Information Technology in Business Operations: A Tesco Case Study

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Individual Report
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Abstract
Information Technology (IT) is used by business organisations all over the world to
implement the benefits of technologies into their communication system. The evolution of
technology has been a boon for businesses, but not without some drawbacks. Companies use
various types of network technologies to facilitate the communication and exchange of data
between employees. The intranet and the internet is used by companies to increase their sales.
A System Development Cycle is used to develop necessary system technologies.
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Table of Contents
Introduction................................................................................................................................4
Literature Review.......................................................................................................................5
Analysis and Discussion............................................................................................................9
Conclusion................................................................................................................................13
Reference List..........................................................................................................................14
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Introduction
Information Technology (IT) is a broad term that includes all the uses of computers,
networking, storage services and other physical technological devices. IT is the process of
creating an infrastructure for the creation and storage of any kind of electronic data and
processing it for secure exchanges. IT is the use of data electronics for use in companies and
businesses, not for personal and entertainment purposes. IT incorporates the use of
networking technologies like internet and storage technologies like computers (Schwalbe,
2015).
This report will explain the role and purpose of IT in managing and running operations and
its social and ethical issues pertaining to running a business. The differences between internet
and intranet, and different networking technologies will be explained. The various stages of
systems development will be elaborated. The chosen retail sector organisation for this report
is Tesco. Jack Cohen established the company in the year 1919. It is currently the largest
retail supermarket chain in the UK.
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Literature Review
Information Technology (IT) is the use of computers and networks in the operations of a
business in order to achieve the objectives of the company. The importance of IT has
increased every day due to the evolution and use of modern technologies and the internet in
order to conduct business operations. Businesses are evolving along with the evolution of
technologies. Therefore, businesses are implementing the use of IT in their day-to-day
business operations so that performing necessary tasks become easier.
Purpose of Information Technology
Tesco implements the use of IT in their operations because it allows them to maintain their
various mainframe systems and their information databases through the use of computer
technologies.
 System of Communication: Most employees of Tesco and their suppliers
communicate with each other using telephones and E-Mails. Since E-Mails are sent
using computers and the internet, its use falls under the category of IT. Over the years,
the evolution of technology has provided Tesco with other methods of communication
using computers and the internet in the form of online video chatting, video
conferencing systems and many more. These systems and its use in Tesco are all
maintained by the organisations IT department.
 Management of Data: Tesco needs to store all their data regarding the operations like
inventory management, books of accounts, and other forms of documents. Instead of
using written documents, computers are used to account and manage their inventory.
The computers are used in creating and storing digital documents pertaining to
inventory management in the cloud storage of Tesco. This management technique
uses the concept of cloud computing to store data. Physical documents can easily get
lost and tampered with, compared to digital documents (Wu et al., 2015). Managing systems of information: The information stored in the cloud needs to be
accessed by the employees of Tesco in order to conduct their activities. Therefore, the
IT department must make sure that the process of accessing relevant data by the
employees is secure and smooth. The systems need to be maintained and managed
properly in order to increase the speed and efficacy of operations being conducted so
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that no time is wasted. The system also needs to be managed so that outsiders cannot
access the files stored in these systems. Managing Consumer Relations: Feedback given by the customers of Tesco is
essential for improving the products and services offered by the company. The
organisation needs to be in constant touch with the customers so that all grievances
and issues raised by the consumers are addressed in time. In this situation, the IT
department steps in to maintain steady flow of communication between the company
and their employees. This flow of information is done using the internet and mobile
networks (Lee et al., 2015). Call centres are setup by Tesco for Customer Relations
Management (CRM).
Ethical and Social Issues
Even though the use of IT is prevalent in the modern businesses, it still suffers from some
drawbacks in the form of ethical and social issues that are raised due to the extensive use of
IT.  Cyber Crime: Cyber crime refers to the use of IT to conduct criminal activities. These
types of criminal activities are happening every day all around the world and at an
increasing rate due to technological advancements. Cyber crimes are of many types.
Corporate Identity Theft occurs when a person impersonates a business organisation
in order to swindle money from other businesses by promising to conduct certain
beneficial operations in behalf of the targeted company in exchange for money.
Phishing is the process of creating and using fake corporate websites to target
potential business related clients and companies to extract data and money from them.
Digital Copyright Infringement refers to the illegal sale of copyrighted products of a
company through piracy websites. Corporate Hacking is the most common form of
cyber crime where criminals hack the information systems of businesses in order to
gain more information. The hackers can then sell this information to the competitors
of the business for money or might make illegal use of the information to swindle
money from the targeted company (Stein et al., 2015). Hacking is also used to delete
important data of the targeted company and also to spy on them. Tesco has made sure
that their information systems are protected and secures by their experienced IT
department.
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Figure 1: Forms of Cyber Crimes
(Source: Tarafdar et al., 2015)
 Information Rights and Moral Obligations: Every employee of Tesco has the right
to privacy. This means that business organisations cannot monitor their employees
and seek personal information from them (Lloyd, 2017). There have been many cases
where a company has spied on the day-to-day activities of their employees through
tracking their social network accounts and their cellular location.
Networking Technologies
Networking technologies refer to all the systems that allow employees of the company
communicate with each other. The IT department of Tesco sets up and manages all the
networking technologies. There are different types of networking technologies based on their
geographical area that Tesco uses in their operations.
