Innovation in an Organization

This report evaluates the effectiveness of innovative processes undertaken by Tesco and the risks faced while managing inventories. It recommends an innovative strategy to maintain supply chain efficiency and provides an action plan and key performance indicators for implementation. The report also discusses the risks involved in implementing the automated billing device.

Running head: INNOVATION IN AN ORGANIZATION
INNOVATION IN AN ORGANIZATION
Name of the student
Name of the university
Author note

1INNOVATION IN AN ORGANIZATION
Executive summary
The report will focus on evaluating the effectiveness of innovative processes undertaken by
Tesco and the different risks that are faced by the same while managing inventories. In this
relation, an innovation will be recommended in the report for the organization, which will help
the same in maintaining the efficiency of the supply chain and logistics operations. The report
will enumerate an action plan through which the organization might implement the innovative
strategy and thereby measure the effectiveness through the enumeration of the KPIs. However,
the organization might face different risks while implementing the innovative strategy, which are
also enumerated as a part of the research.

2INNOVATION IN AN ORGANIZATION
Table of Contents
1. Introduction to the organization...................................................................................................3
2. Current state of innovation in the organization...........................................................................3
2.1. Key drivers for the innovations............................................................................................4
2.2. Strengths and weaknesses of the organization related to innovation...................................4
3. The new innovation.....................................................................................................................5
4. Evaluation of the need of undertaking the innovation.................................................................6
5. Action plan for the innovation.....................................................................................................7
6. Key performance indicators.........................................................................................................9
7. Risks while implementing the automated billing device...........................................................10
8. Conclusion.................................................................................................................................11
References......................................................................................................................................12

3INNOVATION IN AN ORGANIZATION
1. Introduction to the organization
The concerned organization, Tesco, is a British multinational organization, which aimed
at providing the customers with groceries and general merchandise. The organization was
established in the year 1919 and is headquartered in Welwyn Garden City, United Kingdom
(Tesco.com 2019). According to a survey report, the organization stood as the ninth-largest
retailer in the world in accordance to the revenues earned by the same. The concerned
organization held shops in seven countries across Asia and Europe apart from being a market
leader in UK, Ireland and Hungary (Tesco.com 2019).
The different innovations that are undertaken by the organization in the processes as
helped the same in gaining a competitive edge over the other players in diverse economies. The
concerned organization held a market capitalization of approximately £18.1 billion, computed as
on 2015 (Tescoplc.com 2018). The revenue and net income of the concerned organization was
£57,491 million and £1,208 million respectively, which was computed by the end of fiscal year
2018 (Tescoplc.com 2018). The developments in the processes have helped the business in
supporting the sustenance of the same while operating in diverse global economies.
2. Current state of innovation in the organization
The organization has taken steps to develop different innovative processes in order to
maintain the efficiency of the operations. The organization implemented the replenishment
application system, which has helped the business in tracking the amount of sales and thereby
the data is recorded and transferred to the supply department (Kim, Kumar and Kumar 2012). It
has helped the business in maintaining the efficiency of the supply chains while operating in

4INNOVATION IN AN ORGANIZATION
accordance to the changing buying behaviors of the customers (Atieh et al. 2016). On the other
hand, the system helped the business in identifying the demand that is encountered by the same
in the different regions. The concerned organization also undertook steps to implement Oracle
retail warehouse management system, which is similar to the replenishment application system
and helped the organization in managing their supplies in accordance to the demand faced by the
same (Abulrub and Lee 2012). Therefore, the innovations have helped the concerned
organization in enhancing the operations of the supply chain and logistics.
2.1. Key drivers for the innovations
The major driver was to encourage an innovative culture in the organization related to
knowledge management which has helped the same in identifying the market demand. The
driver will be helping the concerned organization in developing the innovative culture in
accordance to the needs of the business sustainability (Schneider and Spieth 2013).
2.2. Strengths and weaknesses of the organization related to innovation
The strengths of undertaking the strategy is based on the knowledge of the organization
in maintaining the efficiency of the supply chain operations as per the needs of the customers.
On the other hand, the innovations have enabled the organization to undertake suitable steps for
managing the inventory (Fernández-Mesa et al. 2013). It has helped the business in gaining a
competitive advantage through maintaining the availability of the products in accordance to the
sustainability needs of the business. The strategies helped the organization in identifying the
demand that is faced by the same and thereby design the manufacturing and supplying processes
in order to maintain the efficiency of the operations in accordance to the needs of the business.

