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Information Systems in Organizations: A Case Study of TESCO

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This report examines the role of information systems in various functional areas of TESCO, a leading multinational retail company. It explores the information needs of different departments, describes various types of information systems used, and investigates current trends in using information systems to solve business problems. The report also analyzes the suitability of information systems for different functional areas and proposes alternative methods for addressing the integration challenges faced by TESCO.

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INFORMATION SYSTEMS
IN ORGANIZATIONS

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TABLE OF CONTENTS
Introduction................................................................................................................................ 1
TASK 1......................................................................................................................................2
A.C1.1 Evaluate the information needs of the different functional areas of your chosen
organization............................................................................................................................2
Task 2......................................................................................................................................... 5
A.C2.1 Describe minimum of five different types of Information Systems used in your
chosen organisations in task 1 and give examples of each....................................................5
A.C2.2 Investigate the current trend in using Information System applications to solve
business problems in your chosen organisation in Task 1.....................................................8
A.C2.3 evaluate the suitability of information system for different functional areas of your
chosen organization in task 1...............................................................................................10
Task 3....................................................................................................................................... 15
A.C3.1 Use an information system to generate valid, accurate and useful information for
any given problem of your selected organisation................................................................15
A.C3.2 Evaluate alternative methods of solving the problem identified in 3.1.................17
Conclusion................................................................................................................................20
References................................................................................................................................ 21

LIST OF TABLES
Table 1: Information system...................................................................................................... 8
Table 2: Suitability for distribution..........................................................................................12
Table 3: Administration suitability.......................................................................................... 13

LIST OF FIGURES
Figure 1: Information flow at TESCO.......................................................................................2
Figure 2: Various departments at TESCO.................................................................................4
Figure 3: Effectiveness of EIS................................................................................................... 5
Figure 4: MIS effectiveness.......................................................................................................6
Figure 5: application of DSS system..........................................................................................7
Figure 6: TPS...........................................................................................................................12
Figure 7: TESCO......................................................................................................................15
Figure 8: Integration of functions of sales department............................................................16
Figure 9: Artificial intelligence a tool for meeting integration efficiency...............................17
Figure 10: Client server model.................................................................................................18

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Introduction
TESCO is a leading multinational company in Britain dealing in merchandise, grocery and
other products such as books and toys. The headquarters is in UK. It has been observed
through the statistics that TESCO is the third largest retail store in terms of revenues. It has
almost 12 branches all over the world. The organization provides various services such as
financial, telecom and internet services. This report will consider the role of information
system in the various departments of TESCO. The first task will describe the role of
information system in the functions of management such as human resource, sales, training
and administration. The second task will describe the current trend in using information
system and the suitability of information system in the various functional areas. The last task
will conclude with the problem that is faced by TESCO due to improper information system
and how the alternative sources of information system can be used to handle the information.
1

TASK 1
A.C1.1 Evaluate the information needs of the different functional areas of your chosen
organization
About information system of TESCO
TESCO is a leading retailer of groceries, books and other merchandise in UK and many other
places around the globe. It has many branches in around 12 countries that has to be
effectively managed. This is possible only with the help of problem information system
management in the organization. Initially TESCO offered only high quality groceries at lower
prices so as to achieve customer base, gradually it started diversifying its products and
geographical location. TESCO entered into the market of software, toys, books, financial
services and music systems (Rahman, 2015).
There was a significant impact of diversification in the position of TESCO. This made them
increase their focus on employee performance and development. The employees of the
organization were given equal opportunities of being heard and their ideas entertained. Also
maintaining the morals and cultural values is essential so as to gain the support of society and
government. There has to be a proper information system so that the data’s of all the branches
can be collected and analyzed for improving performance. This information system also
enhances the process of communication and flow of information in the organization. TESCO
has developed its own software for collecting and storing of Data (Morgan et.al, 2017).
Information need of different functional area of TESCO
Figure 1: Information flow at TESCO
(Source: wordpress.com, 2018)
2

