Impact of Information Technology on Tesco: A Business Report

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BABS Foundation UOS IIT Assignment
Assignment 2
Impact of Information Technology
on business operations of 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used from the published or unpublished works of other people.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 report included the role of information technology in general context and specific to Tesco Plc.
The importance of networking technologies including LAN, WAN, and others has been
demonstrated. Social and ethical issues concerning application of information technology have been
highlighted. The report demonstrated types of information systems used in Tesco along with their
advantages.
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BABS Foundation UOS IIT Assignment
Table of Contents
1. Introduction.......................................................................................................................................5
1.1 Purpose........................................................................................................................................5
1.2 Background..................................................................................................................................5
2. Literature Review..............................................................................................................................6
2.2 Information Technology and its role in retail business in general...............................................6
2.3 Networking Technology, different types in general.....................................................................6
2.4 Ethics and Social Issues of using technology in general...............................................................7
2.5 The importance of Intranet and Internet in business in general..................................................7
3. Analysis and Discussion.....................................................................................................................8
3.1 Role of Information Technology in the selected business...........................................................8
3.1.1 Types of different Information Systems that are used in selected business like
Management Information System, Decision Support Systems etc................................................8
3.2 Types of Networking Technologies used in the selected business...............................................8
3.3 Ethics and social issues in selected business................................................................................9
3.3 The importance of Intranet and Internet in the selected business..............................................9
3.4 List and explain the different stage of system development life cycle........................................9
4. Conclusions......................................................................................................................................11
Bibliography.........................................................................................................................................12
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BABS Foundation UOS IIT Assignment
1. Introduction
1.1 Purpose
The purpose of this report is to determine impacts of information technology on business operations
of Tesco Plc, UK. The report shall identify positive and negative impacts of information technology.
1.2 Background
Information technology concerns computing including software, telecommunication, hardware, and
other things that are associated with transmission of systems or information that facilitate
communication. In general, information technology relates to something similar to computer
technology. The increase in globalisation of point-of-supply and point-of-sale, the use of information
technology in retail industry has increased tremendously. Management of critical retail operations
has become possible through information technology. Retailers are aiming to transform IT
capabilities for several reasons including increased ability to respond to evolving marketplace,
collection customer data, effective working of systems, and others. The study on impact of
information technology on business operations shall be studied by taking examples of Tesco. The
chosen firm is a multinational retailer with headquarter located in Welwyn Garden City, UK. It is one
of the market leaders in the UK’s grocery market and it operates in more than 6,800 shops as of
2019 (Tescoplc, 2019).
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BABS Foundation UOS IIT Assignment
2. Literature Review
2.2 Information Technology and its role in retail business in general
‘Information technology’ is the use of computers to transmit, retrieve, manipulate, and store data in
various areas of business and other enterprises. According to ITAA, the study, development, support,
implementation, and design of information systems, including computer hardware and software
application is termed as information technology. IT is also considered as the capability to input,
process, and transfer data including graphics, videos, sounds, texts, and others.
IT plays several roles in retail business in terms of managing customer data, maintaining
transparency among all systems, ensuring security systems, and others. Retailers face challenges of
information overload, as they have to collect and manage huge numbers of customer data (Shet,
2015). The role of IT is to convert use and manage customer data for ensuring a customer-centric
service. It is important to increase transparency among business systems and integrate all systems to
obtain relevant sales and customer information. Another role of information technology is to use
real-time data to control and manage inventory. “Radio frequency identification tagging’ technology
helps to safeguard shipments by maintaining proper tracking from manufacturing points to
consumption (Oh et al., 2012).
Nowadays, information technology is playing a crucial role to reduce waiting for lines that are being
faced by customers previously. Customers are no longer required to wait for long hours in a queue,
as they are able to purchase retail products with help of self-help kiosks. IT allows customers to have
better ideas on products that they want to buy before visiting retail stores. Customer satisfaction
and experience are improving through application of IT in retail business. Additionally, technology
has made easier processes such as price auditing, employee data management, and performance
management.
2.3 Networking Technology, different types in general
Networking technology is basically of four types including ‘Personal area network’, ‘wide area
network’, ‘local area network’, and ‘metropolitan area network’ (Pantano & Timmermans, 2014).
PAN refers to an organised computer network used in a single building for personal use. This can be
used in residence or office buildings. This technology includes one or more telephones, computers,
peripheral devices, personal entertainment services, and others. LAN is a computer network used in
an individual building. It is much beneficial to store data and share resources. The network can be
built inexpensive hardware including Ethernet cables, network adaptors, hubs, and others. WAN
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BABS Foundation UOS IIT Assignment
technology is used for large area that can be for a nation or entire globe. MAN provides computer
network access to a small region consisting of maximum of ten miles.
