Introduction to Information Technology: Tesco Case Study

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INTRODUCTION TO INFORMATION TECHNOLOGY

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Table of Content
Introduction:...............................................................................................................................3
Literature Review:......................................................................................................................3
Frequently used IT technologies in Tesco:................................................................................3
Ethical and Social Issues............................................................................................................5
Networking Technologies..........................................................................................................6
Importance of Internet Technology In Tesco.............................................................................7
Stages involved in System Development...................................................................................9
Conclusion..................................................................................................................................9
Reference List..........................................................................................................................11

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Introduction:
Indeed modern and advanced technology has made a deep impact in our day to day life. From
home appliances to business organization management in time as well as cost-effective way,
modern and advanced technology has changed our perceptions. This research paper aims to
provide details about how modern technologies have increased our day to day life products as
well as in the business sector. To increase the understandability of reader, this research paper
further discusses the role of IT in the success of a particular organization, ethical and social
values associated with it, different IT technologies and use of Intranet and internet in this
particular context, role in the management system and different stages involved in system
development. For this work, I have chosen a company named Tesco.
Literature Review:
Tesco is a British multinational retail company founded back in the year of 1919. Generally,
they started as a grocery company in the UK, but later in the 1990s, they expanded their
business globally in more than 11 new countries. They expanded their activities into clothing,
internet service providing, software business, financing, electronics and fuels supplying back
at the end of the 1960s. As of today, it is the third largest retail company worldwide
according to gross revenues and the ninth largest company as per revenues. Furthermore, they
are the largest retailer company in the UK with a market share of 28.4%. Currently, they have
a market capitalization of about 18.1 billion pound and numbers of branches worldwide are
2250.
Frequently used IT technologies in Tesco:
Tesco introduced a loyalty card named Clubcard and started providing Internet services in
1995. Again, in 2001, they started selling groceries online and in 2010, they started investing
in the small filming studio and finally in 2013, released it is first ever tablet PC named Hudl.
as per the annual report of Tesco in 2018, overall they saw growth in their revenue by 22.5%
after implementing technologies in their business management and after providing
technology related services. Furthermore, they have re-developed their whole business model
and integrated modern technologies into their working structure. Modern technologies that
have been implemented in Tesco, is being discussed in the below section (Kuhrmann et al.,
2017).

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● RFID tag or radio frequency identification has indeed revolutionized modern
technology. Tesco has implemented RFID tag in its groceries body and they are first
among other retailing companies to integrate the same. Additionally, the reason
behind the implementation of the same is it will automate the process of stocking,
keeping counts of inventory and other administrative works in less time consuming
and cost effective way. As per the report from the technology officer of Tesco,
implementation RFID into their stock management has enabled them to receive real-
time information about stock inventory more accurately. Every time new products
come in inventory for storage are tagged and then they are distributed at local stores
and is monitored their performance. Finally, at the time of sale, the tag is being
removed. Data that is being generated and collected are feed into the analysis machine
and implemented over business strategy (McCaffery et al., 2017). This will help them
to improve their supply chain system and supply products as per market trends and
customers demands.
● Payments through mobile devices have enabled customers to go cashless. Mobile
payment services like Apple pay, Samsung pay and Android pay has changed global
payment methods. Connecting bank accounts with the payment apps and paying with
the just one click. Similarly, Tesco introduced their own payment services in 2015 by
the name of PayQwiq. Almost 925 stores in the UK are accepting payment through
this service. This particular app uses NFC technology, which is embedded in the sale
systems of stores. Shoppers need to install the app and link their Clubcard in order to
get the service. Additionally, customers can add multiple credit cards in the app rather
than one provided by Tesco. Regarding profitability in these sectors, Starbucks is still
considered a leader with one-fifth of its overall payment is done through mobile
payment services. Although Tesco is first in providing this type of services in all over
UK’s groceries sector.
● Bring Your Own Devices or BYOD strategy used Tesco enabled them to scan
barcodes available on products so that they can track them in real time and gain
information about the products available in the stock inventory. Furthermore, it can
also help them to improve their adoption strategy while implementing new technology
in-store inventory. Additionally, they have aimed to develop their mobile and digital
platforms. They have started providing services based on 360-degree image, video
contents and sometimes by considering videos (Lin and Peng, 2018). They have urged

