The Value of Effective IT Systems

This document discusses the value of effective IT systems in organizations, focusing on the case of Tesco. It explores the use of IT systems in different functions of Tesco, their contribution to achieving organizational objectives, and the role of reliable and flexible IT systems. It also discusses IT systems that support value-added change in Tesco and provides practical IT solutions for business problems in the workplace.

THE VALUE OF
EFFECTIVE IT SYSTEMS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Use of IT systems in different functions of Tesco.................................................................3
P2 Contribution of IT systems in achievement of organisational objectives..............................5
LO 2.................................................................................................................................................6
P3 Reliable and flexible IT systems to meet requirements of the company................................6
LO 3.................................................................................................................................................8
P4 IT systems that support value added change in Tesco...........................................................8
LO 4.................................................................................................................................................9
P5 Practical IT solutions for business problems in workplace....................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
An information system is a unified set of components for collection, storage, processing
of data along with providing knowledge, information, and digital products. Business
organizations and corporations depend upon information systems for carrying out and
management of the business operations, interaction with the suppliers and customers and to
compete in the marketplace (Bessen, 2017). Information systems are used for running the supply
chains, logistics infrastructure, and electronic markets in an inter-organizational context. The
company chosen for assessing the It needs and infrastructure is Tesco. Tesco is a British
multinational corporation consisting of supermarket chains and stores across the globe to retail
general merchandise and groceries, headquartered in Hertfordshire, England. The report will aim
at demonstrating the role of IT systems in support of organizational objectives and analyzing
reliable and flexible IT systems to meet the requirements of the company. It will also evaluate IT
systems that support value-added changes in Tesco, and give recommendations of practical IT
system solutions in business scenarios.
LO 1
P1 Use of IT systems in different functions of Tesco
Information technology systems are inculcated in organizations for smoothing their
business operations and attaining their organizational objectives. Business organizations and
retail companies like Tesco depend upon information systems for management of the business
operations, human resource management, in-store communication and operation, handling
finance, billing procedures, marketing, interaction with the suppliers and customers, running the
supply chain, and electronic marketplace. The primary components of IT systems are computer
software and hardware, databases, data warehouses, telecommunications ingrained in the
operations and management of Tesco. The systems can be used in major functions across the
company such as:
Financial management: An efficient financial system consists of the underlying
technology that can handle analytics, cash flow and management, transactions, and reporting
ideally in one place so that the finance team of Tesco can plan, transact, report, and analyze data
without leaving the system. A cloud-based financial management system is incorporated to carry
out these functions. Tesco uses the management information system called Oracle accounting
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hub for a streamlined credit decision, flexible invoices activity prioritization, configurable
collections strategies, self-service account management of customers, creating automated
receipts, revenue processing for effective inventory control, product details, supplier details,
customer details, and purchase and sales ledger (Toerien, 2017).
Customer relationship management: For interaction with customers TESCO is using the
customer relationship management system to follow up on them using telephone and email from
the contact center, as well as for the generation of a knowledge base of information on products
like food, drinks, electronics, clothing, financial services.
Supply chain: The oracle retail warehouse management system has been adopted by
Tesco for the standardization of its supply chain pattern across businesses and alteration in the
distribution networks.
Figure 1: Retail Warehouse Management System
Source: Oracle
This system is operational across Europe, Southeast Asia, and America. Tesco initially used the
system in South Korea for ambient distribution of its fresh products, with the purpose to strip out
the aggregate amount from the supply chain and making it possible for transportation across
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large capacities using one site. This was further adopted internationally and oracle has helped
Tesco to gain strong base functionality for operations across different distribution centers
internationally. Tesco has adopted a centralized process for conversion, management, joint
replacement, and distribution and integrate them into the fresh warehouse management system
(McKinley, 2017).
Marketing: For promotions and advertisements, Tesco is using the Oracle Marketing
platform. The adaptive campaign orchestration can help in the creation of dynamic marketing
campaigns to intrigue buyers and smartly adapt experiences of customers on real-time activities
at every stage of the customer’s journey. It helps Tesco in faster processes by a multi-step as well
as simple campaigns in minutes through an intuitive interface spanning across multiple channels
like email, web, display search, social media platforms, videos, and mobile.
Human resource management: HRM system is used for connecting information
technology and human resource management through HR based software. HRMS is used for
recruitment of candidates, payroll management, attendance tracking, approval of leaves, a
progression of career, succession planning, performance appraisals, and overall maintenance of
employee information within the company. Tesco has also introduced online training programs,
pre optional and optional tests for enhancing the customer service and retail skills of workers.