2.4 Ethics and Social Issues of using technology in general
Social issue associated with application of technology is cybercrime that can be occurred through
use of various websites and social media sites. Individuals facing such issues loss their hope and trust
upon retail business. People with less technical knowledge cannot use retail technologies effectively
for which the purpose of applying advanced information technology may fail (Sandler, 2016). The
chance of disclosure of customer and business data increases with application of technology in
business. Retailers have to follow certain ethics while using technology in business practices. They
should not compromise violence privacy of individuals so that a safe and secure database needs to
be managed. They should oversee system errors and maintain quality of data to work in compliance
of policies related to use of technology.
2.5 The importance of Intranet and Internet in business in general
Intranet is important for ensuring efficiency of retail business by publishing and delivering business
news in time (nibusinessinfo.co.uk, 2019). It helps in document management by working
collaboratively on documents such as databases and spreadsheets. Intranet is helpful in automation
of workflow and this is observed in various administration processes including performance reviews,
store management, customer relation management, and others. Incorporating intranet contents
with email services ensures easy distribution of information.
Internet is important in retail business because of transmission of business communication in
desired time (Dijkman et al., 2015). It provides a great way to connect with clients anytime. High-
speed internet is helpful to speed up business operations. Retailers are able to aware about buying
habits of customers, marketing strategies adopted by competitors, and get relevant customer data.
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3. Analysis and Discussion
3.1 Role of Information Technology in the selected business
Information technology handles sales activities, helps to buy dealings and optimise stocks in Tesco.
Installation and implementation of system namely GOLD help to manage stock flows within Tesco’s
warehouses (Ecommerceworkroom.co.uk., 2016). This technology manages quality of goods,
controls stock levels, and helps smooth functioning of warehouses. Tesco’s website gives customers
flexibility to determine their needs whenever required. Another role of IT in Tesco is to convert raw
data into valuable information that can be used in business decision-making process. Store
managers of Tesco use information technology to understand motives of customers and design
coupons, rewards, and loyalty schemes accordingly.
Additionally, CCTV surveillance, scheduling systems, order-processing systems, and other hand-held
IT devices help to connect all functional and operational departments. ‘Electronic Point of Sale’
installed at Tesco perform all works of store checkout counters. This IT-enabled system verifies
transactions, coordinates inventory data, and allows payment through credit cards and other
services that are manually provided by employees (Ecommerceworkroom.co.uk., 2016). Tesco’s
mobile payment application ‘PayQwid’ enables customers to use in stores for regular shopping
activities (Ecommerceworkroom.co.uk., 2016).
3.1.1 Types of different Information Systems that are used in selected business like
Management Information System, Decision Support Systems etc.
Tesco uses two types of information systems including “Management Information systems” and
“Decision Support systems”. Tesco’s MIS helps to map client reports and prepare store reports
easily. This system also performs some basic activities such as procurement, storage, and transfer of
goods (Xie & Allen, 2013). It helps to update inventory records, track orders, and analyse
transactions. DSS provides accurate and timely information with relevant information and tools that
assist in decision-making of Tesco’s retail business. Operational decisions such as CRM, inventory
management, and campaign management are carried out with implication DSS.
3.2 Types of Networking Technologies used in the selected business
In Tesco, two types of networking technologies are being used. ‘LAN or Local area network’ is used
to connect devices within short distances. It is used within two or three buildings located together to
share data. Tesco applies this in its corporate offices and retail stores. Similarly, WLAN is another
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BABS Foundation UOS IIT Assignment
networking technology used in Tesco having similar application as of LAN. This technology does not
require physical cables in order to connect networks.
3.3 Ethics and social issues in selected business
Tesco faces failure in its information systems led customers to miss deliveries
(ComputerWeekly.com, 2019). Customers may complain about such issues in Facebook and Twitter
pages of Tesco. This hampers Tesco’s reputation due to flaws in its ‘Grocery Home Shopping
services’. Individual privacy is another area that is identified as unethical behaviour. Tesco’s
personnel collect personal information, track buying habits, and internet usage of customers. This
creates a threat of misleading information that questions about clients’ security. The firm adheres to
Government’s legislation concerning usage of personal data on online platforms. Similarly, another
ethical issue arises regarding continuous monitoring of staff activities through security camera.
3.3 The importance of Intranet and Internet in the selected business
In order to provide better financial, telecommunication, consumer goods, and other services,
internet and intranet are important. Intranet creates internal networks that use secured network
applications in areas of customer relationship management, project management, and others
(Dijkman et al., 2015). Employee management portal is an intranet portal that allows HR managers
of Tesco to monitor grading, salaries, leaves, and other activities. Internet connects people including
suppliers, employees, and customers with business through effective business communication.