Finance Department:
Finance is one of the most complex and major department at TESCO handling various
activities such as resource funding, preparation of annual reports, employee payroll, and tax
payment and financing expenditures of the various departments. These functions effective
performance depends on how well the management information system works in an
organization. The main role of information system at TESCO is managing proper investment
decision, collection employee attendance and calculation of employee salary (Kukreja and
Gupta, 2016). Also the department supports the organization during economic crisis. Finance
department supports the working of overall organization by providing economic feasibility.
Human resource department:
Humans are the most vital resource of an organization. They need to be well managed in all
the departments. The human resources need to be trained, guided and supported for effective
performance. Proper allocation of human resource requires collection of data of all
departments so as to find the requirement and collection of employee detail so that the
employee are given job roles that best suit their skill and personality. Another major issue in
big organizations like TESCO is the reduction of employee turnover, which is the number of
employee leaving the organization. The management need to prepare effective appraisal
strategies so as per the performance so that they feel secured and do not switch their jobs.
Information system in human resource department of TESCO enables proper collection and
storing of employee details so that the work is distributed as per the relevant skill and
knowledge of the individual.
Sales:
The most important function of any organization is managing sales so that the profits can be
maximized. TESCO deals in various products such as books, music downloads, toys,
software etc. information system in sales department helps to collect relevant data of the
current market condition and then these data are used for various strategic calculations to
forecast the future sales (Minor et.al, 2015). This helps in finding the demand for various
products in the market and maintaining employee focus on increasing sales and production.
The sales department need to coordinate with other departments such as administration and
marketing so as to gain knowledge of the market trend and customer needs. This will also
3

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assist in making sales strategies as per current market norms. The department also need to
collect feedback and conduct surveys from the customers.
Training:
Training department is a part of human resource department where the information system is
used to collect the data of the employees so that proper training can be provided as per the job
requirement. This will lead to effective achievement of targets of the organization. The
management need to adopt new technologies to impart proper training and practical sessions
to the employees. This will not only help in achieving organizational goals but also assist in
self development plans of employees.
Administration:
The administration department of TESCO is responsible for holding and managing the
various departments of the organization together. The structure and management of TESCO
depends on how efficiently the administration department works (Laudon, 2016). The
information system helps in proper structuring and regulating proper environment in the
organization.
Figure 2: Various departments at TESCO
(Source: alamy.com, 2018)
4

Task 2
A.C2.1 Describe minimum of five different types of Information Systems used in your
chosen organisations in task 1 and give examples of each
Information systems in the organisation are effective for enhancing the operational excellence
of the Tesco in order to attain higher profitability. With such systems business usually
manage correct amount of stock in the store with bringing changes in the operations. For
properly management of the operations there are different types of information systems used
in the business that includes:
Executive information system (EIS): It is the suitable kind of management support system
that facilitates and supports for information to the executives and also with taking effective
decisions in Tesco. It helps Tesco to gather, analyse and summarise the key internal and
external information to the management of operations. It basically involves huge amount of
analysis of data that emphasis business to take strategic decisions. For example, such system
is mainly applicable in the operational decision making of manufacturing, marketing and
financial (Yu et.al. 2015). It enhances the strong drill down capabilities to have better
analysis of the information but huge databases can lower down the system performance and is
hardly to be managed.
Figure 3: Effectiveness of EIS
(Source: Expertmind.com, 2018)
5

Management information system (MIS): It is effective to process the financial information
that is organised and programmed to carry daily operations of Tesco. It helps in inputs of
statistical data along with involving the process of distribution. In addition, stronger security
is added to maintain secrecy in the data and secure the processing of organisation. For
example, effective database management system is effectively required for processing and
effective storage of data (Laudon and Laudon, 2015). It supports each departmental
functioning to manage own operations for enhancing the productivity of the business. Tesco
need proper management of operations with support of such systems in the business for
enhancing effeceincy and profitability.
Figure 4: MIS effectiveness
(Source: MIS working, 2018)
Decisions support system (DSS): Business in case of facing uncertainties in some situations
uses such system to take accurate decisions. For example, in case of failure of marketing
strategies in the current year, business takes support from such system to gather information
of the case where proper strategy is applicable in the situation. Data occur in the form of
complex spreadsheets and databases helping in protection from the negative impact of
external and internal environment. It requires mainly database for faster processing.
6