5INNOVATION IN AN ORGANIZATION
Inability to manage inventory
Sales data misinterpretation Insufficient consumer knowledge
Lack of suitable communication Inefficient financial records
One of the major weaknesses of the strategies that are implemented by the organization
are dependent on the validity and reliability of the sales data. Data misinterpretation might affect
the capabilities of the organization in undertaking the processes in accordance to the needs of the
customers (Kim, Kumar and Kumar 2012). The capabilities of the organization have helped the
same in maintaining the efficiency of the operations in accordance to the needs of the customers.
On the other hand, the falsification of the sales data would affect the capabilities of the
organization in keeping a track of the amount of sales per month from every checkpoint.
Therefore, it might affect the organizational initiative of strengthening the supply chain and
logistics operations (Bandhole et al. 2012).
2.2.1 Fishbone diagram
3. The new innovation
The innovation that might be undertaken by the concerned organization is to implement
an automated billing device, which will provide billing services to the customers along with

6INNOVATION IN AN ORGANIZATION
suitable recordkeeping of the sales data (Salge et al. 2012). The automated billing device will be
implemented in the different shops and outlets that encounter maximum visits from the targeted
customers. The open innovation technique will be helping the concerned organization in
upgrading the technologies through relevant knowledge of the different innovative practices
undertaken by the competitors. The open innovation technique will be undertaken by the
concerned organization through consultation with the different other organizations in the
industry, which has already implemented the innovation (Volberda et al. 2013). The innovation
is radical in nature in order to supplement the existing checkout system through the inclusion of
automation. The implementation of the innovation will bring about total change in the checkout
processes that was followed by the organization (Pilar, Simmonds and Astudillo 2014). The
implementation of the automated billing device where the organization is facing excessive
demand will help the same in keeping record of the sales volume (Schneider and Spieth 2013).
On the other hand, the data will be retrieved and transferred to the different departments in the
organization in order to regulate the processes in accordance to the demand that is faced by the
business. The organization might undertake crowd funding operations for supporting the suitable
implementation of the innovative devices. The crowd funding activity will be undertaken by the
organization through sponsorships in different social and charitable events. The concerned
organization will undertake Debt Crowd funding technique through which they will issue short
term shares to a group of investors for a specific time frame. The crowd funding technique will
be helping the organization in gathering the required financial resources in order to implement
the innovation (Honarpour, Jusoh and Md Nor 2012).

7INNOVATION IN AN ORGANIZATION
4. Evaluation of the need of undertaking the innovation
The implementation of the automated billing device will be helping the concerned
organization in maintaining the efficiency of the operations as per the needs of the organizational
recordkeeping (Yoo 2012). On the other hand, the implementation of the automated billing
device will help the organization in ensuring the human related errors in recordkeeping (West
and Bogers 2014). The automated billing system will help the concerned organization in cutting
cost of operations through layoff of employees and reduce the risks of data misinterpretation and
errors in recordkeeping. Honarpour, Jusoh and Md Nor (2012) stated that the continuous
innovation initiatives helps an organization in adhering to the demand and expectation of the
customers. In this relation, the development of the automated billing device will be helping the
concerned business in identifying the demand that is encountered by the business and thereby
regulating the production, supplying and distribution processes (Tesco.com 2019).
The implementation of the innovation in the organizational context will support the
knowledge management initiatives and thereby help the organization in guiding the processes in
accordance to the needs of the customers (Pilar, Simmonds and Astudillo 2014). In this relation,
the implementation of the automated billing devices in the different checkpoints would assist the
business in facilitating efficient recordkeeping and retrieving sales data (Yoo 2012). The
implementation of the automated billing device will help the organization in facilitating
inventory management, which will be helping the same in upholding the systematic functioning
of the business processes (Pilar, Simmonds and Astudillo 2014).

