Analyzing Tesco's Use of IT: A Business Studies Foundation Year Report

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BABS Foundation UOS IIT Assignment
Assignment 2
Impact of Information Technology
on business operations of a Tesco
Student ID:<Your Student ID>
BA in Business Studies(Foundation Year)
University of Suffolk
Date of Submission:<Date of Submission>
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BABS Foundation UOS IIT Assignment
I declare that this assignment is all my own work and that I have acknowledged all materials
used from the published or unpublished works of other people. All references have been duly
cited.
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BABS Foundation UOS IIT Assignment
Executive Summary or Abstract
The purpose of the study was defined first and influence of information technology in IT
sector, has been defined. A literature review then was performed in context of this topic. The
role of information technology in retail sector gave some general ideas. The idea was further
made specific for Tesco by indentifying their own methods for implementation of this
technology. Types of networking technology, which are available, were discussed and
specific networking technologies, which Tesco uses was pointed. Ethical issues, which are to
be followed in a retail organisation like Tesco were mentioned in this study. Lastly, SDLC
was described in context to this organisation.
Table of Contents
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1.Introduction.............................................................................................................................4
1.1 Purpose.............................................................................................................................4
1.2 Background.......................................................................................................................4
2. Literature Review...................................................................................................................5
2.2 Information Technology and its role in retail business in general...................................5
2.3 Networking Technology, different types in general.........................................................5
2.4 Ethics and Social Issues of using technology in general..................................................6
2.5 The importance of Intranet and Internet in business in general.......................................6
3. Analysis and Discussion........................................................................................................7
3.1 Role of Information Technology in the selected business................................................7
3.1.1 Types of different Information Systems that are used in selected business like
Management Information System, Decision Support Systems etc.....................................7
3.2 Types of Networking Technologies that used in the selected business............................8
3.3 Ethics and social issues in selected business....................................................................8
3.4 The importance of Intranet and Internet in the selected business....................................8
3.5 List and explain the different stage of system development life cycle.............................9
4. Conclusions..........................................................................................................................11
5.References.............................................................................................................................12
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1.Introduction
1.1 Purpose
The purpose of the present study is to identify the role of information technology in Tesco.
1.2 Background
This study would focus on the role of information technology in the retail business. The
various types of networking technology would be discussed. The significance of social as
well as ethical issues in business concerning the use of IT would be explained. The
importance of internet and intranet in retail business would be discussed along with the
discussion on various systems of Information. The networking technologies would be
explained that are used in the selected organisation. The stages of life cycle of system
development will be assessed.
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2. Literature Review
Theme- Importance of information technology in retail business
According to Neubert (2018), the information technology assists in retail business by
managing the supply chain. The role of IT in supply chain management are gathering,
sharing, and collecting the data, sharing information, optimisation of the processes through
the package software and many others. As per his view, the information technology aids in
enhancing the value chain. This is true as IT has the key role in improving the system of
supply chain management by simplifying the processes.
As per the view of Wu He (2015), the social media is helpful for the businesses of retail
industry for enhancing the intelligence system of business. The analytics of social media are
used in the platform of data mining to gather, monitor, and evaluate the data so that the
patterns would be extracted that can be used in gaining insight in the requirements of the
market. This is a fact, as the value of the business would be improved undoubtedly as well as
the organisation would gain competitive advantage. The company would be able to
understand the preference and need of the customers through the help of social media.
2.2 Information Technology and its role in retail business in general
Information technology is the application of technology such as computers to transfer, store,
recover, and control information or data that are used in a business. IT is a division of ICT or
Information and communication technology. In a retail business, the IT is used in managing
the operations such as controlling information and data. It has the role of providing the
knowledge of market to the retailers for taking effective decisions and strategies for the
success of the business. It collects the data of the customers to analyse them as well as for
making a differentiation from other retail companies for enhancing the image of the business
(Gunasekaran et al., 2017).
