelling (BIM) framework for practical implementation. Automation in Construction, 20(2), pp. 126-133.
Lowe, M., George, G., & Alexy, O. (2012) Organizational identity and capability development in internationalization: transference, splicing and enhanced imitation in Tesco’s US market entry. Journal of Economic Geography, 12(5), pp. 1021-1054.
Melville, N. P. (2010) Information systems innovation for environmental sustainability. MIS quarterly, 34(1), pp. 1-21.
Potter, A., & Disney, S. M. (2010) Removing bullwhip from the Tesco supply chain. In Production and Operations Management Society Annual Conference Vol. 23, pp. 109-118.
Quelch, J. A. (2010) TESCO PLC: Fresh & Easy in the United States. USA: Harvard Business School.
Sørensen, C. G., Fountas, S., Nash, E., Pesonen, L., Bochtis, D., Pedersen, S. M., … & Blackmore, S. B. (2010) Conceptual model of a future farm management information system. Computers and electronics in agriculture, 72(1), pp. 37-47.
Spears, J. L., & Barki, H. (2010) User participation in information systems security risk management. MIS quarterly, pp. 503-522.
Stair, R., & Reynolds, G. (2013) Principles of information systems. USA: Cengage Learning.
Tesco (2017) [Online] Available at: https://www.tesco.com/ (Accessed: 10 November 2017).
Velcu, O. (2010) Strategic alignment of ERP implementation stages: An empirical investigation. Information & Management, 47(3), pp. 158-166.
Xie, Y., & Allen, C. (2013) Information technologies in retail supply chains: a comparison of Tesco and Asda. International Journal of Business Performance and Supply Chain Modelling, 5(1), pp. 46-62.
Academic Research Writing Arm of Global Research Services.