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Figure 5: application of DSS system
(Source: DSS, 2018)
Enterprise resource planning (ERP): Such integrated systems act as the core management
software for handling business processes and in real time handling of operations. Tesco use
ERPs for tracking business resources such as cash flow management, CRMs, product cycle
management, supply chain management, etc with handling the operations of purchasing,
manufacturing and distribution (Pearlson et.al. 2016). It store different types of data with
performing different computerised systems. Tesco being large businesses, need to manage
huge storage of data for delivering efficient large business outputs.
Transactions processing systems: These systems are designed for maintaining the regular
transaction processing. For example, it require billing systems for sending invoice to the
customers, accounting systems to calculate weekly and monthly payrolls and tax payments,
purchasing systems to have the effective purchase of raw materials, stock control systems for
effective management of the inventory. However, it requires effective storage and databases
for effective control over the finances (Mars, 2018).
7

A.C2.2 Investigate the current trend in using Information System applications to solve
business problems in your chosen organisation in Task 1
Table 1: Information system
Information
system
Trends Application Suitability
Executive
information
system (EIS)
It helps senior level
professionals for
handling the external
data in determining the
overall vision and
scope of the business
processes usually
supporting in
integration and
aggregation of the data.
It helps on finding the
root cause of problem
with having the root
cause of data.
Such systems are mainly used for
executive to get help in strategic
situations. It helps business to
overcome from the negative impact
of the macro global environment
with utilisation of hyper text and
hyper media (Kasemsap, 2018)
For strategic
decisions and
better planning
control that will
help organisation
to meet with the
objectives of the
business.
Management
information
system (MIS)
It helps in the tactical
management that helps
in authorising the
computerised financial
information of the
business. Information
is programmed to
produce regular reports
to handle each and
every operation.
Such system helps in operations of
human resources, calculation of
profits, expenses, taxes and other
financial information. This saves
business with problem of excess use
of financial resources and finding
those areas causing deviations in the
business. It helps in delivering
exception that is automatically
generated in occurrence of the
unusual situations or in case
management ask for sudden reports.
Suitable to record
and manages the
activities that are
using financial
resources for
managing the
operations of
Tesco.
Decisions
support
system (DSS)
Set of related computer
programs and activities
are helpful in taking
Sometimes business face issues of
over utilisation of time,
communication problem, threat for
Suitability is
enhanced with
supporting the
8

business decisions. It
supports in decisions
for combination of raw
data, documents,
personal knowledge
and effective for using
business models.
competitor, etc that hinder the
competitive advantage of the
business. DSS is being applied with
several software and hardware
designed for supporting impact of
external factors of the business
(Ptak, and Schragenheim, 2016).
situations of crisis
and strategic
controlling of the
operations. With
this Tesco is
effective to follow
different stages of
intelligence, choice
and designing.
Enterprise
resource
planning
(ERP)
It is the devised system
that is effective for
using the integrated
applications and
automate many of the
back office functions
that are aligned with
technology, offering
services and human
resources (Ogiela and
Ogiela, 2015)
In case business are facing from
inefficiencies such as activities are
time consuming due to poor
communication. For example,
accounting team spend large time
for preparing sales invoicing and
orders. ERPs support to generate the
sales orders, invoices and financial
forecasting automatically.
Suitable for proper
management of the
organisation
resources and
reducing the
complex
procedures that are
complicated and
time consuming.
Transactions
processing
systems
It collects, modifies
and retrieves the data
transaction of the
enterprise. Current
trends of using such
systems are basically
for payroll, employee
records, managing
sales order entry etc.
Databases system is
effective for managing
the day to day
operations and
transactions of the
business.
Transactions system is effective for
overcoming the problem of proper
management of the regular
transactions. Such systems are
applied in effective billing, proper
calculation of tax payments,
purchasing systems, stock
controlling and proper handling of
the raw material. It enhanced the
proper reliability, performance and
consistency of the data (Sadagopan,
2014.).
Suitable for proper
handling of
numerical and
statistical
calculations in
order to manage
the data
transactions of the
enterprise.
9

