Analyzing Tesco's IT Infrastructure and Challenges

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Abstract
Business organizations have to modify their organizational framework in order to cope with the
growing demand and gain an edge over other competitive forces. Majorly retail organizations
have implicated Information Technology in Management to interpret future objectives and
business strategies to attain business targets. By differentiating between different types of
networks the role of information and communication technology in the business frame of Tesco
Plc. can be better understood through this report.
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Table of Contents
Introduction......................................................................................................................................5
Literature review..............................................................................................................................6
The implication of frequently used Computing terminologies....................................................6
The interrelation of ethical behaviour and social issues with Technology..................................8
Different types of networks.........................................................................................................8
Application of Internet and communication technology (ICT) in Management.........................9
Different stages of systems development..................................................................................10
Analysis and discussion.................................................................................................................13
Major challenges........................................................................................................................13
Recommendations......................................................................................................................14
Conclusion.....................................................................................................................................16
References......................................................................................................................................17
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Introduction
In this report, we are discussing the scenario of the most profitable and reputed retail company to
represent the value of Information Technology by proving how the implication of IT can save the
time, effort and cost. For this purpose, we may choose an organization, named Tesco. Tesco is
regarded as one of the biggest UK-based retailers in the world. IT plays the role of a protagonist
of the entire platform of the organization. The important aspects of modern technology, the
developing key of an increasing firm is depending on the value of productivity, efforts and
mainly the dedication of the workers. Here the role of IT especially represents the source of
increasing the worldwide prosperity of the organization in the retail industry.
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Literature review
Tesco Plc. is one of the leading British companies that deal in retail services that include general
merchandise, grocery items and clothing apparel. The company currently has its headquarter
Hertfordshire, England. The company has been renowned worldwide for its unmatched service
quality standards and customer interaction. The company has been maintaining its legacy of
around 100 years in retail services. It can be better understood from the writings of Nugent and
Leidner, (2016) the company is regarded as the most valuable retail brand as of 2016. Moreover,
the organization holds over 25 percent of the retail market of the United States.
The company has stated that they are aimed to provide valuable services to its stakeholders and
customers by implicating innovative and modern approaches. Implementation of technological
advancement in terms of Information Technology, secure networking and transactional services
is beneficiary for the companies to attain organizational objectives and communicate with the
global customer base. The implication of advanced technological strategies and gadgets has
aided the organization to gain an edge over other competitive companies like Sainsbury's, Asda,
Morrisons, Amazon etc. Tesco public limited company has segregated their services into more
than 14 countries and is regarded as the second largest by monetary profit ratio and third highest
retailer in terms of sales revenue.
The implication of frequently used Computing terminologies
Increasing interest over the internet and technological advancement have helped the business
organizations to spread their services across the globe. Tesco Plc. has embedded Information
System in its framework in terms of better service facility (Bilińska-Reformat et al. 2019).
Haleem and Jehangir, (2017) mentioned the hierarchical framework of Information Systems in
Tesco Plc. has been helpful for interpreting the interrelationship among the alternative options in
Information Systems framework. Information Systems can be bifurcated into two parts on the
basis of purposes like general and specialized purpose (Fernández-Vilas et al. 2017). As stated
by the author database management system (DBMS) include a combination of software and
analyzed data. DBMS is mainly used for general purpose and not specific for any organization.
Such that Tesco utilizes electronic spreadsheet tool for defining the relationship among various
data resources.
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Figure: Typical Information Systems structure at Tesco Plc.
Source: Johnson et al. (2018)
Operational tools and models of Information Systems structure at Tesco Plc. include CCTV
surveillance, RFID systems, order-scheduling systems, financial software, recruitment
associative tools etc. Incorporation of Information Systems and Communication technology is
beneficiary to develop e-commerce business framework. Tesco has insurance policy validating
systems, loyalty card with electronic chip systems and loan application handling systems namely
Tesco Personal Finance (TPF) to exchange data with its suppliers. Additionally, food quality
checking systems, manpower recruiting as well as allocating software is a useful tool to ensure
effective workflow inside retail outlets of Tesco. Electronic Point of Sale (EPOS) is such an
example of applied Information Technology that is useful to look after and manage the stock at
the check-out system.