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customers to provide them with metadata in order to improve their experience and
meet their needs.
● Tesco Cupboard, which is a Data-driven customer service provider and loyalty
service, which tags every customer with a unique id while purchasing. Later they
collect and store those data for Big Data Analysis. Using sophisticated Algorithms
and Data analysis mechanism, they can improve their business strategy and most
importantly their Supply chain method. This has helped them to provide products as
per market trends and predicts customers future needs, habits and most importantly
generating personalized contents online.
Ethical and Social Issues
Ethical and social issues related to Information Technology are as follows:
Ethical Issues:
● Security: Due to the advancement in technological tools and the internet, the security
of users has been compromised. Nowadays hackers can easily gain access to insecure
computers connected to the internet. By this, they can collect information and use
them for their own benefits. Furthermore, widely used of cookies which stores
information about internet activities of users, has raised concerns about privacy and
personal interests. The larger organization collects these types of data and advertising
as per our interest (Liu et al., 2015). Additionally, the online money transfer method
can be easily compromised and hackers can transfer all the money in their account.
● Privacy: besides helping us to share information easily to anyone, it has exploited
our privacy freedom. For example, hackers can turn on webcams remotely without
users consent and can interfere with your personal life. Many celebrities have been
victims of privacy-related matters. Furthermore, social media, although it has helped
to connect to anyone from around the world, anyone with wrong intentions can use
your photos, personal details for their own mischief. Additionally, many governments
and companies are believed to be spying on users and using their info for their own
good.
● Copyright Issues: Due to an increase in sharing method over the internet of music,
videos and others, it may seem like a way of popularizing those contents. But at the
same time, original content creators are losing their credibility. Due to free music
download sites and files free of cost, creators face difficulties in generating revenue
(McGregor et al., 2015).

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Social Issues:
● Breakdown in Communication: socialising with friends and family members
outside always straighten our bonds. But due to an increase in numbers of household
computers and mobile phones, they are getting engaged over social media and leading
into lack of communication outside. nowadays, everywhere people go, they make
their presence allied type by engaging themselves in a mobile phone. Even in the
house, during dinner, they are found staring at their smartphones.
● Character Judgement: Due to the increase in the use of social media, the character
of a person is judged on the basis of their social media activities more often. A
number of followers, numbers of likes in their photos, etc define their character. Due
to this adults are losing their natural judgement value and more often face problems
while dealing with real life issues.
● Character Defamation: Nowadays, it has become a trend of uploading videos of
social conflicts, ideas of someone, thoughts regarding the current situation in social
media. Although it helps people to get aware of situations many are using social
media platforms to defame people by spreading wrong information about them. All of
this has led to arrests, lawsuits and has created fear among users (Schafer and Stevens,
2015).
Networking Technologies
● PAN: Personal Area Network, generally the basic networking type. It consists of a
modem with a computer or a printer or a phone. Generally found in small office,
residence and is controlled from a single device.
● LAN: Local Area Network, is the most used and simplest type of networking
technology. It helps to connect groups of computers over short distances to share
business pieces of information. Generally found within a building, or consists of two,
three building situated in close range.
● WLAN: Wireless Local Area Network, generally works as a LAN system takes help
of WiFi technology. They don't rely on physical cables in order to connect with
devices.
● CAN: Campus Area Network, as the name suggests, mainly found in schools or
universities and connects building close to each other in order to share pieces of
information. They are larger than a typical LAN network but smaller than a MAN
network (Schwalbe, 2015).