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Based on the analysis of the different application of the information systems, all meet with
different operational activities of the Tesco. Different system will help business to overcome
the problems and meet with specific requirements of the business. Also productivity and
efficiency can be increased with improving with taking proper care of the systems. Usually
management information system and executive support systems are recommended for
business they lead to functions multiple activities that are effective for handling the key
operations of the business.
A.C2.3 evaluate the suitability of information system for different functional areas of your
chosen organization in task 1
TESCO
The main activity of TESCO is the production and selling of products to the customers as per
their needs. TESCO requires proper administration and supply of products to the retail store
before stock out condition is reached. The employees need top well informed and guided
about the various products in the store and its utility so that the customers can be explained
the same. Information system can be used to process order, generate bill and collection of
cash. The executive information system can be used by the top level managers to meet
business efficiency (Robson, 2015).
Information systems
Executive information system (EIS):
This information system is used by the top level managers or the head branch to collect
information from the other information system and assemble them to carefully read and
further planning be done (Yu et.al, 2015).
Suitability:
This information system helps in timely and accurate calculation of data for planning
strategic goals and objectives. This is a reliable source of collection of data by the top
managers and provides automatic analysis. This information system helps in timely
formulation of strategies and future goals.
Decision supporting system (DSS):
10

This information system helps in taking faster decision for allocation of various resources
such as human resources. the main aim of this is to allocate human resource to the various
operations as per requirement.
Suitability:
This kind of information system is used when there are higher needs of collection of orders
and processing the same with proper utilization of resources. This will help in effective
decision making and team work.
Management information system (MIS):
This is the most efficient system used in organizations to manage the internal activities that
include role assignment and collection of employee detail. This is a secured and reliable form
of information system that helps to maintain coordination of activities in various departments.
This information system enhances the process of communication and builds trust (Laudon
and Laudon, 2015).
Suitability:
This information system is used by the middle level managers to handle the various types of
work and assigning and organizing activities for smooth operations. this will lead to accuracy
in control of stock and job assignment.
Transaction processing system (TPS):
This information system is used by the lower level employees to make the transaction easier
and control the final process of sale (Mauseth et.al, 2014).
Suitability:
This information system is most suitable when effective pricing and clearance is to be done.
The final transaction with the employees will become more enhanced when this information
system is enabled. The process becomes faster and the problem of standing in queue of
customer is also solved as transactions now take place with well developed software.
11

Figure 6: TPS
(Source: wordpress.com, 2018)
The main functional areas of TESCO include distribution and administration.
Table 2: Suitability for distribution
Organizational Level System Name Description Suitability
Lower level managers Transaction at lower
level and training
development
programmers.
This is used to manage
the final transactions of
the organization. It
includes payment, bills.
This information
system helps in
management of goods
and proper distribution
in all the departments.
Middle level(Manager
at management level)
Management
information system and
ERP (Beynon-Davies,
2016)
This type of
information system
helps in proper
management of time
and maintaining record
of transactions.
Maintaining proper
supply and ensuring
delivery at all the
branches before the
product is out of stock.
Higher level of
employees
Executive information
system
This is the top level
where strategic
decisions need to be
Planning, goal setting
and objective
12