CRM (customer relationship management) tools are major parts of Information Technology that
aids organizations to maintain strong communication between the key partners, look over the
activities of the competitive companies through market research, undermine value proposition
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ExclusiveInformationSystemTransactionProcessingSystemCustomerSupportManagementInformationSystem(MIS)

policy, build effective relationship with its customers, and channelize with small and mid-level
companies to retain its grip over the local as well as global retail industry.
The implication of Transaction Cost Theory
Resta, (2016) mentioned that organizations can avail certain products or services by avoiding
the internal transaction costs and gain the products at a cheaper rate than the market with the
practical incorporation of transaction cost theory. Such that the organization can expand its sales
revenue growth level by implementing Information Technology inside the workflow. Tesco Plc.
has definitely implicated Transaction Cost Theory in the work process in order to open up the
possibility of expanding market capital in the open-ended market but without expanding and
shifting the transaction costs.
The interrelation of ethical behaviour and social issues with Technology
Tesco Plc. had invented Intra 2.0, that include collaborative tools like Tesco WebEx and
TelePresence to identify the potential idea among the alternatives and track the periodic progress
of the innovative ideas. It has been clearly represented in the reports of Tesco that
implementation of such tools elevated the potential level knowledge sharing systems within a
short duration. Inbound logistics activities such as inspection of goods, scanning of goods at the
check-out corners, restoring data into centralized data resources and monitoring the logistics
operational effectiveness (Tesco plc. 2019).
Such validated data resource is essential for building trust with the major stakeholders like
suppliers, manufacturers, distributors and finally customers. Transparent business operation aids
a business organization to achieve organizational objectives in measured time duration, avoid
complexity, organize the internal-external workflow and maintain the brand image of the
organization in front of the relevant business entities.
The implication of social, political, socio-economical, environmental, economic and legal
(PESTEL) is beneficiary for evaluating the details of the macro environment of an organization.
Main moral issues that can be identified under this research are property rights and control,
quality of service facility, secure networking, information rights and accountability.
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Different types of networks
As resourced from the writings of Johnson et al. (2018) an Information System is defined as
software that helps an organization to restore data and analyze those data to interpret strategic
decisions. There are some general types of systems in terms of Information Technology. It can
be better studied from the research works of Guo and Wang, (2019) that Information System can
be segregated into three typical structures that include decision making, communication and
operational activities. It has been observed that organizations are typically dependent upon
information and communication technology (ICT).
Figure: Hierarchical structure of Information System in a business environment
Source: (Ismail, 2017)
Application of Internet and communication technology (ICT) in Management
An information system can be divided into five major parts like hardware, software, databases,
network and procedures. Among all these hardware include all the computer-based gadgets like
processors, monitors etc. and software is based on the programs that aid the organization to
process, organize data. Intranet and internet are typical parts of the networking and information
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system of any organizational framework. Tesco has been renowned for its technological adoption
in its business model that started since 1984. Later on in 1998 Tesco invented G.O.L.D
Information Systems to ease maintenance of goods, controlling the stock levels and look after the
major functionalities of the logistics operation.
Difference application of Intranet and Internet
Intranet
Intranet network can be defined as the secure network that is mainly privately operated by an
enterprise. Such that the business entities of that particular organization can only assess to
centralized data resource through that network. But security and less traffic are major advantages
of this network. Tesco Plc. has its own privatized network system that is mainly operated by the
business personalities of the organization. To log into the system, an individual has to input the
secure pin over the username and after unlocking that he can easily operate. The intranet of
Tesco is securely protected by the Firewall. In general corporate houses utilize this network to
transact important information among the business entities. The network needs to be adapting to
changes in a faster way so that Tesco can support overseas customers over online mode in a
more secure way.