Tesco uses Oracle HR software as its HRMS. Another effective function of Oracle HRMS is that
it helps to prevent poor information management and save the stores from losses and detection of
shoplifting. POS systems are used to reduced fraudulent returns and allowing workers to quickly
tap into customers. The current system at Tesco allows employees and the finance department to
remain updated with the bank account information and tax contributions.
P2 Contribution of IT systems in achievement of organisational objectives
IT systems hugely benefit business functions by solving an array of business problems
through technology, integration, and innovations and help the company in achieving its
organizational objectives, the major business objectives of Tesco are customer satisfaction, brand
equity, expansion, profit, growth through efficient business operations. Management systems
provided by companies like Oracle and Sap have improved the efficiency of Tesco. The major
contributions of these IT systems are:
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IT systems have helped in improving the security and storage of data and company files along
with customer sensitive information. The data is made accessible only to authorised users within
Tesco and have kept it safe from hackers.
 Communication problems have been solved by IT systems which have integrated all the
digital platforms, internal company billboards, routers, email serves and chat services that
allow employees to communicate and interact with consumers.
 The streamlining of workflow systems, shared storage facilities and creation of
collaborative workplaces can improve the efficiency of employees. This enables workers
to become more productive as technology eases their operations.
 The innovation systems in practice have successfully let Tesco automate its routine store
tasks, improve the data analytics and proper storage for retrieval. This has helped
company save time and money when it comes to marketing functions or supply chain
operations.
 It has helped Tesco gain competitive advantage against its major competitors like
Sainsburys, Aldi, Asda etc. as the more advanced technology systems a company adopts,
more efficiently it can handle all operations and improve customer service.
 IT systems can help company in lowering its costs through centralised redundant tasks by
migration of costly functions to online system in one location. For example, offering
customers email support for lower costs unlike phone support.
 In case of pandemic like situations, outsourcing functions can give employees the
opportunity to work remotely by using less expensive communication options (Lin and
Peng, 2018).
LO 2
P3 Reliable and flexible IT systems to meet requirements of the company
Various IT systems that can be used in organisations for improving the efficiency of
business operations by storing and processing data in multiple ways:
Knowledge management: The primary goal of knowledge management is improvement of
organization's efficiency and saving knowledge within the company. The IT system stores and
retrieves knowledge to foster collaboration, understanding, and process alignment for customer
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support. Tesco uses it to store the relevant data required for purposes of marketing, insights into
consumer behaviour. Automated services and AI algorithms can improve sales in e-commerce
and retail industry by simplification of end-to-end data, comparison and analytical tools for data
interpretation of shopping. It comprises of a cycle of structuring, sharing, creating and auditing
knowledge, for maximizing the effectiveness of company’s collective knowledge.
Customer relationship management: CRM is a combination of strategies, practices and
technology that Tesco uses to manage and analyse interaction with customers and all relevant
data collection at multiple stages of customer lifecycle like selection, purchase, payment, after
sales queries etc. It caters to the goals of the company to improve customer service relationships
and assist in retention of customers along with driving sales growth. The system compile
consumer data across various channels and points of contact like telephone, website, direct mail,
social media, marketing materials and live chat etc. The system can give the sales assistants a
detailed information on customer’s shopping preferences, purchase history, concerns etc
(Anshari, et.al., 2019).
Data and communication management: This administrative process which consists of
acquisition, validation, storage, protection and processing of data to ensure reliability, timeliness
and accessibility of the data for users. Enterprises and retailers like Tesco utilize the Big data to
gain insights of customer behaviour, preferences, trends, opportunities and take business
decisions to create extraordinary consumer experiences. Tesco uses this collected data for
database marketing purposes and it is linked to customer relation management systems. It helps
Tesco in personalisation of customer experiences, addition of value to interactions, detecting the
root causes of business and marketing failures in real-time, enhancing customer loyalty and
engagement through effective communication.
Transactional processing system: Tesco uses transactional processing systems or TPS to
collect, store, retrieve and modify transactions in the company. Every transaction is standardised
to improve competence and Tesco requires a customer made TPS to align its business processes
and strategy through batch processing system and real-time processing. The processing systems
are made for rapid response, reduce inflexibility, control processing and are highly reliable
(Greiner, Jacobi and Slegel, 2016).
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LO 3
P4 IT systems that support value added change in Tesco
IT systems helps the company in implementing strategies for value creation like creation
of new products, ideas, increasing the existing value or profit of the company and betterment of
quality of operations. They help in project management and create competitive advantage for the
company in the retail industry, help in decision making and cost and benefit analysis. IT support
can be provided along with new and existing approaches for improving the position of
technology in the company which directly impacts other business areas providing value added
services.