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taken after analysis of
all the data. The ERP
method is used to get
information from all
servers and then
analyze them for
making proper
decisions for future
growth (Kavanagh and
Jhonson, 2017).
achievement.
Operational level This includes
distribution of salary to
the employees.
The information
system in TESCO is
used to mange
production of the
enterprise and maintain
suitable records
This system is suitable
in the organization that
requires proper
monitoring of
activities.
The above detail concludes that information system at every level is essential to coordinate
the various activities and reduce the wastage of time and other resources. The installation of
proper systems helps in managing demand and supply in TESCO. The process of
communication becomes easier and viable. All the details are shared with the various
departments. The information system installed at the top level helps in achieving
centralization and control. There is a development of trust and loyalty among the employees
of the organization and hence the process of decision making is enhanced (Lin and Peng,
2018).
Table 3: Administration suitability
Organizational Level System Name Description Suitability
Middle level(Manager
at management level)
Enterprise resource
planning and
management
information system
This method helps in
maintaining proper
stock level and
ensuring timely
delivery of goods.
This is suitable at the
retail store where the
stock needs to be
replenished before the
level decreases.
13

Leaders The main role of leader
is to train and motivate
the employees to
provide customer
satisfaction.
The leaders help in
assigning and
distribution of roles
and responsibilities to
the employees while
directing them to work
for achieving goals
(Argyris, 2017).
This system is required
in organizations where
there are various levels
of work and it is
essential to determine
the area of
responsibility of every
individual employee.
Top level management Executive information
system like ERP
This information
system is the master of
all systems that
combines the activities
of all the other
departments. The
internal and external
operations are regularly
monitored. This system
helps in proper
integration of work.
This system is suitable
to organizations such
as TESCO which has a
number of branches
and the activities of the
entire branch need to
be recorded and
monitored for final
compilation (Taylor
and Joudrey, 2017).
14

Task 3
A.C3.1 Use an information system to generate valid, accurate and useful information for any
given problem of your selected organisation
Issue:
TESCO Plc is a huge organization with complex structure and various departments. There are
branches of TESCO in many other countries around the globe. It faces various issues due to
the geographical and product diversification such as the problem of integration of
departments of various branches, proper communication of information to the branches and
department of strategic plans. The major issue at present in TESCO is the integration of
various applications of business operations of different functional department (Kim et.al,
2014).
Figure 7: TESCO
(Source: thedrinksbusiness.com, 2018)
The synchronization of activities of various departments and then of all the 12 branches is a
major task to be performed by the information system of TESCO. The organization need to
focus on bringing effective integration system for which proper information system need to
be installed so that the process is cost effective and accurate.
Steps to bring integration efficiency:
15

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Figure 8: Integration of functions of sales department
(Source: saptechpro.com, 2018)
Application of focus:
The business needs to focus on the functions of various departments such as selling,
advertisement, customer relationship, accounts and finance. This requires keen observation
for which TESCO needs to align the IT groups of all the departments so that there is an ease
of collection of information.
Communication system:
Effective communication system enhances the proper flow of information in the organization.
This will help in the establishment of a single application for collection of information and
not separate platforms for each department (Thompson, 2017). This will allow all
departments to know details of all the other departments.
Control on number of applications:
Many times confusion takes place due to a number of software and applications being used
by the departments of organizations. TESCO need to subscribe for an integrated package of
application so that there is a proper monitoring and control over the various applications and
activities being performed.
Expert advice:
There are various experts in the market who are skilled in this field and hold a good
experience of analysing the issues that arise during the integration process and have solutions
16

for the same. TESCO need to employ experienced staff so as to get the best advice. This will
increase the effectiveness and efficiency (Wilensky, 2015).
There are various information systems that TESCO can use to implement effective decision
making such as MIS and ESS systems. There is a developer team who are handed over the
various data that is collected for better analysis and interpretation. The data is then sorted
and sent to the software of headquarters for making annual reports and financial plans. This
method will enhance the process of integration and solve the issue.
A.C3.2 Evaluate alternative methods of solving the problem identified in 3.1
The integration process is necessary in an organization for improving the flow of information
in TESCO. There are various other ways that can be adopted by the management of
organization to achieve integration efficiency. The other alternative methods include client
server, artificial intelligence, database and others.
Alternative methods:
The various alternative methods available to TESCO for meeting integration issue is as
follows:
Figure 9: Artificial intelligence a tool for meeting integration efficiency
(Source: medium.com, 2018)
Database:
This process involves collection of data at branch level in the form of quantities, images,
texts and others. The data is analyzed by the particular department for bringing the required
17

