Importance of Information Systems to Tesco

Importance of Information Systems to Tesco PLC

Utilization technology for collaboration has enabled Tesco to build good relationships with its stakeholders that has contributed to persistent growth.  The company has elaborate information systems that are used for processing useful information resources for supporting decision making.  These information systems are aligned with information requirements at different decision making levels.  Essay writing servicesThere are specific benefits of information systems in the retail sector.  These benefits include supporting strategy implementation and enhancing collaboration with key stakeholders.

Strategy Implementation

The success of any organization is dependent on the quality of strategies and the effectiveness of implementation.  Strategies are classified into corporate, tactical, and operational in line with the level at which they are implemented.  Formulating each category of the strategies require information resources that are provided by specific information systems( Delone & McLean, E.R., 2003.   Tesco’s information systems support strategy implementation at all levels.  The company’s   TPS gather relevant information needed to implement operational strategies. Useful information gathered by the TPS includes the number of customers, demand for specific products, and inventory levels. This information supports the implementation of operational strategies such as inventory management to ensure a free flow of activities in the organization. Operational strategies are short term in nature, and they help an organization react swiftly to changes in the environment.  The retail sector is influenced by unstable factors that require retailers to be quick at implementing quality short-term strategies. Information systems support the implementation of tactical strategies at the middle management level.    Tactical strategies are made at departmental or branch level, and they involve addressing environmental forces that affect the concerned division. They are also directed towards improving operational efficiency at the branch or departmental level. Tesco’s DSS and MIS support the implementation of tactical strategies.  Retailers develop corporate strategies to determine the direction of a company. Corporate strategies are long term in nature and involve heavy capital commitments.   Information produced in the middle level management systems is used as inputs of information systems used by the top management.  Consequently, the ESS produces information needed to make long term strategies. This information system also provides information for evaluating the effectiveness of corporate strategies.  Tesco and other retailers have benefited immensely from applying information system in strategy formulation and implementation.

Customer Relationship Management (CRM)

Developing good relationships with customers is a key business success factor. Customer relationship management is a contemporary approach to managing interactions with customers. The approach focuses on both current and potential customers to ensure the existing customers are retained, and new ones are acquired.  Information systems developers have come up with an application known as the CRM whose sole responsibility is to manage how an organization interacts with its customers. The application ensures a free flow of accurate and relevant information between the organization and its customers. Tesco has an elaborate CRM system that manages interactions with the customers. The company’s website has an interactive feature that allows clients to react to the company’s services (Kenyon & Vakola 2003).  Tesco also uses the social media to interact with its customers, and this reinforces the CRM system.  Customer relationship management involves various activities.  Answering to customer queries is one of the main activities in this engagement.  Potential and actual customers have many questions regarding retailer’s operations. For instance, customers may experience difficulties when using products acquired from the retailer thus necessitating guidance.  Also, potential and actual customers may have queries regarding the availability of some services. These and other queries are addressed by the CRM.  In addition to handling customers’ queries, the CRM supports research.  It gathers market intelligence from customers thus supporting decision making.

 Suppliers Collaboration

Creating sustainable relationships with the suppliers is important in the retail sector. A retailer can only meet customer demand when a steady supply of inputs exists. Information systems support retailers in creating a good relationship with the suppliers.  Tesco has an inventory management system that allows suppliers to view the inventory level of their supplies.  Some suppliers have login details that allow limited access to the company’s inventory records. Other customers are notified by an SMS or email when the inventory reaches the reorder level thus prompting supply (Palmer 2005).  The classification of suppliers depends on the importance of the supplier to the organization.  Large suppliers of critical items are given login details to enable them to monitor the inventory level, and this ensures deliveries are made on time. Utilization of information systems in managing relationships with the suppliers gives a retailer a sustainable competitive advantage.  It implies that retailers who fail to use information systems to collaborate with retailers lose a competitive edge.

Collaborating with Employees

Information systems allow seamless communication between the managers and employees and among employees.  As a result, team spirit is created increasing productivity.  These systems reduce time and communication costs that translate into lower operating costs. Tesco’s information systems are employee friendly since all employees interact with the existing systems without difficulties. Information systems help retailers implement process automation that includes replacing workers with computers.   Labour is a major cost centre in the retail sector since operations in retail outlets are labour intensive.     Labour productivity increases when employees use information systems to make work easier (Laudon & Laudon 2011). Information systems reduce error rates, and this brings operating costs down. Processing transactions using information systems is more accurate than manual processing.   In addition to reduced errors, information systems are faster than manual processing.  Tesco’s points of sale terminals are made of fast systems, and this reduces the duration stayed by each customer at the point of sales. As a result, retailer’s outlets are characterized by short quest, and this enhances customer experience.  Tesco’s information system has a queue management module that was put in place to manage queues.  All these activities increase the productivity of workers as technology enables workers to accomplish big tasks in less time. Failure to integrate information systems in retail processes makes a retailer to lose a competitive advantage.

Conclusion

Tesco is one of the world’s leading retailers, and much of its success is derived from the use of information systems when collaborating with stakeholders.  Information systems are made of elements that work together to meet information goals. Elements of an information system include hardware, software, liveware, procedures, network, and data. Each element performs a specific goal towards supporting an organization to meet its goals. Information systems vary across the organization hierarchy in line with the diversity in information needs.  Decisions made across hierarchies vary where lower level decisions are programmed while decisions made at the highest level are unstructured.  Benefits of information systems to an organization are many.  They enhance collaboration during strategy development and implementation.  Strategy development and implementation processes require quality and timely information, and information systems provide this information. Tesco’s success to a great extent stems from the utilization of information systems in strategic management.  Information systems support collaboration with customers thus supporting customer relationship management.  Building sustainable relationships with customers have given Tesco a sustainable competitive advantage in the retail sector.   Information systems support collaborating with suppliers, and this ensures the right and timely supplies.  Tesco’s   information systems allow the company to seamlessly communicate with the suppliers. As a result, the company’s meets customer demands on time since items do not go out of stock.  Collaborating with employees increases their productivity. Information systems enhance collaboration with employees thus increasing their productivity.

List of References

Bhattacherjee, A., 2001. Understanding information systems continuance: an expectation-confirmation model. MIS quarterly, pp.351-370.

Delone, W.H. &  McLean, E.R., 2003. The DeLone and McLean model of information systems success: a ten-year update. Journal of management information systems, 19(4), pp.9-30.

Gregor, S., 2006. The nature of theory in information systems. MIS quarterly, pp.611-642.

Kenyon, J. & Vakola, M., 2003. Customer relationship management: a viable strategy for the retail industry?. International Journal of Organization Theory and Behavior, 6(3), p.329.

Laudon, K.C. & Laudon, J.P., 2011. Essentials of management information systems. Upper Saddle River: Pearson.

Munusamy, J. &  Wong, C.H., 2008. Relationship between marketing mix strategy and consumer motive: an empirical study in major Tesco stores. Unitar e-journal, 4(2), pp.41-56.

Palmer, M., 2005. Retail multinational learning: a case study of Tesco. International journal of retail & distribution management, 33(1), pp.23-48.

Tesco 2017. Interim Results 2017/18. Available from https://www.tescoplc.com/news/news-releases/2017/interim-results-201718/(13 December 2017)

Van der Heijden, H., 2004. User acceptance of hedonic information systems. MIS quarterly, pp.695-704.

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