Tesco Information System Name of Student: Robert Onyango Course Instructor: Mr. Bonoko Course: Date of Submission Introduction This paper is generally about information systems in an organisation. To illustrate this further, the author will specifically look at Tesco, an organisation of choice. This paper intends to highlight a specific information system––management information systems––and explore it thoroughly using the various analytical models in relation to Tesco. The illustrations will draw from various related information system schematics and draw examples of how the organization in question – Tesco – has put them into use.
Description of the Organization (Tesco) Founded in the year 1919 in London, Tesco is a grocery and merchandising retail chain. The organisation is without a doubt the largest retailer in Britain by local and global market shares and sales. The organisation originally dealt with foodstuff, but they have since ventured into other circles, for example, financial services, software, internet services, clothing, car and health insurance, and consumer electronics. Tesco appears on the London Stock Exchange and it also headlines the FTSE 100 Index.
As at 23rd December 2011,the organization had bagged an astounding ? 31. 3 billion in terms of the Market Capitalisation and consequently ranked the 14th-biggest organization on London’s Stock Exchange. Looking at the competition in the retail industry, it is very important for organisations to establish operational strategies that are efficient. Information System (IS) covers a complex sample of Information Technologies and the professionals who apply the fastidious technology in he sustenance of an assortment of organisational functions (Williamson, Harrison, and Jordan 2004, 376). Structure of Management Information System This kind of information system––MIS––entails information technology application to managerial and organisational needs. It constitutes determining the type of information technology to be beneficial to organisation and development and application of business solutions in relation to it (Seilheimer 2000; Walsham 1993).
The strong point of this kind of information system is that in combines the business understanding with information system and technology knowledge to help an organisation––Tesco––compete successfully or restructure on-going operations. [pic] Fig. 2. The Role of MIS in Tesco Source: Tesco Annual Report, 2010. Professionals who are conversant with this type of IS use their backgrounds that are business based in working with users and managers to recommend and pinpoint technological improvements that may be beneficial to an organisation.
Their work is to codify, analyse, design, implement, and manage modern telecommunications, business, and many other computerised information systems. Moreover, traditional processing systems are maintained. Professionals in this discipline are also assigned the duty of dealing with exhilarating growth technologies, for example, the design and management of telecommunications systems, e-business, using and developing server systems for the consumer, data warehousing and database development, and finally, developing web-based technologies for other applications in business inclusive of electronic commerce (Trinder, 2007).
MIS is the primary source of information required to keep an organisation running effectively and efficiently. This kind of IS has three main resources: information, technology, and people, although in recent times, data, procedures, hardware, and software (programs) have since been added to that list. Management information systems stand out from the rest of the pack as they are employed in the analysis an organisation’s operational activities.
In the spheres of academics, the term usually refers to the set of information methods of management linked to the automation or propping peoples’ ability to make decisions, for example, expert systems, executive information systems, and decision support system. Before the in-depth investigation into Tesco, it is important to highlight the various management information systems available as most of these systems specialise in exact industrial and commercial segments, structure of management, or features of the project, and
At the top of the food chain is the management information system, which comes up with reports that are preset and have standard schedules founded on summarised data that was retrieved from the organisation’s transaction processing systems to operational level and middle management for information of semi-structured and structured decision setbacks and also classify them. The second are the marketing information systems (MIS) purposefully for management of marketing elements of the organisation.
Thirdly, there is the executive information system (EIS), which is a reporting instrument that gives hasty access to recapitulated reports stemming from all echelons in the organisation and is usually a host to operations, accounting, and human resources departments. Decision support system (DSS) is the fourth typology. These are computer applications utilised by the middle management in the anthology of information from vast source ranges to catalyse making of decisions and solving of problems.
Last is the office automation system (OAS), which is meant to aid productivity and communication via eradicating log jams and automating the flow of work. This typology can be put to practice at all and any echelon of management (Cronholm and Goldkuhl 2003). How IMS Supports Tesco’s Organizational activities For market success, an organisation has to be efficient in its customer service. To get to this goal, Tesco saw it necessary to boost its efficiency pertaining to the customers by processing their orders from its compound conduits.