changes. This will reduce the burden of integration at top level and will also reduce wastage
of time of collection, integration, analysis and again communicating. The data is analyzed for
a particular business operation and solutions communicated. This will develop a sense of
responsibility among the managers of different department that they need to collect data and
manage the target achievement process. The data can be further used to determine the level of
efficiency of various departments and make necessary improvements (Clifford and Robinson,
2016).
Client server:
This method includes formation of two servers where one is developed for the customers and
the other side is handled by the computer operator. This alternative method helps in
collecting feedbacks of customer and processing requests as soon as possible. This method
reduces the need of integration at TESCO. Also this leads to customer satisfaction as their
demands and requests are being processed timely. Therefore there is a good customer
relationship maintained by the management. The main aim of any organization including
TESCO is customer satisfaction. The process of client server helps in maintaining good
relations with customer and faster query settlement which will enhance the customer base
(Mahaffey et.al, 2016).
Figure 10: Client server model
(Source: youtube.com, 2018)
Expert system:
Human resource is the most vital part of an organization. TESCO is a large organization
where employees belong to diverse culture and societies. It is not possible to observe
employee performance manually and collect address their issue and problems at personal
18

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level. The expert system helps in effective collection of employee issues and finding potential
solutions while adding to their welfare. This method helps in effective management of human
resources of the organization. This system will help in observing the behavioural pattern of
employees so as to find out any loopholes that might cause a negative impact on the business
environment.
Artificial intelligence:
There are various activities in the store that requires the help of manual individuals such as
bill checking at exit, security check at the entrance of the shop, etc. these manual labours are
replaced by a centralized monitoring machines of artificial intelligence that are monitored and
judged by the operators from the headquarters. The security checking machines at airports
that have censors installed for detecting metals and tags are the artificial intelligence
machines that can be used by TESCO to make the checking process easy. These are basically
computer systems and chits that cannot make decisions itself but can monitor the operation of
a particular task. This method is being widely used by many organizations to make work
faster with central observation by superiors. Technologically updated system is used by
TESCO to have operational efficiency. This method reduces the burden of employing
professionals and training them (Nilsson, 2014).
Implementation of one of these processes will reduce the burden of integration of activities
and functions at the headquarters. The process of Integration at TESCO is a very difficult
task. The software of each branch need to be aligned with that of the head branch so that
there is easy flow of information. The strategies mentioned above will enhance the
effectiveness of the organization (Bond and Gasser, 2014).
This process also helps in bringing up leadership quality among the mangers and developing
a sense of responsibility and authority, responsibility relationship. The performance of all the
departments can be collected and analyzed with the help of this method and there is a support
of the central authority as every information is being reported to the headquarters. The main
aim of having a well developed information system is that there is proper coordination of
activities and all strategic decisions are taken wisely (Stair and Reynolds, 2017).
19

Conclusion
This report discusses about the importance of information system in organization considering
the example of TESCO, a multinational retail store dealing in various products such as toys,
gifts, books and groceries. The report discusses about the role of information system in
various functional areas of management. Information system has been described as the
backbone of an organization. Information system is vital for communication and resource
planning. The report discusses about the suitability of information system in different
functional areas. Also an information system to generate valid, accurate and useful
information for TESCO is developed. The alternative methods of information system to
figure out the problem of integration faced by TESCO, it has been observed in the report that
integration is the main issue faced by the management of TESCO. The report highlights the
various functional areas such as human resource management, finance, sales, training and
administration. The different types of information system in TESCO is also discussed in the
report.
20

References
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