2.3 Networking Technology, different types in general
Various kinds of networking technology are used in the retail business for enhancing the
satisfaction level of the customers. Wireless Bluetooth is one such technology that can boost
satisfaction of the customers. It can be used in the retail sector by the use of geolocation
technology to share messages to the customers regarding special coupons in the store as soon
as they make entrance. The retail companies also need security in network such as software-
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defined networking or SDN. It would facilitate the control functions of the program as well
as assist in managing the network services (Raj and Raman, 2018). Radio and television are
other modes of networks that can be used by the retailers to promote the business and to
increase the sales of the business.
Content Distribution Networks are helpful in assembling content from various sources and
for publishing them. The companies can use web content management system for the same
purpose. Even social media such as Facebook can be used to enhance the relationship
between the customers and the companies. EDI or Electronic data Interchange can be used
for making communication between the vendors and suppliers. Virtual Private Networking or
VPN provides secure connections that would assist in linking the private networks through
Internet. The company to connect with the stores from anywhere can use this.
2.4 Ethics and Social Issues of using technology in general
There are some social as well as ethical issues related with the use of technology in business.
The first issue is that of security. The hackers can misuse the internet for their selfish
purpose. The data can be hacked by using IP address. Another issue is that of privacy. The
privacy of the users is exploited with the use of internet (Lipschultz, 2017). The technology
has provided easy medium for the customers to purchase goods through online method.
However, this has reduced the movement of people and has made them lazy. Even e-
commerce activities can be unsafe for the customers as the criminals can gain access to the
credit card information and this would result in financial loss. The unauthorised access of
technology can harm the business. The inexperienced employees might harm the data of the
company if the technology is improperly used. The malicious programs would result in
malfunctioning of the system that would affect the management of organisation in a negative
way.
2.5 The importance of Intranet and Internet in business in general
Intranet is the LAN of a business that uses the technology of internet to access information
about the customers and the resources and assets of the business. The management of the
documents are carried out through directories and search engines. The workflow is provided
by intranet as well as integration with the electronics can be made to process the sales that
have been made through internet. It is also helpful in fulfilment of the order placed by the
customers. The vital information such as policies of the business can be understood through
its use (Anderson and Bolton, 2018). Internet assists the business by influencing the
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purchasing decision of customers through online promotion as well as with social media. The
in-store facilities provide details to the customers about the products.
3. Analysis and Discussion
3.1 Role of Information Technology in the selected business
Tesco uses information technology to increase their ability in an evolving market place,
where flexibility and speed is a factor for becoming competitive. Tesco uses MIS system to
control and plan their decisions to solve problems. It includes hardware, data and software.
The company increases their transparency and uses better tracking for integrating system.
This lets them take vast amount of data from customers and information about their sales,
without slowing down the system. Tesco introduced G.O.L.D system to handle their dealings,
products and stock optimisation in a methodical way. This system is allowing managers to
control stocks properly in warehouses. Tesco uses a POS system, which enables them to
manage sales process through accessible interface. During a purchase, which works for
tracking inventory and it is useful for data mining. Tesco have servers at each branch and
headquarters and it lets them to stay connected through network (Ratchford, 2016).
3.1.1 Types of different Information Systems that are used in selected business
like Management Information System, Decision Support Systems etc.
Management information system lets Tesco to take information such as customer data,
historical records and integrate it in their system through software. This enables managers to
aggregate and summarize results to forecast future performance as well as monitory present
business operations. They use it for managing systems and make budgets by strategically
considering various algorithms to make their strategy more dynamic with the competitive
market. MIS system gives Tesco more control over production, marketing and financial
operations (Laudon and Laudon, 2016). Decision support systems in Tesco are vital, as it lets
managers to take decisions, which are not in routine. This system takes information through
internal systems, such as transaction process system. This system uses mathematical models
and statistics to give out solutions. Tesco’s financial planning is done by this because it lets
managers to consider alternative methods. It lets them chose optimal way to reach a goal.
They integrate it with their computers and let them project revenues and sales in future
(Alyoubi, 2015).