Moreover, the firm had to place a maintenance limit to its cost. Information systems have developed into a vital feature in running an organisation, considering it is an impetus to the organisation’s supply chain (Stapleton and Murphy 2003). Furthermore, it gives an arena for the amalgamation of the whole organisation into a single block. Following the rapid innovations of technology, information systems are growing by the day. The end result is the emergence of various information systems that have already been stated above.
In a calculated move aimed at elevation of its competitiveness, Tesco has integrated a transaction processing system (TPS) into its supply chain (Friedlos 2007), which has been made possible via the development of Tesco Direct (Tesco 2009). The invention is assisting clients to place orders of non-edible stuff that the organisation is dealing with before ensuring that the goods are delivered to clients’ residences. The organisation has since introduced an official webpage, and this has amplified the efficiency of this service (Amatya 2005, 5).
Individuals were definitely enjoying a comfortable process of consumption thanks to Tesco direct products. The major challenge that the organisation faced while implementing this policy is that they had to ensure customer satisfaction by making sure their expectations were met. This cannot be disputed as it can be confirmed that Tesco has managed to supply high-quality products to its consumers via its Tesco. com service and eventually deeming it as reliable to customers. Besides, guaranteeing that the new product will propel the organisation’s retail operations was one of Tesco’s objectives.
Before scrutinizing Tesco’s application of management information systems, it is helpful to understand its role, which is data conversion from external and internal sources into information that can be utilised in effective decision making in light of planning, organizing, and directing the activities linking them with responsibility. Tesco has several information systems, some of which they utilise on a day-to-day basis to make operational decisions. Others are also used in coming up with strategic and tactical decisions. Performance and Order Management System
In addressing these challenges, the organisation resorted to developing a system of processing the orders placed by customers. This was bent on hastening the processing speed of such orders. The ever escalating customer base of the organisation prompted the need for a more efficient system of processing orders. Considering that Tesco was pitting the development against a time frame, the organisation had put in double efforts to beat their deadline. A team comprising of ten engineers was therefore assembled, and after working in-house for six months, the project was done.
Tesco also had to do outsourcing from IVIS group and Microsoft Gold Certified. Eventually, this saw the birth of order management system (OMS) (Tesco 2009). Decision making model Tesco is a worldwide organisation whose IT organisation is basically managed from India and the United Kingdom. This is a major hindrance to ease of decision making as most of the persons involved and the stakeholders cannot come together to table and discuss strategies and policies, and this could be only pinned on the time factor.
Mike Yorweth, who is the Chief Architect, organised a worldwide meeting using Cisco TelePresence, and the purpose of this meeting was to brainstorm; all the members agreed on the organisation’s use of a global IT strategy. Later, Yorweth stated that the TelePresence had enabled the meeting to take place in three hours, whereas the absence of the TelePresence technology would have resulted in the organisation’s managers waiting another six months to proceed with a face-to-face meeting.
Yorweth also confessed to the TelePresence, enabling the members to come to an understanding faster than in the meetings that had proceeded Decision making is one of the basic sub-branches of organisational models. In management of an organisation of Tesco’s calibre, there exists two types of decision making: structured and unstructured. The former is usually routine and repetitive, and standard methods are used while dealing with them. On the other hand, the latter need evaluation, insight, and judgement.
Important decisions usually exist in Tesco, considering its wide customer base, and sadly, there exists on preset measures in cracking them. CIPSODAR; decision-making and communication models It should be highlighted that making abstract and unstructured decision is a procedure that is assigned a given time frame following gathering of information from relevant sources. Tesco managers, especially the middle ones, go through a series of steps before coming up with a concrete decision. The first step is usually acknowledgement and acceptance that a problem exists.
A good information system will point the managerial team in the right direction by providing all sorts of information needed and also underlines where there lays a problem following evaluation of the organisation, which is readily available online with the introduction of modern technological innovations. At this echelon, Tesco’s policy of exception reporting is vital. This is to say that only situations that require to be addressed immediately are reported. For example, a drastic increase or decrease in sales in comparison with a similar time frame at a previous year, consumers with outstanding balances, and staff resigning in big numbers.