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● MAN: Metropolitan Area Network, are quite larger than LAN networks but smaller
than WAN’s. They are generally spread over an entire region or city. They are
controlled and managed by a larger company or even by a single person.
● WAN: Wide Area Network, it is more complex than LAN networks. Generally
connects computers and other devices globally and remotely. Example of this type of
network is the Internet itself. Due to its vast reach and complexity generally, it is
managed and controlled by several administrations.
● SAN: System Area Network, this type of network is designed in order to provide a
high-speed network in server to server applications, processor to processor
applications and Storage area network. They generally operate at high speed as a
single system.
● EPN: Enterprise Private network, as the name suggests, it is generally built and used
by enterprises that they want to share pieces of information and connect to ist various
locations securely (Smith and Wong, 2016).
● VPN: Virtual Private Network lets users browse and surf internet content
anonymously. Additionally, it helps someone to access censored contents. Except
these, users can also access an organization's secure network remotely and share data.
● POLAN: Passive optical Local Area Network, is considered as an alternative to
Ethernet LAN. This type of networking technology uses point to multipoint LAN
architecture. Furthermore, it uses optical splitter technology to split and serve multiple
signals to users.
Analysis:
Importance of Internet Technology In Tesco
As discussed in IT technologies section, Tesco has re-developed its whole business model
and integrated modern advanced technology in order to increase their efficiency. Later on,
they saw an overall growth of 22.5% than the previous year. Technological implementation
like mobile payment service, an RFID tag in inventory, use of NFC technology in stores to
receive cashless payments and more importantly stepping into e-commerce platform to sell
groceries online. Furthermore, from 2006, they have operated several numbers of dark stores
namely, Croydon, Aylesford, Greenford, Enfield and many more. They control and provide
online shopping services through a website called tesco.com. except these, they also used to
provide internet services throughout the UK, telecommunication services across the UK,
Ireland, Slovakia, Czech Republic and Hungry (Tarafdar et al., 2015). But in the year off

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2015, they sold their telecommunication and broadband service to TalkTalk in 5 million
pounds. Back in the year of 2007, they bought a small tech support company named The PC
Guys and launched it in December of 2008 by the name of Tesco Tech Support. They were
the first company to use the technology of NFC and RFID tag in payment and inventory
service respectively.
Considering the internal environment of Tesco, internet technology plays an essential role
while sharing information within the organization. They use LAN technology along with
VPN or EPN networking for sharing and communication within the company (Van and De,
2017). As mentioned earlier, both VPN and EPN networking technology let the employees
connect to the company's network securely from any corner of the world and share data. On
looking at the overall profitability, as of 25 February 2018, their net profit was about 992
million pounds, which was 292 million pounds in 2016 before integrating of payment
services in groceries sector, and grossed the top spot of market share with 30.2%.
IT in Management
As revealed by the CTO of Tesco, the main strategy for expansion of their territory was to
integrate modern and advanced technology. They were the first in their sector to make self-
serving tills and used a camera to decrease queues. Then they adopted NFC card payment
technology. Except for providing services to external stakeholders, they have implemented
technological strategies into the internal business environment in order to increase the
efficiency of production. Use of RFID tags on end products has helped them to keep track as
well as of their inventory storage. Furthermore, RFID tags alert respective authorities in case
of an inventory shortage or overflow. This helps the company to plan out its inventory
management in a cost-effective way. Again information collected from RFID tags will help
them to predict market trends and customers future habits (Wood et al., 2016). Thus,
producing products as per market needs and distributing at a perfect time will increase their
profitability. Again, information collected over the internet and on analyzing them, Tesco
will be able to generate more personalized contents over web apps and increase customers
engagement. Regarding managing of an organization, it consists of strategies like cost,
alliance, growth, innovations strategies and many more. Moreover, IT automate the process
of management in both internal and external sectors more efficiently and effectively. It
enables us to do work in a short amount of time. Furthermore, operating business with the
help of technologies gives less stress and increases the productivity of an organization.
Integrating of IT in business model by Tesco has enabled them to control and manage both
internal and external sectors of the organization. Additionally, it has helped them to generate