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3.2 Types of Networking Technologies that used in the selected business
Tesco uses local area network or LAN to make connection between employees though
computers. They use routers to connect between devices and this lets them share information
regarding important business data between employees. They have expanded the use of LAN
and implemented wireless technology to make their reach wider through WAN. WAN is
letting them connect with employees by crossing global boundaries digitally. They are using
WIFI to connect with several members of Tesco in various geographical locations. This
networking technology lets Tesco to be remotely connected with employees. Due to its vast
reach, they are able to communicate with each other much faster. The most important
networking technology Tesco uses is enterprise private network. This is their private and
customised network, which is accessible by their employees only. This securely connects
employees and shares information with maximum security. Therefore, they are able to
synchronise properly and this makes them work as a unit across global locations.
3.3 Ethics and social issues in selected business
The social and ethical issues that have been faced by Tesco due to technology are failure of
delivery because of tech problem. The technology cannot be dependable and should be
managed properly though technicians and computer engineers to facilitate the customers’
experience. This issue can affect the image of the organisation in a negative way. Another
issue that can affect the business is the improper management of the security system (Wright,
2018). The corporate espionage would track the activities of the organisation that would be
harmful for the success of the business.
3.4 The importance of Intranet and Internet in the selected business
Tesco uses intranet for giving access to information to their employees, which lets them to
access without leaving business premise. They are using wireless technology and enabling
staffs to use their corporate intranet. Personal digital assistants are letting staffs to get hold
of data using radio frequency. Price checking and stock checks are much easier due to their
intranet usage. Employees can have access to vast amount of data to answer customer
queries. Internet has a major influence on Tesco’s business from perspective of customers
and company. Customers can get access to information on their products and compare prices
with other retail organisations. If perspective of Tesco is considered, then it is evident that
they use internet to connect with customers at international level. This lets them to
synchronise with global customers and other clients. They are able to optimise search engines
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to make their information easily available during search from customers. The latest concept is
internet of things, and this is letting them give Omni-channel experiences. They use IOT to
harness details of customer data and make CRM programmes. Tesco is efficiently tracking
stocks with maximum accuracy (Chow et al., 2016).
3.5 List and explain the different stage of system development life cycle
Figure 1: System development life cycle
(Source: Isaias and Issa, 2015)
Planning
In this phase, it is necessary to define the target and problems, which they are trying to solve.
They have to study if there are any alternate solutions for developing this system, which
meets their needs.
Analysis
The second step is to understand end-user requirement and this should be documented. It is
necessary to understand, expectations of Tesco from this new system. Therefore, feasibility
study will let them understand if the system is economically feasible or not.
System design
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Design phase will require understanding the client’s requirements. This stage is vital for
defining elements and components of this system. Architecture and security level is to be
determined and designed at this phase. This is done by chalking out the design and giving it
an outlook about the way the system will function.
Development
After the system is designed, it is necessary to implement it. This is the construction process,
which is supported by illustrated design. In case of software and hardware, configuration is
necessary. Fine-tuning is done to meet any special requirements of client. At end of this
stage, the system becomes productive (Isaias and Issa, 2015).
Testing
System testing is necessary to understand if it is functioning perfectly or not. The integrated
system mixes subsystems and other components to make it whole. Different inputs are given
and after receiving output, it is analysed. Real users or some specialised personnel perform it.
They see if output is matching with their desired result, according to design (Kar, 2015).
Maintenance
Maintenance is vital for saving the system from becoming obsolete. Maintenance often
requires twigging up some software or hardware. This may involve replacing some
components of a system though evaluating performance.
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4. Conclusions
The study was vital for understanding the impact of information technology in retail sector in
general. Various types of networking technologies, such as WAN, LAN were discussed.
Ethical considerations for retail organisations, were discussed and data protection of
customers, such as data protection. In case of Tesco, systems like G.O.L.D and POS system
are letting them manage inventory. Intranet is letting employees of Tesco use their
personalised network to access data, without leaving business premises and internet has been
pointed as a vital part of networking, which is letting them to connect with customers. Lastly,
the SDLC was described by focusing on each cycle.
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