Management information system or MIS is employed in Tesco which provide managers
essential tools for management, evaluation and efficient running of departments and help them in
faster and accurate decision-making through reliable information and prediction. Tesco uses this
system to find the number of hours employees have worked, get monthly reports of expenditure
compared to costs etc. Tesco use this for replenishment, cost-benefit analysis, pricing analysis,
database marketing, markdowns and sales management.
Decision support systems or DSS is used in Tesco, provided by SAP Business Objects
Polestar in the SAP business objects edge BI. Tesco uses these to navigate data for easy
exploration of information, promptly answer significant business questions through simple
search on daily, weekly, monthly and annual basis. It also helps in the analysis of salary trends,
recruitment success rate, dropout reasons, low retention factors, applicant statistics by providing
accurate data from HRM system and utilise tools to make strategic decisions (Dellermann and
et.al., 2019).
Executive support system helps Tesco in decision-making process by proving a set of
techniques and tools for imparting structure to situations and improve effectiveness of the
outcomes of decisions for executives. Oracle Credit-to-cash software lets information regarding
activities internally and externally to be showcased to the responsible parties. Tesco becomes
uniquely enabled because of these systems ad increases its capabilities (Heathfield, 2019).
The systems help Tesco in gaining competitive advantage by assisting its performance,
procurement through supply chain management and streamlined distribution, technological
development through centralised and automated management systems, structured human
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resource management system for collaborative work environment which leads to stronger cash
flow, profit, efficiency, better customer service and brand equity.
LO 4
P5 Practical IT solutions for business problems in workplace
The business environment of Tesco is dynamic in nature and emergence of uncertain
operational problems can hinder the efficiency of workplace. IT solutions can help counter those
problems.
 Decision support systems can be used for problems pertaining to decision making in the
Tesco. It is a computerized system which gathers and analyses data to produce
comprehensive information outcomes. It is different from ordinary operations
applications and helps company in making more informed decisions, problem-solving,
event management, planning, predictions etc (Martins, D., and et.al., 2019).
 Data security can be effectively done in Tesco by using IT systems by companies like
IBM come with the features like banking cybersecurity, data security services for
streamlined approach, aligning risk management objectives to gain insights on sensitive
data, risk mitigation to manage regulatory compliance which essentially makes it easier
for the company to function without any potential internal and external threats by helping
in optimization of control over data using loss prevention and encryption technologies
(Arora, Raja and Bahl, 2018).
 The storage and management of data can be done effectively through new management
information systems and cloud computing in Tesco. Incase the company wants to save
costs; it can benefit from cloud computing instead of owning data centers. Firm can avoid
upfront cost and complexities of maintenance of IT infrastructure (Li and et.al., 2018).
 Database marketing can be implemented in Tesco using the DBMS system to refine the
direct marketing campaigns of the company in retailing. This can essentially be linked to
the customer relation management system for understanding consumer behavior and
conducting promotions on the basis of consumer preferences and upcoming trends.
Artificial intelligence can be incorporated in these systems and customized
communication can be done for better interaction with consumers (CousseMent and De
Bock, 2016).
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 Artificial intelligence is the future solution as it has a dynamic outreach and can reshape
the inventory management of Tesco, by better demand forecasting, improve the user
experience on digital platforms by interactive interface and adaptive homepage, guided
approaches, visual curation, interactive chat programs, conversational support, customer
engagement, personalization and customer insights etc. Artificial intelligence can also be
used for handling the online reviews and help the company to map customer feedback
through sentiment analysis (Semenov, Chernokulsky and Razmochaeva, 2017).
CONCLUSION
From the above report it is noted that IT infrastructure of Tesco is very efficient and
successful in all business fronts but it can still do further improvements for becoming a digitally
enabled company. The application of IT systems in various departments like finance, Human
resources, supply chain, in-store operations, customer relationship, marketing have helped Tesco
in meeting its business objectives and made the company a leader in the retail industry. Tesco
primarily uses the information systems of Oracle and SAP including oracle accounting hub,
oracle marketing platform, oracle HR, SAP business objects polestar, oracle retail warehouse
management system, Oracle BI etc. It can further improve its decision support systems, adopt
artificial intelligence features, use more database marketing for promotions and adopt cloud
computing techniques for solving major business problems.
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REFERENCES
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Oracle Retail Warehouse Management System, Oracle, 2020, Available through:
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management/>
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