Internet
Internet is based on a global system of interrelated computer networks that run by using Internet
protocol address (IP) or TCP address to link with other devices inside the public domain. More
traffic and fewer security issues are key drawbacks of this network. Tesco Plc. has internet
network facilities to provide easy access to the online website of the organization and
communicate with various organizations, domestic as well as international institutions from any
place and any time.
The organization was the first company to implement an online shopping transaction from home
policy in its business framework. In present days ICT implementation is important for the
business organizations in terms of addressing vast array potential networking with the global
customer base. Internet and Internet of things (IoT), telecommunication and wireless networks
are parts of this advanced information system. Tesco has implicated such facilities to retain its
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existing customer base and increase the level of acceptance among the customers. Such that
presently Tesco customers communicate with the management of Tesco through the digital
platforms and social networking websites using technologies such as voice over IP (VoIP),
video-conferencing, order tracking facility, and instant messaging applications.
Different stages of systems development
In general management information systems tools are beneficiary to elevate the operational
effectiveness, support decision-making process and interpret the possible business strategies.
From the writings of Ismail, (2017) it can be understood that operational, technology and
management are three major dimensions of Information Systems at Tesco. Information systems
can be further divided into the technical and behavioural approach. The technical approach
focuses mainly over the normative framework of the system whereas the behavioural approach
concentrates on organizational policy and implementation structure.
Majorly the ongoing activities under Tesco can be segregated into support activities and primary
activities. Inbound logistics, operation, outbound logistics, sales-marketing, servicing are critical
parts of primary activities that add value to the profit margin.
Inbound Logistics
This involves integral business operations like receiving, classifying data and storing of data on
the basis of complexity and type. Electronic Point of Sale (EPOS) is a useful element to look
after and manage the stock at the check-out system and send those analyzed data the centralized
data resources.
EDI is another example of such useful element that aids to enhance the quality standards of
logistics and business operations. Tasks like tracking of orders, planning of delivery and product
pick up timing are key parts of EDI.
Operation
Through operational tactics, those data resources are transformed to deliver to the desired
customer base. Additionally, proper maintenance of supply chain management cycle, faster
movement of data, communication with a large number of customers and buyers are some
elements that fluctuate the operational standards of Tesco.
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Outbound Logistics
This includes reverse and forward logistics operations such as the transformation of goods to the
customers through channelizing by a different network. Retail outlets, express stores, shopping
complexes, metros are part of this outbound logistics program. EDI and EPOS are important
elements in terms of extracting relevant data and transmit those data into a centralized data
resource system.
Sales-Marketing
Tools like efficient customer response (ECR), cash flow monitoring systems, and customer
interaction issues are regarded under outbound logistics. ECR system aids the management of
Tesco to observe the concerns, feedbacks or any complaints of the customers. Such that the
customers may interact with the logistics centre directly and communicate with responsible
persons for resolving internal as well as external issues.
Servicing
Record keeping activities regarding service or products are mentioned under the service part.
Tesco has introduced virtual supermarkets over mobile and computer applications. Moreover,
digital help desks are always available to aid an individual.
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Analysis and discussion
Tesco Plc. has diversified their retail services into several areas like clothing apparel, financial
services, electronics, telecommunications, healthcare, insurance policies, software and internet
services. It can be identified from the findings of Wood, Wrigley and Coe, (2016) Tesco Plc. has
seen elevated market capitalization ratio and expansion retail services to several countries
through the online business strategies (Guo and Wang, 2019). The organization has raised its
offline grocery sales revenue by 25 percent and around 44 percent sales growth over digital
platforms. Inculcation of Information Systems has helped the organization to digitally transform
its business framework and attain organizational objectives (Heller, 2017). Presently the brand
value of the organization across the world is around 10 billion USD and around 4.5 billion USD
is the net sales value of the organization over online media platform.
Figure: Information technology framework inside Tesco Plc.
Source: (Eternal Sunshine of the IS Mind, 2019)
Technological development has obviously enhanced the quality of service facilities, moreover
generated various opportunities as well as operational risks for the organization in the retail
industry.
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