 LAN (Local area Network): This is a wired network connection, which has its
geographical range spread around a single area of operation, like an office, a
manufacturing unit, or a building. This is a wired network that is set up by the IT
department of Tesco in order to keep the communications of the employees limited to
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themselves and not with the outside world (Iyengar et al., 2015). A wireless version
of LAN exists in modern organisations like Tesco, which is called as WLAN
(Wireless Local Area Network).
 MAN (Metropolitan Area Network): This network is larger is size than LAN as it
covers an entire town or a city. Tesco implements this network in order to create a
communication link between the various stores in a city to their headquarters in
London or their head office in other cities.
 WAN (Wide Area Network): The geographical area of this network covers the entire
world. Tesco implements this network connection in order to facilitate
communication between all the stores of Tesco that are present in various countries to
their headquarters (Krasyuk et al., 2017).

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Analysis and Discussion
Business organisations like Tesco make extensive use of the Intranet and the Internet to
facilitate communication between the employees of the organisation and with the outside
world. In order to create necessary systems for exchange of information and data, a
convenient system is required to be developed by the company by following a process. These
factors provide an understanding of the role of IT in management of a company. These
factors are analysed and discussed in detail below.
Information and Communication Technology (ICT)
ICT refers to all the technologies that a company uses to allow the employees o the company
to interact with each other and the outside world through digital mediums like the intranet
and the internet. The advancement of ICT in business enterprises have helped companies
reduce costs related to communication and operations. The management of Tesco also
benefits from the use of ICT because it helps the managers to communicate more effectively
with the employees, so that plans and strategies regarding the operations get implemented
easily. The two most commonly used technologies for communication are the intranet and the
internet.
Figure 2: Information and communication Technology
(Source: Created by the learner)
 Intranet: A private communication and data sharing network that is only used by the
employees of Tesco is known as the intranet. The use of intranet in companies all
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around the world has become widely common due to its benefits and ease of use. The
intranet of Tesco comprises of many interconnected LAN networks in the office
building. Each computer present in the office is connected to that specific intranet
server, so that the data and information that is communicated between these devices
are encrypted and secure. This process of encryption of data is called Tunnelling.
The intranet is also protected by a Firewall that blocks external sources from
accessing the network and to maintain organisational security by showing the
information exchanged between employees to both parties and the employer (Vlosky
et al., 2015).
 Internet: Internet is the most commonly used network medium for exchanging
information and data all over the world. It is used by Tesco to do many operations,
like sending E-Mails to other organisations related to the business, receiving customer
feedback, researching about customer trends and demands along with activities of the
competitors. Tesco implements the use of internet extensively in the field of online
marketing. The company has their own website that allows customers to visit the
website and gain information about the company, like the various products and
services offered by Tesco, along with all the products and services that are up for
online sale. The use of internet is increasing rapidly at a fast pace that has compelled
businesses to understand its uses and measure how it can benefit a company. The
most important use of internet lies in advertising. Due to the increased use of internet
by people all around the world, especially of social media websites, companies like
Tesco are advertising their products and services in these websites to increase brand
recognition and to attract more potential customers (Sanchez, 2018).
System Development Life Cycle
System Development Life Cycle refers to the transformation of a newly introduced and
developed project into an operational task. This process follows many steps that are all
structured in a way that incorporates many methods and strategies. This cycle provides a
framework for conducting operations that may be either technical or non-technical. This
cycle is mostly used in operations conducted by the IT department of Tesco. The system
development life cycle has seven stages, which are all described below. The products and
services created by this cycle will help the managers in conducting their operations in the
most efficient way possible (Cassidy, 2016). The following example will demonstrate the use
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of the system development life cycle in order to implement the PayQuiq mobile payment
service.
Step 1: Planning
This is the first step of the cycle, where the ideas and concepts regarding what to implement
as the solution to a problem that is plaguing the company. All the required resources,
employees, expenses, and time is calculated in this step. Benefits of the solution are also
considered in the planning process. For example, Tesco wants to implement the PayQuiQ
mobile payment application in order to make customer payments easier. Tesco will plan all
the necessary resources required to build the application and also make a budget for this
operation.
Step 2: Requirements and Analysis of the System
In this step, the team responsible for making the PayQuiQ application needs to analyse all the
requirements of this service that is functional. Research is also done on how this app will
benefit the customers and align with their expectations.
Step 3: Systems Design
This step describes in detail what are the necessary specifications, characteristics, and the
tasks that need to be conducted to complete making the application. It is necessary for Tesco
to make sure that the design of this service will be beneficial to the customers and to Tesco
itself as they need to make sure it is profitable.
Step 4: System Development
The development of PayQuiQ begins and all necessary changes in the way employees help
the customers to pay for purchasing products and services are implemented in order to make
sure that this application gets integrated into the systems and operations of Tesco.
Step 5: Integration and Testing
The application is installed in the systems and its quality is checked by a Quality Assurance
(QA) professional. This is done in order to see if the design of PayQuiQ meets company
expectations and achieves the objectives it was initially developed for.
Step 6: Implementation
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In this phase, most of the codes for the application are written so that when this application
finally gets running, the data and parts of the previous system are transferred over to this new
system. In this case, a completely new and separate system of payment is implemented.
Step 7: Maintenance and Operations
In this final step of implementing the new system, the application is refined and final tests are
conducted to make sure everything is running perfectly before customers can finally be able
to use this application.
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