Tesco is achieving success in competitive retail market through usage of internet.
3.4 List and explain the different stage of system development life cycle
There are total 7 stages of system development life cycle and they are detailed below.
Planning- This is the first phase, where Tesco has to make sure that they are making a noteworthy
analysis of the issues and making a proficient analysis of the issues associated with work force
planning. The process of implementing something new to the system will be derived from the phase.
System Analysis and Requirements- It is important for Tesco to make sure that they are using and
authentic software and it will help in making a detailed analysis of the measures associated with the
business modification process.
Design- The phase is designing the entire software and making a structure, which will be used by the
people who are interested (Isaias & Issa, 2015). Tesco needs to incorporate the AI technology and
they have to modify the services as well. For this purpose designing the product is essential.
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Development- It is related with software development. If Tesco is using particular software then it
has to be made sure that the fund issues are solved. The software development process is connected
with service development and Tesco should make modifications in the process. For example the self
billing counters for customers need to be checked again so that issues do not occur on a regular
frequency and the experience of customers’ remains on the top priority.
Integration and Testing- The quality assurance process comes to lime light and it is seen that the
issues found in the system of the software of machine is mitigated to make productive change
(Technologies, 2018). Alterations are made to the product and then it is tested again to have a better
and detailed and rational result.
Implementation- the testing results are analysed and if everything found to be good then the
software is introduced to the market. For example, Tesco launched self billing process and it resulted
in a disaster. Then the machines were collected from the market and then with proper research
some of them are launched for a practical test.
Maintenance- the maintenance phase is related with making alteration to the system, depending
upon needs. It is seen that management makes sure that maintenance is done after a scheduled
time interval. The time management for maintaining quality service is important too. Maintaining
the service of software used in Tesco’s system will help in analysing the performance and there will
be a good report in the market.
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4. Conclusions
From the given detail, it can be elucidated that the business modification needs involvement of
information technology and in the long run this type of modifications will help in assuring quality
service. The most of the cases it is seen that the business management process is directly related
with analysis of the situation and for that purpose the management has to consider the factual data
derived in the process of market analysis. It can be concluded that the phases have to be managed
with rational thinking and decision making to ensure proficient development. It is evident that
Information Technology is evolving and there is a good scope for the companies to incorporate that
into their subsections to assure quality service.
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Bibliography
ComputerWeekly.com, 2019. Tesco customers miss out on deliveries due to tech fault. [Online]
Available at: https://www.computerweekly.com/news/450421076/Tesco-customers-miss-out-on-
deliveries-due-to-tech-fault [Accessed 21 june 2019].
Dijkman, R.M., Sprenkels, B., Peeters, T. & Janssen, A., 2015. Business models for the Internet of
Things. . International Journal of Information Management, , pp.35(6), pp.672-678.
Ecommerceworkroom.co.uk., 2016. Technology in Tesco - Using Technology To Improve The
Shopping Experience - The Ecommerce Workroom. [Online] Available at:
https://ecommerceworkroom.co.uk/technology-in-tesco-how-tesco-are-improving-online-and-
offline-shopping/ [Accessed 21 june 2019].
Isaias, P. & Issa, T., 2015. Information system development life cycle models. In High Level Models
and Methodologies for Information Systems . 2140th ed. New York, NY.: Springer,.
nibusinessinfo.co.uk, 2019. Benefits of intranet. [Online] Available at:
https://www.nibusinessinfo.co.uk/content/benefits-intranet [Accessed 21 June 2019].
Oh, L.B., Teo, H.H. & Sambamurthy, V., 2012. The effects of retail channel integration through the
use of information technologies on firm performance. . Journal of operations management, , 30((5)),
pp.368-81.
Pantano, E. & Timmermans, H.., 2014. What is smart for retailing? . Procedia Environmental Sciences,
22, pp.101-107.
Sandler, R., 2016. Ethics and emerging technologies.. Springer.
Shet, A.R.., 2015. Information Technology in Retail Sector. International Journal of Scientific
Engineering and Research (IJSER), p.43.
Technologies, I., 2018. 7 Stages of System Development Life Cycle, What is it? IPHS Technologies.
[Online] Available at: https://iphtechnologies.com/how-many-steps-are-in-the-system-
development-life-cycle/ [Accessed 21 June 2019].
Tescoplc, 2019. About us. [Online] Available at: https://www.tescoplc.com/about-us/ [Accessed 21
june 2019].
Xie, Y. & Allen, C.., 2013. Information technologies in retail supply chains: a comparison of Tesco and
Asda. International Journal of Business Performance and Supply Chain Modelling, 5(1), pp.pp.46-62.
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