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revenues by driving great customers engagement because of providing more personalized
contents and products based on current market trends.
Stages involved in System Development
There are seven stages involved in system development. Those have been discussed below.
● Planning: it is the first step involved in system development. It consists of finding
problems and determining solutions regarding resources like raw materials,
determining budget or overall cost of the project, time for completion and other
benefits related to the company's profitability.
● Analysis of system and determining the requirements: in this phase, the team
discusses the needs or requirements for the completion of the project or the solution of
a problem. Additionally, system analysis is done in this part in order to determine
whether they meet the expectations of end users or not.
● System Designing: this particular phase describes requirements, features and
operations that will take place in order to satisfy the needs of the proposed project or
the application (Wood et al., 2016).
● Development: this phase depicts the end of the initial analysis process and the start of
production works like installation of systems.
● Testing and Integration: in this step, integration of systems and testing is being
carried out. Generally, it is done by quality assurance professionals to check out
whether the progress of the project is meeting the initial goals or not.
● Implementation: this is the step or phase where everything related to coding or
designing and making is finished and the new end product is implemented into the
new proposed system.
● Operation and Management: the last phase of the development cycle where end
users, that is consumers, test them and report back to respective developers to fix bugs
or to boost performance and any other requirements before global market release.
Conclusion
Indeed advanced and modern IT technologies have made our life more productive and
enabled us to work more efficiently and effectively. Alike, the integration of IT into the
business sector can help them to achieve their goals easily and produce a more efficient
result. That what has happened with Tesco company. After integrating technology into their
business structure, they saw tremendous growth in their revenue. Furthermore, creating
technological tools like cashless cards, payment apps have helped them to increase their

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customer base. Additionally, with the help of proper knowledge and management of customer
expectations like personalized shops and services over the internet, Tesco can reach easily
reach into the top position of the retailing market of the world.

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Reference List
Kuhrmann, M., Diebold, P., Münch, J., Tell, P., Garousi, V., Felderer, M., Trektere, K.,
McCaffery, F., Linssen, O., Hanser, E. and Prause, C.R., 2017, July. Hybrid software and
system development in practice: waterfall, scrum, and beyond. In Proceedings of the 2017
International Conference on Software and System Process (pp. 30-39). ACM.
Lin, C. and Peng, J., 2018. Analysis and Solution of the Problems in the Distribution of
Suning Tesco. Transportation Management, 1(1).
Liu, Y., Zhan, L., Zhang, Y., Markham, P.N., Zhou, D., Guo, J., Lei, Y., Kou, G., Yao, W.,
Chai, J. and Liu, Y., 2015. Wide-area-measurement system development at the distribution
level: An FNET/GridEye example. IEEE Transactions on Power Delivery, 31(2), pp.721-
731.
McGregor, G.R., Bessemoulin, P., Ebi, K.L. and Menne, B. eds., 2015. Heatwaves and
health: guidance on warning-system development. Geneva, Switzerland: World
Meteorological Organization.
Schafer, D.P. and Stevens, B., 2015. Microglia function in central nervous system
development and plasticity. Cold Spring Harbor perspectives in biology, 7(10), p.a020545.
Schwalbe, K. (2015). Information technology project management. Cengage Learning.
Smith, L.C. and Wong, M.A. eds., 2016. Reference and Information Services: An
Introduction: An Introduction. ABC-CLIO.
Tarafdar, M., Gupta, A., and Turel, O. (2015). Special issue on'dark side of information
technology use': an introduction and a framework for research. Information Systems
Journal, 25(3), 161-170.
Van Grembergen, W. and De Haes, S., 2017, January. Introduction to IT Governance and Its
Mechanisms Minitrack. In Proceedings of the 50th Hawaii International Conference on
System Sciences.
Wood, S., Coe, N.M. and Wrigley, N., 2016. Multi-scalar localization and capability
transference: exploring embeddedness in the Asian retail expansion of Tesco. Regional
Studies, 50(3), pp.475-495.