8INNOVATION IN AN ORGANIZATION
5. Action plan for the innovation
Goals Activities Person
responsible
Timeframe
Market assessment
and problem
identification
 Undertaking a market evaluation
 Identification of the problem faced by
the organization
 Identifying the checkpoints where the
organization faced majority of the
demands
Market analyst
of Tesco
3- 7
months
Creating plan for
implementation
 Analyzing and prioritizing the problem
that is being found in the market
research
 Creating strategies for mitigating the
problem (Volberda et al. 2013)
 Assessing the models of innovation
and change management in order to
create strategies for mitigation
(Rychkova 2012)
CEO and
management
board of Tesco
2 months
Consultation with
the stakeholders
 Undertaking meetings and seminars
with the different stakeholder groups
and encouraging the active
involvement of the same in the change
management process (Rychkova
HR managers
of Tesco
3 months

9INNOVATION IN AN ORGANIZATION
2012)
 Undertaking consultations with the
employees for maintaining the change
readiness (Bucherer, Eisert and
Gassmann 2012)
Implementation of
the automated
billing system
 Undertaking a pilot testing process in
order to identify the efficiency through
implementation of automated billing
device in a single checkpoint
 Assessing feedbacks after the pilot
testing
 Implementation of the automated
billing device in the checkpoints
where maximum demand is faced
(Seebode, Jeanrenaud and Bessant
2012)
Operation and
IT of Tesco
6 months
Monitoring and
controlling the
system operations
 Gathering feedbacks on the process
 Monitoring the change in the
operations that are undertaken by the
organization through the enumeration
of KPIs (Key Performance Indicators)
(Schiederig, Tietze and Herstatt
2012)
Quality analyst
of Tesco
3- 7
months

10INNOVATION IN AN ORGANIZATION
 Bringing forth modifications in the
process in accordance to the feedbacks
6. Key performance indicators
The KPI for assessing the effectiveness of the automated billing device are:
 The implementation of the automated billing will help in enhancing the business
operations by 13% by the end of an year
 The implementation of the automated billing devices will ensure that the rate of customer
retention of the organization will grow by 1.5% by the end of an year due to lack of
human related billing errors
 The implementation of the automated billing device will reduce the error rate relating to
misinterpretation of sales data by 10% within the first year
7. Risks while implementing the automated billing device
The risks that might be faced by the concerned organization while implementing the
automated billing device are being discussed in this section of the report.
 Resistance from the employees – The employees might take steps to resist the idea of
implementing the automated billing device, as it might affect the employability of the
same. The implementation of the automated billing device will endanger the
employability of the people working in the business. Therefore, the implementation of the
automated billing device will affect the interests of the people working in the billing

11INNOVATION IN AN ORGANIZATION
desks(Tesco.com 2019). The resistance from the employees might affect the capabilities
of the organization in upholding the efficiency of the operations. Cost of implementing the automated billing- The higher cost of implementing the
automated technologies might maximize the cost of operations and contradict with the
investment plans of the concerned organization. However, the higher cost of
implementation might affect the capabilities of the organization while correlating to the
budgetary concerns. Requires monitoring activities- The implementation of the automated technologies
requires frequent monitoring and controlling activities, which will require the
organization to establish a team for monitoring the technology. The extensive monitoring
and controlling activities for the automated billing device requires a recurring investment,
which should be invested by the concerned organization. It will contribute to the
enhancement in the operational costs of the concerned business.
8. Conclusion
Therefore, from the above research it might be stated that Tesco has undertaken different
innovations the field of supply chain and logistics for supporting the smooth functioning of the
systems. However, the concerned organization faced different issues relating to sales data
misinterpretation from different checkpoints, which has affected the smooth functioning of te
production, distribution and supplying processes. On the other hand, the concerned organization
also faced issues relating to falsified billing due to human errors, which affected the trust and
loyalty of the customers. Therefore, the concerned organization must take steps to implement the
automated billing device, which will transmit appropriate information for inventory management

12INNOVATION IN AN ORGANIZATION
and reduce the risks of human related errors in billing. The innovation will be helping the
organization in enhancing the brand name of the same while operating in diverse economies.