The second step is to check out all the possible solutions. In-depth analysis is usually handy at this juncture, and much information is also needed. Tools that can model the impact of various solutions like price variations and salary increments, such as the spread sheet, may be required. It automatically follows that the third stage is choosing a decision and consequently implementation of the solution. In some cases, it requires the formation of a new information system biased towards management to keep an eye on the solution progress. [pic] Fig 2. The Decision Making Process in Tesco
Source: Tesco Annual Report, 2010. Decision making is not a smooth process as many a people may assume, especially when dealing with a global organisation such as Tesco. Occasionally, one has to take steps backwards when it is evident that the decision is not applicable and is bound to backfire. This may be also brought about by discovery of helpful new information that offers better alternatives. Conversely, structured decisions are straightforward as Tesco’s information systems provide the correct information, and a manager would have to be a goof if they made the wrong decision(s).
How the System Produces the Required Information Web interface was the tool designed to cover online processes (Shneiderman 1998). The OMS processes the order right after they are sorted. This begets an increase in flexibility, something that can assist the organisation to replace the system online while they have removed it for maintenance. A number of channels that could be either online or offline send orders that are received by the system in order for it to be operational (Larson and Davis 2003).
Tesco has several warehouses within it that make use of the OMS; therefore, employees have an easy time monitoring and managing processes of the workflow as the system automatically makes it available for them. Technology model Hardware and Software in Use The software that was used by the organisation is BizTalk Server 2006 to put into operation the OMS development, which was a sub-channel to Tesco Direct. This particular program gives an organisation the capability to merge various systems, resulting in an efficient process of business (Chappell 2005, 3).
This boosts circulation of information between factions where vast software ranges come into play. The software’s ability to be interpretable is solely responsible for this. A good example is highlighting the ability of Tesco to use its former Tesco. com in communicating despite the fact that it was using Microsoft SQL server version in 2005. Moreover, the efficiency of processing the orders is amplified, considering that the software is able to support a variety of data formats. The health and activity tracking system is also used effectively by the OMS system.
The former refines debugging and monitoring of the processes and applications besides keeping a track on performance statistics on every system components. Plus, the slipups that may possibly arise from the process of procurement are resolved after being recognised by the HAT. The system reliability is also refined in the process. Subsequently, the BizTalk server is also made manageable by the OMS. Tesco’s communication with the varied applications of the warehouse utilised by the suppliers of the organisation is improved by the server, both externally and internally.
Tesco’s direct service has comfortably integrated the OMS. Four computer servers that are installed with Windows Server 2003 operating system are employed to make certain the operation of the implemented OMS. Conversely, the databases are managed by the SQL server version 2005. Performance – Positive Aspects Tesco’s retail procedures have been thoroughly refined, courtesy of the ordering system. The OMS has brought the following advantages to Tesco: improvement in order processing capacity. The ability of Tesco’s performance pertaining to processing of orders has skyrocketed.
As per the latest statistics, Tesco’s reliability in relation to processing orders has shot up to approximately 5,000 orders in an hour. It is without a shred of doubt that the BizTalk Server 2006 is responsible for pulling these strings, proving that it is much more superior to the mainframe-based Tesco. com. Tesco has also experienced reduced hardware costs. This is made possible as the OMS has ensured a massive drop of the cost of the hardware involved in the organisation’s chain of supply.
This sprouts from the fact that the OMS is capable of performing processing of orders by using a minute fraction of the server (estimated to be about 20–25 per cent). Consequently, the organisation has been handling huge customer numbers with ease and escalated reliability. What is even more fascinating is that if Tesco decided to broaden its consumer base, they will not have to spend anything on the hardware, i. e. , the server. Moreover, there are very high chances of the organisation further developing its processing of orders.
These probabilities stem from the acknowledgement that distributed processing is enhanced by Window Server 2003. Supplier relationship is maintained. This is the third advantage that cannot be overlooked. It is mandatory for any organisation to maintain its flexibility with regards to the replacement of their suppliers within the supply chain so as to not to have an impact on the operation of the organisation (Williamson, Harison, and Jordan 2004). Sundry business developments that have been effected by its partners in business are accommodated by the BizTalk Server used in propping the OMS.
The outcome is evidently positive as Tesco is experiencing finesse in communication with their business partners. At this juncture, it is already evident that the integration of BizTalk Server within Tesco’s information system has improved and augmented the reliability with which Tesco is handling processing of orders. Taking into the consideration that the server possesses elements of coupling loosely with the Internet and interoperability, it is safe to make a suggestion of removing the OMS for maintenance without necessarily affecting the purchase activities and processes for the customers.
Formal information systems are important to Tesco as they give exact answers to recurrent questions on the screen or via monthly, weekly, or daily reports. High ranking Tesco managers are bound to use new information via a new method of data analysis or by outsourcing the information. The Tesco design management team designed their MIS to have the following characteristics that make it stand out from the rest. It is very elastic, which provides for various methods of data analysis and information evaluation (Remenyi and Sherwood 1999). They have the capacity to prop up a scope of knowledge and skills. They make the managers’ work asier via interpersonal communication with organisation members besides not needing too much concentration as managers are always busy and give them the time to focus on other things. Work is easily interrupted and could be easily resumed at a later time, and finally they ensure managers are out of scope for overload of information. It can therefore be safely concluded that the system is a success. Analysis of Failure and Success It is general knowledge that management information systems are compound, and in the process of selecting, implementing, and designing them usually require many people, both from within Tesco and outside it.
The managerial team charged with the responsibility of making sure the system pulls through ought to have a clear understanding of the system and have a very close relationship with the organisation (Croholm and Goldkuhl 2002). Managers ought to be knowledgeable on the probabilities Offered by the ICT systems are the challenges that they may come across, and they should be able to understand the need of having the necessary measures in place to make sure that the organisation is operating smoothly. Failures
A good amount of money is required to ensure that the OMS is operational and maintained despite the fact that it brings alongside many positive attributes. There exists an interrelationship between the implementation and purchase of the system with the cost. For example, if Tesco might be needed to carry out an all-inclusive investigation into the system before it is implemented, outsource of professionals and consultations are mandatory. Moreover, Tesco will have to be carrying out maintenance of the system regularly, and that is considerably costly.
Despite Tesco having the cost slip-ups only, there are several others factors that can cause the failure of a management system that they ought to be wary about. The first one is inadequate analysis. This is likely to surface when potential setbacks, particular needs, and limitations are not wholly comprehended prior to the design and selection of a new information system. Another factor is absentia of the management in design. It is very important that all the members and persons intending to gain or benefit from the design should be entirely immersed in its development (Monk, Wright, Haber, and Davenport 1993).
Failure of which leads to destruction or collapse of an organisation as information that is of no interest to anyone is provided; worse still, information that cannot be comprehended by anyone may be produced. This also has a negative effect on the managerial team in that they are left waiting for an information system that will never see the day or light. The third factor is placement of emphasis on the computing system. It is rather obvious that this entails choosing the proper hardware and software, especially for modern computers, and this is very crucial to any corporation regardless of its size.
Before implementation of a system, it should be noted that measures dealing with both data output and input should be established. The organisation needs to clearly spell out the aims and objectives of the new system. For no reason at all, users may decide to ask for the field population on a database and are fond of asking for reports about the organisations’ management that are never read or are completely useless. Fourth, is the lack of teamwork.
An ICT manager needs to be able to integrate all the departments under his/her jurisdiction to operate as one single unit (Naranjo-Gil 2009). Some of the departments under an organisation include marketing, accounts, and dispatch and storage departments. Conclusion When an organisation decides to incorporate the management information system, it is bound to fuel the achievement of being highly competitive (Manning and Raghavan 2006). This is founded on the basis that operations linked to chain management are refined. By using the OMS, Tesco has climbed the charts of market positioning.
Moreover, the relationship between Tesco and its suppliers and customers has immensely improved Tesco should consider doing a couple of things to ensure that they reach the peak in working with the OMS. The first one is to conduct a research on whether OMS culminates into shrinkage with regard to operational costs. Secondly, they should undertake research on the market that is continuous to establish the efficiency with which the organisation is effective in its undertakings. Reference List Amatya, L. , 2005. Information systems of Nepal Telecom for customer service.
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