13INNOVATION IN AN ORGANIZATION
References
Abulrub, A.H.G. and Lee, J., 2012. Open innovation management: challenges and
prospects. Procedia-Social and Behavioral Sciences, 41, pp.130-138.
Atieh, A.M., Kaylani, H., Al-abdallat, Y., Qaderi, A., Ghoul, L., Jaradat, L. and Hdairis, I., 2016.
Performance improvement of inventory management system processes by an automated
warehouse management system. Procedia Cirp, 41, pp.568-572.
Bandhole, J.S., Lakshman, T.K., Nanja, S. and Chang, H.C.W., Symantec Operating Corp,
2012. Method and system for automated management of information technology. U.S. Patent
8,260,893.
Bucherer, E., Eisert, U. and Gassmann, O., 2012. Towards systematic business model
innovation: lessons from product innovation management. Creativity and innovation
management, 21(2), pp.183-198.
Fernández-Mesa, A., Alegre-Vidal, J., Chiva-Gómez, R. and Gutiérrez-Gracia, A., 2013. Design
management capability and product innovation in SMEs. Management Decision, 51(3), pp.547-
565.
Honarpour, A., Jusoh, A. and Md Nor, K., 2012. Knowledge management, total quality
management and innovation: A new look. Journal of technology management &
innovation, 7(3), pp.22-31.
Kim, D.Y., Kumar, V. and Kumar, U., 2012. Relationship between quality management practices
and innovation. Journal of operations management, 30(4), pp.295-315.

14INNOVATION IN AN ORGANIZATION
Pilar, M., Simmonds, J. and Astudillo, H., 2014. Semi-automated tool recommender for software
development processes. Electronic Notes in Theoretical Computer Science, 302, pp.95-109.
Rychkova, I., 2012, September. Towards automated support for case management processes with
declarative configurable specifications. In International Conference on Business Process
Management (pp. 65-76). Springer, Berlin, Heidelberg.
Salge, T.O., Bohné, T.M., Farchi, T. and Piening, E.P., 2012. Harnessing the value of open
innovation: The moderating role of innovation management. International Journal of Innovation
Management, 16(03), p.1240005.
Schiederig, T., Tietze, F. and Herstatt, C., 2012. Green innovation in technology and innovation
management–an exploratory literature review. R&d Management, 42(2), pp.180-192.
Schneider, S. and Spieth, P., 2013. Business model innovation: Towards an integrated future
research agenda. International Journal of Innovation Management, 17(01), p.1340001.
Seebode, D., Jeanrenaud, S. and Bessant, J., 2012. Managing innovation for sustainability. R&D
Management, 42(3), pp.195-206.
Tesco.com (2019). Tesco :: Online Groceries, Banking & Mobile Phones. [online] Tesco.com.
Available at: https://www.tesco.com/ [Accessed 21 Mar. 2019].
Tescoplc.com (2018). Serving shoppers a little better every day- Annual Report and Financial
Statements 2018. [online] Tescoplc.com. Available at:
https://www.tescoplc.com/media/474793/tesco_ar_2018.pdf [Accessed 21 Mar. 2019].
Volberda, H.W., Van Den Bosch, F.A. and Heij, C.V., 2013. Management innovation:
Management as fertile ground for innovation. European Management Review, 10(1), pp.1-15.

15INNOVATION IN AN ORGANIZATION
West, J. and Bogers, M., 2014. Leveraging external sources of innovation: a review of research
on open innovation. Journal of Product Innovation Management, 31(4), pp.814-831.
Yoo, Y., 2012. The tables have turned: How can the information systems field contribute to
technology and innovation management research?. Journal of the Association for Information
Systems, 14(5), p.4.